UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-K
(Mark One)
þANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2017
For the fiscal year ended September 30, 2022
OR
¨

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

COMMISSION FILE NUMBER: 1-33901
Oaktree Specialty Lending Corporation

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWAREDelaware
(State or jurisdiction of

incorporation or organization)
26-1219283
(I.R.S. Employer

Identification No.)
333 South Grand Avenue, 28th Floor
Los Angeles, CA
(Address of principal executive office)
90071
(Zip Code)
REGISTRANT’SREGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(213) 830-6300


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, par value $0.01 per share
5.875% Unsecured Notes due 2024
6.125% Unsecured Notes due 2028

OCSL
The NASDAQ Global SelectNasdaq Stock Market
The New York Stock Exchange
The NASDAQ Global Select Market
LLC

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨þ        No  þ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨        No  þ
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 periods asperiod that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ     No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨   No  ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large"large accelerated filer,” “accelerated filer”" "accelerated filer," "smaller reporting company" and “smaller reporting company”"emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer  þ
Accelerated filer  ¨
Non-accelerated filer  ¨
Smaller reporting company  ¨
Large accelerated filer  þ
        Accelerated filer  ¨
Non-accelerated filer  ¨
Smaller reporting company  ¨
(Do not check if a 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 ifwhether the registrant has elected notfiled a report on and attestation to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)its management’s assessment of the Exchange Act. ¨effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    Yes  ¨     No  þ
The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant as of March 31, 2017 is $526.32022 was $1,154.7 million. For the purposes of calculating the aggregate market value of common stock held by non-affiliates, the registrant has

excluded (1) shares held by its current directors and officers and (2) those reported to be held by Fifth Street Holdings L.P. and Leonard M. Tannenbaum and his other affiliates. The registrant had 140,960,651183,374,250 shares of common stock outstanding as of November 28, 2017.11, 2022.


DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement relating to the registrant’s 20182023 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission, or the SEC, within 120 days following the end of the Company’s fiscal year, are incorporated by reference in Part III of this Annual Report on Form 10-K as indicated herein.



OAKTREE SPECIALTY LENDING CORPORATION
FORM 10-K FOR THE YEAR ENDED SEPTEMBER 30, 20172022



TABLE OF CONTENTS



PART I
PART I
Business
2
2522
4947
Properties
47
4947
4948
PART II
49
5456
5557
8077
8279
171168
171168
172169
PART III
172169
172169
172169
172169
172169
PART IV
173169
179175






 








 
















1


PART I


Item 1.     Business
General
Oaktree Specialty Lending Corporation, (formerly known as Fifth Street Finance Corp. through October 17, 2017), a Delaware corporation, or together with its subsidiaries, where applicable, the Company, which may also be referred to as “we,” “us” or “our”, is a specialty finance company dedicated to providing customized, one-stop credit solutions to companies with limited access to public or syndicated capital markets. We were formed as a Delaware corporation in late 2007 and currently operate as a closed-end, externally managed, non-diversified management investment company that has elected to be regulated as a business development companyBusiness Development Company under the Investment Company Act of 1940, as amended, or the 1940Investment Company Act. In addition, we have qualified and elected to be treated as a regulated investment company, or RIC, under the Internal Revenue Code of 1986, as amended, or the Code, for tax purposes. See “Taxation as a Regulated Investment Company.” As a RIC, we generally will not have to pay corporate-level U.S. federal income taxes on any net ordinary income or net realized capital gains that we distribute to our stockholders if we meet certain source-of-income, income distribution and asset diversification requirements.
As of October 17, 2017, weWe are externally managed by Oaktree Capital Management, L.P.,Fund Advisors, LLC, which we also refer to as “Oaktree” or our “Investment Adviser,“Adviser,” pursuant to an Investment Advisory Agreement, dated October 17, 2017,investment advisory agreement, as amended from time to time, or the New Investment Advisory Agreement, between the Company and Oaktree. Oaktree is an affiliate of Oaktree Capital Management, L.P., or OCM, the Company's external investment adviser from October 17, 2017 through May 3, 2020, and a subsidiary of Oaktree Capital Group, LLC, or OCG. In 2019, Brookfield Asset Management Inc., which we refer to as "Brookfield," acquired a majority economic interest in OCG. OCG a globaloperates as an independent business within Brookfield, with its own product offerings and investment, manager specializing in alternative investments.marketing and support teams. Oaktree Fund Administration, LLC, which we refer to as “Oaktree Administrator” or “OFA”,Administrator,” a subsidiary of our Investment Adviser, alsoOCM, provides certain administrative and other services necessary for us to operate. Prior to October 17, 2017, we were externally managed and advised by Fifth Street Management LLC, which we refer to as our “Former Adviser” or “Fifth Street Management.” For more information about the New Investment Advisory Agreement and Oaktree see “-The Investment Adviser” below.
We seekOur investment objective is to generate current income and capital appreciation by providing companies with flexible and innovative financing solutions, including first and second lien loans, unsecured and mezzanine loans, bonds, preferred equity and preferred equity.certain equity co-investments. We may also seek to generate capital appreciation and income through secondary investments at discounts to par in either private or syndicated transactions. We invest in companies across a variety of industries that typically possess resilient business models we expect to be resilient in the future with strong underlying fundamentals that will provide strength in future downturns.fundamentals. We intend to deploy capital across credit and economic cycles with a focus on long-term results, which we believe will enable us to build lasting partnerships with financial sponsors and management teams, and we may seek to opportunistically take advantage of dislocations in the financial markets and other situations that may benefit from our Investment Adviser’s credit and structuring expertise.expertise, including throughout the COVID-19 pandemic. Sponsors may include financial sponsors, such as an institutional investor or a private equity firm, or a strategic entity seeking to invest in a portfolio company.
WeOur Adviser is generally lend to and invest in small and mid-sized companies. Our Former Adviser defined small and mid-sized companies as those with annual EBITDA (generally defined as Earnings before Interest, Taxes, Depreciation and Amortization) between $10 million and $120 million. The investments in our portfolio as of September 30, 2017 are principally in the form of first lien, second lien, or, collectively, senior secured, and subordinated debt investments, which may also include an equity component. Our focus prior to entry into the New Investment Advisory Agreement was on originating a prudent mix of senior secured and subordinated loans that our Former Adviser believed would provide superior risk-adjusted returns while maintaining adequate credit protection.
Our Investment Adviser intends to reposition our portfolio into investments that are better aligned with our Investment Adviser's overall approach to credit investing. We expect that our Investment Adviser will focusfocused on middle-market companies, which we define as companies with enterprise values of between $100 million and $750 million. Going forward, weWe expect our portfolio to include a mix of senior securedfirst and second lien loans, including asset backed loans, unitranche loans, (which aremezzanine loans, that combine the characteristics of both senior and subordinated debt, generally in a first lien position), unsecured and mezzanine loans, bonds, preferred equity and certain equity co-investments as well asco-investments. Our portfolio may also include certain structured finance and other non-traditional structures. We generally invest in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as “high yield” and “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.
From inception through September 30, 2017, we originated approximately $8.0 billion of funded debt and equity investments. Our portfolio totaled $1.5$2.5 billion at fair value as of September 30, 20172022 and was comprisedcomposed of125 149 portfolio companies. As of September 30, 2017, we heldThese included debt investments in 88 of135 companies, equity investments in 38 companies, and our portfolio companies, one of which wasinvestments in Senior Loan Fund JV I, LLC, or SLF JV I, a joint venture through which we and Trinity Universal Insurance Company, a subsidiary of Kemper Corporation, or Kemper, co-invest in senior secured loans of middle-market companies and other corporate debt securities, and OCSI Glick JV LLC, or the Glick JV, a joint venture through which we and GF Equity Funding 2014 LLC, or GF Equity Funding, co-invest primarily in senior secured loans of middle-market companies. Twenty-six of our equity investments consisting of common stock, preferred stock or other equity interests in 67 of our portfolio companies, one of which was in SLF JV I, 18 of which were in private equity funds and several


of which are in portfolio companies in which we also heldhad a debt investment as of September 30, 2017.investment. At fair value, 92.4%95.0% of our portfolio consisted of debt investments, including our debt investments in SLF JV I and 78.0%Glick JV, and 86.9% of our portfolio consisted of senior secured loans as of September 30, 2017.2022. The weighted average annual yield of our debt investments at fair value as of September 30, 2017,2022, including the return on our mezzanine note investmentdebt investments in SLF JV I and Glick JV, was approximately 9.6%10.6%, including 8.5%9.3% representing cash payments. The weighted average annual yield of our debt investments is determined before the payment of, and therefore does not take into account, our (and our consolidated subsidiaries') expenses and the payment by an investor of any stockholder transaction expenses, and does not represent the return on investment for our stockholders. See “—Investments—SLF JV I” and “—Investments—Glick JV ” below for additional information regarding our investment in SLF JV I and Glick JV.
We are permitted to, and expect to continue to, finance our investments through borrowings. However, as a business development company,Business Development Company, subject to certain limited exceptions, we are generallycurrently only allowed to borrow amounts such that ourin accordance
2


with the asset coverage as definedrequirements in the 1940 Act, equals at least 200% after such borrowing, provided, that, pursuantInvestment Company Act. We generally expect to exemptive relief we received from the SEC, we are permittedtarget a long-term debt to exclude theequity ratio of 0.90x to 1.25x (i.e., one dollar of equity for each $0.90 to $1.25 of debt of any small business investment company, or SBIC, subsidiaries guaranteed by the U.S. Small Business Administration, or the SBA, from the definition of senior securities in calculating our 200% asset coverage ratio under the 1940 Act. See “-Business Development Company Regulations.” The amount of leverage that we employ will depend on our assessment of market conditions and other factors at the time of any proposed borrowing, such as the maturity, covenant package and rate structure of the proposed borrowings, our ability to raise funds through the issuance of shares of our common stock and the risks of such borrowings within the context of our investment outlook. Ultimately, we only intend to use leverage if the expected returns from borrowing to make investments will exceed the cost of such borrowing.outstanding). As of September 30, 2017,2022, we had a debt to equity ratio of 0.78x1.08x (i.e., one dollar of equity for each $0.78$1.08 of debt outstanding). At a special meeting of stockholders held on June 28, 2019, our stockholders approved the application of the reduced asset coverage requirements in Section 61(a)(2) of the Investment Company Act to us, effective as of June 29, 2019. As a result of the reduced asset coverage requirement, we can incur $2 of debt for each $1 of equity.
Joint Venture
We and Trinity Universal Insurance Company, a subsidiary of KemperOn March 19, 2021, we acquired Oaktree Strategic Income Corporation, or Kemper, also co-invest through an unconsolidated, Delaware limited liability company, SLF JV I. SLF JV I was formed in May 2014OCSI, pursuant to invest in middle-marketthat certain Agreement and other corporate debt securities. AsPlan of September 30, 2017, we and Kemper had funded approximately $165.5 million to SLF JV I, of which $144.8 million was from us. As of September 30, 2017, we and Kemper had the option to fund additional debt investments in SLF JV I, subject to additional equity funding to SLF JV I from us and Kemper. Additionally, SLF JV I had $400.0 million of borrowing capacity, including a senior revolving credit facility with Deutsche Bank AG, New York Branch,Merger, or the Deutsche Bank I facility, with a stated maturity date of July 1, 2019, which permitted up to $200.0 million of borrowings, and a second senior revolving credit facility with Deutsche Bank, AG, New York Branch, or the Deutsche Bank II facility, with a stated maturity date of July 7, 2023, which permitted up to $200.0 million of borrowings. SLF JV I is managed by a four person board of directors, two of whom are selected by us and two of whom are selected by Kemper. SLF JV I is generally capitalized as transactions are completed and all portfolio decisions must be approved by its investment committee consisting of one representative selected by us and one representative selected by Kemper (with approval of each required). As of September 30, 2017, our investment in SLF JV I was approximately $134.2 million at fair value. We do not consolidate SLF JV I in our Consolidated Financial Statements.
Organizational Structure
The following diagram shows a simplified organizational structure reflecting our relationship with Oaktree and OFA, our Investment Adviser and administrator, respectively,OCSI Merger Agreement, dated as of October 17, 201728, 2020, by and among OCSI, us, Lion Merger Sub, Inc., our wholly-owned subsidiary, and, solely for the limited purposes set forth therein, Oaktree. Pursuant to the OCSI Merger Agreement, OCSI was merged with and into us in a two-step transaction, with us as the surviving company, or the OCSI Merger. As a result of the OCSI Merger, we issued an aggregate of 39,400,011 shares of our common stock to former OCSI stockholders.
On September 14, 2022, we entered into an Agreement and Plan of Merger, or the Merger Agreement, with Oaktree Strategic Income II, Inc., a Delaware corporation, or OSI2, Project Superior Merger Sub, Inc., a Delaware corporation and our directwholly-owned subsidiary, or the Merger Sub, and, indirect ownership interestsolely for the limited purposes set forth therein, Oaktree. The Merger Agreement provides that, subject to the conditions set forth in certainthe Merger Agreement, Merger Sub will merge with and into OSI2, with OSI2 continuing as the surviving company and as our wholly-owned subsidiary, or the Merger, and, immediately thereafter, OSI2 will merge with and into us, with us continuing as the surviving company, or together with the Merger, the Mergers. See “Item 7. Management’s Discussion and Analysis of our subsidiaries asFinancial Condition and Results of such date:



Operations—Recent Developments—Merger Agreement” for further information regarding the Merger Agreement and the Mergers.
Our principal executive office is located at 333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071 and our telephone number is (213) 830-6300.
The Investment Adviser
As of October 17, 2017, weWe are externally managed and advised by Oaktree, a registered investment adviser under the Investment Advisers Act of 1940, as amended, or the Advisers Act. Oaktree, subject to the overall supervision of our Board of Directors, manages our day-to-day operations, and provides investment advisory services to us pursuant to the New Investment Advisory Agreement.
Our Investment Adviser was formed in April 1995 and is an affiliate of OCM, a premier credit manager and leader among alternativeleading global investment managersmanagement firm headquartered in Los Angeles, California. Oaktree has $99.5 billion in assets under management asCalifornia, focused on less efficient markets and alternative investments. A number of September 30, 2017, with approximately 70% in credit strategies. The firm has an extensive global investment platform with more than 900 employees, including over 250the senior executives and investment professionals who have significant origination, structuringof our Adviser and underwriting expertise. Oaktree’s disciplined investment philosophy and commitment to credit investing and lendingits affiliates have been demonstrated acrossinvesting together for over 35 years and have generated impressive investment performance through multiple market cycles for more than 20 years. Oaktree emphasizescycles. Our Adviser and its affiliates emphasize an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, corporate debt (including mezzanine finance, high yieldhigh-yield debt and senior loans), control investing, real estate, convertible securities and listed equities. Oaktree manages
In 2019, Brookfield acquired a majority economic interest in OCG. OCG operates as an independent business within Brookfield, with its own product offerings and investment, marketing and support teams. Brookfield is a leading global alternative asset manager with over a 100 year history and over $750 billion of assets forunder management (inclusive of OCG) across a wide varietybroad portfolio of clients, including manyreal estate, infrastructure, renewable power, credit and private equity assets. OCG's founders, senior management and current and former employee-unitholders of OCG are able to sell their remaining OCG units to Brookfield over time pursuant to an agreed upon liquidity schedule and approach to valuing such units at the time of liquidation. Pursuant to this liquidity schedule, the earliest year in which Brookfield could own 100% of the most significant investorsOCG business is 2029.
The primary firm-wide goal of our Adviser and OCM is to achieve attractive returns while bearing less than commensurate risk. Our Adviser believes that it can achieve this goal by taking advantage of market inefficiencies in which financial markets and their participants fail to accurately value assets or fail to make available to companies the world.capital that they reasonably require.
Our Adviser and its affiliates believe that their defining characteristic is adherence to the highest professional standards, which has yielded several important benefits. First and foremost, this characteristic has allowed our Adviser and its affiliates to attract and retain an extremely talented group of investment professionals, or the Investment Professionals, as well as accounting, valuation, legal, compliance and other administrative professionals. As of September 30, 2017, this client base includes 75 of2022, our Adviser and its affiliates had more than 1,000 professionals in 20 cities and 14 countries, including a deep and broad credit platform drawing from more than 350 highly experienced investment professionals with significant origination, structuring and underwriting expertise. Specifically, the 100 largest U.S. pension plans, the main pension fund of 38 states in the United States, over 400 corporations, over 350 university, charitable and other endowments and foundations, over 350 non-U.S. institutional investors and 16 sovereign wealth funds.
Members of our Investment Adviser’s Strategic Credit team have, in the aggregate, over 50 yearsgroup that is primarily responsible for implementing our investment strategy consists of investment experience and include professionals who have experience structuring new investments and restructuring existing capital structures in order to maximize recoveries. Ourapproximately 30 Investment Adviser’s Strategic Credit team is comprised of individuals with a diversity of backgrounds, including, as of the date hereof, former investment bankers, corporate/restructuring lawyers, a doctor, private equity investors, and management consultants. We believe this diversity of experience helps enhance the investment processProfessionals led by bringing different perspectives to credit discussions.


The Transaction and the New Investment Advisory Agreement with Oaktree
On July 13, 2017, Oaktree entered into an Asset Purchase Agreement, or the Purchase Agreement, with our Former Adviser and, for certain limited purposes, Fifth Street Asset Management Inc., or FSAM, the indirect, partial owner of our Former Adviser, and Fifth Street Holdings L.P., the direct, partial owner of our Former Adviser.
In order to ensure that the transactions contemplated by the Purchase Agreement, or the Transaction, complied with Section 15(f) of the 1940 Act, our Investment Adviser and our Former Adviser agreed to certain conditions. First, for a period of three years after the closing of the Transaction, at least 75% of the members of our Board of Directors must not be interested persons of Oaktree or our Former Adviser. Second, an “unfair burden” must not be imposed on us as a result of the closing of the Transaction or any express or implied terms, conditions or understandings applicable thereto during the two-year period after the closing of the Transaction.
On September 7, 2017, we held a special meeting of stockholders, or the Special Meeting. At the Special Meeting, our stockholders approved the New Investment Advisory Agreement to take effect upon the closing of the Transaction. Our stockholders also approved, contingent upon the closing of the Transaction, the election of John B. Frank, Marc H. Gamsin, Craig Jacobson, Richard G. Ruben and Bruce Zimmerman to serve on our Board of Directors, each of whom commenced serving on our Board of Directors on October 17, 2017. In addition, in connection with the Transaction, Edgar Lee becameArmen Panossian, our Chief Executive Officer and Chief Investment Officer, Mathew Pendo becamewho focus on the investment strategy employed by our Chief Operating Officer, Mel Carlisle became our Chief Financial OfficerAdviser and Treasurercertain of its affiliates. Second, it has permitted the investment team to build strong relationships with brokers, banks and Kimberly Larin became our Chief Compliance Officer.other market participants. These institutional relationships have been instrumental in strengthening access to trading opportunities, to understanding the current market, and to executing the investment team’s investment strategies. OCM aims to attract, motivate and retain talented employees (both Investment Professionals and accounting, valuation, legal, compliance and other administrative professionals)
Upon the closing
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by making them active participants in, and beneficiaries of, the Transactionplatform’s success. In addition to competitive base salaries, all OCM employees share in the discretionary bonus pool. An employee’s participation in the bonus pool is based on October 17, 2017, Oaktree became the investment adviser to eachoverall success of Oaktree Strategic Income Corporation (formerly known as Fifth Street Senior Floating Rate Corp.), or OCSI, and us, and Oaktree paid gross cash consideration of $320 million to our Former Adviser. The closing of the Transaction resulted in an assignment for purposes of the 1940 Act of the investment advisory agreement between our Former Adviser and us, orits affiliates and the Former Investment Advisory Agreement,individual employee’s performance and as a result,level of responsibility.
Our Adviser and its immediate termination. The material terms of theaffiliates provide discretionary investment management services to be provided under the New Investment Advisory Agreement, other than the fee structure, are substantially the same as the Former Investment Advisory Agreement, except that services are provided by Oaktree.
On October 17, 2017, each of Bernard D. Berman, James Castro-Blanco, Brian S. Dunn, Alexander C. Frank, Byron J. Haneymanaged accounts and Douglas F. Ray resigned as a member ofinvestment funds, which may have overlapping investment objectives and strategies with our Board of Directors. In addition, on October 17, 2017, each of Mr. Berman, our former Chief Executive Officer, Mr. Steven Noreika, our former Chief Financial Officer,own and, Ms. Kerry Acocella, our former Secretary and Chief Compliance Officer, resigned from his or her role as an officer of the Company.

Our Former Adviser and Administrator
Prior to October 17, 2017, we were externally managed and advised by our Former Adviser, which was a registered investment adviser under the Advisers Act. Subject to the overall supervision of our Board of Directors, our Former Adviser managed our day-to-day operations and provided us with investment advisory servicesaccordingly, may invest in asset classes similar to those now providedtargeted by us. The activities of such managed accounts and investment funds may raise actual or potential conflicts of interest.
Strategic Credit
Our Adviser's affiliates officially launched the Strategic Credit strategy in early 2013 as a step-out from the Distressed Debt strategy, to capture attractive investment opportunities that appear to offer too little return for distressed debt investors, but may pose too much uncertainty for high-yield bond creditors. The strategy seeks to achieve an attractive total return by investing in public and private revenue-generating, performing debt.
Strategic Credit focuses on U.S. and non-U.S. investment opportunities that arise from pricing inefficiencies that occur in the primary and secondary markets or from the financing needs of healthy companies with limited access to traditional lenders or public markets. Typical investments will be in high yield bonds and senior secured loans for borrowers that are in need of direct loans, rescue financings, or other capital solutions or that have had challenged or unsuccessful primary offerings.
The Investment Professionals employ a fundamental, value-driven opportunistic approach to credit investing, which seeks to benefit from the resources, relationships and proprietary information of the global investment platform of our Adviser and its affiliates.
Our Administrator
We entered into an administration agreement, as amended from time to time, or the Administration Agreement, with Oaktree Administrator, a Delaware limited liability company and a wholly owned subsidiary of OCM. The principal executive offices of Oaktree Administrator are located at 333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071. Pursuant to the Administration Agreement, Oaktree Administrator provides services to us, and we reimburse Oaktree Administrator for costs and expenses incurred by Oaktree as described belowAdministrator in performing its obligations under “-New Investment Advisory Agreement.” FSC CT LLC, or our Former Administrator, was a wholly-owned subsidiary of our Former Adviser. Our Former Administrator provided administrative services necessary for us to operate pursuant to an administrativethe Administration Agreement and loan services agreement, or the Former Administration Agreement. See “- Former Administration Agreement.”
The following diagram shows a simplified organizational structure reflecting our relationship with our Former Adviserproviding personnel and Former Administrator and our direct and indirect ownership interest in certain of our subsidiaries as of September 30, 2017:facilities thereunder.


Market Opportunity
We believe that the middle market represents a significant opportunity for direct lending for many reasons, including:

Large Market. According to the National Center for the Middle Market, as of the second quarter of 2017, there were nearly 200,000 businesses with annual revenues of $50 million to $1 billion or EBITDA of $10 million to $50 million, which businesses represented one-third of private sector U.S. gross domestic product and accounted for nearly 48 million jobs in the United States.

Demand From Middle-Market Companies. According to Thomson Reuters Q3’17 Middle Market Lender Outlook, over the past five years, middle-market lending has averaged $170 billion annually, much of which we believe has been used to finance leveraged buyouts, recapitalizations, capital expenditures and acquisitions. While the market for middle-market lending has attracted increased capital flows and competition, we believe that the market remains robust and growing and that new market participants may not have the same experience in direct lending and investing across credit cycles as our Investment Adviser. We believe that the market for middle-market lending is relatively less efficient and less well-trafficked, which may provide us with opportunities for incremental returns on our investments relative to the risk of such investments.

Reduced Focus From Banks on Middle-Market Lending. We believe that many commercial banks have decreased their lending to middle-market companies in recent years, which has created an opportunity for non-traditional market participants. According to the Standard & Poor’s Leveraged Commentary & Data Leveraged Lending Review - Q2’17, banks account for just 10% of middle-market loans as of September 30, 2017.
Business Strategy
We seek
Our investment objective is to generate current income and capital appreciation by providing companies with flexible and innovative financing solutions, including first and second lien loans, unsecured and mezzanine loans, bonds, preferred equity and preferred equity.certain equity co-investments. We may also seek to generate capital appreciation and income through secondary investments at discounts to par in either private or


syndicated transactions. We intend to invest in companies across a variety of industries that typically possess resilient business models we expect to be resilient in the future with strong underlying fundamentals that will provide strength in future downturns.fundamentals. We intend to deploy capital across credit and economic cycles with a focus on long-term results, which we believe will enable us to build lasting partnerships with financial sponsors and management teams, and we may seek to opportunistically take advantage of dislocations in the financial markets and other situations that may benefit from our Investment Adviser’s deep credit and structuring expertise. Our Investment Adviser intends to implement the following business strategy to achieve our investment objective:


Portfolio Repositioning.Our Investment Adviser intends to reposition our portfolio in the near-term in order to (1) protect principal and minimize credit losses, (2) reduce the portfolio to a smaller number of investments in which our Investment Adviser's team has high convictions, (3) restructure certain loans and exit positions where fair value can be obtained and (4) as investments mature or are refinanced, rotate into investments that are better aligned with our Investment Adviser’s overall approach to credit investing. In the longer-term, our Investment Adviser intends to generate a competitive return on equity and sustainable, consistent dividends through (1) opportunistically investing across the capital structure, (2) seeking to take advantage of dislocations in financing markets and other situations that may benefit from our Investment Adviser’s restructuring expertise and (3) generating capital appreciation and income through secondary investments at discounts to par in either private or syndicated transactions.

•Emphasis on Proprietary Deals.Our Investment Adviser is primarily focused on proprietary opportunities as well as partnering with other lenders as appropriate. Dedicated sourcing professionals of our Investment Adviser and its affiliates are in continuous contact with financial sponsors and corporate clients to originate proprietary deals and seek to leverage the networks and relationships of Oaktree’s over 250 investment professionalsInvestment Professionals with management teams and corporations to originate non-sponsored transactions. Since 2005, our Investment Adviser hasand its affiliates have invested more than $10$31 billion in over 200500 directly originated loans, and the Oaktree platform has the capacity to invest in large deals and to solely underwrite transactions.


•Focus Onon Quality Companies Andand Extensive Diligence.  Our Investment Adviser seeks to maintain a conservative approach to investing with discipline around fundamental credit analysis and downside protection. Our Investment Adviser intends to focus on companies with resilient business models, we expect to be resilient in the future,strong underlying fundamentals, that will provide strength in future downturns, significant asset or enterprise value and seasoned management teams, although not all portfolio companies will meet each of these criteria. Our Investment Adviser intends to leverage its deep credit and deal structuring expertise to lend to companies that have unique needs, complex business models or specific business challenges. Our Investment Adviser conducts diligence on underlying collateral value,
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including cash flows, hard assets or intellectual property, and will typically model exit scenarios as part of the diligence process, including assessing potential “work-out” scenarios.


•Disciplined Portfolio Management.  Our Investment Adviser monitors our portfolio on an ongoing basis to manage risk and take preemptive action to resolve potential problems where possible. Our Investment Adviser intends to seek to reduce the impact of individual investment risks by diversifying portfolios across industry sectors and, with the exception of our investment in SLF JV I, which has a diversified portfolio, limiting positions to no more than 5% of our portfolio.


•Manage Risk Through Loan Structures.  Our Investment Adviser seeks to leverage its experience in identifying structural risks in prospective portfolio companies and developing creativecustomized solutions in an effort to enhance downside protection where possible. Our Investment Adviser has the expertise to structure comprehensive, flexible and creativecustomized solutions for companies of all sizes across numerous industry sectors. Our Investment Adviser employs a rigorous due diligence process and seeks to include covenant protections designed to ensure that we, as the lender, can negotiate with a portfolio company before a dealdebt investment reaches impairment. The Oaktree platform has the ability toof our Adviser and its affiliates can address a wide range of borrower needs, with capability to invest across the capital structure and to fund large loans, and our Investment Adviser pays close attention to market trends. Our Investment Adviser provides certainty to borrowers by seeking to provide fully underwritten financing commitments and has expertise in both performing credit as well as restructuring and turnaround situations, which we expect will allowallows us to invest and lend duringat times of market stress when our competitors may halt or reduce investment activity.

Our Investment Adviser’s emphasis is on fundamental credit analysis, consistency and downside protection, all of which are key tenets of its investment philosophy.philosophy and important in times of market dislocation. We believe this philosophy strongly aligns with the interests of our stockholders. Our Investment Adviser controls primarily for risk, rather than return. Although this may lead us to underperform in bullish markets, we expect that prudence across the economic cycle and limiting losses will allow us to achieve our investment objectives.

Identification of Investment Opportunities

Our primary focus is on identifying differentiated private lending opportunities, with a secondary emphasis on identifying opportunities in the public markets.
Private Lending Opportunities. We believe that the market for lending to private companies is underserved and presents a compelling investment opportunity. We intend to focus on private lending opportunities in the following key areas:

•Non-Sponsor Situational Lending. Certain businesses (including those with complex business models or specific business challenges) may present challenges for traditional lenders to understand or value, thus presenting attractive lending opportunities for the Company. Prospective borrowers with little-to-no revenue or earnings before interest, taxes, depreciation and amortization, or EBITDA, may be unable to secure financing from traditional lenders. In these instances, a debt-to-EBITDA approach may not be appropriate, instead requiring a value-oriented approach that involves targeting low loan-to-value ratios and negotiating highly-structured investments with bespoke covenants, contingencies and terms that help mitigate business-specific risks. Examples of these opportunities may include life sciences companies that are unable to access traditional bank financing to commercialize their product pipelines.

•Select Sponsor-Related Financings. Financing for portfolio companies backed by private equity firms is one the most active areas of opportunity, including those opportunities related to leveraged buyouts and refinancings. The Investment Professionals have many longstanding relationships with established, reputable sponsors and generally favor those that view their portfolio companies as long-term partners and those that specialize in certain industries where they have significant subject matter expertise. In addition, the Investment Professionals have historically favored borrowers backed by sponsors that have demonstrated a willingness to invest large amounts of equity, which provides enhanced downside protection. Examples of these opportunities may include financings for software- or healthcare-focused borrowers backed by private equity firms.

•Stressed Sector/Rescue Lending. Individual businesses or sectors experiencing stress or reduced access to capital can create attractive private lending opportunities. Broad market weakness or sector-specific issues can constrain borrowers’ access to capital. Further, certain factors such as regulation may cause entire industries (e.g., energy) to be rebuffed by more traditional lenders (e.g., commercial banks) such that all borrowers in the industry lose access to capital, regardless of their individual financial condition. Oftentimes, by sifting through an industry issuer-by-issuer, the Investment Professionals can identify attractive investment opportunities that are over-secured by valuable assets. Examples of these opportunities may include debtor-in-possession loans or loans to companies in sectors temporarily impacted by COVID-19 headwinds or other macro events.
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Opportunities in Public Markets. Certain factors may also drive opportunities for us in the public market and will allow us to leverage Oaktree’s broader credit platform and decades of credit investing experience. These factors may include:

•Macro Factors. Macro factors that drive market dislocations can ripple through the global economy and include sovereign debt crises, political elections, global pandemics and other unexpected geopolitical events. These factors drive highly correlated “risk on” and “risk off” market swings and frequently result in the indiscriminate selling of securities and obligations at prices that the Investment Professionals believe are well below their intrinsic values.

•Industry Headwinds. Select industries may face secular challenges or may fall out of favor due to a variety of factors such as evolving technology or regulation. These headwinds can cause the debt of healthy and unhealthy companies alike to trade lower, potentially allowing the Investment Professionals to identify mispriced opportunities.

•Company Characteristics. Company-specific factors that drive market dislocations include overleveraged balance sheets, near-term liquidity or maturity issues, secular pressures, acute shock to company operations, asset-light businesses and new or relatively small issuers. These factors may result in mispriced securities or obligations or require a highly structured direct loan.

The securities we may purchase in the public markets include broadly syndicated loans, high yield bonds and structured credit products. We generally expect to have smaller positions in these securities, and to hold such securities for a shorter period of time, relative to securities purchased in private lending opportunities.
Investment Criteria and Guidelines
OurOnce the Investment Adviser hasProfessionals have identified a potential investment opportunity, they will evaluate the opportunity against the following investment criteria and guidelines for identifying and investing in prospective portfolio companies.guidelines. However, not all of these criteria will be met by each prospective portfolio company in which we invest.


Equity Cushion.•Covenant Protections.  We generally expect to invest in loans that have covenants that may help to minimize our risk of capital loss and meaningful equity investments in the portfolio company. We intend to target investments that have strong credit protections, including default penalties, information rights and affirmative, negative and financial covenants, such as limitations on debt incurrence, lien protection and prohibitions on dividends.


•Sustainable Cash Flow. Our investment philosophy places emphasis on fundamental analysis from an investor’s perspective and has a distinct value orientation. We intend to focus on companies with significant asset or enterprise value in which we can invest at relatively low multiples of normalized operating cash flow. Additionally, we anticipate investing in companies with a demonstrated ability or credible plan to de-lever. Typically, we will not invest in start-up companies or companies having speculative business plans or structures that could impair capital over the long-term although we may target certain earlier stage companies that have yet to reach profitability.


•Experienced Management Team.  We generally will look to invest in portfolio companies with an experienced management team and proper incentive arrangements, including equity compensation, to induce management to succeed and to act in concert with our interests as investors.


•Strong Relative Position Inin Its Market.  We intend to target companies with what we believe to be established and leading market positions within their respective markets and well-developed long-term business strategies.


•Exit Strategy. We generally intend to invest in companies that we believe will provide us with the opportunity to exit our investments in three to eight years, including through (1) the repayment of the remaining principal outstanding at maturity, (2) the recapitalization of the company resulting in our debt investments being repaid andor (3) the sale of the company resulting in the repayment of all of its outstanding debt.


•Geography.  As a business development company,Business Development Company, we will invest at least 70% of our investmentstotal assets in U.S. companies. To the extent we invest in non-U.S. companies, we intend to do so in accordance with 1940 Act limitations and only in jurisdictions with established legal frameworks and a history of respecting creditor rights.

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Investment Process

Our investment process consists of the following five distinct stages.
Source.Source
Oaktree’s Strategic Credit has access to a team has dedicatedof shared sourcing professionals and also leverages itsthe strong market presences and relationships across Oaktree’sthe global platform which includes more than 250 highly-experienced investment professionals,of our Adviser and its affiliates to gain access to opportunities from advisers, sponsors, banks, management teams, capital raising advisers and other sources. Our Investment Adviser is a trusted partner to financial sponsors and management teams based on its long-term commitment and focus on lending across economic cycles. We believe this will givegives us access to proprietary deal flow and first looks"first looks" at investment opportunities and that we are well-positioned for difficult and complex transactions. In 2016, Oaktree’s Strategic Credit team evaluated more than 200 potential direct lending opportunities with total transaction value of approximately $30 billion. More than 85% of these potential direct lending opportunities were for transactions of $50 million or larger, and Oaktree’s Strategic Credit team continues to see a meaningful pipeline of sizeable transactions.
Screen Using Investment Criteria.Criteria
We expect to be highly selective in making new investments. The initial screening process will typically include a review of the proposed capital structure of the prospective portfolio company, including level of assets or enterprise value coverage, an assessment by our Investment Adviser of the company’s management team and its equity ownership levels as well as the viability of its long-term business model, and a review of forecasted financial statements and liquidity profile. In addition, our Investment Adviser may assess the prospect of industry or macroeconomic catalysts that may create enhanced value in the investment as well as the potential ability to enforce creditor rights, particularly where collateral is located outside of the United States.
Research.


Research
Prior to making any new investment, our Investment Adviser intends to engage in an extensive due diligence process led by investment analysts assigned to each transaction. The analysts will assess a company’s management team, products, services, competitive position in its markets, barriers to entry and operating and financial performance, as well as the growth potential of its markets. In performing this evaluation, the analysts may use financial, descriptive and other due diligence materials provided by the targetprospective portfolio company, commissioned third party reports and internal sources, including members of the investment team, industry participants and experts with whom our Investment Adviser has relationships. As part of the research process, our Investment Adviser’s analysts typically perform a “what-if” analysis that explores a range of values for each proposed investment and a range of potential credit events.
Evaluate.Evaluate
Our Investment Adviser assesses each potential investment through a robust,rigorous, collaborative decision-making process. Our Investment Adviser applies disciplined investment criteria and evaluates potential risk and reward of each investment with significant focus on downside risk. Our Investment Adviser sizes investments at the portfolio level across a variety of characteristics, including based on the investment criteria described above.
Monitor.Monitor
Our Investment Adviser prioritizes managing risk. In managing our portfolio, our Investment Adviser intends to closely monitormonitors each portfolio company andto be well-positioned to make hold and exit decisions when credit events occur, our collateral becomes overvalued or opportunities with more attractive risk/reward profiles are identified. Investment analysts will beare assigned to each investment to monitor industry developments, review company financial statements, attend company presentations and regularly speak with company management. Based on their monitoring, the Investment Professionals seek to determine the optimal time and strategy for exiting and maximizing the return on the investment, typically when prices or yields reach target valuations. In circumstances where a particular investment is underperforming, our Investment Adviser intends to employ a variety of strategies to maximize its recovery based on the specific facts and circumstances of the underperforming investment, including actively working with the management to restructure all or a portion of the business, explore the possibility of a sale or merger of all or a portion of the assets, recapitalize or refinance the balance sheet, negotiate deferrals or other concessions from existing creditors and arrange new liquidity or new equity contributions. We believe that our Investment Adviser’s experience with restructurings and our access to our Investment Adviser’s deep knowledge, expertise and contacts in the distressed debt area will help us preserve the value of our investments.
Due Diligence Process
As part of the underwriting process, our Investment Adviser completes a rigorous due diligence process that focuses on four key areas:


Company Analysis. Our Investment Adviser actively engages and assesses company management teams. The focus of this analysis also includes identifying and understanding key business and demand drivers. Our Investment Adviser strives to evaluate core risks within businesses and industries and to complete the analysis by thinking like company ownership when evaluating cash flows.
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Financial Analysis. Our Investment Adviser analyzes the consistency, stability and reliability of cash flows in addition to evaluating the quality of earnings and conversion of EBITDA to cash. Our Investment Adviser also reviews historical performance through economic cycles, analyzes the potential impact of a downturn in the prospective portfolio company’s end markets and compares the prospective portfolio company’s key metrics to those of its competitors.

Down-side Focus. Our Investment Adviser considers the impact on the prospective portfolio company’s business and cash flows under a number of downside case scenarios and develops an exit strategy in the event of the downside case. There is also a focus on potential risks to business models. Following this analysis, our Investment Adviser considers appropriate risk mitigants, including the structure of the investment and affirmative, negative and financial covenants.

Value. Our Investment Adviser analyzes the risk/reward potential of each new investment relative to other opportunities in the industry and market as well as overall industry valuation trends as compared to the industry risk profile. As part of this analysis, our Investment Adviser considers the cost of capital to competitors as well as alternative investment options. Our Investment Adviser also considers the value of liquidity to our business and operations as well as appropriate illiquidity premiums where we are unlikely to acquire liquid securities.



Investments
We target debt investments that will generate current income and also provide the opportunity for capital appreciation through our ownership of equity securities in certainDebt Investments
At fair value, 95.0% of our portfolio companies. We seek to structure our debt investments to provide downside protection through strong credit protections, including default penalties, information rights and affirmative, negative and financial covenants, such as limitations on debt incurrence, lien protection and prohibitions on dividends, although not all of our investments will meet each of the criteria. Our Investment Adviser has expertise in creative, efficient structuring and institutional knowledge of bankruptcy and restructurings, enabling our Investment Adviser to focus on risk control. Our debt investments may be collateralized by a first or second lien on the assets of the portfolio company. As of September 30, 2017, 78.0% of our portfolio at fair value consisted of debt investments that were secured by first or second priority liens on the assetsand 86.9% of the portfolio company.
Debt Investments
We intend to tailor the terms of each investment by negotiating a structure that seeks to protect our rights and manage our risk while creating incentives for the portfolio company to achieve its business plan. A substantial source of return is monthly or quarterly cash interest that we collect on our debt investments. We expect that our Investment Adviser will focus on middle-market companies, which we define as companies with enterprise values of between $100 and $750 million. Going forward, we expect our portfolio to include a mixconsisted of senior secured loans including asset backed loans, unitranche loans, unsecured and mezzanine loans, bonds, preferred equity and certain equity co-investments as well as certain structured finance and other non-traditional structures.of September 30, 2022. Our debt investments generally consist of the following:


•First Lien Loans.   Our first lien loans generally have terms of three to seven years, provide for a variable or fixed interest rate, contain prepayment penalties and are secured by a first priority security interest in all existing and future assets of the borrower. Our first lien loans may take many forms, including revolving lines of credit, term loans and acquisition lines of credit.


•Unitranche Loans.    Our unitranche loans generally have terms of five to seven years and provide for a variable or fixed interest rate, contain prepayment penalties and are generally secured by a first priority security interest in all existing and future assets of the borrower. Our unitranche loans may take many forms, including revolving lines of credit, term loans and acquisition lines of credit.
Unitranche loans typically provide a borrower with all of its capital except for common equity, often with higher interest rates than those associated with traditional first lien loans.


•Second Lien Loans.    Our second lien loans generally have terms of five to eight years, provide for a variable or fixed interest rate, contain prepayment penalties and are secured by a second priority security interest in all existing and future assets of the borrower. Our second lien loans may include payment-in-kind, or PIK, interest, which represents contractual interest accrued and added to the principal that generally becomes due at maturity.


•Mezzanine Loans.    Our mezzanine loans generally have maturities of five to ten years. Mezzanine loans may take the form of a second priority lien on the assets of a portfolio company and have interest-only payments in the early years with cash or PIK payments with amortization of principal deferred to the later years. In some cases, we may invest in debt securities that, by their terms, convert into equity or additional debt securities or defer payments of interest for the first few years after our investment.


•Unsecured Loans.  Our unsecured investments generally have terms of five to ten years and provide for a fixed interest rate. We may make unsecured investments on a stand-alone basis, or in connection with a senior secured loan, a junior secured loan or a “one-stop” financing. Our unsecured investments may include PIK interest and an equity component, such as warrants to purchase common stock in the portfolio company.


•Bonds.  We may selectively invest in high yield corporate bonds issued by middle-market companies that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. The bonds in which we may invest are expected to have terms of five to eight years and provide for fixed interest rate payments. We do not expect that these bonds would be secured by any assets of the issuer.
Equity Investments
When we make a debt investment, we may also be granted equity, such as warrants to purchase common stock in the company in the same class of security as the sponsor receives upon funding. In addition, from time to timea portfolio company. To a lesser extent, we may also make preferred and/or common equity investments, which may be in conjunction with a concurrent debt investment or the result of an investment restructuring. For non-control equity co-investments in connection with private equity sponsors. Weinvestments, we generally seek to structure our non-control equity investments such as direct equity co-investments, to provide us with minority rights provisions and event-driven put rights. We also seek to obtain limited registration rights in connection with these investments, which may include “piggyback” registration rights.


Private Equity Fund Investments
We have historically made investments in the private equity funds of certain private equity sponsors we partner with in making investments in small and mid-sized companies. In general, we make these investments where we have a long-term relationship and are comfortable with the sponsor’s business model and investment strategy. As of September 30, 2017, we had investments in 18 private equity funds, which represented less than 2% of the fair value of our assets as of such date. Our Investment Adviser does not expect private equity fund investments to be a meaningful portion of our strategy going forward.
SLF JV I
We have invested inand Kemper co-invest through SLF JV I, which as of September 30, 2017, consisted of a portfolio of loans to 32 different borrowers in industries similar to the companies in our portfolio.an unconsolidated Delaware limited liability company, or LLC. SLF JV I investswas formed in May 2014 to invest in middle-market and other corporate debt securities, including traditionalsecurities. As of September 30, 2022, we and Kemper had funded an aggregate of approximately $165.5 million to SLF JV I, of which $144.8 million was from us. As of September 30, 2022, we had aggregate commitments to fund SLF JV I of $35.0 million, of which approximately $26.2 million was to fund additional subordinated notes issued by SLF JV I, or the SLF JV I Notes, and approximately $8.8 million was to fund LLC equity interests in SLF JV I. Additionally, SLF JV I has a senior debt thatrevolving credit facility with Deutsche Bank AG, New York Branch, as amended, or the Deutsche Bank I Facility, which permitted up to $260.0 million of borrowings (subject to borrowing base and other limitations) as of September 30, 2022. Borrowings under the Deutsche Bank I Facility are secured by some or all of the company’s assets.assets of a special purpose financing subsidiary of SLF JV I. SLF JV I is managed by a four-person Board of Directors, two of whom are selected by us and two of whom are selected by Kemper. SLF JV I is generally capitalized as transactions are completed and all portfolio decisions must be approved by its investment committee consisting of one representative selected by us and one representative selected by Kemper (with approval of each required). As of September 30,
Portfolio Management
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Active Involvement

2022, our investment in SLF JV I was approximately $117.0 million at fair value. We do not consolidate SLF JV I in our Portfolio CompaniesConsolidated Financial Statements.
Glick JV
On March 19, 2021, as a result of the consummation of the OCSI Merger, we became party to the LLC agreement of the Glick JV. The Glick JV invests primarily in senior secured loans of middle-market companies. Approximately $84.0 million in aggregate commitments was funded to the Glick JV as of September 30, 2022, of which $73.5 million was from us. As of September 30, 2022, we had aggregate unfunded commitments to Glick JV of approximately $14.0 million, of which $12.4 million was to fund subordinated notes issued by the Glick JV, or the Glick JV Notes, and $1.6 million was to fund LLC equity interests in the Glick JV. The Glick JV has a senior revolving credit facility with Deutsche Bank AG, New York Branch, or the Glick JV Deutsche Bank Facility, which permitted borrowings of up to $90.0 million (subject to borrowing base and other limitations) as of September 30, 2022. Borrowings under the Glick JV Deutsche Bank Facility are secured by all of the assets of the Glick JV and all of the equity interests in the Glick JV. The Glick JV is managed by a four-person Board of Directors, two of whom are selected by us and two of whom are selected by GF Equity Funding. The Glick JV is generally capitalized as transactions are completed and all portfolio decisions must be approved by its investment committee consisting of one representative selected by us and one representative selected by GF Equity Funding (with approval of each required). As of September 30, 2022, our investment in the Glick JV was approximately $50.3 million at fair value. We do not consolidate Glick JV in our Consolidated Financial Statements.
Valuation Procedures
As a business development company, we are obligated to offer to provide significant managerial assistance to our portfolio companies and to provide it if requested. We provide managerial assistance to most of our portfolio companies as a general practice and we seek investments where such assistance is appropriate. We monitor the financial trends of each portfolio company to assess the appropriate course of action for each company and to evaluate overall portfolio quality. We have several methods of evaluating and monitoring the performance of our investments, including the following:
Review of monthly and quarterly financial statements and financial projections for portfolio companies;
Periodic and regular contact with portfolio company management to discuss financial position requirements and accomplishments;
Attendance at board meetings;
Periodic formal update interviews with portfolio company management and, if appropriate, the private equity sponsor; and
Assessment of business development success, including product development, profitability and the portfolio company’s overall adherence to its business plan.
Valuation of Portfolio Investments
As a business development company,Business Development Company, we generally invest in illiquid securities including debt and equity securities issued by private middle-market companies. We are required to carry our portfolio investments of small and mid-sized companies. All of our Level 3 investments are recordedat market value or, if there is no readily available market value, at fair value as determined in good faith byaccordance with our Board of Directors.valuation policies and procedures. See “- Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies- Investment Valuation” for a description of our investment valuation processes and procedures.
Competition
We compete for investments with other business development companies, public and private funds (including hedge funds, mezzanine funds and collateralized loan obligations) and private equity funds (to the extent they provide an alternative form of financing), as well as traditional financial services companies such as commercial and investment banks, commercial financing companies and other sources of financing. Many of these entities have greater financial and managerial resources than we do. We believe we are able to be competitive with these entities primarily on the basis of the experience and contacts of our management team, our responsive and efficient investment analysis and decision-making processes, the investment terms we offer, and our willingness to make smaller investments.
We believe that some of our competitors make loans with total rates of returns that are comparable to or lower than the returns that we target. Therefore, we do not seek to compete solely on the interest rates that we offer to potential portfolio companies. See “Risk Factors - Risks Relating to Our Business and Structure - We may face increasing competition for investment opportunities, which could reduce returns and result in losses."
Employees
We do not have any employees. Our day-to-day investment operations are managed by Oaktree Capital Management, L.P. as our Investment Adviser. See “- New Investment Advisory Agreement.” Our Investment Adviser and its affiliates employ more than 250 investment professionals. In addition, we reimburse our administrator, Oaktree Administrator, for the allocable portion of overhead and other expenses incurred by it in performing its obligations under an administration agreement or the New Administration Agreement, including our allocable portion of the costs of compensation of our Chief Financial Officer,


Chief Compliance Officer, their staffs and other non-investment professionals at Oaktree that perform duties for us. See “- New Administrative Services Agreement.”
Properties
We do not own any real estate or other physical properties materialNote 2 to our operations. Our administrative and principal executive offices are located at 333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071. We believe that our office facilities are suitable and adequate for our business as it is presently conducted.Consolidated Financial Statements in this Annual Report on Form 10-K.
New Investment Advisory Agreement

The following is a description of the New Investment Advisory Agreement, which has been in effect sinceAgreement. From October 17, 2017.2017 through May 3, 2020, we were externally managed by OCM pursuant to an investment advisory agreement. On May 4, 2020, OCM effected the novation of such investment advisory agreement to Oaktree. Immediately following such novation, we and Oaktree entered into a new investment advisory agreement with the same terms, including fee structure, as the investment advisory agreement with OCM. The investment advisory agreement with Oaktree was subsequently amended and restated on March 19, 2021 in connection with the closing of the OCSI Merger. The term “Investment Advisory Agreement” refers collectively to the agreements with Oaktree and, prior to its novation, with OCM.
Management Services
Oaktree is registered as an investment adviser under the Advisers Act. Subject to the overall supervision of our Board of Directors, since October 17, 2017, Oaktree has managedmanages our day-to-day operations and providedprovides us with investment advisory services. Under the New Investment Advisory Agreement, Oaktree:
 
•determines the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes;
•identifies, evaluates and negotiates the structure of the investments we make;
•executes, closes, monitors and services the investments we make;
•determines what securities and other assets we purchase, retain or sell; and
•performs due diligence on prospective portfolio companies.companies; and
•provides us with such other investment advisory, research and related services as we may, from time to time, reasonably required for the investment of our funds.
The New Investment Advisory Agreement provides that Oaktree’s services are not exclusive to us and Oaktree is generally free to furnish similar services to other entities so long as its services to us are not impaired.
Management and Incentive Fee
Under the New Investment Advisory Agreement, we pay Oaktree a fee for its services under the investment advisory agreement consisting of two components: a base management fee and an incentive fee. The cost of both the base management fee payable to Oaktree and any incentive fees earned by Oaktree is ultimately borne by our common stockholders.
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Base Management Fee
Under the New Investment Advisory Agreement, the base management fee onis calculated at an annual rate of 1.50% of total gross assets, including any investment made with borrowings, but excluding cash and cash equivalents. Effective May 3, 2019, the base management fee on the Company’s gross assets, including any investments made with borrowings, but excluding any cash and cash equivalents, is 1.50%that exceed the product of (A) 200% and (B) the Company’s net asset value will be 1.00%. For the avoidance of doubt, the 200% will be calculated in accordance with the Investment Company Act and will give effect to exemptive relief the Company received from the SEC with respect to debentures issued by a small business investment company subsidiary. In connection with the OCSI Merger, we and Oaktree entered into an amended and restated investment advisory agreement, which among other items, waived an aggregate of $6 million of base management fees otherwise payable to Oaktree in the two years following the closing of the OCSI Merger on March 19, 2021 at a rate of $750,000 per quarter (with such amount appropriately prorated for any partial quarter).
Incentive Fee
The incentive fee consists of two parts. Under the New Investment Advisory Agreement, the first part of the incentive fee, which is referred to as the incentive fee on income or the Part I incentive fee, is calculated and payable quarterly in arrears based upon our “pre-incentive fee net investment income” for the immediately preceding quarter. The payment of the incentive fee on income is subject to payment of a preferred return to investors each quarter (i.e., a “hurdle rate”), expressed as a rate of return on the value of our net assets at the end of the most recently completed quarter, of 1.50%, subject to a “catch up” feature.
For this purpose, “pre-incentive fee net investment income” means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies, other than fees for providing managerial assistance) accrued during the fiscal quarter, minus our operating expenses for the quarter (including the base management fee, expenses payable under the New Administration Agreement and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, or OID, debt instruments or OID, with PIK interest and zero coupon securities), accrued income that we have not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. In addition, pre-incentive fee net investment income does not include any amortization or accretion of any purchase premium or purchase discount to interest income resulting solely from merger-related accounting adjustments in connection with the assets acquired in the OCSI Merger, including any premium or discount paid for the acquisition of such assets, solely to the extent that the inclusion of such merger-related accounting adjustments, in the aggregate, would result in an increase in pre-incentive fee net investment income.
Under the New Investment Advisory Agreement, the calculation of the incentive fee on income for each quarter is as follows:
 


•No incentive fee is payable to Oaktree in any quarter in which our pre-incentive fee net investment income does not exceed the preferred return rate of 1.50% (the “preferred return”) on net assets.
•100% of our pre-incentive fee net investment income, if any, that exceeds the preferred return but is less than or equal to 1.8182% in any fiscal quarter is payable to Oaktree. We refer to this portion of the incentive fee on income as the “catch-up” provision, and it is intended to provide Oaktree with an incentive fee of 17.5% on all of our pre-incentive fee net investment income when our pre-incentive fee net investment income reaches 1.8182% on net assets in any fiscal quarter.
•For any quarter in which our pre-incentive fee net investment income exceeds 1.8182% on net assets, the subordinated incentive fee on income is equal to 17.5% of the amount of our pre-incentive fee net investment income, as the preferred return and catch-up will have been achieved.

There is no accumulation of amounts on the hurdle rate from quarter to quarter and accordingly there is no clawback of amounts previously paid if subsequent quarters are below the quarterly hurdle.
The following is a graphical representation of the calculation of the incentive fee on income under the New Investment Advisory Agreement:


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Quarterly Incentive Fee on Income
Pre-incentive fee net investment income
(expressed as a percentage of net assets)




ocsl-20220930_g1.jpg


Percentage of pre-incentive fee net investment income allocated to income-related portion of incentive fee

Under the New Investment Advisory Agreement, the second part of the incentive fee will beis determined and payable in arrears as of the end of each fiscal year (or upon termination of the investment advisory agreement,Investment Advisory Agreement, as of the termination date) commencing with the fiscal year endingended September 30, 2019 and will equalequals 17.5% of our realized capital gains, if any, on a cumulative basis from the beginning of the fiscal year endingended September 30, 2019 through the end of each subsequent fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees under the New Investment Advisory Agreement. Any realized capital gains, realized capital losses, unrealized capital appreciation and unrealized capital depreciation with respect to the Company’sour portfolio as of the end of the fiscal year endingended September 30, 2018 will beare excluded from the calculations of the second part of the incentive fee. In addition, the calculation of realized capital gains, realized capital losses and unrealized capital depreciation does (1) not include any such amounts resulting solely from merger-related accounting adjustments in connection with the assets acquired in the OCSI Merger, including any premium or discount paid for the acquisition of such assets, solely to the extent that the inclusion of such merger-related accounting adjustments, in the aggregate, would result in an increase in the capital gains incentive fee and (2) include any such amounts associated with the investments acquired in the OCSI Merger for the period from October 1, 2018 to the date of closing of the OCSI Merger, solely to the extent that the exclusion of such amounts, in the aggregate, would result in an increase in the capital gains incentive fee.
Examples of Quarterly Incentive Fee Calculation under the New Investment Advisory Agreement(A)
Example 1: Incentive Fee on Income for Each Quarter
Alternative 1
Assumptions
Investment income (including interest, dividends, fees, etc.) = 2%
Preferred return under the New Investment Advisory Agreement1 = 1.50%
Management fee under the New Investment Advisory Agreement2 = 0.375%
Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.20%
Pre-incentive fee net investment income
(investment    (investment income - (management fee + other expenses)) = 1.425%


Pre-incentive fee net investment income does not exceed the preferred return under the New Investment Advisory Agreement, therefore there is no incentive fee on income under the New Investment Advisory Agreement.

Alternative 2
Assumptions


Investment income (including interest, dividends, fees, etc.) = 2.375%
Preferred return under the New Investment Advisory Agreement1 = 1.50%
Management fee under the New Investment Advisory Agreement2 = 0.375%
Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.20%
Pre-incentive fee net investment income
(investment    (investment income - (management fee + other expenses)) = 1.80%
Incentive fee = 17.5% × pre-incentive fee net investment income, subject to “catch-up”3
= 100% × (1.80% - 1.50%)
= 0.30%

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Alternative 3
Assumptions
Investment income (including interest, dividends, fees, etc.) = 3.5%
Preferred return under the New Investment Advisory Agreement1 = 1.50%
Management fee under the New Investment Advisory Agreement2 = 0.375%
Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.20%
Pre-incentive fee net investment income
(investment    (investment income - (management fee + other expenses)) = 2.925%
Incentive fee = 17.5% × pre-incentive fee net investment income, subject to “catch-up”3
Incentive fee = 100% × “catch-up” + (17.5% × (pre-incentive fee net investment income - 1.8182%))
Catch-up = 1.8182% - 1.50% = 0.3182%
Incentive fee = (100% × 0.3182%) + (17.5% × (2.925% - 1.8182%))
= 0.3182% + (17.5% × 1.1068%)
= 0.3182% + 0.1937%
= 0.5119%
__________ 
(A) Solely for purposes of these illustrative examples, we have assumed that we have not incurred any leverage. However, we have in the past and expect to continue in the future to use leverage to partially finance our investments.

1.Represents 6.0% annualized preferred return.
2.Represents 1.50% annualized management fee and does not reflect any waivers of the management fee.
3.The “catch-up” provision is intended to provide our Adviser with an incentive fee of 17.5% on all of our pre-incentive fee net investment income as if a preferred return did not apply when our net investment income exceeds 1.50% in any calendar quarter and is not applied once our Adviser has received 17.5% of investment income in a quarter. The “catch-up” portion of our pre-incentive fee net investment income is the portion that exceeds the 1.50% preferred return but is less than or equal to approximately 1.8182% (that is, 1.50% divided by (1 - 0.175)) in any fiscal quarter.

Example 2: Incentive Fee on Capital Gains under the New Investment Advisory Agreement
Assumptions
•Year 1: $10 million investment made in Company A (“Investment A”), $10 million investment made in Company B (“Investment B”), $10 million investment made in Company C (“Investment C”), $10 million investment made in Company D (“Investment D”) and $10 million investment made in Company E (“Investment E”).
•Year 2: Investment A sold for $20 million, fair market value (“FMV”) of Investment B determined to be $8 million, FMV of Investment C determined to be $12 million, and FMV of Investments D and E each determined to be $10 million.
•Year 3: FMV of Investment B determined to be $8 million, FMV of Investment C determined to be $14 million, FMV of Investment D determined to be $14 million and FMV of Investment E determined to be $16 million.
•Year 4: Investment D sold for $12 million, FMV of Investment B determined to be $10 million, FMV of Investment C determined to be $16 million and FMV of Investment E determined to be $14 million.
•Year 5: Investment C sold for $20 million, FMV of Investment B determined to be $14 million and FMV of Investment E determined to be $10 million.
•Year 6: Investment B sold for $16 million and FMV of Investment E determined to be $8 million.
•Year 7: Investment E sold for $8 million and FMV.




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These assumptions are summarized in the following chart:
Investment AInvestment BInvestment CInvestment DInvestment ECumulative Unrealized Capital DepreciationCumulative Realized Capital LossesCumulative Realized Capital Gains
Year 1$10 million (cost basis)$10 million (cost basis)$10 million (cost basis)$10 million (cost basis)$10 million (cost basis)------
Year 2$20 million (sale price)
$8 million

FMV
$12 million FMV$10 million FMV$10 million FMV$2 million--$10 million
Year 3--
$8 million

FMV
$14 million FMV$14 million FMV$16 million FMV$2 million--$10 million
Year 4--$10 million FMV$16 million FMV$12 million (sale price)$14 million FMV----$12 million
Year 5--$14 million FMV$20 million (sale price)--$10 million FMV----$22 million
Year 6--$16 million (sale price)----$8 million FMV$2 million--$28 million
Year 7--------$8 million (sale price)--$2 million$28 million
__________ 
1.Represents 6.0% annualized preferred return.



2.Represents 1.0% annualized management fee.
3.The “catch-up” provision is intended to provide our Investment Adviser with an incentive fee of 17.5% on all of our pre-incentive fee net investment income as if a preferred return did not apply when our net investment income exceeds 1.50% in any calendar quarter and is not applied once our Investment Adviser has received 17.5% of investment income in a quarter. The “catch-up” portion of our pre-incentive fee net investment income is the portion that exceeds the 1.50% preferred return but is less than or equal to approximately 1.8182% (that is, 1.50% divided by (1 - 0.175)) in any fiscal quarter.


The Incentive Fee on Capital Gains under the New Investment Advisory Agreement would be:
•Year 1:    None


•Year 2:    Capital Gains Fee = 17.5% multiplied by ($10 million realized capital gains on sale of Investment A less $2 million cumulative capital depreciation) = $1.4 million


•Year 3:    Capital Gains Fee = (17.5% multiplied by ($10 million cumulative realized capital gains less $2 million cumulative capital depreciation)) less $1.4 million cumulative Capital Gains Fee previously paid = $1.4 million less $1.4 million = $0.00 million


•Year 4:    Capital Gains Fee = (17.5% multiplied by ($12 million cumulative realized capital gains)) less $1.4 million cumulative Capital Gains Fee previously paid = $2.1 million less $1.4 million = $0.7 million


•Year 5:    Capital Gains Fee = (17.5% multiplied by ($22 million cumulative realized capital gains)) less $2.1 million cumulative Capital Gains Fee previously paid = $3.85 million less $2.1 million = $1.75 million


•Year 6:    Capital Gains Fee = (17.5% multiplied by ($28 million cumulative realized capital gains less $2 million cumulative capital depreciation)) less $3.85 million cumulative Capital Gains Fee previously paid = $4.55 million less $3.85 million = $0.70 million


•Year 7:    Capital Gains Fee = (17.5% multiplied by ($28 million cumulative realized capital gains less $2 million cumulative realized capital losses)) less $4.55 million cumulative Capital Gains Fee previously paid = $4.55 million less $4.55 million = $0.00 million
Collection and Disbursement of Fees Owed to Our Former Adviser
Under the Former Investment Advisory Agreement described below, both the base management fee and incentive fee on income were calculated and paid to our Former Adviser at the end of each quarter. In order to ensure that our Former Adviser receives any compensation earned during the quarter ending December 31, 2017, the initial payment of the base management fee and incentive fee on income under the New Investment Advisory Agreement will cover the entire quarter in which the New Investment Advisory Agreement became effective, and be calculated at a blended rate that will reflect fee rates under the respective investment advisory agreements for the portion of the quarter in which our Former Adviser and Oaktree were serving as investment adviser. This structure will allow Oaktree to pay our Former Adviser in early 2018, the pro rata portion of the fees that were earned by, but not paid to, our Former Adviser for services rendered to us prior to October 17, 2017.
Duration and TerminationBase Management Fee
Unless earlier terminated as described below,Under the New Investment Advisory Agreement will remain in effect until October 17, 2019 and thereafter from year-to-year if approved annually by our Board or by the affirmative vote of the holders of a majority of our outstanding voting securities, including, in either case, approval by a majority of our directors who are not interested persons. The New Investment Advisory Agreement will automatically terminate in the event of its assignment. The New Investment Advisory Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other. The New Investment Advisory Agreement may also be terminated, without penalty, upon the vote of a majority of our outstanding voting securities.
Indemnification
The New Investment Advisory Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of their respective duties or by reason of the reckless disregard of their respective duties and obligations, Oaktree and its officers, managers, partners, agents, employees, controlling persons, members (or their owners) and any other person or entity affiliated with it, are entitled to indemnification from us for any damages, liabilities, costs and expenses (including


reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of Oaktree’s services under the New Investment Advisory Agreement or otherwise as our investment adviser.
Organization of our Investment Adviser
Our Investment Adviser is a Delaware limited partnership that is registered as an investment adviser under the Advisers Act. The principal address of our Investment Adviser is 333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071.
Board Approval of the New Investment Advisory Agreement
The then-current members of our Board of Directors met in person with Oaktree to consider the New Investment Advisory Agreement on June 20, 2017 and July 13, 2017. At the in person meeting held on July 13, 2017, such members of the Board of Directors, including all of the then-current independent directors, unanimously approved the New Investment Advisory Agreement. Such independent directors met separately with independent counsel on multiple occasions in connection with their review of the New Investment Advisory Agreement and the Transaction. In reaching its decision to approve the New Investment Advisory Agreement, our Board of Directors, including all of the then-current independent directors, reviewed a significant amount of information, which had been furnished by Oaktree at the request of independent counsel, on behalf of the independent directors. In reaching a decision to approve the New Investment Advisory Agreement, the then-current membersbase management fee is calculated at an annual rate of our Board1.50% of Directors considered, among other things:
the nature, extenttotal gross assets, including any investment made with borrowings, but excluding cash and quality of services to be performed by Oaktree;
the investment performance of us and funds managed by Oaktree;
the expected costs of services to be provided and the anticipated profits to be realized by Oaktree and its affiliates from their relationship with us;
the possible economies of scale that would be realized due to our growth;
whether fee levels reflect such economies of scale for the benefit of investors; and
comparisons of services to be rendered to and fees to be paid by us with the services provided by and the fees paid to other investment advisers and the services provided to and the fees paid by other Oaktree clients.
The then-current members of our Board of Directors noted that the terms of the New Investment Advisory Agreement would in comparison to the Former Investment Advisory Agreement:
reducecash equivalents. Effective May 3, 2019, the base management fee to 1.50% of gross assets;
decrease the rate of the income incentive fee from 20.0% to 17.5%;
decrease the hurdle rate to 6.0% on our income, which could have the effect of making it more likely that Oaktree will earn an incentive fee;
decrease the rate of the capital gains incentive fee from 20.0% to 17.5%;
eliminate a capital gains incentive fee until the fiscal year ending September 30, 2019; and
eliminate the total return hurdle in the Former Investment Advisory Agreement, which could have the effect of making it more likely that Oaktree will earn an incentive fee.
The Board of Directors also considered other investment management services to be provided to us, such as the provision of managerial assistance, monitoring adherence to our investment restrictions and monitoring compliance with various of our policies and procedures and with applicable securities laws and regulations. The then-current members of our Board of Directors discussed Oaktree’s cyber security programs and those of its service providers. Based on the factors above, as well as those discussed below,Company’s gross assets, including any investments made with borrowings, but excluding any cash and cash equivalents, that exceed the then-current membersproduct of our Board(A) 200% and (B) the Company’s net asset value will be 1.00%. For the avoidance of Directors concluded that they were satisfieddoubt, the 200% will be calculated in accordance with the nature, extentInvestment Company Act and quality ofwill give effect to exemptive relief the services to be provided to us by Oaktree.
No single factor was determinative ofCompany received from the decision of the Board of Directors, including all of the then-current independent directors, to approve the New Investment Advisory Agreement and individual directors may have weighed certain factors differently. Throughout the process, the independent directors were advised by independent counsel. Following this process, the then-current members of the Board of Directors, including all of the then-current independent directors, unanimously voted to approve the New Investment Advisory Agreement subject to stockholder approval. Our stockholders approved the New Investment Advisory Agreement at the Special Meeting.


Payment of Our Expenses
Our primary operating expenses are the payment of (i) a base management fee and any incentive fees as described below in “-Former Investment Advisory Agreements”SEC with respect to the period prior to October 17, 2017 and as described above in “-New Investment Advisory Agreement” with respect to the period subsequent to that date and (ii) the allocable portion of overhead and other expenses incurreddebentures issued by our Former Administrator or Oaktree Administrator, as applicable, in performing its obligations under the Former Administration Agreement or New Administration Agreement, as applicable. Our management fee compensates oura small business investment adviser for its work in identifying, evaluating, negotiating, executing and servicing our investments. We generally bear all other expenses of our operations and transactions, including (without limitation) fees and expenses relating to:
expenses of offering our debt and equity securities;
the investigation and monitoring of our investments;
the cost of calculating our net asset value;
the cost of effecting sales and repurchases of shares of our common stock and other securities;
management and incentive fees payable pursuant to the investment advisory agreement;
fees payable to third parties relating to, or associated with, making investments and valuing investments (including third-party valuation firms);
transfer agent, trustee and custodial fees;
interest payments and other costs related to our borrowings;
fees and expenses associated with marketing efforts (including attendance at investment conferences and similar events);
federal and state registration fees;
any exchange listing fees;
federal, state and local taxes;
independent directors’ fees and expenses;
brokerage commissions;
costs of mailing proxy statements, stockholders’ reports and notices;
costs of preparing government filings, including periodic and current reportscompany subsidiary. In connection with the SEC;
fidelity bond, liability insuranceOCSI Merger, we and other insurance premiums; and
printing, mailing, independent accountants and outside legal costs and all other direct expenses incurred by either our administrator or us in connection with administering our business, including payments under the administration agreement.
Former Investment Advisory Agreements
The following is a description of the Former Investment Advisory Agreement, which was terminated on October 17, 2017. The Former Investment Advisory Agreement, dated March 20, 2017, was effective January 1, 2017 through its termination on October 17, 2017. The Former Investment Advisory Agreement amended and restated our thirdOaktree entered into an amended and restated investment advisory agreement, with our Former Adviser, which was effective asamong other items, waived an aggregate of January 1, 2016,$6 million of base management fees otherwise payable to imposeOaktree in the two years following the closing of the OCSI Merger on March 19, 2021 at a total return hurdle provision and reduce the “preferred return.”rate of $750,000 per quarter (with such amount appropriately prorated for any partial quarter).
ManagementIncentive Fee
Through October 17, 2017, we paid our Former Adviser aThe incentive fee for its services underconsists of two parts. Under the Former Investment Advisory Agreement, consistingthe first part of two components -the incentive fee, which is referred to as the incentive fee on income or the Part I incentive fee, is calculated and payable quarterly in arrears based upon our “pre-incentive fee net investment income” for the immediately preceding quarter. The payment of the incentive fee on income is subject to payment of a base managementpreferred return to investors each quarter (i.e., a “hurdle rate”), expressed as a rate of return on the value of our net assets at the end of the most recently completed quarter, of 1.50%, subject to a “catch up” feature.
For this purpose, “pre-incentive fee net investment income” means interest income, dividend income and an incentive fee. The cost of bothany other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies, other than fees for providing managerial assistance) accrued during the fiscal quarter, minus our operating expenses for the quarter (including the base management fee, expenses payable under the Administration Agreement and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, or OID, debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. In addition, pre-incentive fee net investment income does not include any amortization or accretion of any purchase premium or purchase discount to interest income resulting solely from merger-related accounting adjustments in connection with the assets acquired in the OCSI Merger, including any premium or discount paid for the acquisition of such assets, solely to the extent that the inclusion of such merger-related accounting adjustments, in the aggregate, would result in an increase in pre-incentive fee net investment income.
Under the Investment Advisory Agreement, the calculation of the incentive fee on income for each quarter is as follows:
•No incentive fee is payable to Oaktree in any quarter in which our pre-incentive fee net investment income does not exceed the preferred return rate of 1.50% (the “preferred return”) on net assets.
•100% of our pre-incentive fee net investment income, if any, that exceeds the preferred return but is less than or equal to 1.8182% in any fiscal quarter is payable to Oaktree. We refer to this portion of the incentive fee on income as the “catch-up” provision, and it is intended to provide Oaktree with an incentive fee of 17.5% on all of our pre-incentive fee net investment income when our pre-incentive fee net investment income reaches 1.8182% on net assets in any fiscal quarter.
•For any quarter in which our pre-incentive fee net investment income exceeds 1.8182% on net assets, the incentive fee on income is equal to 17.5% of the amount of our pre-incentive fee net investment income, as the preferred return and catch-up will have been achieved.
There is no accumulation of amounts on the hurdle rate from quarter to quarter and accordingly there is no clawback of amounts previously paid if subsequent quarters are below the quarterly hurdle.
The following is a graphical representation of the calculation of the incentive fee on income under the Investment Advisory Agreement:

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Quarterly Incentive Fee on Income
Pre-incentive fee net investment income
(expressed as a percentage of net assets)


ocsl-20220930_g1.jpg

Percentage of pre-incentive fee net investment income allocated to income-related portion of incentive fee

Under the Investment Advisory Agreement, the second part of the incentive fee is determined and payable in arrears as of the end of each fiscal year (or upon termination of the Investment Advisory Agreement, as of the termination date) commencing with the fiscal year ended September 30, 2019 and equals 17.5% of our realized capital gains, if any, on a cumulative basis from the beginning of the fiscal year ended September 30, 2019 through the end of each subsequent fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees under the Investment Advisory Agreement. Any realized capital gains, realized capital losses, unrealized capital appreciation and unrealized capital depreciation with respect to our Formerportfolio as of the end of the fiscal year ended September 30, 2018 are excluded from the calculations of the second part of the incentive fee. In addition, the calculation of realized capital gains, realized capital losses and unrealized capital depreciation does (1) not include any such amounts resulting solely from merger-related accounting adjustments in connection with the assets acquired in the OCSI Merger, including any premium or discount paid for the acquisition of such assets, solely to the extent that the inclusion of such merger-related accounting adjustments, in the aggregate, would result in an increase in the capital gains incentive fee and (2) include any such amounts associated with the investments acquired in the OCSI Merger for the period from October 1, 2018 to the date of closing of the OCSI Merger, solely to the extent that the exclusion of such amounts, in the aggregate, would result in an increase in the capital gains incentive fee.
Examples of Quarterly Incentive Fee Calculation under the Investment Advisory Agreement (A)
Example 1: Incentive Fee on Income for Each Quarter
Alternative 1
Assumptions
Investment income (including interest, dividends, fees, etc.) = 2%
Preferred return under the Investment Advisory Agreement1 = 1.50%
Management fee under the Investment Advisory Agreement2 = 0.375%
Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.20%
Pre-incentive fee net investment income
    (investment income - (management fee + other expenses)) = 1.425%

Pre-incentive fee net investment income does not exceed the preferred return under the Investment Advisory Agreement, therefore there is no incentive fee on income under the Investment Advisory Agreement.

Alternative 2
Assumptions
Investment income (including interest, dividends, fees, etc.) = 2.375%
Preferred return under the Investment Advisory Agreement1 = 1.50%
Management fee under the Investment Advisory Agreement2 = 0.375%
Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.20%
Pre-incentive fee net investment income
    (investment income - (management fee + other expenses)) = 1.80%
Incentive fee = 17.5% × pre-incentive fee net investment income, subject to “catch-up”3
= 100% × (1.80% - 1.50%)
= 0.30%

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Alternative 3
Assumptions
Investment income (including interest, dividends, fees, etc.) = 3.5%
Preferred return under the Investment Advisory Agreement1 = 1.50%
Management fee under the Investment Advisory Agreement2 = 0.375%
Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.20%
Pre-incentive fee net investment income
    (investment income - (management fee + other expenses)) = 2.925%
Incentive fee = 17.5% × pre-incentive fee net investment income, subject to “catch-up”3
Incentive fee = 100% × “catch-up” + (17.5% × (pre-incentive fee net investment income - 1.8182%))
Catch-up = 1.8182% - 1.50% = 0.3182%
Incentive fee = (100% × 0.3182%) + (17.5% × (2.925% - 1.8182%))
= 0.3182% + (17.5% × 1.1068%)
= 0.3182% + 0.1937%
= 0.5119%
__________ 
(A) Solely for purposes of these illustrative examples, we have assumed that we have not incurred any leverage. However, we have in the past and expect to continue in the future to use leverage to partially finance our investments.

1.Represents 6.0% annualized preferred return.
2.Represents 1.50% annualized management fee and does not reflect any waivers of the management fee.
3.The “catch-up” provision is intended to provide our Adviser with an incentive fee of 17.5% on all of our pre-incentive fee net investment income as if a preferred return did not apply when our net investment income exceeds 1.50% in any calendar quarter and is not applied once our Adviser has received 17.5% of investment income in a quarter. The “catch-up” portion of our pre-incentive fee net investment income is the portion that exceeds the 1.50% preferred return but is less than or equal to approximately 1.8182% (that is, 1.50% divided by (1 - 0.175)) in any incentive fees earnedfiscal quarter.

Example 2: Incentive Fee on Capital Gains under the Investment Advisory Agreement
Assumptions
•Year 1: $10 million investment made in Company A (“Investment A”), $10 million investment made in Company B (“Investment B”), $10 million investment made in Company C (“Investment C”), $10 million investment made in Company D (“Investment D”) and $10 million investment made in Company E (“Investment E”).
•Year 2: Investment A sold for $20 million, fair market value (“FMV”) of Investment B determined to be $8 million, FMV of Investment C determined to be $12 million, and FMV of Investments D and E each determined to be $10 million.
•Year 3: FMV of Investment B determined to be $8 million, FMV of Investment C determined to be $14 million, FMV of Investment D determined to be $14 million and FMV of Investment E determined to be $16 million.
•Year 4: Investment D sold for $12 million, FMV of Investment B determined to be $10 million, FMV of Investment C determined to be $16 million and FMV of Investment E determined to be $14 million.
•Year 5: Investment C sold for $20 million, FMV of Investment B determined to be $14 million and FMV of Investment E determined to be $10 million.
•Year 6: Investment B sold for $16 million and FMV of Investment E determined to be $8 million.
•Year 7: Investment E sold for $8 million and FMV.



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These assumptions are summarized in the following chart:
Investment AInvestment BInvestment CInvestment DInvestment ECumulative Unrealized Capital DepreciationCumulative Realized Capital LossesCumulative Realized Capital Gains
Year 1$10 million (cost basis)$10 million (cost basis)$10 million (cost basis)$10 million (cost basis)$10 million (cost basis)------
Year 2$20 million (sale price)$8 million
FMV		$12 million FMV$10 million FMV$10 million FMV$2 million--$10 million
Year 3--$8 million
FMV		$14 million FMV$14 million FMV$16 million FMV$2 million--$10 million
Year 4--$10 million FMV$16 million FMV$12 million (sale price)$14 million FMV----$12 million
Year 5--$14 million FMV$20 million (sale price)--$10 million FMV----$22 million
Year 6--$16 million (sale price)----$8 million FMV$2 million--$28 million
Year 7--------$8 million (sale price)--$2 million$28 million


The Incentive Fee on Capital Gains under the Investment Advisory Agreement would be:
•Year 1:    None

•Year 2:    Capital Gains Fee = 17.5% multiplied by our Former Adviser were ultimately borne($10 million realized capital gains on sale of Investment A less $2 million cumulative capital depreciation) = $1.4 million

•Year 3:    Capital Gains Fee = (17.5% multiplied by our common stockholders.($10 million cumulative realized capital gains less $2 million cumulative capital depreciation)) less $1.4 million cumulative Capital Gains Fee previously paid = $1.4 million less $1.4 million = $0.00 million

•Year 4:    Capital Gains Fee = (17.5% multiplied by ($12 million cumulative realized capital gains)) less $1.4 million cumulative Capital Gains Fee previously paid = $2.1 million less $1.4 million = $0.7 million

•Year 5:    Capital Gains Fee = (17.5% multiplied by ($22 million cumulative realized capital gains)) less $2.1 million cumulative Capital Gains Fee previously paid = $3.85 million less $2.1 million = $1.75 million

•Year 6:    Capital Gains Fee = (17.5% multiplied by ($28 million cumulative realized capital gains less $2 million cumulative capital depreciation)) less $3.85 million cumulative Capital Gains Fee previously paid = $4.55 million less $3.85 million = $0.70 million

•Year 7:    Capital Gains Fee = (17.5% multiplied by ($28 million cumulative realized capital gains less $2 million cumulative realized capital losses)) less $4.55 million cumulative Capital Gains Fee previously paid = $4.55 million less $4.55 million = $0.00 million
Base Management Fee
As of January 1, 2016,Under the Investment Advisory Agreement, the base management fee wasis calculated at an annual rate of 1.75%1.50% of ourtotal gross assets, including any borrowings for investment purposesmade with borrowings, but excluding cash and cash equivalents. TheEffective May 3, 2019, the base management fee wason the Company’s gross assets, including any investments made with borrowings, but excluding any cash and cash equivalents, that exceed the product of (A) 200% and (B) the Company’s net asset value will be 1.00%. For the avoidance of doubt, the 200% will be calculated in accordance with the Investment Company Act and will give effect to exemptive relief the Company received from the SEC with respect to debentures issued by a small business investment company subsidiary. In connection with the OCSI Merger, we and Oaktree entered into an amended and restated investment advisory agreement, which among other items, waived an aggregate of $6 million of base management fees otherwise payable quarterlyto Oaktree in arrears and the feetwo years following the closing of the OCSI Merger on March 19, 2021 at a rate of $750,000 per quarter (with such amount appropriately prorated for any partial month or quarter was appropriately prorated.quarter).
Incentive Fee


The incentive fee paid to our Former Adviser hadconsists of two parts. TheUnder the Investment Advisory Agreement, the first part wasof the incentive fee, which is referred to as the incentive fee on income or the Part I incentive fee, is calculated and payable quarterly in arrears based onupon our pre-incentive“pre-incentive fee net investment incomeincome” for the immediately preceding fiscal quarter. Pre-incentiveThe payment of the incentive fee net investmenton income is subject to payment of a preferred return to investors each quarter (i.e., a “hurdle rate”), expressed as a rate of return on the value of our net assets at the end of the immediately precedingmost recently completed quarter, was compared to a “hurdle rate” of 1.75% per quarter (2% for periods prior to January 1, 2017)1.50%, subject to a “catch-up” provision measured“catch up” feature.
For this purpose, “pre-incentive fee net investment income” means interest income, dividend income and any other income (including any other fees such as ofcommitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies, other than fees for providing managerial assistance) accrued during the end of each quarter. Ourfiscal quarter, minus our operating expenses for the quarter (including the base management fee, expenses payable under the Administration Agreement and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income used to calculate this part of the incentive fee was also includedincludes, in the amountcase of our gross assets used to calculate the 1.75% base management fee. The operation of the incentiveinvestments with a deferred interest feature (such as original issue discount, or OID, debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash. Pre-incentive fee with respect to ournet investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. In addition, pre-incentive fee net investment income does not include any amortization or accretion of any purchase premium or purchase discount to interest income resulting solely from merger-related accounting adjustments in connection with the assets acquired in the OCSI Merger, including any premium or discount paid for the acquisition of such assets, solely to the extent that the inclusion of such merger-related accounting adjustments, in the aggregate, would result in an increase in pre-incentive fee net investment income.
Under the Investment Advisory Agreement, the calculation of the incentive fee on income for each quarter wasis as follows:
•No incentive fee wasis payable to the Former AdviserOaktree in any fiscal quarter in which our pre-incentive fee net investment income diddoes not exceed the preferred return rate of 1.75% (2% for periods prior to January 1, 2017)1.50% (the “preferred return”); on net assets.
•100% of our pre-incentive fee net investment income, if any, that exceeded the preferred return rate but was less than or equal to 2.1875% (2.5% for periods prior to January 1, 2017) in any fiscal quarter was payable to our Former Adviser. We refer to this portion of our pre-incentive fee net investment income (which exceeds the preferred return rate but is less than or equal to 2.1875% (2.5% for periods prior1.8182% in any fiscal quarter is payable to January 1, 2017))Oaktree. We refer to this portion of the incentive fee on income as the “catch-up.” The “catch-up” provision, wasand it is intended to provide our Former AdviserOaktree with an incentive fee of 20%17.5% on all of our pre-incentive fee net investment income as if a preferred return rate did not apply when our pre-incentive fee net investment income exceeded 2.1875%reaches 1.8182% on net assets in any quarter (2.5% for periods prior to January 1, 2017); andfiscal quarter.
•For any quarter in which our pre-incentive fee net investment income if any, exceeded 2.1875%exceeds 1.8182% on net assets, (2.5% for periods prior to January 1, 2017) , the subordinated incentive fee on income wasis equal to 20%17.5% of the amount of our pre-incentive fee net investment income, as the preferred return and catch-up wouldwill have been achieved.
From January 1, 2017 to October 17, 2017, in the event the cumulative subordinated incentive fee on income accrued for the Lookback Period (after giving effect to any reduction(s) pursuant to this paragraph for any prior fiscal quarters of the Lookback Period but not the quarter of calculation) exceeded 20.0% of the cumulative net increase in net assets resulting from operations during the Lookback Period, then the subordinated incentive fee on income for the quarter was reduced by an amount equal to (1) 25% of the subordinated incentive fee on income calculated for such quarter (prior to giving effect to any reduction pursuant to this paragraph) less (2) any base management fees waived by our Former Adviser for such fiscal quarter. For this purpose, the “cumulative net increase in net assets resulting from operations” was an amount, if positive, equal to the sum of pre-incentive fee net investment income, base management fees, realized gains and losses and unrealized capital appreciation and depreciation of the Company for the Lookback Period. “Lookback Period” meant the period commencing January 1, 2019 and ending on the last day of the fiscal quarter for which the subordinated incentive fee on income was being calculated.
There wasis no accumulation of amounts on the hurdle rate from quarter to quarter and accordingly there wasis no clawback of amounts previously paid if subsequent quarters were below the quarterly hurdle and there was no delay of payment if prior quarters wereare below the quarterly hurdle.
The following is a graphical representation of the calculation of the income-related portion ofincentive fee on income under the incentive fee:Investment Advisory Agreement:


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Quarterly Incentive Fee on Income
Pre-incentive fee net investment income
(expressed as a percentage of net assets)




ocsl-20220930_g1.jpg


Percentage of pre-incentive fee net investment income allocated to income-related portion of incentive fee
(subject to total return requirement)
TheUnder the Investment Advisory Agreement, the second part of the incentive fee wasis determined and payable in arrears as of the end of each fiscal year (or upon termination of the Former Investment Advisory Agreement, as of the termination date) commencing with the fiscal year ended September 30, 2019 and equaled 20%equals 17.5% of our realized capital gains, if any, on a cumulative basis from inceptionthe beginning of the fiscal year ended September 30, 2019 through the end of each subsequent fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain


incentive fees provided that,under the incentive fee determined as of September 30, 2008 was calculated for a period of shorter than twelve calendar months to take into account anyInvestment Advisory Agreement. Any realized capital gains, computed netrealized capital losses, unrealized capital appreciation and unrealized capital depreciation with respect to our portfolio as of allthe end of the fiscal year ended September 30, 2018 are excluded from the calculations of the second part of the incentive fee. In addition, the calculation of realized capital gains, realized capital losses and unrealized capital depreciation does (1) not include any such amounts resulting solely from inception.merger-related accounting adjustments in connection with the assets acquired in the OCSI Merger, including any premium or discount paid for the acquisition of such assets, solely to the extent that the inclusion of such merger-related accounting adjustments, in the aggregate, would result in an increase in the capital gains incentive fee and (2) include any such amounts associated with the investments acquired in the OCSI Merger for the period from October 1, 2018 to the date of closing of the OCSI Merger, solely to the extent that the exclusion of such amounts, in the aggregate, would result in an increase in the capital gains incentive fee.
Examples of Quarterly Incentive Fee Calculation under the Investment Advisory Agreement (A)
Example 1: Incentive Fee on Income for Each Quarter
Alternative 1
Assumptions
Investment income (including interest, dividends, fees, etc.) = 2%
Preferred return under the Investment Advisory Agreement1 = 1.50%
Management fee under the Investment Advisory Agreement2 = 0.375%
Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.20%
Pre-incentive fee net investment income
    (investment income - (management fee + other expenses)) = 1.425%

Pre-incentive fee net investment income does not exceed the preferred return under the Investment Advisory Agreement, therefore there is no incentive fee on income under the Investment Advisory Agreement.

Alternative 2
Assumptions
Investment income (including interest, dividends, fees, etc.) = 2.375%
Preferred return under the Investment Advisory Agreement1 = 1.50%
Management fee under the Investment Advisory Agreement2 = 0.375%
Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.20%
Pre-incentive fee net investment income
    (investment income - (management fee + other expenses)) = 1.80%
Incentive fee = 17.5% × pre-incentive fee net investment income, subject to “catch-up”3
= 100% × (1.80% - 1.50%)
= 0.30%

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Alternative 3
Assumptions
Investment income (including interest, dividends, fees, etc.) = 3.5%
Preferred return under the Investment Advisory Agreement1 = 1.50%
Management fee under the Investment Advisory Agreement2 = 0.375%
Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.20%
Pre-incentive fee net investment income
    (investment income - (management fee + other expenses)) = 2.925%
Incentive fee = 17.5% × pre-incentive fee net investment income, subject to “catch-up”3
Incentive fee = 100% × “catch-up” + (17.5% × (pre-incentive fee net investment income - 1.8182%))
Catch-up = 1.8182% - 1.50% = 0.3182%
Incentive fee = (100% × 0.3182%) + (17.5% × (2.925% - 1.8182%))
= 0.3182% + (17.5% × 1.1068%)
= 0.3182% + 0.1937%
= 0.5119%
__________ 
(A) Solely for purposes of these illustrative examples, we have assumed that we have not incurred any leverage. However, we have in the past and expect to continue in the future to use leverage to partially finance our investments.

1.Represents 6.0% annualized preferred return.
2.Represents 1.50% annualized management fee and does not reflect any waivers of the management fee.
3.The “catch-up” provision is intended to provide our Adviser with an incentive fee of 17.5% on all of our pre-incentive fee net investment income as if a preferred return did not apply when our net investment income exceeds 1.50% in any calendar quarter and is not applied once our Adviser has received 17.5% of investment income in a quarter. The “catch-up” portion of our pre-incentive fee net investment income is the portion that exceeds the 1.50% preferred return but is less than or equal to approximately 1.8182% (that is, 1.50% divided by (1 - 0.175)) in any fiscal quarter.

Example 2: Incentive Fee on Capital Gains under the Investment Advisory Agreement
Assumptions
•Year 1: $10 million investment made in Company A (“Investment A”), $10 million investment made in Company B (“Investment B”), $10 million investment made in Company C (“Investment C”), $10 million investment made in Company D (“Investment D”) and $10 million investment made in Company E (“Investment E”).
•Year 2: Investment A sold for $20 million, fair market value (“FMV”) of Investment B determined to be $8 million, FMV of Investment C determined to be $12 million, and FMV of Investments D and E each determined to be $10 million.
•Year 3: FMV of Investment B determined to be $8 million, FMV of Investment C determined to be $14 million, FMV of Investment D determined to be $14 million and FMV of Investment E determined to be $16 million.
•Year 4: Investment D sold for $12 million, FMV of Investment B determined to be $10 million, FMV of Investment C determined to be $16 million and FMV of Investment E determined to be $14 million.
•Year 5: Investment C sold for $20 million, FMV of Investment B determined to be $14 million and FMV of Investment E determined to be $10 million.
•Year 6: Investment B sold for $16 million and FMV of Investment E determined to be $8 million.
•Year 7: Investment E sold for $8 million and FMV.



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These assumptions are summarized in the following chart:
Investment AInvestment BInvestment CInvestment DInvestment ECumulative Unrealized Capital DepreciationCumulative Realized Capital LossesCumulative Realized Capital Gains
Year 1$10 million (cost basis)$10 million (cost basis)$10 million (cost basis)$10 million (cost basis)$10 million (cost basis)------
Year 2$20 million (sale price)$8 million
FMV		$12 million FMV$10 million FMV$10 million FMV$2 million--$10 million
Year 3--$8 million
FMV		$14 million FMV$14 million FMV$16 million FMV$2 million--$10 million
Year 4--$10 million FMV$16 million FMV$12 million (sale price)$14 million FMV----$12 million
Year 5--$14 million FMV$20 million (sale price)--$10 million FMV----$22 million
Year 6--$16 million (sale price)----$8 million FMV$2 million--$28 million
Year 7--------$8 million (sale price)--$2 million$28 million


The Incentive Fee on Capital Gains under the Investment Advisory Agreement would be:
•Year 1:    None

•Year 2:    Capital Gains Fee = 17.5% multiplied by ($10 million realized capital gains on sale of Investment A less $2 million cumulative capital depreciation) = $1.4 million

•Year 3:    Capital Gains Fee = (17.5% multiplied by ($10 million cumulative realized capital gains less $2 million cumulative capital depreciation)) less $1.4 million cumulative Capital Gains Fee previously paid = $1.4 million less $1.4 million = $0.00 million

•Year 4:    Capital Gains Fee = (17.5% multiplied by ($12 million cumulative realized capital gains)) less $1.4 million cumulative Capital Gains Fee previously paid = $2.1 million less $1.4 million = $0.7 million

•Year 5:    Capital Gains Fee = (17.5% multiplied by ($22 million cumulative realized capital gains)) less $2.1 million cumulative Capital Gains Fee previously paid = $3.85 million less $2.1 million = $1.75 million

•Year 6:    Capital Gains Fee = (17.5% multiplied by ($28 million cumulative realized capital gains less $2 million cumulative capital depreciation)) less $3.85 million cumulative Capital Gains Fee previously paid = $4.55 million less $3.85 million = $0.70 million

•Year 7:    Capital Gains Fee = (17.5% multiplied by ($28 million cumulative realized capital gains less $2 million cumulative realized capital losses)) less $4.55 million cumulative Capital Gains Fee previously paid = $4.55 million less $4.55 million = $0.00 million
Duration and Termination
The FormerUnless earlier terminated as described below, the Investment Advisory Agreement will remain in effect from year-to-year if approved annually by our Board or by the affirmative vote of the holders of a majority of our outstanding voting securities, including, in either case, approval by a majority of our directors who are not interested persons. The Investment Advisory Agreement will automatically terminate in the event of its assignment. The Investment Advisory Agreement may be terminated pursuantby either party without penalty upon 60 days’ written notice to its terms on October 17, 2017.the other. The Investment Advisory Agreement may also be terminated, without penalty, upon the vote of a majority of our outstanding voting securities.
Indemnification
The Former Investment Advisory Agreement providedprovides that, absent willful misfeasance, bad faith or gross negligence in the performance of their respective duties or by reason of the reckless disregard of their respective duties and obligations, Oaktree and its officers, managers, partners, members (and their members, including the owners of their members), agents, employees, controlling persons and any other person or entity affiliated with it, are entitled to indemnification similar to that described abovefrom us for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of Oaktree’s services under “-Newthe Investment Advisory Agreement-Indemnification.”Agreement or otherwise as our investment adviser.
New Administrative Services
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Organization of our Adviser
Our Adviser is a Delaware limited liability company that is registered as an investment adviser under the Advisers Act. The principal address of our Adviser is 333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071.
Board Approval of the Investment Advisory Agreement
At the meeting held on November 10, 2022, our Board of Directors, including all of the independent directors, unanimously approved the Investment Advisory Agreement. In reaching its decision to approve the Investment Advisory Agreement, our Board of Directors, including all of the independent directors, reviewed a significant amount of information, which had been furnished by Oaktree at the request of independent counsel, on behalf of the independent directors. In reaching a decision to approve the Investment Advisory Agreement, our Board of Directors considered, among other things:
•the nature, extent and quality of services performed by Oaktree;
•the investment performance of us and other Business Development Companies with a similar investment objective to us;
•the costs of services provided and the profits realized by Oaktree and its affiliates from their relationship with us;
•the possible economies of scale that would be realized due to our growth;
•whether fee levels reflect such economies of scale for the benefit of investors; and
•comparisons of services rendered to and fees paid by us with the services provided by and the fees paid to other investment advisers and the services provided to and the fees paid by other Oaktree clients.
No single factor was determinative of the decision of our Board of Directors, including all of the independent directors, to approve the Investment Advisory Agreement and individual directors may have weighed certain factors differently. Throughout the process, the independent directors were advised by, and met separately with, independent counsel.
Payment of Our Expenses
Our primary operating expenses are the payment of (i) a base management fee and any incentive fees and (ii) the allocable portion of overhead and other expenses incurred by Oaktree Administrator in performing its obligations under the Administration Agreement. Our management fee compensates our Adviser for its work in identifying, evaluating, negotiating, executing and servicing our investments. We generally bear all other expenses of our operations and transactions, including (without limitation) fees and expenses relating to:
•expenses of offering our debt and equity securities;
•the investigation and monitoring of our investments;
•the cost of calculating our net asset value;
•the cost of effecting sales and repurchases of shares of our common stock and other securities;
•management and incentive fees payable pursuant to the Investment Advisory Agreement;
•fees payable to third parties relating to, or associated with, making investments and valuing investments (including third-party valuation firms);
•transfer agent, trustee and custodial fees;
•interest payments and other costs related to our borrowings;
•fees and expenses associated with marketing efforts (including attendance at investment conferences and similar events);
•federal and state registration fees;
•any exchange listing fees;
•federal, state and local taxes;
•independent directors’ fees and expenses;
•brokerage commissions;
•costs of mailing proxy statements, stockholders’ reports and notices;
•costs of preparing government filings, including periodic and current reports with the SEC;
•fidelity bond, liability insurance and other insurance premiums; and
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•printing, mailing, independent accountants and outside legal costs and all other direct expenses incurred by either our administrator or us in connection with administering our business, including payments under the Administration Agreement.
Administration Agreement
We entered intoare party to the New Administration Agreement with Oaktree Administrator on October 17, 2017.Administrator. Pursuant to the New Administration Agreement, Oaktree Administrator provides administrative services to us necessary for our operations, which include providing office facilities, equipment, clerical, bookkeeping and record keeping services at such facilities and such other services as Oaktree Administrator, subject to review by our Board of Directors, shall from time to time deem to be necessary or useful to perform its obligations under the New Administration Agreement. Oaktree Administrator may, on behalf of us, conduct relations and negotiate agreements with custodians, trustees, depositories, attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable. Oaktree Administrator will make reports to our Board of Directors of its performance of obligations under the New Administration Agreement and furnish advice and recommendations with respect to such other aspects of our business and affairs, in each case, as it shall determine to be desirable or as reasonably required by our Board of Directors; provided that Oaktree Administrator shall not provide any investment advice or recommendation.
Oaktree Administrator will also provideprovides portfolio collection functions for interest income, fees and warrants and is responsible for the financial and other records that we are required to maintain, and prepares, prints and disseminates reports to our stockholders and all other materials filed with the SEC. In addition, Oaktree Administrator will assistassists us in determining and publishing our net asset value, overseeing the preparation and filing of our tax returns, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others. Oaktree Administrator may also offer to provide, on our behalf, managerial assistance to our portfolio companies.
For providing these services, facilities and personnel, we will reimburse Oaktree Administrator the allocable portion of overhead and other expenses incurred by Oaktree Administrator in performing its obligations under the New Administration Agreement, including our allocable portion of the rent of the Company’sour principal executive offices (which are located in a building owned by a Brookfield affiliate) at market rates and the Company’sour allocable portion of the costs of compensation and related expenses of our Chief Financial Officer, Chief Compliance Officer, their staffs and other non-investment professionals at Oaktree that perform duties for us. Such reimbursement is at cost, with no profit to, or markup by, Oaktree Administrator.
The New Administration Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of their respective duties or by reason of the reckless disregard of their respective duties and obligations, Oaktree Administrator and its officers, managers, partners, agents, employees, controlling persons, members (or their owners) and any other person or entity affiliated with it, are entitled to indemnification from us for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of Oaktree Administrator’s services under the New Administration Agreement or otherwise as our administrator.
Unless earlier terminated as described below, the New Administration Agreement will remain in effect until October 17, 2019 and thereafter from year-to-year if approved annually by our Board of Directors or by the affirmative vote of the holders of a majority of our outstanding voting securities, including, in either case, approval by a majority of our directors who are not interested persons. The New Administration Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other. The New Administration Agreement may also be terminated, without penalty, upon the vote of a majority of our outstanding voting securities.
FormerCompetition
We operate in a highly competitive market for investment opportunities. We compete for investments with various other investors, such as other public and private funds, other Business Development Companies, commercial and investment banks, commercial finance companies and to the extent they provide an alternative form of financing, private equity funds, some of which may be our affiliates. Other Oaktree funds may have investment objectives that overlap with ours, which may create competition for investment opportunities. Many competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of funds and access to funding sources that will not be available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments than we do, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that the Investment Company Act and the Code impose on us. The competitive pressures could impair our business, financial condition and results of operations. As a result of this competition, we may not be able to take advantage of attractive investment opportunities. See
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“Item 1A. Risk Factors – Risks Relating to Our Business and Structure – We may face increasing competition for investment opportunities, which could reduce returns and result in losses."
Staffing
We do not currently have any employees and do not expect to have any employees. Services necessary for our business are provided through the Administration Agreement and the Investment Advisory Agreement.
The Former Administration Agreement was in effect throughout our 2017 fiscal yearAllocation of Investment Opportunities and terminated by its terms on October 17, 2017. Our Former Administrator was a wholly-owned subsidiary of Fifth Street Management. Pursuant to the Former Administration Agreement, our Former Administrator provided services substantially similar to those provided by Oaktree Administrator as described above under “-New Administrative Services Agreement.” For providing these services,


facilities and personnel, we reimbursed the Former Administrator the allocable portion of overhead and other expenses incurred by it in performing its obligations under the Former Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our Chief Financial Officer and Chief Compliance Officer and their staffs. Such reimbursement was at cost, with no profit to, or markup by, our Former Administrator. Our allocable portion of our Former Administrator’s costs was determined based upon costs attributable to our operations versus costs attributable to the operations of other entities for which our Former Administrator provided administrative services.
The Former Administration Agreement provided indemnification similar to that described under "- New Administrative Services Agreement."
License Agreement
We were party to a license agreement with an affiliate of our Former Adviser pursuant to which such affiliate granted us a non-exclusive, royalty-free license to use the name “Fifth Street” for so long as our Former Adviser or one of its affiliates remained our investment adviser. That license agreement terminated on October 17, 2017.
MaterialPotential Conflicts of Interest
Our executive officers and directors, and certain members of our Investment Adviser, serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as we do or of investment funds managed by our affiliates. For example, Oaktree presently serves as the investment adviser to OCSI,Oaktree Strategic Income II, Inc., or OSI 2, a publicly-traded business development company. OCSI has historically investedprivate Business Development Company, and Oaktree Strategic Credit Fund, or OSCF, a continuously offered Business Development Company. All of our executive officers serve in substantially similar capacities for OSI 2, and one of our independent directors serves as an independent director of OSI 2 and OSCF. OSI 2 and OSCF invest in senior secured loans, including first lien, unitranche and second lien debt instruments that pay interest at rates which are determined periodically on the basis of a floating base lending rate, made to private middle-market companies whose debt is rated below investment grade, similar to those we target for investment. Therefore, there may be certain investment opportunities that satisfy the investment criteria for both OCSI and us. OCSI operates as a distinct and separate public company and any investment in our common stock will not be an investment in OCSI. In addition, all of our executive officers and four of our independent directors serve in substantially similar capacities for OCSI. Oaktree and its affiliates also manage or sub-advise other Business Development Companies, registered investment companies and sub-advise private investment funds and accounts, and may manage other such funds and accounts in the future, which have investment mandates that are similar, in whole and in part, with ours. Accordingly, theyTherefore, there may be certain investment opportunities that satisfy the investment criteria for OSI 2, OSCF and us as well as other Business Development Companies, registered investment companies and private investment funds and accounts advised or sub-advised by Oaktree or its affiliates. In addition, Oaktree and its affiliates may have obligations to investors in thoseother entities that they advise or sub-advise, the fulfillment of which might not be in the best interests of us or our stockholders.
For example, the personnel of our Investment Adviser may face conflicts of interest in the allocation of investment opportunities to us and such other funds and accounts.
Oaktree has investment allocation guidelines that govern the allocation of investment opportunities among the investment funds and accounts managed or sub-advised by Oaktree and its affiliates. To the extent an investment opportunity is appropriate for usOSI 2, OSCF or OCSIus or any other investment fund or account managed or sub-advised by Oaktree or its affiliates, Oaktree will adhere to its investment allocation guidelines in order to determine a fair and equitable allocation.
We may invest alongside funds and accounts managed or sub-advised by our Investment Adviser and its affiliates in certain circumstances where doing so is consistent with applicable law and SEC staff interpretations. For example, we may invest alongside such accounts consistent with guidance promulgated by the staff of the SEC permitting us and such other accounts to purchase interests in a single class of privately placed securities so long as certain conditions are met, including that our Investment Adviser, acting on our behalf and on behalf of other clients, negotiates no term other than price or terms related to price.
In addition, on October 18, 2017,affiliates of our Investment Adviser have received exemptive relief from the SEC to allow certain managed funds and accounts, each of whose investment adviser is OaktreeOCM or an investment adviser controlling, controlled by or under common control with Oaktree,OCM, such as our Adviser, as well as proprietary accounts (subject to certain conditions) to participate in negotiated co-investment transactions where doing so is consistent with the applicable registered fund’s or business development company’sBusiness Development Company’s investment objective and strategies as well as regulatory requirements and other pertinent factors, and pursuant to the conditions of the exemptive relief. Each potential co-investment opportunity that falls under the terms of the exemptive relief and is appropriate for us and any affiliated fund or account, and satisfies the then-current board-established criteria, will be offered to us and such other eligible funds and accounts. If there is a sufficient amount of securities to satisfy all participants, the securities will be allocated among the participants in accordance with their proposed order size and if there is an insufficient amount of securities to satisfy all participants, the securities will be allocated pro rata based on the investment proposed by the applicable investment adviser to such participant, up to the amount proposed to be invested by each, which is reviewed and approved by an independent committee of legal, compliance and accounting professionals at our Investment Adviser. We may also invest alongside funds managed by our Adviser and its affiliates in certain circumstances where doing so is consistent with applicable law and SEC staff interpretations. For example, we may invest alongside such accounts consistent with guidance promulgated by the staff of the SEC permitting us and such other accounts to purchase interests in a single class of privately placed securities so long as certain conditions are met, including that our Adviser, acting on our behalf and on behalf of other clients, negotiates no term other than price.

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Although Oaktree will endeavor to allocate investment opportunities in a fair and equitable manner, we and our common stockholders could be adversely affected to the extent investment opportunities are allocated among us and other investment vehicles managed or sponsored by, or affiliated with, our executive officers, directors and members of our Investment Adviser. We might not participate in each individual opportunity, but will, on an overall basis, be entitled to participate equitably with other entities managed by Oaktree and its affiliates. Oaktree seeksis committed to treattreating all clients fairly and equitably over time such that none receive preferential treatment vis-à-vis the others over time, in a manner consistent with its fiduciary duty to each of them; however, in some instances, especially in instances of limited liquidity, the factors may not result in pro rata allocations or may result in situations where certain funds or accounts receive allocations where others do not.
Pursuant to the New Investment Advisory Agreement, our Investment Adviser’s liability is limited and we are required to indemnify our Investment Adviser against certain liabilities. This may lead our Investment Adviser to act in a riskier manner in performing its duties and obligations under the New Investment Advisory Agreement than it would if it were acting for its own account, and creates a potential conflict of interest.
Pursuant to the New Administration Agreement, the Oaktree Administrator furnishes us with the facilities, including our principal executive office, and administrative services necessary to conduct our day-to-day operations. We pay the Oaktree Administrator its allocable portion of overhead and other expenses incurred by the Oaktree Administrator in performing its obligations under the New Administration Agreement, including, without limitation, a portion of the rent at market rates and compensation of our Chief Financial Officer, Chief Compliance Officer, their respective staffs and other non-investment professionals at Oaktree that perform duties for us.
Available Information
We maintainElection to be Taxed as a website at www.oaktreespecialtylending.com. The information on our website is not incorporated by reference in this annual report on Form 10-K.Regulated Investment Company
We make availablehave elected to be treated, and intend to operate in a manner so as to continuously qualify annually, as a RIC for U.S. federal income tax purposes under Subchapter M of the Code. As a RIC, we generally will not be required to pay corporate-level U.S. federal income taxes on any ordinary income or through our website certain reports and amendments to those reportscapital gains that we file withtimely distribute (or are deemed to distribute) to our stockholders as dividends. Instead, dividends we distribute (or are deemed to distributed) generally will be taxable to stockholders, and any net operating losses, foreign tax credits and most other tax attributes generally will not pass through to stockholders. To continue to qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below). In addition, to qualify for RIC tax treatment we must distribute to our stockholders, for each taxable year, at least 90% of the Company’s “investment company taxable income” for that year, which is generally its ordinary income plus the excess of its realized net short-term capital gains over its realized net long-term capital losses, or furnishthe Annual Distribution Requirement.
If we:
•qualify as a RIC; and
•satisfy the Annual Distribution Requirement;

then we will not be subject to U.S. federal income tax on the portion of our investment company taxable income and net capital gain (i.e., realized net long-term capital gains in excess of realized net short-term capital losses) we distribute to stockholders. We are subject to U.S. federal income tax at the regular corporate rates on any income or capital gain not distributed (or deemed distributed) to our stockholders.
We will be subject to a 4% nondeductible federal excise tax on certain undistributed income unless we distribute in a timely manner an amount at least equal to the SECsum of (1) 98% of our ordinary income for each calendar year, (2) 98.2% of our capital gain net income for the one-year period ending October 31 in accordancethat calendar year and (3) any income realized, but not distributed, and on which we paid no U.S. federal income tax, in preceding years.
In order to maintain our qualification as a RIC for U.S. federal income tax purposes, we must, among other things:
•at all times during each taxable year, have in effect an election to be treated as a Business Development Company under the Investment Company Act;

•derive in each taxable year at least 90% of our gross income from (a) dividends, interest, payments with respect to certain securities (including loans), gains from the Securities Exchangesale of stock or other securities or currencies, or other income derived with respect to our business of investing in such stock, securities or currencies and (b) net income derived from an interest in a “qualified publicly traded partnership;” (the “90% Gross Income Test”) and

•diversify our holdings so that at the end of each quarter of the taxable year:
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◦(i) at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of its assets or more than 10% of the outstanding voting securities of the issuer; and

◦(ii) no more than 25% of the value of our assets is invested in (a) the securities, other than U.S. government securities or securities of other RICs, of one issuer, (b) the securities of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses or (c) the securities of one or more “qualified publicly traded partnerships” ((i) and (ii) collectively, the “Diversification Tests”).
We may be required to recognize taxable income in circumstances in which we do not receive cash. For example, if we hold debt obligations that are treated under applicable tax rules as having OID (such as debt instruments with increasing interest rates or debt instruments issued with warrants), we must include in income each year a portion of the OID that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. Because any OID accrued will be included in our investment company taxable income for the year of accrual, we may be required to make a distribution to our stockholders in order to satisfy the Annual Distribution Requirement, even though we will not have received any corresponding cash amount.
Because we use debt financing, we are subject to certain asset coverage ratio requirements under the Investment Company Act described above and financial covenants under loan and credit agreements that could, under certain circumstances, restrict us from making distributions necessary to satisfy the Annual Distribution Requirement. If we are unable to obtain cash from other sources or are otherwise limited in our ability to make distributions, we could fail to qualify for RIC tax treatment and thus become subject to corporate-level income tax.
Certain of 1934,our investment practices may be subject to special and complex U.S. federal income tax provisions that may, among other things: (a) disallow, suspend or otherwise limit the allowance of certain losses or deductions; (b) convert lower taxed long-term capital gain into higher taxed short-term capital gain or ordinary income; (c) convert an ordinary loss or a deduction into a capital loss (the deductibility of which is more limited); (d) cause us to recognize income or gain without a corresponding receipt of cash; (e) adversely affect the time as amended,to when a purchase or sale of securities is deemed to occur; (f) adversely alter the Exchange Act. These includecharacterization of certain complex financial transactions; or (g) produce income that will not be qualifying income for purposes of the 90% Gross Income Test described above. We will monitor our annual reports on Form 10-K,transactions and may make certain tax elections in order to mitigate the potential adverse effect of these provisions.
If, in any particular taxable year, we do not qualify as a RIC, all of our quarterly reports on Form 10-Qtaxable income (including our net capital gains) will be subject to tax at regular corporate rates without any deduction for distributions to stockholders, and distributions will be taxable to the stockholders as ordinary dividends to the extent of our current reports on Form 8-K. We make this information available on our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC.and accumulated earnings and profits.
Business Development Company Regulations
We have elected to be regulated as a business development companyBusiness Development Company under the 1940Investment Company Act. As with other companies regulated by the Investment Company Act, a Business Development Company must adhere to certain substantive regulatory requirements. The 1940Investment Company Act contains prohibitions and restrictions relating to transactions between business development companiesBusiness Development Companies and their affiliates (including any investment advisers), principal underwriters and affiliates of those affiliates or underwriters.
The 1940Investment Company Act further requires that a majority of our directors be persons other than “interested persons,” as that term is defined in the 1940Investment Company Act. In addition, the 1940 Act provides that we may not change the nature of our business so as to cease to be, or to withdraw our election as, a business development companyBusiness Development Company unless approvedauthorized by a majorityvote of our outstanding voting securities.
The 1940 Act defines “aa majority of the outstanding voting securities”securities, as required by the Investment Company Act. A majority of the outstanding voting securities of a company is defined under the Investment Company Act as the lesser of (i)of: (a) 67% or more of thesuch company’s voting securities present at a meeting if the holders of more than 50% of ourthe outstanding voting securities of such company are present or represented by proxy, or (ii)(b) more than 50% of ourthe outstanding voting securities.
On October 18, 2017,securities of such company. We do not anticipate any substantial change in the nature of our Investment Adviser received exemptive relief from the SEC to allow certain managed funds and accounts, each of whose investment adviser is Oaktree or an investment adviser controlling, controlled by or under common control with Oaktree, to participate in negotiated co-investment transactions where doing so is consistent with the applicable registered fund’s or business development company’s investment objective and strategies, as well as regulatory requirements and other pertinent factors, and pursuant to the conditions of the exemptive relief.business.
We are not generally able to issue and sell our common stock at a price below net asset value per share. We may, invest uphowever, sell our common stock, warrants, options or rights to 100%acquire our common stock, at a price below the current net asset value of our assets in securities acquired directly from issuers in privately negotiated transactions. With respect to such securities, we may, for the purpose of public resale, be deemed an “underwriter” as that term is defined in the Securities Act of 1933, as amended, or the Securities Act. Our intention is to not write (sell) or buy put or call options to manage risks associated with the publicly traded securities of our portfolio companies, except that we may enter into hedging transactions to manage the risks associated with interest rate and foreign exchange fluctuations. However, we may purchase or otherwise receive warrants to purchase the common stock if our Board of Directors determines that such sale is in our best interests and that of our portfolio companiesstockholders, and our stockholders approve such sale. In any such case, the price at which our securities are to be issued and sold may not be less than a price which, in connection with acquisition financing or other investments. Similarly, in connection with an acquisition, we may acquire rights to require the issuersdetermination of acquired securities or their affiliates to repurchaseour Board of Directors, closely approximates the market value
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of such securities under certain circumstances.(less any distributing commission or discount). We may also make rights offerings to our stockholders at prices per share less than the net asset value per share, subject to applicable requirements of the Investment Company Act.
Investment Restrictions
We do not intend to acquire securities issued by any investment company that exceed the limits imposed by the 1940Investment Company Act. Under thesesuch limits, except for registered money market funds, we generally


cannot acquire more than three percent3% of the voting stock of any registered investment company (which may be increased to 25% in certain circumstances under certain fund of funds arrangements), invest more than five percent5% of the value of our total assets in the securities of one registered investment company or invest more than 10% of the value of our total assets in the securities of registered investment companies. With regard to thatcompanies in the aggregate. The portion of our portfolio invested in securities issued by investment companies it should be noted that such investments mightordinarily will subject our stockholders to additional indirect expenses. None of thesethe policies described above is fundamental and alleach such policy may be changed without stockholder approval.approval, subject to any limitations imposed by the Investment Company Act.
Qualifying Assets
Under the 1940Investment Company Act, a business development companyBusiness Development Company may not acquire any asset other than assets of the type listed in Section 55(a) of the 1940Investment Company Act, which are referred to as qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets. The principal categories of qualifying assets relevant to our business are any of the following:
(1) Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC. An eligible portfolio company is defined in the 1940Investment Company Act as any issuer which:
(a) is organized under the laws of, and has its principal place of business in, the United States;
(b) is not an investment company (other than a small business investment company wholly owned by the business development company)Business Development Company) or a company that would be an investment company but for certain exclusions under the 1940Investment Company Act; and
(c) satisfies any of the following:
(i) does not have any class of securities that is traded on a national securities exchange;
(ii) has a class of securities listed on a national securities exchange, but has an aggregate market value of outstanding voting and non-voting common equity of less than $250 million;
(iii) is controlled by a business development companyBusiness Development Company or a group of companies including a business development companyBusiness Development Company and the business development companyBusiness Development Company has an affiliated person who is a director of the eligible portfolio company; or
(iv) is a small and solvent company having total assets of not more than $4 million and capital and surplus of not less than $2 million;
(2) Securities of any eligible portfolio company that we control;
(3) Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements;
(4) Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the eligible portfolio company;
(5) Securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant to the exercise of warrants or rights relating to such securities; or
(6) Cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment.
In addition, a business development company
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Managerial Assistance to Portfolio Companies
A Business Development Company must be operated for the purpose of making investments in the types of securities described in (1), (2) or (3) above. However, in order to count portfolio securities as qualifying assets for the purpose of the 70% test, a Business Development Company must either control the issuer of the securities or must offer to make available to the issuer of the securities (other than small and solvent companies described above) significant managerial assistance. However, when a Business Development Company purchases securities in conjunction with one or more other persons acting together, one of the other persons in the group may make available such managerial assistance. Making available managerial assistance includes any arrangement whereby a Business Development Company, through its directors, officers or employees, offers to provide, and, if accepted, does so provide, significant guidance and counsel concerning the management, operations or business objectives and policies of a portfolio company.
Temporary Investments
Pending investment in other types of “qualifying"qualifying assets,”" as described above, our investments may consist of cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment which we refer to, collectively, as temporary investments,(collectively, “temporary investments”) so that 70% of our assets are qualifying assets. We may also invest in U.S. Treasury bills or in repurchase agreements, provided that such agreements are fully collateralized by cash or securities issued by the U.S. government or its agencies. A repurchase agreement (which is substantially similar to a secured loan)


involves the purchase by an investor, such as us,the Company, of a specified security and the simultaneous agreement by the seller to repurchase it at an agreed-upon future date and at a price thatwhich is greater than the purchase price by an amount that reflects an agreed-upon interest rate. There is no percentage restriction on the proportion of our assets that may be invested in such repurchase agreements. However, if more than 25% of our totalgross assets constitute repurchase agreements from a single counterparty, we would generally not meet the diversification tests in order to qualify as a RIC for U.S. federal income tax purposes.Diversification Tests. Thus, we do not intend to enter into repurchase agreements with a single counterparty in excess of this limit. Our Investment Adviser will monitor the creditworthiness of the counterparties with which we enter into repurchase agreement transactions.
Managerial Assistance to Portfolio CompaniesSenior Securities
Business development companies generally must offer to make available toAt a special meeting of stockholders held on June 28, 2019, our stockholders approved the issuerapplication of the securities significant managerial assistance, exceptreduced asset coverage requirements in circumstances where either (i) the business development company controls such issuer of securities or (ii) the business development company purchases such securities in conjunction with one or more other persons acting together and oneSection 61(a)(2) of the other persons inInvestment Company Act to us, effective as of June 29, 2019. The reduced asset coverage requirements permit us to double the group makes available such managerial assistance. Making available significant managerial assistance means, among other things, any arrangement wherebymaximum amount of leverage that we are permitted to incur by reducing the business development company, through its directors, officers or employees (if any), offersasset coverage requirements applicable to provide,us from 200% to 150%. As a result of the reduced asset coverage requirement, we can incur $2 of debt for each $1 of equity.
Consistent with applicable legal and if accepted, does so provide, significant guidance and counsel concerning the management, operations or business objectives and policies of a portfolio company.
Senior Securities
Weregulatory requirements, we are permitted, under specified conditions, to issue multiple classes of debtindebtedness and one class of stock senior to our common stock if our asset coverage, as definedcalculated as provided in the 1940Investment Company Act, is at least equal to 200%150% immediately after each such issuance. In addition, while any senior securities remain outstanding, we may be prohibited from making distributionsmake provisions to prohibit any distribution to our stockholders or repurchasingthe repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. We maywould also be permitted to borrow amounts up to 5% of the value of our total assets for generally up to 60 days for temporary or emergency purposes without regard to asset coverage. For a discussion of the risks associated with leverage, see “Risk Factors — Risks Relating
Other
We are subject to Our Business and Structure — Regulations governing our operation as a business development company and RIC affect our ability to raise, and the way in which we raise, additional capital or borrow for investment purposes, which may have a negative effect on our growth” and “— Because we borrow money, the potential for loss on amounts invested in us will be magnified and may increase the risk of investing in us.”
We received exemptive relief fromperiodic examination by the SEC to permit us to excludefor compliance with the debt of our SBIC subsidiaries guaranteed by the United States Small Business Administration, or SBA, from the definition of senior securitiesin the 200% asset coverage ratio weInvestment Company Act.
We are required to provide and maintain undera bond issued by a reputable fidelity insurance company to protect us against larceny and embezzlement. Furthermore, as a Business Development Company, we are prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the 1940 Act. This exemptive relief provides us increased flexibility underduties involved in the 200% asset coverage test by permitting us to borrow more than we would otherwise be able to under the 1940 Act absent the receiptconduct of this exemptive relief.
Common Stocksuch person’s office.
We and our Adviser are not generally ableeach required to issueadopt and sell our common stock at a price below net asset value per share. We may, however, sell our common stock, warrants, options or rightsimplement written policies and procedures reasonably designed to acquire our common stock, at a price below the current net asset valueprevent violation of the common stock if our BoardU.S. federal securities laws, review these policies and procedures annually for their adequacy and the effectiveness of Directors determines that such sale is in our best intereststheir implementation, and that of our stockholders, and our stockholders approve such sale. In any such case, the price at which our securities aredesignate a Chief Compliance Officer to be issuedresponsible for administering the policies and sold may not be less than a price which, in the determination of our Board of Directors, closely approximates the market value of such securities (less any distributing commission or discount). We may also make rights offerings to our stockholders at prices per share less than the net asset value per share, subject to applicable requirements of the 1940 Act. See “Risk Factors — Risks Relating to Our Business and Structure — Regulations governing our operation as a business development company and RIC affect our ability to raise, and the way in which we raise, additional capital or borrow for investment purposes, which may have a negative effect on our growth.”procedures.
Code of Ethics
We have adopted a joint code of ethics with OCSIOSI 2 and OSCF pursuant to Rule 17j-1 under the 1940Investment Company Act and we have also approved the investment adviser’sOaktree’s code of ethics that was adopted by it under Rule 17j-1 under the 1940Investment Company Act and Rule 204A-1 under the Advisers Act. These codes establish procedures for personal investments and restrict certain
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personal securities transactions. Personnel subject to the codecodes may invest in securities for their personal investment accounts, including securities that may be purchased or held by us, so long as such investments are made in accordance with the applicable code’s requirements. You may read and copy the codes of ethics at the SEC’s Public Reference Room located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the


The codes of ethics are available on the EDGAR Database on the SEC’s website at http://www.sec.gov and areour code of ethics is available at the Investors: Corporate Governance portion of our website at www.oaktreespecialtylending.com.
Compliance Policies and Procedures
We and our Investment Adviser have adopted and implemented written policies and procedures reasonably designed to prevent violation of the federal securities laws and are required to review these compliance policies and procedures annually for their adequacy and the effectiveness of their implementation. Our Chief Compliance Officer is responsible for administering these policies and procedures.
Proxy Voting Policies and Procedures
We have delegated our proxy voting responsibility to our Investment Adviser. The proxy voting policies and procedures of our investment adviserAdviser are set forth below. TheThese guidelines are reviewed periodically by our Investment Adviser and our non-interestedindependent directors, and, accordingly, are subject to change.
Introduction
As anAn investment adviser registered under the Advisers Act our Investment Adviser has a fiduciary duty to act solely in the best interests of its clients. As part of this duty, itour Adviser recognizes that it must vote clientportfolio securities in a timely manner free of conflicts of interest and in the best interests of its clients.
These policies and procedures for voting proxies for the investment advisory clients of our Investment Adviser are intended to comply with Section 206 of, and Rule 206(4)-6 under, the Advisers Act.
Proxy Voting Policies
Our Investment Adviser will vote proxies relating to our portfolio securities, if any, in what it perceives to be the best interest of our stockholders. ItOur Adviser will review on a case-by-case basis each proposal submitted forto a stockholdershareholder vote to determine its impact on the portfolio securities held by us. TheAlthough our Adviser will generally vote against proposals that may have a negative impact on our portfolio securities, it may vote for such a proposal if there are compelling long-term reasons to do so.
Our Adviser’s proxy voting decisions of our Investment Adviser with respect to any of our investments arewill be made by the investment professionalsofficers who are responsible for monitoring such investment.each of our investments. To ensure that itsthe vote is not the product of a conflict of interest, our Investment Adviser requireswill require that: (a)(1) anyone involved in the decision-making process disclose to its legal and compliance personnelthe Chief Compliance Officer any potential conflict that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote; and (b)(2) employees involved in the decision makingdecision-making process or vote administration are prohibited from revealing how our Investment Adviser intends to vote on a proposal, in order to reduce any attempted influence from interested parties.
Proxy Voting Records
YouStockholders may obtain information without charge, regarding how our Investment Adviser and Former Adviserwe voted proxies for us for the most recent 12-month period ended June 30, 2017 with respect to our portfolio securities by making a written request for proxy voting information to: Oaktree Specialty Lending Corporation, Chief Compliance Officer, 333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071.
OtherReporting Obligations
We are subjectfile annual reports containing audited financial statements, quarterly reports, and such other periodic reports as we determine to periodic examinationbe appropriate or as may be required by the SEC for compliance with the 1940 Act.
law. We are required to providecomply with all periodic reporting, proxy solicitation and maintain a bond issued by a reputable fidelity insurance company to protect us against larceny and embezzlement. Furthermore, as a business development company, we are prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard ofother applicable requirements under the duties involved in the conduct of such person’s office.
Securities Exchange Act of 1934, as amended, or the Exchange Act.
We make available on or through our website certain reports and amendments to those reports that we file with or furnish to the SEC in accordance with the Exchange Act. These include our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K. We make this information available on our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. The SEC also maintains a website that contains reports, proxy and information statements and other information we file with the SEC at www.sec.gov.
We maintain a website at www.oaktreespecialtylending.com. The information on our website is not incorporated by reference in this annual report on Form 10-K.
Sarbanes-Oxley Act Compliance
We are subject to the reporting and disclosure requirements of the Exchange Act, including the filing of quarterly, annual and current reports, proxy statements and other required items. In addition, we are subject to the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, which imposes a wide variety of regulatory requirements on publicly-heldpublic companies and their insiders. For example:
 
•pursuant to Rule 13a-14 under the Exchange Act, our chief executive officer and chief financial officer are required to certify the accuracy of the financial statements contained in our periodic reports;


•pursuant to Item 307 of Regulation S-K, our periodic reports are required to disclose our conclusions about the effectiveness of our disclosure controls and procedures; and
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•pursuant to Rule 13a-15 under the Exchange Act, our management is required to prepare a report regarding its assessment of our internal control over financial reporting. Our independent registered public accounting firm is required to audit our internal control over financial reporting.
Small Business Investment Company Regulations
Our wholly-owned SBIC subsidiaries are subject to regulation and oversight by the SBA. Our SBIC subsidiaries’ licenses allow them to obtain leverage by issuing SBA-guaranteed debentures, subject to customary procedures. As of September 30, 2017, we had no SBA-guaranteed debentures outstanding, and we had commenced actions to surrender such licenses to the SBA. Our SBIC subsidiaries held approximately $140.0 million, or 8.7%, of our total assets at September 30, 2017.
We have received exemptive relief from the SEC to permitThe Sarbanes-Oxley Act requires us to excludereview our current policies and procedures to determine whether we comply with the debt of our SBIC subsidiaries guaranteed bySarbanes-Oxley Act and the SBA from the definition of senior securities in the 200% asset coverage testregulations promulgated thereunder. We will continue to monitor compliance with all regulations that are adopted under the 1940Sarbanes-Oxley Act which allows us increased flexibility under the 200% asset coverage test by permitting usand will take actions necessary to borrow more thanensure that we would otherwise be able to absent the receipt of this exemptive relief.are in compliance therewith.
Our SBIC subsidiaries are subject to regulation and oversight by the SBA until such time as their respective SBIC license is surrendered to the SBA.


Stock Exchange Corporate Governance Regulations
Each of the NASDAQ Global SelectThe Nasdaq Stock Market and the New York Stock ExchangeLLC has adopted corporate governance regulations that listed companies must comply with. We are in compliance with such corporate governance regulations as applicable to business development companies.us.
Taxation as a Regulated Investment Company
As a business development company, we have elected to be treated, and intend to continue to qualify annually, as a RIC under Subchapter M of the Code. As a RIC, we generally will not be subject to corporate-level U.S. federal income taxes on any income that we distribute (or are deemed to have distributed) to our stockholders as dividends for U.S. federal income tax purposes. To continue to qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below). In addition, to qualify for RIC tax treatment we must distribute to our stockholders, for each taxable year, dividends of an amount generally equal to at least 90% of our “investment company taxable income,” which is generally our ordinary income plus the excess of our realized net short-term capital gains over our realized net long-term capital losses, determined without regard to any deduction for dividends paid, or the Annual Distribution Requirement.
If we qualify as a RIC and satisfy the Annual Distribution Requirement, then we generally will not be subject to U.S. federal income tax on the portion of our income we distribute (or are deemed to distribute) to stockholders. We will be subject to U.S. federal income tax at the regular corporate rates on any income or capital gains not distributed (or deemed distributed) to our stockholders.
We will be subject to a 4% nondeductible U.S. federal excise tax on certain undistributed income unless we timely distribute dividends in respect of each calendar year of an amount at least equal to the sum of (1) 98% of our net ordinary income (taking into account certain deferrals and elections) for each calendar year, (2) 98.2% of our capital gain net income (adjusted for certain ordinary losses) for the one-year period ending October 31 in that calendar year and (3) any net ordinary income or capital gain net income recognized, but not distributed, in preceding years and on which we paid no U.S. federal corporate income tax, or the Excise Tax Avoidance Requirement. We generally will endeavor in each taxable year to make sufficient distributions to our stockholders to avoid any U.S. federal excise tax on our earnings.
In order to qualify as a RIC for U.S. federal income tax purposes, we must, among other things:
continue to maintain our election to be treated as a business development company under the 1940 Act at all times during each taxable year;
derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to loans of certain securities, gains from the sale of stock or other securities, net income from certain “qualified publicly traded partnerships,” or other income derived with respect to our business of investing in such stock or securities, or the 90% Income Test; and
diversify our holdings so that at the end of each quarter of the taxable year:


at least 50% of the value of our assets consists of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer; and
no more than 25% of the value of our assets is invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses or of certain “qualified publicly traded partnerships,” or the Diversification Tests.
Earnings considered qualifying income in determining our satisfaction of the 90% Income Test may exclude such income as management fees received in connection with our SBIC subsidiaries or other potential outside managed funds and certain other fees.
We may be required to recognize taxable income in circumstances in which we do not receive cash. For example, if we hold debt instruments that are treated under applicable tax rules as having OID (such as debt instruments with PIK interest or, in certain cases, increasing interest rates or debt issued with warrants), we generally would be required to include in income each taxable year a portion of the OID that accrues over the life of the debt instrument, regardless of whether cash representing such income is received by us in the same taxable year. We also may be required to include in income other amounts that we have not yet received in cash, such as PIK interest and deferred loan origination fees that are paid after origination of a loan or are paid in non-cash compensation such as warrants or stock. Because any OID or other amounts accrued will be included in our investment company taxable income for the taxable year of accrual, we may be required to make a distribution to our stockholders in order to satisfy the Annual Distribution Requirement or the Excise Tax Avoidance Requirement, even though we will not have received any corresponding cash amount.
Although we do not presently expect to do so, we are authorized to borrow funds and to sell assets in order to satisfy the Annual Distribution Requirement or the Excise Tax Avoidance Requirement. However, under the 1940 Act, we are not permitted in certain circumstances to make distributions to our stockholders while our debt obligations and other senior securities are outstanding unless certain “asset coverage” tests are met. Moreover, our ability to dispose of assets to meet Annual Distribution Requirement or the Excise Tax Avoidance Requirement may be limited by (1) the illiquid nature of our portfolio and/or (2) other requirements relating to maintaining our status as a RIC. If we dispose of assets in order to meet the Annual Distribution Requirement or the Excise Tax Avoidance Requirement, we may make such dispositions at times that, from an investment standpoint, are not advantageous.

RISK FACTORS
Item 1A. Risk Factors
Investing in our securities involves a number of significant risks. In addition to the other information contained in this annual report on Form 10-K, you should consider carefully the following information before making an investment in our securities. The risks set out below are not the only risks we or other business development companies face. Additional risks and uncertainties not presently known to us or not presently deemed material by us might also impair our operations and performance. If any of the following events occur, our business, financial condition and results of operations could be materially and adversely affected. In such case, our net asset value and the trading price of our securities could decline, and you may lose part or all of your investment. This section also describesThe risk factors described below are the specialprincipal risk factors associated with an investment in us as well as those factors generally associated with an investment company with investment objectives, investment policies, capital structure or trading markets similar to ours.
An investment in our securities involves risks. The following is a summary of the principal risks that you should carefully consider before investing in our securities.
•Global economic, political and market conditions, including those caused by inflation and a rising interest rate environment, have (and in the future, could further) adversely affect our business, results of operations and financial condition and those of our portfolio companies.
•Changes in interest rates, changes in the method for determining the London Interbank Offered Rate, or LIBOR, and the potential replacement of LIBOR may affect our cost of capital and net investment income.
•A significant portion of our investment portfolio is and will continue to be recorded at fair value and, as a result, there is and will continue to be uncertainty as to the value of our portfolio investments.
•Our ability to achieve our investment objective depends on our Adviser’s ability to support our investment process; if our Adviser were to lose key personnel or they were to resign, our ability to achieve our investment objective could be significantly harmed.
•Because we borrow money, the potential for loss on amounts invested in us will be magnified and may increase the risk of investing in business developmentus.
•There are significant potential conflicts of interest that could adversely impact our investment returns.
•Regulations governing our operation as a Business Development Company and RIC affect our ability to raise, and the way in which we raise, additional capital or borrow for investment purposes, which may have a negative effect on our growth.
•Our investments in portfolio companies may be risky, and we could lose all or parts of our investments.
•There are risks related to the Mergers that could adversely impact us or our stockholders.
•Shares of closed-end investment companies, including the risks associated with investing inBusiness Development Companies, may trade at a portfoliodiscount to their net asset value.
•The market price of small and developing or financially troubled businesses.our common stock may fluctuate significantly.

Risks Relating to Economic Conditions
•Economic recessions or downturns may have a material adverse effect on our business, financial condition and results of operations, and could impair the ability of our portfolio companies to repay debt or pay interest.
Economic recessions or downturns may result in a prolonged period of market illiquidity which could have a material adverse effect on our business, financial condition and results of operations. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could limit our investment originations, limit our ability to grow and negatively impact our operating results. In addition, uncertainty with regard to economic recovery from recessions or downturns could also have a negative impact on our business, financial condition and results of operations.

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When recessionary conditions exist, the financial results of small and mid-sized companies, like those in which we invest, typically experience deterioration, which could ultimately lead to difficulty in meeting debt service requirements and an increase in defaults. Additionally, the end markets for certain of our portfolio companies’ products and services would likely experience negative economic trends. Further, adverse economic conditions may decrease the value of collateral securing some of our loans and the value of our equity investments. As a result, we may need to modify the payment terms of our investments, including changes in PIK interest provisions and/or cash interest rates. The performances of certain of our portfolio companies have been, and may continue to be, negatively impacted by these economic or other conditions, which may result in our receipt of a reduced level of interest income from our portfolio companies and/or losses or charge offs related to our investments, and, in turn, may adversely affect distributable income and have a material adverse effect on our results of operations.

Global economic, political and market conditions, including downgrades of the U.S. credit rating, may adversely affect our business, results of operations and financial condition, including our revenue growth and profitability.
The current worldwide financial market situation, as well as various social and political tensions in the United States and around the world, may contribute to increased market volatility, may have long-term effects on the United States and worldwide financial markets and may cause economic uncertainties or deterioration in the U.S. and worldwide. The impact of downgrades by rating agencies to the U.S. government’s sovereign credit rating or its perceived creditworthiness as well as potential government shutdowns could adversely affect the U.S. and global financial markets and economic conditions. Since 2010, several European Union, or EU, countries have faced budget issues, some of which may have negative long-term effects for the economies of those countries and other EU countries. There is continued concern about national-level support for the Euro and the accompanying coordination of fiscal and wage policy among European Economic and Monetary Union member countries. In addition, the fiscal policy of foreign nations, such as Russia and China, may have a severe impact on the worldwide and U.S. financial markets. The decision made in the United Kingdom referendum to leave the EU (the so-called "Brexit") has led to volatility in global financial markets and may lead to weakening in consumer, corporate and financial confidence in the United Kingdom and Europe. The extent and process by which the United Kingdom will exit the EU remain unclear at this time and could lead to political and economic uncertainty and periods of exacerbated volatility in both the United Kingdom and in wider European markets. Additionally, volatility in the Chinese stock markets and global markets for commodities may affect other financial markets worldwide. We cannot predict the effects of these or similar events in the future on the U.S. and global economies and securities markets or on our investments. We monitor developments and seek to manage our investments in a manner consistent with achieving our investment objective, but there can be no assurance that we will be successful in doing so.
Risks Relating to Our Business and Structure
Our Investment Adviser has limited experience operating underGlobal economic, political and market conditions, including those caused by inflation and a rising interest rate environment have (and in the constraints imposed on usfuture, could further) adversely affect our business, results of operations and financial condition and those of our portfolio companies.

Any disruptions in the capital markets, as a business development company, whichresult of inflation and a rising interest environment or otherwise, may hinderincrease the achievementspread between the yields realized on risk-free and higher risk securities and can result in illiquidity in parts of the capital markets, significant write-offs in the financial sector and re-pricing of credit risk in the broadly syndicated market.  These and any other unfavorable economic conditions could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. During the spring of 2020, the occurrence of these events during the initial onset of the COVID-19 pandemic negatively impacted the fair value of the investments that we held and, if they were to occur again in the future, could limit our investment originations (including as a result of the investment professionals of our investment objectives.Adviser diverting their time to the restructuring of certain investments), negatively impact our operating results and limit our ability to grow. More recently, the fair value of our investments has been adversely affected by increasing market yields.
The 1940 Act imposes numerous constraints on
In addition, market conditions (including inflation, supply chain issues and decreased consumer demand) have adversely impacted, and could in the future further impact, the operations of business developmentcertain of our portfolio companies.  If the financial results of middle-market companies, that do not applylike those in which we invest, experience deterioration, it could ultimately lead to difficulty in meeting debt service requirements and an increase in defaults, and further deterioration in market conditions will further depress the outlook for those companies. Further, adverse economic conditions decreased and may in the future decrease the value of collateral securing some of our loans and the value of our equity investments. Such conditions have required and may in the future require us to modify the payment terms of our investments, including changes in PIK interest provisions and/or cash interest rates. The performance of certain of our portfolio companies has been, and in the future may be, negatively impacted by these economic or other investment vehicles managed by Oaktreeconditions, which can result in our receipt of reduced interest income from our portfolio companies and/or realized and its affiliates. Business developmentunrealized losses related to our investments, and, in turn, may adversely affect distributable income and have a material adverse effect on our results of operations.
We have acquired, and may in the future opportunistically acquire the securities and obligations of distressed companies. These investments in distressed companies are required, for example,subject to invest at least 70%significant risks, including lack of their total assets primarilyincome, extraordinary expenses, uncertainty with respect to satisfaction of debt, lower-than-expected investment values or income potentials and resale restrictions.

We have acquired, and may in securities of U.S. private or thinly-traded public companies, cash, cash equivalents, U.S. governmentthe future acquire, the securities and other high-qualityobligations of distressed or bankrupt companies. At times, distressed debt instruments that matureobligations may not produce income and may require us to bear certain extraordinary expenses (including legal, accounting, valuation and transaction expenses) in one year or less from the date oforder to protect and recover our investment. Our Investment Adviser does not have any experience operating under these constraints, which may hinderTherefore, when we invest in distressed debt, our ability to take advantageachieve current income for our stockholders may be diminished, particularly where the portfolio company has negative EBITDA.

We also are subject to significant uncertainty as to when and in what manner and for what value the distressed debt we acquire will eventually be satisfied whether through a refinancing, restructuring, liquidation, an exchange offer or plan of attractive investment opportunities and to achieve our investment objective. Our Investment Adviser's track record and achievements are not necessarily indicativereorganization involving the distressed debt securities or a payment of some amount in satisfaction of the future results it will achieve. Accordingly, weobligation. In addition, even if an exchange offer is made or plan of reorganization is adopted with respect to distressed debt held by us, there can offerbe no assurance that wethe securities or other assets received by us in connection with such exchange offer or plan of reorganization will replicate the historical performance of other investment companies with which our investment professionalsnot have a lower value or income potential than may have been affiliated andanticipated when the investment was made.

Moreover, any securities received by us upon completion of an exchange offer or plan of reorganization may be restricted as to resale. As a result of our participation in negotiations with respect to any exchange offer or plan of reorganization with respect to an issuer of distressed debt, we caution that our investment returns couldmay be substantially lower than the returns achieved byrestricted from disposing of such other companies.securities.
Changes in interest rates, changes in the method for determining LIBOR and the potential replacement of LIBOR may affect our cost of capital and net investment income.

General interest rate fluctuations and changes in credit spreads on floating rate loans may have a substantial negative impact on our investments and investment opportunities and, accordingly, may have a material adverse effect on our rate of return on invested capital, our net investment income, our net asset value and the market price of our common stock. The majority of our debt investments have, and are expected to have, variable interest rates that reset periodically based on benchmarks such as the London Interbank Offered Rate, or LIBOR, or the federal funds rate or prime rate, so an increaserate. Increases in interest rates maytend to make it more difficult for our portfolio companies to service their obligations under the debt investments that we will hold and increase defaults even where our investment income increases. In addition, any increase inRising interest rates would make it more expensivecould also cause borrowers to use debtshift cash from other productive uses to finance our investments.the payment of
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interest, which may have a material adverse effect on their business and operations and could, over time, lead to increased defaults. Additionally, as interest rates increase and the corresponding risk of a default by borrowers increases, the liquidity of higher interest rate loans may decrease as fewer investors may be willing to purchase such loans in the secondary market in light of the increased risk of a default by the borrower and the heightened risk of a loss of an investment in such loans. All of these risks may be exacerbated when interest rates rise rapidly and/or significantly. Decreases in credit spreads on debt that pays a floating rate of return would have an impact on the income generation of our floating rate assets. Trading prices for debt that pays a fixed rate of return tend to fall as interest rates rise. Trading prices tend to fluctuate more for fixed rate securities that have longer maturities.
Conversely, if interest rates were to decline, borrowers may refinance their loans at lower interest rates, which could shorten the average life of the loans and reduce the associated returns on the investment, as well as require our Adviser and the Investment Professionals to incur management time and expense to re-deploy such proceeds, including on terms that may not be as favorable as our existing loans.
In addition, because we borrow to fund our investments, a portion of our net investment income is dependent upon the difference between the interest rate at which we borrow funds and the interest rate at which we invest these funds. Portions of our investment portfolio and our borrowings have floating rate components. As a result, athe recent significant changechanges in market interest rates could have a material adverse effect onincreased our net investment income.interest expense. In periods of rising interest rates, such as in the current market, our cost of funds could increase,increases, which wouldtends to reduce our net investment income. We may hedge against interest rate fluctuations by using standard hedging instruments such as interest rate swap agreements, futures, options and forward contracts, subject to applicable legal requirements, including all necessary registrations (or exemptions from registration) with the Commodity Futures Trading Commission. These activities may limit our ability to participate in the benefits of lower interest rates with respect to the hedged borrowings. Adverse developments resulting from changes in interest rates or hedging transactions could have a material adverse effect on our business, financial condition and results of operations.
As a result of concerns about the accuracy of the calculation of LIBOR, a number of British Bankers’ Association, or BBA, member banks entered into settlements with certain regulators and law enforcement agencies with respect to the alleged manipulation of LIBOR. Actions by the BBA, regulators or law enforcement agencies as a result of these or future events, may result in changes to the manner in which LIBOR is determined.determined (to the extent it continues beyond June 30, 2023). Potential changes, or uncertainty related to such potential changes may adversely affect the market for LIBOR-based securities, including our portfolio of LIBOR-indexed, floating-rate debt securities and our borrowings. In addition,
Although most U.S. dollar LIBOR rates will continue to be published through June 30, 2023, the FCA no longer compels panel banks to continue to contribute to LIBOR and the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation have encouraged banks to cease entering into new contracts that use U.S. dollar LIBOR as a reference rate. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, supports replacing U.S.-dollar LIBOR with the Secured Overnight Financing Rate, or SOFR, a new index calculated by short-term repurchase agreements, backed by Treasury securities. Although there are an increasing number of issuances utilizing SOFR or the Sterling Over Night Index Average, or SONIA, an alternative reference rate that is based on transactions, these alternative reference rates may not attain market acceptance as replacements for LIBOR. The transition away from LIBOR to alternative reference rates is complex and could have a material adverse effect on our business, financial condition and results of operations, including as a result of any changes or reformsin the pricing of our investments, changes to the determinationdocumentation for certain of our investments and the pace of such changes, disputes and other actions regarding the interpretation of current and prospective loan documentation or supervisionmodifications to processes and systems.
In anticipation of the cessation of LIBOR, we may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market for LIBOR-based securities or the value ofneed to renegotiate any credit agreements extending beyond June 30, 2023 with our portfolio of LIBOR-indexed, floating-rate debt securities and our borrowings.
In July 2017,companies that utilize LIBOR as a factor in determining the head of the United Kingdom Financial Conduct Authority announced the desireinterest rate or rely on certain fallback provisions that could cause interest rates to phase out the use of LIBOR by the end of 2021. There is currently no definitive information regarding the future utilization of LIBOR or of any particular replacement rate. Asshift to a base rate plus a margin. Any such the potentialrenegotiations may have a material adverse effect of any such event on our costbusiness, financial condition and results of capital and net investment income cannot yet be determined.operations, including as a result of changes in interest rates payable to us by our portfolio companies.
AThe general increase in interest rates will likely havehas had the effect of increasing our net investment income, which would makemakes it easier for our Investment Adviser to receive incentive fees.
AnyThe general increase in interest rates would likely havehas had the effect of increasing the interest rate that we receive on many of our debt investments. Accordingly, a general increase in interest rates may make it has become easier for our Investment Adviser to meet the quarterly hurdle rate for payment of income incentive fees under the New Investment Advisory Agreement and may resulthas resulted in a substantialan increase in the amount of the income-based incentive fee on income payable to our New Investment Adviser.
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A significant portion of our investment portfolio is and will continue to be recorded at fair value as determined in good faith by our Board of Directors and, as a result, there is and will continue to be uncertainty as to the value of our portfolio investments.
Under the 1940Investment Company Act, we are required to carry our portfolio investments at market value or, if there is no readily available market value, at fair value as determined by our Board of Directors.Adviser in its capacity as our valuation designee. Typically, there is not a public market for the securities of the privately held companies in which we have invested and will generally continue to invest. As a result, we valueour Adviser values these securities quarterly at fair value as determined in good faith byunder the oversight of our Board of Directors. The fair value of such securities may change, potentially materially, between the date of the fair value determination by our Board of Directors and the release of the financial results for the corresponding period or the next date at which fair value is determined.
Certain factors that may be considered in determining the fair value of our investments include the nature and realizable value of any collateral, the portfolio company’s earnings and its ability to make payments on its indebtedness, the markets in which the portfolio company does business, comparison to comparable publicly-traded companies, discounted cash flow and other relevant factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our Adviser's determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. In addition, any

investments that include OID or PIK interest may have unreliable valuations because their continuing accruals require ongoing judgments about the collectability of their deferred payments and the value of their underlying collateral. Due to these uncertainties, our Adviser's fair value determinations may cause our net asset value on a given date to materially understate or overstate the value that we may ultimately realize upon the sale of one or more of our investments. As a result, investors purchasing our common stock based on an overstated net asset value would pay a higher price than the realizable value of our investments might warrant.
In addition, the participation of the Investment Professionals in the valuation process could result in a conflict of interest as the management fee payable to our Adviser is based on our gross assets and the incentive fees earned by the Adviser will be based, in part, on unrealized gains and losses.
Our ability to achieve our investment objective depends on our Investment Adviser’s ability to support our investment process; if our Investment Adviser were to lose any of its key personnel or they were to resign, our ability to achieve our investment objective could be significantly harmed.
We depend on the investment expertise, skill and network of business contacts of the senior personnel of our Investment Adviser. Our Investment Adviser evaluates, negotiates, structures, executes, monitors and services our investments. Key personnel of our Investment Adviser have departed in the past and current key personnel could depart at any time. Our Investment Adviser’s capabilities in structuring the investment process, providing competent, attentive and efficient services to us, and facilitating access to financing on acceptable terms depend on the employment of investment professionals in adequate number and of adequate sophistication to match the corresponding flow of transactions. The departure of key personnel or of a significant number of the investment professionals or partners of our Investment Adviser could have a material adverse effect on our ability to achieve our investment objective. Our Investment Adviser may need to hire, train, supervise and manage new investment professionals to participate in our investment selection and monitoring process and may not be able to find investment professionals in a timely manner or at all.
In addition, our Adviser may resign on 60 days’ notice. If we are unable to quickly find a new investment adviser or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms, our operations are likely to experience a disruption and our ability to achieve our investment objective and pay distributions would likely be materially and adversely affected.
Our business model depends to a significant extent upon strong referral relationships, and the inability of the personnel associated with our Investment Adviser to maintain or develop these relationships, or the failure of these relationships to generate investment opportunities, could adversely affect our business.
We expect that personnel associated with our Investment Adviser will maintain and develop their relationships with intermediaries, banks and other sources, and we will rely to a significant extent upon these relationships to provide us with potential investment opportunities. If these individuals fail to maintain their existing relationships or develop new relationships with other sources of investment opportunities, we may not be able to grow or maintain our investment portfolio. In addition, individuals with whom the personnel associated with our Investment Adviser have relationships are not obligated to provide us with investment opportunities, and, therefore, there is no assurance that such relationships will generate investment opportunities for us. The failure of the personnel associated with our Investment Adviser to maintain existing relationships, grow new relationships, or for those relationships to generate investment opportunities could have an adverse effect on our business, financial condition and results of operations.
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We may face increasing competition for investment opportunities, which could reduce returns and result in losses.
We compete for investments with other business development companies,Business Development Companies, public and private funds (including hedge funds, mezzanine funds and collateralized loan obligations)CLOs) and private equity funds (to the extent they provide an alternative form of financing), as well as traditional financial services companies such as commercial and investment banks, commercial financing companies and other sources of financing. Many of our competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of capital and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments than we have. These characteristics could allow our competitors to consider a wider variety of investments, establish more relationships and offer better pricing and more flexible structuring than we are able to do. We may lose investment opportunities if we do not match our competitors’ pricing, terms and structure. If we are forced to match our competitors’ pricing, terms and structure, we may not be able to achieve acceptable returns on our investments or may bear substantial risk of capital loss. A significant increase in the number and/or the size of our competitors in this target market could force us to accept less attractive investment terms. Furthermore, many of our competitors are not subject to, the regulatory restrictions that the 1940Investment Company Act imposes on us as a business development company.

Our incentive fee may induce our Investment Adviser to make speculative investments.
The incentive fee payable by us to our Investment Adviser may create an incentive for it to make investments on our behalf that are risky or more speculative than would be the case in the absence of such compensation arrangement, which could result in higher investment losses, particularly during cyclical economic downturns. The incentive fee payable to our Investment Adviser is calculated separately in two components as a percentage of the income (subject to a hurdle rate) and as a percentage of the realized gain on invested capital, which may encourage our Investment Adviser to use leverage to increase the return on our investments or otherwise manipulate our income so as to recognize income in quarters where the hurdle rate is exceeded and may result in an obligation for us to pay an incentive fee to the Investment Adviser even if we have incurred a loss for an applicable period. Under certain circumstances, the use of leverage may increase the likelihood of default, which would disfavor the holders of our common stock.
The incentive fee payable by us to our Investment Adviser also may create an incentive for our Investment Adviser to invest on our behalf in instruments that have a deferred interest feature. Under these investments, we would accrue the interest over the life of the investment but would not receive the cash income from the investment until the end of the investment’s term, if at all. Our net investment income used to calculate the income portion of our incentive fee, however, includes accrued interest. Thus, a portion of the incentive fee would be based on income that we have not yet received in cash and may never receive in cash if the portfolio company is unable to satisfy such interest payment obligation to us. While we may make incentive fee payments on income accruals that we may not collect in the future and with respect to which we do not have a formal “clawback” right against our Investment Adviser, the amount of accrued income written off in any period will reduce the income in the period in which such write-off was taken and thereby reduce such period’s incentive fee payment.
In addition, commencing with the fiscal year ending September 30, 2019, our Investment Adviser will receive an incentive fee based upon net capital gains realized on our investments. Unlike the portion of the incentive fee based on income, there is no performance threshold applicable to the portion of the incentive fee based on net capital gains. As a result, our Investment Adviser may have a tendency to invest more in investments that are likely to result in capital gains as compared to income producing securities. Such a practice could result in our investing in more speculative securities than would otherwise be the case, which could result in higher investment losses, particularly during economic downturns.
Given the subjective nature of the investment decisions made by our Investment Adviser on our behalf, we will be unable to monitor these potential conflicts of interest between us and our Investment Adviser.
Our base management fee may induce our Investment Adviser to incur leverage.
The fact that our base management fee is payable based upon our gross assets, which includes borrowings for investment purposes, may encourage our Investment Adviser to use leverage to make additional investments. Under certain circumstances, the use of increased leverage may increase the likelihood of default, which would disfavor holders of our common stock. Given the subjective nature of the investment decisions made by our Investment Adviser on our behalf, we may not be able to monitor this potential conflict of interest.Business Development Company.
The incentive fee we pay to our Investment Adviser relating to capital gains may be effectively greater than 17.5%.
Commencing with the fiscal year ending September 30, 2019, the InvestmentThe Adviser can earnmay be entitled to receive an incentive fee based on our capital gains, calculated on a cumulative basis from the beginning of the fiscal year endingended September 30, 2019 through the end of each fiscal year. As a result of the operation of the cumulative method of calculating such capital gains portion of the incentive fee, the cumulative aggregate capital gains fee received by our Investment Adviser could be effectively greater than 17.5%, depending on the timing and extent of subsequent net realized capital losses or net unrealized depreciation. This result would occur to the extent that, following receipt by the Investment Adviser of a capital gain incentive fee, we subsequently recognizerealized capital depreciation and capital losses in excess of cumulative recognizedrealized capital gains. We cannot predict whether, or to what extent, this payment calculation would affect your investment in our stock.

Because we borrow money, the potential for loss on amounts invested in us will be magnified and may increase the risk of investing in us.
Borrowings, also known as leverage, magnify the potential for loss on invested equity capital. If we continue to use leverage to partially finance our investments, through borrowings from banks and other lenders, you will experience increased risks of investing in our common stock. We borrow under our credit facilities, have issued 4.875% unsecured notes due 2019, or the 2019 Notes, 5.875% unsecured notes due 2024, or the 2024 Notes, and 6.125% unsecured notes due 2028, or the 2028 Notes, and may issue other debt securities or enter into other types of borrowing arrangements in the future. If the value of our assets decreases, leveraging would cause net asset value to decline more sharply than it otherwise would have had we not leveraged. Similarly, any decrease in our income would cause net income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect our ability to make common stock distributions or scheduled debt payments. Leverage is generally considered a speculative investment technique and we only intend to use leverage if expected returns will exceed the cost of borrowing.
As of September 30, 2017, we had $226.5 million of outstanding indebtedness under our secured syndicated revolving credit facility with certain lenders party thereto from time to time and ING Capital LLC, as administrative agent, or as amended, the ING facility, $29.5 million of outstanding indebtedness under our credit facility with Sumitomo Mitsui Banking Corporation, or SMBC, an affiliate of Sumitomo Mitsui Financial Group, Inc., as administrative agent, and each of the lenders from time to time party thereto, or the Sumitomo facility, $250.0 million of outstanding 2019 Notes, $75.0 million of outstanding 2024 Notes, $86.3 million of outstanding 2028 Notes and $13.5 million of secured borrowings outstanding. These debt instruments require periodic payments of interest. The weighted average interest rate charged on our borrowings as of September 30, 2017 was 4.7% (exclusive of deferred financing costs). We will need to generate sufficient cash flow to make these required interest payments. In order for us to cover our annual interest payments on indebtedness, we must achieve annual returns on our September 30, 2017 total assets of at least 1.98%. If we are unable to meet the financial obligations under our credit facilities, the lenders under the credit facilities will have a superior claim to our assets over our stockholders. If we are unable to meet the financial obligations under the 2019 Notes, 2024 Notes or 2028 Notes, the holders thereof will have the right to declare the principal amount and accrued and unpaid interest on such notes to be due and payable immediately.

As a business development company, under the 1940 Act we generally are not permitted to incur indebtedness unless immediately after such borrowing we have an asset coverage for total borrowings of at least 200% (i.e., the amount of debt may not exceed 50% of the value of our assets). We have received exemptive relief from the SEC to permit us to exclude the debt of any SBIC subsidiaries guaranteed by the SBA from the definition of senior securities in the 200% asset coverage ratio we are required to maintain under the 1940 Act. As a result of our receipt of this relief, we have the ability to incur leverage in excess of the amounts set forth in the 1940 Act. If we incur leverage in excess of the amounts set forth in the 1940 Act, our net asset value will decline more sharply if the value of our assets declines than if we had not incurred such additional leverage and the effects of leverage described above will be magnified. In addition, if legislation to modify the 1940 Act and increase the amount of debt that business development companies may incur by modifying the asset coverage percentage were enacted into law, we would able to incur additional indebtedness.

Illustration.  The following table illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns, net of expenses. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing below.

Assumed Return on Portfolio (Net of Expenses)- 10%- 5%0%5%10%
Corresponding net return to common stockholder-22.31%-13.00%-3.69%5.62%14.94%

For purposes of this table, we have assumed $1.6 billion in total assets, $680.3 million in debt outstanding, $867.7 million in net assets as of September 30, 2017, and a weighted average interest rate of 4.7% as of September 30, 2017 (exclusive of deferred financing costs). Actual interest payments may be different.

Substantially all of our assets are subject to security interests under secured credit facilities and if we default on our obligations under the facilities, we may suffer adverse consequences, including foreclosure on our assets.
As of September 30, 2017, substantially all of our assets were pledged as collateral under our credit facilities. If we default on our obligations under these facilities, the lenders may have the right to foreclose upon and sell, or otherwise transfer, the collateral subject to their security interests or their superior claim. In such event, we may be forced to sell our investments to raise funds to repay our outstanding borrowings in order to avoid foreclosure and these forced sales may be at times and at prices we would not consider advantageous. Moreover, such deleveraging of our company could significantly impair our ability to effectively operate our business in the manner in which we have historically operated. As a result, we could be forced to curtail or cease new investment activities and lower or eliminate the distributions that we have historically paid to our stockholders.
In addition, if the lenders exercise their right to sell the assets pledged under our credit facilities, such sales may be completed at distressed sale prices, thereby diminishing or potentially eliminating the amount of cash available to us after repayment of the amounts outstanding under the credit facilities.
Because we intend to distribute at least 90% of our taxable income each taxable year to our stockholders in connection with our election to be treated as a RIC, we will continue to need additional capital to finance our growth.
In order to qualify for the tax benefits available to RICs and to minimize corporate-level U.S. federal income taxes, we intend to distribute to our stockholders at least 90% of our taxable income each taxable year, except that we may retain certain net capital gains for investment, and treat such amounts as deemed distributions to our stockholders. If we elect to treat any amounts as deemed distributions, we would be subject to income taxes at the corporate rate applicable to net capital gains on such deemed distributions on behalf of our stockholders. As a result of these requirements, we will likely need to raise capital from other sources to grow our business. As a business development company, we generally are required to meet a coverage ratio of total assets, less liabilities and indebtedness not represented by senior securities, to total senior securities, which includes all of our borrowings and any outstanding preferred stock, of at least 200%. These requirements limit the amount that we may borrow. Because we will continue to need capital to grow our investment portfolio, these limitations may prevent us from incurring debt and require us to raise additional equity at a time when it may be disadvantageous to do so.
While we expect to be able to issue additional equity securities, we cannot assure you that equity financing will be available to us on favorable terms, or at all. Also, as a business development company, we generally are not permitted to issue equity securities priced below net asset value without stockholder approval. If additional funds are not available to us, we could be forced to curtail or cease new investment activities, and our net asset value and share price could decline.securities.
Our ability to enter into transactions with our affiliates is restricted.
We are prohibited under the 1940Investment Company Act from participating in certain transactions with certain of our affiliates without the prior approval of the members of our independent directors and, in some cases, the SEC. Any person that owns, directly or indirectly, 5% or more of our outstanding voting securities is our affiliate for purposes of the 1940Investment Company Act, and we are generally prohibited from buying or selling any securities (other than our securities) from or to such affiliate, absent the prior approval of our independent directors. The 1940Investment Company Act also prohibits certain “joint” transactions with certain of our affiliates, which could include investments in the same portfolio company (whether at the same or different times), without prior approval of our independent directors and, in some cases, the SEC. If a person acquires more than 25% of our voting securities, we will be prohibited from buying or selling any security (other than any security of which we are the issuer) from or to such person or certain of that person’s affiliates, or entering into prohibited joint transactions with such person, absent the prior approval of the SEC. Similar restrictions limit our ability to transact business with our officers or directors or their affiliates. As a result of these restrictions, except in situations described below, we may be prohibited from buying or selling any security (other than any security of which we are the issuer) from or to any portfolio company of a private equity fund managed by our investment adviserAdviser without the prior approval of the SEC, which may limit the scope of investment opportunities that would otherwise be available to us.
Our Investment Adviser has received exemptive relief from the SEC to allow certain managed funds and accounts to co-invest, subject to the conditions of the relief granted by the SEC, where doing so is consistent with the applicable registered fund’s or business development company’s investment strategy as well as applicable law (including the terms and conditions of the exemptive order issued by the SEC). Under the terms of this exemptive relief permitting us to co-invest with other funds managed by our Investment Adviser and its affiliates, a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors must make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching of us or our stockholders on the part of any person concerned, (2) the transaction is consistent with the interests of our stockholders and is consistent with our investment objectives and strategies and (3) the investment by other funds advised by our Investment Adviser or its affiliates would not disadvantage us and our participation would not be on a basis different from, or less advantageous than, that of any other fund advised by our Investment Adviser or its affiliates

participating in the transaction. We intend to co-invest, subject to the conditions included in the exemptive order we received from the SEC, with certain of our affiliates. We may also invest alongside funds managed by our Investment Adviser and its affiliates in certain circumstances where doing so is consistent with applicable law and SEC staff interpretations. For example, we may invest alongside such accounts consistent with guidance promulgated by the staff of the SEC permitting us and such other accounts to purchase interests in a single class of privately placed securities so long as certain conditions are met, including that our Investment Adviser, acting on our behalf and on behalf of other clients, negotiates no term other than price.
There are significant potential conflicts of interest that could adversely impact our investment returns.
Our executive officers and directors, and certain members of our Investment Adviser, serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as we do or of investment funds managed by our affiliates. For example, Oaktree presently serves as the investment adviser to OCSI, a publicly-traded business development company with over $600 million of total assets at fair value as of September 30, 2017. OCSI has historically invested in senior secured loans, including first lien, unitranche and second lien debt instruments that pay interest at rates which are determined periodically on the basis of a floating base lending rate, made to private middle-market companies whose debt is rated below investment grade, similar to those we target for investment. Therefore, there may be certain investment opportunities that satisfy the investment criteria for both OCSI and us. OCSI operates as a distinct and separate public company and any investment in our common stock will not be an investment in OCSI. In addition, all of our executive officers and four of our independent directors serve in substantially similar capacities for OCSI. Oaktree and its affiliates also manage and sub-advise private investment funds and accounts, and may manage other such funds and accounts in the future, which have investment mandates that are similar, in whole and in part, with ours. Accordingly, they may have obligations to investors in those entities, the fulfillment of which might not be in the best interests of us or our stockholders. For example, the personnel of our Investment Adviser may face conflicts of interest in the allocation of investment opportunities to us and such other funds and accounts.
Oaktree has investment allocation guidelines that govern the allocation of investment opportunities among the investment funds and accounts managed or sub-advised by Oaktree and its affiliates. To the extent an investment opportunity is appropriate for us or OCSI or any other investment fund or account managed or sub-advised by Oaktree or its affiliates, Oaktree will adhere to its investment allocation guidelines in order to determine a fair and equitable allocation.
We may invest alongside funds and accounts managed or sub-advised by our Investment Adviser and its affiliates in certain circumstances where doing so is consistent with applicable law and SEC staff interpretations. For example, we may invest alongside such accounts consistent with guidance promulgated by the staff of the SEC permitting us and such other accounts to purchase interests in a single class of privately placed securities so long as certain conditions are met, including that our Investment Adviser, acting on our behalf and on behalf of other clients, negotiates no term other than price or terms related to price.
In addition, on October 18, 2017, our Investment Adviser received exemptive relief from the SEC to allow certain managed funds and accounts, each of whose investment adviser is Oaktree or an investment adviser controlling, controlled by or under common control with Oaktree, to participate in negotiated co-investment transactions where doing so is consistent with the applicable registered fund’s or business development company’s investment objective and strategies as well as regulatory requirements and other pertinent factors, and pursuant to the conditions of the exemptive relief. Each potential co-investment opportunity that falls under the terms of the exemptive relief and is appropriate for us and any affiliated fund or account, and satisfies the then-current board-established criteria, will be offered to us and such other eligible funds and accounts. If there is a sufficient amount of securities to satisfy all participants, the securities will be allocated among the participants in accordance with their proposed order size and if there is an insufficient amount of securities to satisfy all participants, the securities will be allocated pro rata based on the investment proposed by the applicable investment adviser to such participant, up to the amount proposed to be invested by each, which is reviewed and approved by an independent committee of legal, compliance and accounting professionals at our Investment Adviser. Although Oaktree will endeavor to allocate investment opportunities in a fair and equitable manner, we and our common stockholders could be adversely affected to the extent investment opportunities are allocated among us and other investment vehicles managed or sponsored by, or affiliated with, our executive officers, directors and members of our Investment Adviser. We might not participate in each individual opportunity, but will, on an overall basis, be entitled to participate equitably with other entities managed by Oaktree and its affiliates. Oaktree seeks to treat all clients fairly and equitably such that none receive preferential treatment vis-à-vis the others over time, in a manner consistent with its fiduciary duty to each of them; however, in some instances, especially in instances of limited liquidity, the factors may not result in pro rata allocations or may result in situations where certain funds or accounts receive allocations where others do not.
Pursuant to the New Investment Advisory Agreement, our Investment Adviser’s liability is limited and we are required to indemnify our Investment Adviser against certain liabilities. This may lead our Investment Adviser to act in a riskier manner in

performing its duties and obligations under the New Investment Advisory Agreement than it would if it were acting for its own account, and creates a potential conflict of interest.
Pursuant to the New Administration Agreement, the Oaktree Administrator furnishes us with the facilities, including our principal executive office, and administrative services necessary to conduct our day-to-day operations. We pay the Oaktree Administrator its allocable portion of overhead and other expenses incurred by the Oaktree Administrator in performing its obligations under the New Administration Agreement, including, without limitation a portion of the rent at market rates and the compensation of our Chief Financial Officer, Chief Compliance Officer, their respective staffs and other non-investment professionals at Oaktree that perform duties for us. This arrangement creates conflicts of interest that our Board of Directors must monitor.
A failure on our part to maintain our qualification as a business development companyBusiness Development Company would significantly reduce our operating flexibility.
If we fail to continuously qualify as a business development company,Business Development Company, we might be subject to regulation as a registered closed-end investment company under the 1940Investment Company Act, which would significantly decrease our operating flexibility. In addition, failure to comply with the requirements imposed on business development companiesBusiness Development Companies by the 1940Investment Company Act could cause the SEC to bring an enforcement action against us. See “ — Business Development Company Regulations.”
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Regulations governing our operation as a business development companyBusiness Development Company and RIC affect our ability to raise, and the way in which we raise, additional capital or borrow for investment purposes, which may have a negative effect on our growth.
In order to qualify for the tax benefits available to RICs and to minimize corporate-level U.S. federal income taxes, we intend to distribute to our stockholders at least 90% of our taxable income each taxable year, except that we may retain certain net capital gains for investment, and treat such amounts as deemed distributions to our stockholders. If we elect to treat any amounts as deemed distributions, we would be subject to U.S. federal income taxestax at the corporate rate on such deemed distributions on behalf of our stockholders.
As a business development company,Business Development Company, we are required to invest at least 70% of our total assets primarily in securities of U.S. private or thinly-traded public companies, cash, cash equivalents, U.S. government securities and other high-quality debt instruments that mature in one year or less from the date of investment.
As a Business Development Company, we may issue “senior securities,” including borrowing money from banks or other financial institutions only in amounts such that our asset coverage, as defined in the 1940Investment Company Act, equals at least 200%150% after such incurrence or issuance, provided that, pursuant to exemptive relief we received from the SEC, we are permitted to exclude the debt of our SBIC subsidiaries guaranteed by the SBA from the definition of senior securities in calculating our 200% asset coverage ratio under the 1940 Act.issuance. These requirements limit the amount that we may borrow, may unfavorably limit our investment opportunities and may reduce our ability in comparison to other companies to profit from favorable spreads between the rates at which we can borrow and the rates at which we can lend. If the value of our assets declines, we may be unable to satisfy the asset coverage test, which could prohibit us from paying distributions and could prevent us from being subject to tax as a RIC. If we cannot satisfy the asset coverage test, we may be required to sell a portion of our investments and, depending on the nature of our debt financing, repay a portion of our indebtedness at a time when such sales may be disadvantageous.
Because we will continue to need capital to grow our investment portfolio, these limitations may prevent us from incurring debt and require us to raise additional equity at a time when it may be disadvantageous to do so. As a result of these requirements we need to periodically access the capital markets to raise cash to fund new investments at a more frequent pace than our privately owned competitors. We generally are not able to issue or sell our common stock at a price below net asset value per share, which may be a disadvantage as compared with other public companies or private investment funds. IfWhen our common stock trades at a discount to net asset value, this restriction could adversely affect our ability to raise capital. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the current net asset value of the common stock if our Board of Directors and independent directors determine that such sale is in our best interests and the best interests of our stockholders, and our stockholders as well as those stockholders that are not affiliated with us approve such sale in accordance with the requirements of the 1940Investment Company Act. In any such case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our Board of Directors, closely approximates the market value of such securities (less any underwriting commission or discount). We cannot assure you that equity financing will be available to us on favorable terms, or at all.  If additional funds are not available to us, we could be forced to curtail or cease new investment activities. 
We also may make rights offerings to our stockholders at prices less than net asset value, subject to applicable requirements of the 1940Investment Company Act. If we raise additional funds by issuing more shares of our common stock or issuing senior securities convertible into, or exchangeable for, our common stock, the percentage ownership of our stockholders may decline at that time and such stockholders may experience dilution. Moreover, we can offer no assurance that we will be able to issue and sell additional equity securities in the future, on terms favorable to us or at all.
In addition, we may in the future seek to securitize our portfolio securities to generate cash for funding new investments. To securitize loans, we would likely create a wholly-owned subsidiary and contribute a pool of loans to the subsidiary. We would then sell interests in the subsidiary on a non-recourse basis to purchasers and we would retain all or a portion of the

equity in the subsidiary. An inability to successfully securitize our loan portfolio could limit our ability to grow our business or fully execute our business strategy and may decrease our earnings, if any. The securitization market is subject to changing market conditions and we may not be able to access this market when we would otherwise deem appropriate. Moreover, the successful securitization of our portfolio might expose us to losses as the residual investments in which we do not sell interests will tend to be those that are riskier and more apt to generate losses. The 1940Investment Company Act also may impose restrictions on the structure of any securitization.
We may experience fluctuations in our quarterly results.
We could experience fluctuations in our quarterly results due to a number of factors, including our ability or inability to make investments in companies that meet our investment criteria, the interest rate payable on the debt securities we acquire, changes in accrual status of our portfolio company investments, distributions, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our market and general economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance in future periods.
Our Board of Directors may change our investment objective, operating policies and strategies without prior notice or stockholder approval, the effects of which may be adverse.
Our Board of Directors has the authority to modify or waive our current investment objective, operating policies and strategies without prior notice and without stockholder approval. We cannot predict the effect any changes to our current investment objective, operating policies and strategies would have on our business, net asset value, operating results and value of our stock. However, the effects might be adverse, which could negatively impact our ability to pay you distributions and cause you to lose part or all of your investment.
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Changes in laws or regulations governing our operations may adversely affect our business or cause us to alter our business strategy.
We and our portfolio companies are subject to regulation at the local, state and federal level. New legislation may be enacted or new interpretations, rulings or regulations could be adopted, including those governing the types of investments we are permitted to make or that impose limits on our ability to pledge a significant amount of our assets to secure loans or that restrict the operations of a portfolio company, any of which could harm us and our stockholders and the value of our investments, potentially with retroactive effect. Any amendment or repeal of legislation, or changes in regulations or regulatory interpretations thereof, could create uncertainty in the near term, which could have a material adverse impact on our business, financial condition and results of operations.
Additionally, any changes to the laws and regulations governing our operations relating to permitted investments may cause us to alter our investment strategy in order to avail ourselves of new or different opportunities. Such changes could result in material differences to the strategies and plans set forth herein and may result in our investment focus shifting from the areas of expertise of our Adviser to other types of investments in which our Adviser may have less expertise or little or no experience. Thus, any such changes, if they occur, could have a material adverse effect on our results of operations and the value of your investment.
We are subject to risks associated with communications and information systems. 

We depend on the communications and information systems of our Adviser and its affiliates as well as certain third-party service providers. The risks posed to these communications and information systems have continued to increase over time. Any failure or interruption in these systems could cause disruptions in our activities.  In addition, these systems are subject to attacks, including through adverse events that threaten the confidentiality, integrity or availability of our information resources.  These attacks, which may include cyber incidents, could involve a third party gaining unauthorized access to our communications or information systems for purposes of misappropriating assets, stealing confidential information related to our operations or portfolio companies, corrupting data or causing operational disruption.  Any such attack could result in disruption to our business, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our business relationships, any of which could have a material adverse effect on our business, financial condition and results of operations. 
We may be unable to invest a significant portion of the net proceeds from an offering of our securities on acceptable terms within an attractive timeframe.
Delays in investing the net proceeds raised in an offering of our securities may cause our performance to be worse than that of fully invested Business Development Companies or other lenders or investors pursuing comparable investment strategies. We cannot assure you that we will be able to identify any investments that meet our investment objective or that any investment that we make will produce a positive return. We may be unable to invest the net proceeds of any offering on acceptable terms within the time period that we anticipate or at all, which could harm our financial condition and operating results.
We anticipate that, depending on market conditions, it may take us a substantial period of time to invest substantially all of the net proceeds of any offering in securities meeting our investment objective. During this period, we may use the net proceeds to pay down outstanding debt or we may invest the net proceeds of an offering primarily in cash, cash equivalents, U.S. government securities, repurchase agreements and high-quality debt instruments maturing in one year or less from the time of investment, which may produce returns that are significantly lower than the returns which we expect to achieve when our portfolio is fully invested in securities meeting our investment objective. As a result, any distributions that we pay during this period may be substantially lower than the distributions that we may be able to pay when our portfolio is fully invested in securities meeting our investment objective. In addition, until such time as the net proceeds of an offering are invested in securities meeting our investment objective, the market price for our common stock may decline. Thus, the return on your investment may be lower than when, if ever, our portfolio is fully invested in securities meeting our investment objective.
We may allocate the net proceeds from an offering in ways with which you may not agree.
We have significant flexibility in investing the net proceeds of an offering, and may do so in a way with which you may not agree. Additionally, our Adviser will select our investments subsequent to the closing of an offering, and our stockholders will have no input with respect to such investment decisions. Further, other than general limitations that may be included in a future credit facility, the holders of our debt securities will generally not have veto power or a vote in approving any changes to our investment or operational policies. These factors increase the uncertainty, and thus the risk, of investing in our securities. In addition, pending such investments, we will invest the net proceeds from an offering primarily in high quality, short-term debt securities, consistent with our Business Development Company election and our election to be taxed as a RIC, at yields significantly below the returns which we expect to achieve when our portfolio is fully invested in securities meeting our investment objective. If we are not able to identify or gain access to suitable investments, our income may be limited.
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Risks Relating to Conflicts of Interest

Our base management fee may induce our Adviser to incur leverage.

Our base management fee is payable based upon our gross assets, which includes borrowings for investment purposes, which may encourage our Adviser to use leverage to make additional investments. Given the subjective nature of the investment decisions made by our Adviser on our behalf and the discretion related to incurring leverage in connection with any such investments, it will be difficult to monitor this potential conflict of interest between us and our Adviser.

Our incentive fee may induce our Adviser to make speculative investments.

The incentive fee payable by us to our Adviser may create an incentive for it to make investments on our behalf that are risky or more speculative than would be the case in the absence of such compensation arrangement, which could result in higher investment losses, particularly during cyclical economic downturns. The incentive fee payable to our Adviser includes a component based on a percentage of our net investment income (subject to a hurdle rate), which may encourage our Adviser to use leverage to increase the return on our investments or otherwise manipulate our income so as to recognize income in quarters where the hurdle rate is exceeded and may result in an obligation for us to pay an incentive fee to the Adviser even if we have incurred a loss for an applicable period.

The incentive fee payable by us to our Adviser also may create an incentive for our Adviser to invest on our behalf in instruments that have a deferred interest feature. Under these investments, we would accrue the interest over the life of the investment but would not receive the cash income from the investment until the end of the investment’s term, if at all. Our net investment income used to calculate the income portion of our incentive fee, however, includes accrued interest. Thus, a portion of the incentive fee would be based on income that we have not yet received in cash and may never receive in cash if the portfolio company is unable to satisfy such interest payment obligation to us. While we may make incentive fee payments on income accruals that we may not collect in the future and with respect to which we do not have a formal “clawback” right against our Adviser, the amount of accrued income written off in any period will reduce the income in the period in which such write-off was taken and thereby reduce such period’s incentive fee payment.

In addition, our Adviser may be entitled to receive an incentive fee based upon net capital gains realized on our investments. Unlike the portion of the incentive fee based on income, there is no performance threshold applicable to the portion of the incentive fee based on net capital gains. As a result, our Adviser may have a tendency to invest more in investments that are likely to result in capital gains as compared to income producing securities. Such a practice could result in our investing in more speculative securities than would otherwise be the case, which could result in higher investment losses, particularly during economic downturns.

Given the subjective nature of the investment decisions made by our Adviser on our behalf, we will be unable to monitor these potential conflicts of interest between us and our Adviser.

There are significant potential conflicts of interest that could adversely impact our investment returns.

Our executive officers and directors, and certain members of our Adviser, serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as we do or of investment funds managed by our affiliates. For example, Oaktree presently serves as the investment adviser to OSI 2, a private Business Development Company, and OSCF, a continuously offered Business Development Company. All of our executive officers serve in substantially similar capacities for OSI 2, and one of our independent directors serves as an independent director of OSI 2 and OSCF. OSI 2 and OSCF invest in senior secured loans, including first lien, unitranche and second lien debt instruments that pay interest at rates which are determined periodically on the basis of a floating base lending rate, made to private middle-market companies whose debt is rated below investment grade, similar to those we target for investment. Oaktree and its affiliates also manage or sub-advise other Business Development Companies, registered investment companies and private investment funds and accounts, and may manage other such funds and accounts in the future, which have investment mandates that are similar, in whole and in part, with ours. Therefore, there may be certain investment opportunities that satisfy the investment criteria for OSI 2, OSCF and us as well as other Business Development Companies, registered investment companies and private investment funds and accounts advised or sub-advised by Oaktree or its affiliates. In addition, Oaktree and its affiliates may have obligations to investors in other entities that advise or sub-advise, the fulfillment of which might not be in the best interests of us or our stockholders. An investment in us is not an investment in any of these other entities.

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For example, the personnel of our Adviser may face conflicts of interest in the allocation of investment opportunities to us and such other funds and accounts. Moreover, the Adviser and the Investment Professionals are engaged in other business activities which divert their time and attention. The Investment Professionals will devote as much time to us as such professionals deem appropriate to perform their duties in accordance with the Investment Advisory Agreement. However, such persons may be committed to providing investment advisory and other services for other clients, and engage in other business ventures in which we have no interest. As a result of these separate business activities, the Adviser may have conflicts of interest in allocating management time, services and functions among us, other advisory clients and other business ventures.

Oaktree has investment allocation guidelines that govern the allocation of investment opportunities among the investment funds and accounts managed or sub-advised by Oaktree and its affiliates. To the extent an investment opportunity is appropriate for OSI 2, OSCF or us or any other investment fund or account managed or sub-advised by Oaktree or its affiliates, Oaktree will adhere to its investment allocation guidelines in order to determine a fair and equitable allocation.
In addition, affiliates of our Adviser have received exemptive relief from the SEC to allow certain managed funds and accounts, each of whose investment adviser is OCM or an investment adviser controlling, controlled by or under common control with OCM, such as our Adviser, as well as proprietary accounts (subject to certain conditions) to participate in negotiated co-investment transactions where doing so is consistent with the applicable registered fund’s or Business Development Company’s investment objective and strategies as well as regulatory requirements and other pertinent factors, and pursuant to the conditions of the exemptive relief. Each potential co-investment opportunity that falls under the terms of the exemptive relief and is appropriate for us and any affiliated fund or account, and satisfies the then-current board-established criteria, will be offered to us and such other eligible funds and accounts. If there is a sufficient amount of securities to satisfy all participants, the securities will be allocated among the participants in accordance with their proposed order size and if there is an insufficient amount of securities to satisfy all participants, the securities will be allocated pro rata based on the investment proposed by the applicable investment adviser to such participant, up to the amount proposed to be invested by each, which is reviewed and approved by an independent committee of legal, compliance and accounting professionals at our Adviser. We may also invest alongside funds managed by our Adviser and its affiliates in certain circumstances where doing so is consistent with applicable law and SEC staff interpretations. For example, we may invest alongside such accounts consistent with guidance promulgated by the staff of the SEC permitting us and such other accounts to purchase interests in a single class of privately placed securities so long as certain conditions are met, including that our Adviser, acting on our behalf and on behalf of other clients, negotiates no term other than price or terms related to price.

Although Oaktree will endeavor to allocate investment opportunities in a fair and equitable manner, we and our common stockholders could be adversely affected to the extent investment opportunities are allocated among us and other investment vehicles managed or sponsored by, or affiliated with, our executive officers, directors and members of our Adviser. We might not participate in each individual opportunity, but will, on an overall basis, be entitled to participate equitably with other entities managed by Oaktree and its affiliates. Oaktree seeks to treat all clients fairly and equitably such that none receive preferential treatment vis-à-vis the others over time, in a manner consistent with its fiduciary duty to each of them; however, in some instances, especially in instances of limited liquidity, the factors may not result in pro rata allocations or may result in situations where certain funds or accounts receive allocations where others do not.

Pursuant to the Investment Advisory Agreement, our Adviser’s liability is limited and we are required to indemnify our Adviser against certain liabilities. This may lead our Adviser to act in a riskier manner in performing its duties and obligations under the Investment Advisory Agreement than it would if it were acting for its own account, and creates a potential conflict of interest.

Pursuant to the Administration Agreement, Oaktree Administrator furnishes us with the facilities, including our principal executive office, and administrative services necessary to conduct our day-to-day operations. We pay Oaktree Administrator its allocable portion of overhead and other expenses incurred by Oaktree Administrator in performing its obligations under the Administration Agreement, including, without limitation a portion of the rent at market rates and the compensation of our Chief Financial Officer, Chief Compliance Officer, their respective staffs and other non-investment professionals at Oaktree that perform duties for us. This arrangement creates conflicts of interest that our Board of Directors must monitor.

Risks Relating to Our Use of Leverage

Because we borrow money, the potential for loss on amounts invested in us will be magnified and may increase the risk of investing in us.

Borrowings, also known as leverage, magnify the potential for loss on invested equity capital. We expect to continue to use leverage to partially finance our investments, through borrowings from banks and other lenders and/or issuing unsecured
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notes, which will increase the risks of investing in our common stock, including the likelihood of default. We borrow under our credit facilities and unsecured notes. On November 30, 2017, we entered into a Senior Secured Revolving Credit Agreement, or as amended and/or restated from time to time, the Syndicated Facility, with the lenders, ING Capital LLC, as administrative agent, ING Capital LLC, JPMorgan Chase Bank, N.A., BofA Securities, Inc. and MUFG Union Bank, N.A. as joint lead arrangers and joint bookrunners, and JPMorgan Chase Bank, N.A. and Bank of America, N.A., as syndication agents. On March 19, 2021, we became party to a revolving credit facility, or as amended and/or restated from time to time, the Citibank Facility, with OCSL Senior Funding II LLC, our wholly-owned, special purpose financing subsidiary, as the borrower, us, as collateral manager and seller, each of the lenders from time to time party thereto, Citibank, N.A., as administrative agent, and Wells Fargo Bank, National Association, as collateral agent and custodian. In addition, we have two series of unsecured notes outstanding: our 3.500% notes due 2025, or the 2025 Notes, and our 2.700% notes due 2027, or the 2027 Notes. We may issue other debt securities or enter into other types of borrowing arrangements in the future. If the value of our assets decreases, leveraging would cause net asset value to decline more sharply than it otherwise would have had we not leveraged. Similarly, any decrease in our income would cause net income to decline more sharply than it would have had we not borrowed. To the extent we incur additional leverage, these effects would be further magnified, increasing the risk of investing in us. Such a decline could negatively affect our ability to make common stock distributions or scheduled debt payments. Leverage is generally considered a speculative investment technique and we only intend to use leverage if expected returns will exceed the cost of borrowing.

As of September 30, 2022, we had $700.0 million of outstanding indebtedness under our credit facilities, $300.0 million of outstanding 2025 Notes and $350.0 million of outstanding 2027 Notes. These debt instruments require periodic payments of interest. The weighted average interest rate charged on our borrowings as of September 30, 2022 was 4.4% (exclusive of deferred financing costs and inclusive of the impact of an interest rate swap designated as a hedging instrument). We will need to generate sufficient cash flow to make these required interest payments. In order for us to cover our annual interest payments on indebtedness, we must achieve annual returns on our September 30, 2022 total assets of at least 2.33%. If we are unable to meet the financial obligations under our credit facilities, the lenders under such credit facilities will have a superior claim to our assets over our stockholders. If we are unable to meet the financial obligations under the 2025 Notes or 2027 Notes, the holders thereof will have the right to declare the principal amount and accrued and unpaid interest on such notes to be due and payable immediately.

The Small Business Credit Availability Act, or the SBCAA, among other things, amended Section 61(a) of the Investment Company Act to add a new Section 61(a)(2) that reduces the asset coverage requirement applicable to Business Development Companies from 200% to 150% (i.e., the amount of debt may not exceed 66.67% of the value of the Business Development Company’s assets) so long as the Business Development Company meets certain disclosure requirements and obtains certain approvals. At a special meeting of stockholders held on June 28, 2019, our stockholders approved the application of the reduced asset coverage requirements in Section 61(a)(2) of the Investment Company Act to us, effective as of June 29, 2019. When we incur additional leverage, our net asset value will decline more sharply if the value of our assets declines and the effects of leverage described above will be magnified.

Illustration. The following table illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns, net of expenses. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing below.
Assumed Return on Portfolio (Net of Expenses)- 10%- 5%0%5%10%
Corresponding net return to common stockholder-25.21%-14.99%-4.77%5.45%15.68%

For purposes of this table, we have assumed $2,546.6 million in total assets (less all liabilities and indebtedness not represented by senior securities), $1,350.0 million in debt outstanding, $1,245.6 million in net assets as of September 30, 2022, and a weighted average interest rate of 4.4% as of September 30, 2022 (exclusive of deferred financing costs and inclusive of the impact of an interest rate swap designated as a hedging instrument). Actual interest payments may be different.

Substantially all of our assets are subject to security interests under our credit facilities and if we default on our obligations under any such facility, we may suffer adverse consequences, including foreclosure on our assets.

As of September 30, 2022, substantially all of our assets were pledged as collateral under our credit facilities and may be pledged as collateral under future credit facilities. If we default on our obligations under these facilities, the lenders may have the right to foreclose upon and sell, or otherwise transfer, the collateral subject to their security interests or their superior claim. In such event, we may be forced to sell our investments to raise funds to repay our outstanding borrowings in order to avoid foreclosure and these forced sales may be at times and at prices we would not consider advantageous. Moreover, such deleveraging of our company could significantly impair our ability to effectively operate our business in the manner in which
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we have historically operated. As a result, we could be forced to curtail or cease new investment activities and lower or eliminate the distributions that we have historically paid to our stockholders.

In addition, if the lenders exercise their right to sell the assets pledged under our credit facilities or future credit facilities, such sales may be completed at distressed sale prices, thereby diminishing or potentially eliminating the amount of cash available to us after repayment of the amounts outstanding under the credit facilities.

We may enter into reverse repurchase agreements, which are another form of leverage.

We may enter into reverse repurchase agreements as part of our management of our temporary investment portfolio. Our entry into any such reverse repurchase agreements would be subject to the Investment Company Act limitations on leverage. In connection with entry into a reverse repurchase agreement, we would effectively pledge our assets as collateral to secure a short-term loan. Generally, the other party to the agreement would make a loan to us in an amount equal to a percentage of the fair value of the collateral we have pledged. At the maturity of the reverse repurchase agreement, we will be required to repay the loan and then receive back our collateral. While used as collateral, the assets continue to pay principal and interest which are for the benefit of us.

Our use of reverse repurchase agreements, if any, involves many of the same risks involved in our use of leverage. For example, the market value of the securities acquired in the reverse repurchase agreement may decline below the price of the securities that we have sold but we would remain obligated to purchase those securities, meaning that we bear the risk of loss that the proceeds at settlement are less than the fair value of the securities pledged. In addition, the market value of the securities retained by us may decline. If a buyer of securities under a reverse repurchase agreement were to file for bankruptcy or experience insolvency, we would be adversely affected. In addition, due to the interest costs associated with reverse repurchase agreements, our net asset value would decline, and, in some cases, we may be worse off than if we had not used such agreements.

Risks Related to Distributions

Because we intend to distribute at least 90% of our taxable income each taxable year to our stockholders in connection with our election to be treated as a RIC, we will continue to need additional capital to finance our growth.

In order to qualify for the tax benefits available to RICs and to minimize corporate-level U.S. federal income taxes, we intend to distribute to our stockholders at least 90% of our taxable income each taxable year, except that we may retain certain net capital gains for investment, and treat such amounts as deemed distributions to our stockholders. If we elect to treat any amounts as deemed distributions, we would be subject to U.S. federal income tax at the corporate rate applicable to net capital gains on such deemed distributions on behalf of our stockholders. As a result of these requirements, we will likely need to raise capital from other sources to grow our business. Because we will continue to need capital to grow our investment portfolio, these limitations together with the asset coverage requirements applicable to us may prevent us from incurring debt and require us to raise additional equity at a time when it may be disadvantageous to do so.

We may not be able to pay you distributions, our distributions may not grow over time and a portion of our distributions may be a return of capital.

We intend to pay distributions to our stockholders out of assets legally available for distribution. We cannot assure you that we will achieve investment results that will allow us to sustain a specified level of cash distributions or periodic increases in cash distributions. In addition, the inability to satisfy the asset coverage test applicable to us as a business development companyBusiness Development Company can limit our ability to pay distributions. All distributions will be paid at the discretion of our Board of Directors and will depend on our earnings, our financial condition, maintenance of our ability to be subject to tax as a RIC, compliance with applicable business development companyBusiness Development Company regulations and such other factors as our Board of Directors may deem relevant from time to time. We cannot assure you that we will continue to pay distributions to our stockholders at current levels, or at all.

When we make distributions, our distributions generally will be treated as dividends for U.S. federal income tax purposes to the extent such distributions are paid out of our current or accumulated earnings and profits. Distributions in excess of current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of a stockholder's basis in our stock and, assuming that a stockholder holds our stock as a capital asset, thereafter as a capital gain. A return of capital generally is a return of a stockholder’s investment rather than a return of earnings or gains derived from our investment activities. Moreover, we may pay all or a substantial portion of our distributions from the proceeds of the sale of shares of our common stock or from borrowings in anticipation of future cash flow, which could constitute a return of stockholders’ capital and will lower such stockholders’ tax basis in our shares, which may result in increased tax liability to stockholders when they
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sell or otherwise dispose of such shares. The tax liability incurred by such stockholders upon the sale or other disposition of shares of our common stock may increase even if such shares are sold at a loss.

We will be subject to corporate-level U.S. federal income tax if we are unable to maintain our qualification as a RIC under Subchapter M of the Code or do not satisfy the Annual Distribution Requirement.

To maintain our tax status as a RIC and be relieved of U.S. federal taxes on income and gains distributed to our stockholders, we must meet the following annual distribution, income source and asset diversification requirements:

•The Annual Distribution Requirement will be satisfied if we distribute dividends to our stockholders each taxable year of an amount generally at least equal to 90% of the sum of our net taxable income plus realized net short-term capital gains in excess of realized net long-term capital losses, if any. Because we use debt financing, we are and may, in the future, be subject to certain financial covenants under our debt arrangements that could, under certain circumstances, restrict us from making distributions necessary to satisfy the Annual Distribution Requirement. If we are unable to obtain cash from other sources, we could fail to qualify for RIC tax treatment and thus could become subject to corporate-level U.S. federal income tax.

•The 90% Gross Income Test will be satisfied if we earn at least 90% of our gross income for each taxable year from dividends, interest, gains from the sale of stock or securities or similar sources.


•The Diversification Tests will be satisfied if, at the end of each quarter of our taxable year, at least 50% of the value of our assets consist of cash, cash equivalents, U.S. government securities, securities of other RICs, and other acceptable securities; and no more than 25% of the value of our assets can be invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses or of certain “qualified publicly traded partnerships.” Failure to meet these requirements may result in our having to dispose of certain investments quickly in order to prevent the loss of RIC status. Because most of our investments will be in private companies, and therefore will be relatively illiquid, any such dispositions could be made at disadvantageous prices and could cause us to incur substantial losses.

If we fail to be subject to tax as a RIC and are subject to entity-levelcorporate-level U.S. federal corporate income tax, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions.

We may have difficulty paying our required distributions if we are required to recognize income for U.S. federal income tax purposes before or without receiving cash representing such income.

For U.S. federal income tax purposes, we generally are required to include in income certain amounts that we have not yet received in cash, such as OID or certain income accruals on contingent payment debt instruments, which may occur if we receive warrants in connection with the origination of a loan or possibly in other circumstances. Such OID is generally required to be included in income before we receive any corresponding cash payments. In addition, our loans typically contain PIK interest provisions. Any PIK interest, computed at the contractual rate specified in each loan agreement, is generally required to be added to the principal balance of the loan and recorded as interest income. We also may be required to include in income certain other amounts that we do not receive, and may never receive, in cash. To avoid the imposition of corporate-level tax on us, this non-cash source of income may need to be distributed to our stockholders in cash or, in the event that we determine to do so, in shares of our common stock, even though we may have not yet collected and may never collect the cash relating to such income.

Since, in certain cases, we may recognize income before or without receiving cash representing such income, we may have difficulty meeting the Annual Distribution Requirement necessary to be relieved of entity-levelcorporate-level U.S. federal taxes on income and gains distributed to our stockholders. Accordingly, we may have to sell or otherwise dispose of some of our investments at times and/or at prices we would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose. If we are not able to obtain cash from other sources, we may fail to satisfy the Annual Distribution Requirement and thus become subject to corporate-level U.S. federal income tax.

We may in the future choose to pay distributions partly in our own stock, in which case you may be subject to tax in excess of the cash you receive.

We may distribute taxable distributions that are payable in part in our stock. In accordance with certain applicable Treasury regulationsRegulations and other related administrative pronouncements or interpretations therefore issued by the Internal Revenue Service, or the IRS, a RIC may be eligible to treat a distribution of its own stock as fulfilling its RIC distribution requirements if each stockholder is permitted to elect to receive his or her entire distribution in either cash or stock of the RIC, subject to the
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satisfaction of certain guidelines. If too many stockholders elect to receive cash, (which generally may not be less than 20% of the value of the overall distribution), each stockholder electing to receive cash must receive a pro rata amount of cash (with the balance of the distribution paid in stock). If these and certain other requirements are met, for U.S. federal income tax purposes, the amount of the distribution paid in stock for U.S. federal income tax purposes generally will be equal to the amount of cash that could have been received instead of stock. Taxable stockholders receiving such distributions will be required to include the full amount of the distribution as ordinary income (or as long-term capital gain to the extent such distribution is properly reported as a capital gain dividend) to the extent of their share of our current and accumulated earnings and profits for U.S. federal income tax purposes. As a result, a U.S. stockholder may be subject to tax with respect to such distributions in excess of any cash received. If a U.S. stockholder sells the stock it receives as a distribution in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the distribution, depending on the market price of our stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such distribution, including in respect of all or a portion of such distribution that is payable in stock. In addition, if a significant number of our stockholders determine to sell shares of our stock in order to pay taxes owed on a distribution, such sales may put downward pressure on the trading price of our stock.

We may enter into reverse repurchase agreements, which are another form of leverage.

We may enter into reverse repurchase agreements as part of our management of our temporary investment portfolio. Our entry into any such reverse repurchase agreements would be subject to the 1940 Act limitations on leverage. In connection

with entry into a reverse repurchase agreement, we would effectively pledge our assets as collateral to secure a short-term loan. Generally, the other party to the agreement would make a loan to us in an amount equal to a percentage of the fair value of the collateral we have pledged. At the maturity of the reverse repurchase agreement, we will be required to repay the loan and then receive back our collateral. While used as collateral, the assets continue to pay principal and interest which are for the benefit of us.

Our use of reverse repurchase agreements, if any, involves many of the same risks involved in our use of leverage. For example, the market value of the securities acquired in the reverse repurchase agreement may decline below the price of the securities that we have sold but we would remain obligated to purchase those securities, meaning that we bear the risk of loss that the proceeds at settlement are less than the fair value of the securities pledged. In addition, the market value of the securities retained by us may decline. If a buyer of securities under a reverse repurchase agreement were to file for bankruptcy or experience insolvency, we would be adversely affected. In addition, due to the interest costs associated with reverse repurchase agreements, our net asset value would decline, and, in some cases, we may be worse off than if we had not used such agreements.

We are currently subject to an SEC investigation that could adversely affect our financial condition, business and results of operations.

We are the subject of an SEC investigation principally related to the activities of our Former Adviser, and we may possibly be subject to a variety of additional claims and lawsuits as well as additional SEC examinations or investigations. See “Business - Legal Proceedings.” The outcome of the SEC investigation may materially adversely affect our business, financial condition, and/or operating results and may continue without resolution for long periods of time. Litigation and responses to the SEC’s inquiries might consume substantial amounts of our management’s time and attention, and that time and the devotion of these resources may, at times, be disproportionate to the amounts at stake. The SEC investigation is subject to inherent uncertainties and management’s view of these matters may change in the future. A material adverse impact on our financial statements also could occur for the period in which the effect of an unfavorable final outcome becomes probable and reasonably estimable, particularly where the claims with respect to a particular period exceed both the amount of our insurance coverage relating to claims made with respect to the same period and the amount of any indemnification recoverable from Fifth Street Holdings L.P. In addition, we may incur expenses associated with defending ourselves against this litigation and other future claims and responding to the SEC’s inquiries, and these expenses may be material to our earnings in future periods that might exceed the amount of any indemnification recoverable from Fifth Street Holdings L.P. Under the New Investment Advisory Agreement, we are required to indemnify our Investment Adviser for its expenses incurred in any litigation arising from the rendering of our Investment Adviser’s services under the investment advisory agreement or otherwise as our Investment Adviser absent willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, and our Former Adviser may seek similar indemnification under the Former Investment Advisory Agreement.

We may be unable to invest a significant portion of the net proceeds from an offering of our securities on acceptable terms within an attractive timeframe.
Delays in investing the net proceeds raised in an offering of our securities may cause our performance to be worse than that of other fully invested business development companies or other lenders or investors pursuing comparable investment strategies. We cannot assure you that we will be able to identify any investments that meet our investment objective or that any investment that we make will produce a positive return. We may be unable to invest the net proceeds of any offering on acceptable terms within the time period that we anticipate or at all, which could harm our financial condition and operating results.
We anticipate that, depending on market conditions, it may take us a substantial period of time to invest substantially all of the net proceeds of any offering in securities meeting our investment objective. During this period, we will invest the net proceeds of an offering primarily in cash, cash equivalents, U.S. government securities, repurchase agreements and high-quality debt instruments maturing in one year or less from the time of investment, which may produce returns that are significantly lower than the returns which we expect to achieve when our portfolio is fully invested in securities meeting our investment objective. As a result, any distributions that we pay during this period may be substantially lower than the distributions that we may be able to pay when our portfolio is fully invested in securities meeting our investment objective. In addition, until such time as the net proceeds of an offering are invested in securities meeting our investment objective, the market price for our common stock may decline. Thus, the return on your investment may be lower than when, if ever, our portfolio is fully invested in securities meeting our investment objective.

Changes in laws or regulations governing our operations may adversely affect our business or cause us to alter our business strategy.
We and our portfolio companies are subject to regulation at the local, state and federal level. New legislation may be enacted or new interpretations, rulings or regulations could be adopted, including those governing the types of investments we are permitted to make or that impose limits on our ability to pledge a significant amount of our assets to secure loans or that restrict the operations of a portfolio company, any of which could harm us and our stockholders and the value of our investments, potentially with retroactive effect. For example, President Trump and certain members of Congress have indicated that they intend to seek to amend or repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act, which influences many aspects of the financial services industry, and to substantially amend and reform the Code. Any amendment or repeal of such legislation, or changes in regulations or regulatory interpretations thereof, could create uncertainty in the near term, which could have a material adverse impact on our business, financial condition and results of operations.
Additionally, any changes to the laws and regulations governing our operations relating to permitted investments may cause us to alter our investment strategy in order to avail ourselves of new or different opportunities. Such changes could result in material differences to the strategies and plans set forth herein and may result in our investment focus shifting from the areas of expertise of our Investment Adviser to other types of investments in which our Investment Adviser may have less expertise or little or no experience. Thus, any such changes, if they occur, could have a material adverse effect on our results of operations and the value of your investment.
We have identified a material weakness in our internal control over financial reporting that, if not properly remediated, could result in material misstatements in our financial statements in future periods.
We identified a material weakness relating to our internal control over financial reporting under standards established by the Public Company Accounting Oversight Board, or PCAOB, for the period ended September 30, 2017. The PCAOB defines a material weakness as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis.
We have taken and will take a number of actions to remediate this material weakness, but some of these measures will take time to be fully integrated and confirmed to be effective. We cannot assure you that the steps taken will remediate such weaknesses, nor can we be certain of whether additional actions will be required or the costs of any such actions. Until measures are fully implemented and tested, the identified material weakness may continue to exist.
We may need to take additional measures to fully mitigate these issues, and the measures we have taken, and expect to take, to improve our internal controls may not be sufficient to address the issues identified, to ensure that our internal controls are effective or to ensure that the identified material weaknesses or significant deficiencies or other material weaknesses or deficiencies will not result in a material misstatement of our annual or interim financial statements. In addition, other material weaknesses or deficiencies may be identified in the future. If we are unable to correct material weaknesses or deficiencies in internal controls in a timely manner, our ability to record, process, summarize and report financial information accurately and within the time periods specified in the rules and forms of the SEC will be adversely affected. This failure could negatively affect the market price and trading liquidity of our securities, cause investors to lose confidence in our reported financial information, subject us to civil and criminal investigations and penalties, and generally materially and adversely impact our business and financial condition.
Future control deficiencies could prevent us from accurately and timely reporting our financial results.
We may identify deficiencies in our internal control over financial reporting in the future, including significant deficiencies and material weaknesses. A “significant deficiency” is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of a company’s financial reporting.
Our failure to identify deficiencies in our internal control over financial reporting in a timely manner or remediate any deficiencies, or the identification of material weaknesses or significant deficiencies in the future could prevent us from accurately and timely reporting our financial results.
Our SBIC subsidiaries are subject to SBA regulations.
As of September 30, 2017, we held two licenses from the SBA to operate two of our wholly-owned subsidiaries as SBICs under Section 301(c) of the Small Business Investment Act of 1958, as amended, or the Small Business Investment Act. As of September 30, 2017, we had commenced actions to surrender such licenses to the SBA. Our SBIC subsidiaries are subject to regulation and oversight by the SBA, including certain limitations on the financing terms of investments by SBICs in portfolio

companies and prohibitions on providing funds for certain purposes or to businesses in a few prohibited industries. SBA regulations require that an SBIC be periodically examined and audited by the SBA to determine its compliance with the relevant SBA regulations.
Until our SBIC licenses are surrendered to the SBA, we are partially dependent on our SBIC subsidiaries for cash distributions to enable us to meet the RIC distribution requirements. Our SBIC subsidiaries may be limited by the Small Business Investment Act and SBA regulations governing SBICs, from making certain distributions to us that may be necessary to maintain our status as a RIC. We cannot assure you that the SBA will grant any waivers from such restrictions and if our SBIC subsidiaries are unable to obtain a waiver, compliance with the SBA regulations may prevent us from making certain distributions and result in our loss of RIC tax treatment and a consequent imposition of an entity-level tax on us.
We are subject to risks associated with communications and information systems. 

We depend on the communications and information systems of our Investment Adviser and its affiliates as well as certain third-party service providers. As our reliance on these systems has increased, so have the risks posed to these communications and information systems.  Any failure or interruption in these systems could cause disruptions in our activities.  In addition, these systems are subject to potential attacks, including through adverse events that threaten the confidentiality, integrity or availability of our information resources.  These attacks, which may include cyber incidents, may involve a third party gaining unauthorized access to our communications or information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption.  Any such attack could result in disruption to our business, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our business relationships, any of which could have a material adverse effect on our business, financial condition and results of operations. 
We incur significant costs as a result of being a publicly traded company.
As a publicly-traded company, we incur legal, accounting and other expenses, including costs associated with the periodic reporting requirements applicable to a company whose securities are registered under the Exchange Act, as well as additional corporate governance requirements, including requirements under the Sarbanes-Oxley Act, and other rules implemented by the SEC and the listing standards of the NASDAQ Global Select Market.
Risks Relating to Our Investments
Our investments in portfolio companies may be risky, and we could lose all or parts of our investments.
The companies in which we invest are typically highly leveraged, and, in most cases, our investments in such companies are not rated by any rating agency. If such investments were rated, we believe that they would likely receive a rating from a nationally recognized statistical rating organization of below investment grade (i.e., below BBB- or Baa), which is often referred to as "high yield" and “junk.” Exposure to below investment grade securities involves certain risks, and those securities are viewed as having predominately speculative characteristics with respect to the issuer's capacity to pay interest and repay principal. Investing in small and mid-sized companies involves a number of significant risks. As of September 30, 2017, 53.0%
Certain of our debt portfolio at fair value consistedinvestments consist of debt securities for which issuers wereare not required to make principal payments until the maturity of such debt securities, which could result in a substantial loss to us if such issuers are unable to refinance or repay their debt at maturity. Increases in interest rates may affect the ability of our portfolio companies to repay debt or pay interest, which may in turn affect the value of our portfolio investments, and our business, financial condition and results of operations.
Among other things, our portfolio companies:
•may have limited financial resources, may be more susceptible to rising interest rates and inflation, may have limited or negative EBITDA and may be unable to meet their obligations under their debt instruments that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us realizing any guarantees from subsidiaries or affiliates of our portfolio companies that we may have obtained in connection with our investments, as well as a corresponding decrease in the value of the equity components of our investments;
•may have shorter operating histories, narrower product lines, smaller market shares and/or significant customer concentrations than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns;
•may operate in regulated industries and/or provide services to federal, state or local governments, or operate in industries that provide services to regulated industries or federal, state or local governments, any of which could lead to delayed payments for services or subject the company to changing payment and reimbursement rates or other terms;
•may not have collateral sufficient to pay any outstanding interest or principal due to us in the event of a default by these companies;

•are more likely to depend on the management talents and efforts of a small group of people; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us;
•may have difficulty accessing the capital markets to fund capital needs, which may limit their ability to grow or repay outstanding indebtedness at maturity;
•may not have audited financial statements or be subject to the Sarbanes-Oxley Act and other rules that govern public companies;
•generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position; and
•generally have less publicly available information about their businesses, operations and financial condition. If we are unable to uncover all material information about these companies, we
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These factors may not make a fully informed investment decision, and as a result may lose part or all of our investment.
In addition, in the course of providing managerial assistance to certain of our portfolio companies more susceptible to the adverse events in the economy. As a result of the limitations associated with certain of our portfolio companies, we must therefore rely on the ability of our Adviser to obtain adequate information through due diligence to evaluate the creditworthiness and potential returns from investing in these companies. In addition, certain of our officers and directors may serve as directors on the boards of such companies. To the extent that litigation arises out of our investments in these companies, our officers and directors may be named as defendants in such litigation, which could result in an expenditure of funds (through our indemnification of such officers and directors) and the diversion of management time and resources.
Finally, little public information generally exists about privately owned companies, and these companies may not have third-party debt ratings or audited financial statements. We must therefore rely on the ability of our Adviser to obtain adequate information through due diligence to evaluate the creditworthiness and potential returns from investing in these companies. Additionally, these companies and their financial information will not generally be subject to the Sarbanes-Oxley Act and other rules that govern public companies.
We may be exposed to higher risks with respect to our investments that include OID or PIK interest.
Our investments may include OID and contractual PIK interest, which typically represents contractual interest added to a loan balance and due at the end of such loan’s term. To the extent OID or PIK interest constitute a portion of our income, we are exposed to typical risks associated with such income being required to be included in taxable and accounting income prior to receipt of cash, including the following:
•OID and PIK instruments may have higher yields, which reflect the payment deferral and credit risk associated with these instruments;
•OID and PIK accruals may create uncertainty about the source of our distributions to stockholders;
•OID and PIK instruments may have unreliable valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of the collateral; and
•OID and PIK instruments may represent a higher credit risk than coupon loans.
An investment strategy focused primarily on privately held companies presents certain challenges, including the lack of available information about these companies.
We invest primarily in privately held companies. Generally, little public information exists about these companies, including typically a lack of audited financial statements and ratings by third parties. Furthermore, such an investment strategy involves a dependence on the management talents and efforts of a small group of people as well as a greater vulnerability to economic downturns. We must therefore rely on the ability of our Investment Adviser to obtain adequate information to evaluate the potential risks of investing in these companies. These companies and their financial information may not be subject to the Sarbanes-Oxley Act and other rules that govern public companies. If we are unable to uncover all material information about these companies, we may not make a fully informed investment decision, and we may lose money on our investments. These factors could affect our investment returns.
If we acquire the securities and obligations of distressed or bankrupt companies, such investments may be subject to significant risks, including lack of income, extraordinary expenses, uncertainty with respect to satisfaction of debt, lower-than-expected investment values or income potentials and resale restrictions.
We may acquire the securities and other obligations of distressed or bankrupt companies. At times, distressed debt obligations may not produce income and may require us to bear certain extraordinary expenses (including legal, accounting, valuation and transaction expenses) in order to protect and recover our investment. Therefore, to the extent we invest in distressed debt, our ability to achieve current income for our stockholders may be diminished, particularly where the portfolio company has negative EBITDA.
We also will be subject to significant uncertainty as to when and in what manner and for what value the distressed debt we invest in will eventually be satisfied whether through a liquidation, an exchange offer or plan of reorganization involving the distressed debt securities or a payment of some amount in satisfaction of the obligation. In addition, even if an exchange offer is made or plan of reorganization is adopted with respect to distressed debt held by us, there can be no assurance that the securities or other assets received by us in connection with such exchange offer or plan of reorganization will not have a lower value or income potential than may have been anticipated when the investment was made.

Moreover, any securities received by us upon completion of an exchange offer or plan of reorganization may be restricted as to resale. As a result of our participation in negotiations with respect to any exchange offer or plan of reorganization with respect to an issuer of distressed debt, we may be restricted from disposing of such securities.
Inflation may adversely affect the business, results of operations and financial condition of our portfolio companies.

Certain of our portfolio companies may be impacted by inflation. If such portfolio companies are unable pass any increases in their costs along to their customers, it could adversely affect their results and their ability to pay interest and principal on our loans. In addition, any projected future decreases in our portfolio companies’ operating results due to inflation could adversely impact the fair value of those investments. Any decreases in the fair value of our investments could result in future unrealized losses and therefore reduce our net assets resulting from operations.
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The lack of liquidity in our investments may adversely affect our business.
We invest, and will continue to invest, in companies whose securities are not publicly traded, and whose securities are subject to legal and other restrictions on resale or are otherwise less liquid than publicly traded securities. In fact, all of our assets may be invested in illiquid securities. The illiquidity of these investments may make it difficult for us to sell these investments when desired. In addition, if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the value at which we had previously recorded these investments.investments and suffer losses. Our investments are usuallymay be subject to contractual or legal restrictions on resale or are otherwise illiquid because there is usually no established trading market for such investments. In addition, we may also face restrictions on our ability to liquidate our investments if our Investment Adviser or any of its affiliates have material nonpublic information regarding the portfolio company. The illiquidity of most of our investments may make it difficult for us to dispose of them at a favorable price, and, as a result, we may suffer losses.
We may not have the funds or ability to make additional investments in our portfolio companies.
After our initial investment in a portfolio company, we may be called upon from time to time to provide additional funds to such company or have the opportunity to increase our investment through a follow-on investment. There is no assurance that we will make, or will have sufficient funds to make, follow-on investments. Any decisions not to make a follow-on investment or any inability on our part to make such an investment may have a negative impact on a portfolio company in need of such an investment, may result in a missed opportunity for us to increase our participation in a successful operation, may reduce the expected yield on the investment or impair the value of our investment in any such portfolio company.
Some of our portfolio companies are highly leveraged.
Our investments include companies with significant leverage. Such investments are inherently more sensitive to declines in revenues and to increases in expenses and interest rates. The leveraged capital structure of such investments increases the exposure of the portfolio companies to adverse economic factors, such as downturns in the economy or deterioration in the condition of the portfolio company or its industry. Additionally, the securities acquired by us may be the most junior in what will typically be a complex capital structure, and thus subject to the greatest risk of loss.
Our portfolio companies may incur debt that ranks equally with, or senior to, our investments in such companies.
We invest primarily in first lien, second lien and subordinated debt issued by small and mid-sizedmiddle-market companies. Our portfolio companies may have, or may be permitted to incur, other debt that ranks equally with, or senior to, the debt in which we invest. By their terms, such debt instruments may entitle the holders to receive payments of interest or principal on or before the dates on which we are entitled to receive payments with respect to the debt instruments in which we invest. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution. After repaying such senior creditors, such portfolio company may not have any remaining assets to use for repaying its obligation to us. In the case of debt ranking equally with debt instruments in which we invest, we would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.
The disposition of our investments may result in contingent liabilities.
In connection with the disposition of an investment in private securities, we may be required to make representations about the business and financial affairs of the portfolio company typical of those made in connection with the sale of a business. We may also be required to indemnify the purchasers of such investment to the extent that any such representations turn out to be inaccurate or with respect to certain potential liabilities. These arrangements may result in contingent liabilities that ultimately yield funding obligations that must be satisfied through our return of certain distributions previously made to us.
There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims.
Even though we have structured some of our investments as senior loans, if one of our portfolio companies were to enter bankruptcy proceedings, a bankruptcy court might re-characterize our debt investment and subordinate all or a portion of our claim to that of other creditors, depending on the facts and circumstances, including the extent to which we actually provided managerial assistance to that portfolio company. We may also be subject to lender liability claims for actions taken by us with respect to a borrower’s business or instances where we exercise control over the borrower. It is possible that we could become subject to a lender’s liability claim, including as a result of actions taken in rendering significant managerial assistance.

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Second priority liens on collateral securing loans that we make to our portfolio companies may be subject to control by senior creditors with first priority liens. If there is a default, the value of the collateral may not be sufficient to repay in full both the first priority creditors and us.
Certain loans that we make to portfolio companies will beare secured on a second priority basis by the same collateral securing senior secured debt of such companies. The first priority liens on the collateral will securesecures the portfolio company’s obligations under any outstanding senior debt and may secure certain other future debt that may be permitted to be incurred by the company under the agreements governing the loans. The holders of obligations secured by the first priority liens on the collateral will generally control the liquidation of and be entitled to receive proceeds from any realization of the collateral to repay their obligations in full before us. In addition, the value of the collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from the sale or sales of all of the collateral would be sufficient to satisfy the loan obligations secured by the second priority liens after payment in full of all obligations secured by the first priority liens on the collateral. If such proceeds are not sufficient to repay amounts outstanding under the loan obligations secured by the second priority liens, then we, to the extent not repaid from the proceeds of the sale of the collateral, will only have an unsecured claim against the company’s remaining assets, if any.
The rights we may have with respect to the collateral securing the loans we make to our portfolio companies with senior debt outstanding may also be limited pursuant to the terms of one or more inter-creditor agreements that we enter into with the holders of senior debt. Under such an inter-creditor agreement, at any time that obligations that have the benefit of the first priority liens are outstanding, any of the following actions may be taken with respect to the collateral and will be at the direction of the holders of the obligations secured by the first priority liens: the ability to cause the commencement of enforcement proceedings against the collateral; the ability to control the conduct of such proceedings; the approval of amendments to collateral documents; releases of liens on the collateral; and waivers of past defaults under collateral documents. We may not have the ability to control or direct such actions, even if our rights are adversely affected.
If we make unsecured debt investments, we may lack adequate protection in the event our portfolio companies become distressed or insolvent and will likely experience a lower recovery than more senior debtholders in the event such portfolio companies default on their indebtedness.
We have made, and may in the future make, unsecured debt investments in portfolio companies. Unsecured debt investments are unsecured and junior to other indebtedness of the portfolio company. As a consequence, the holder of an unsecured debt investment may lack adequate protection in the event the portfolio company becomes distressed or insolvent and will likely experience a lower recovery than more senior debtholders in the event the portfolio company defaults on its indebtedness. In addition, unsecured debt investments of small and mid-sized companies are often highly illiquid and in adverse market conditions may experience steep declines in valuation even if they are fully performing.
Our investments may include “covenant-lite” loans, which may give us fewer rights and subject us to greater risk of loss than loans with financial maintenance covenants.

Although the loans in which we expect to invest will generally have financial maintenance covenants, which are used to proactively address materially adverse changes in a portfolio company’s financial performance, we do invest to a lesser extent in “covenant-lite” loans. We use the term “covenant-lite” to refer generally to loans that do not have financial maintenance covenants. Generally, “covenant-lite” loans provide borrower companies more freedom to negatively impact lenders because their covenants are incurrence-based, which means they are only tested and can only be breached following an affirmative action of the borrower, rather than by a deterioration in the borrower’s financial condition or operating results. Accordingly, to the extent we invest in “covenant-lite” loans, we may have fewer rights against a borrower and may have a greater risk of loss on such investments as compared to investments in or exposure to loans with financial maintenance covenants.
Our portfolio companies may prepay loans, which may reduce our yields if capital returned cannot be invested in transactions with equal or greater expected yields.
The loans in our investment portfolio may be prepaid at any time, generally with little advance notice. Whether a loan is prepaid will depend both on the continued positive performance of the portfolio company and the existence of favorable financing market conditions that allow such company the ability to replace existing financing with less expensive capital. As market conditions change, we do not know when, and if, prepayment may be possible for each portfolio company. In some cases, the prepayment of a loan may reduce our achievable yield if the capital returned cannot be invested in transactions with
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equal or greater expected yields, which could have a material adverse effect on our business, financial condition and results of operations.
We may incur greater risk with respect to investments we acquire through assignments or participations of interests.
Although we originate a substantial portion of our loans, weWe may acquire loans through assignments or participations of interests in such loans. The purchaser of an assignment typically succeeds to all the rights and obligations of the assigning institution and becomes a lender under the credit agreement with respect to such debt obligation. However, the purchaser’s rights can be more restricted than those of the assigning institution, and we may not be able to unilaterally enforce all rights and remedies under an assigned debt obligation and with regard to any associated collateral. A participation typically results in a contractual relationship only with the institution participating out the interest and not directly with the borrower. Sellers of participations typically include banks, broker-dealers, other financial institutions and lending institutions. In purchasing participations, we generally will have no right to enforce compliance by the borrower with the terms of the loan agreement against the borrower, and we may not directly benefit from the collateral supporting the debt obligation in which we have purchased the participation. As a result, we will be exposed to the credit risk of both the borrower and the institution selling the participation. Further, in purchasing participations in lending syndicates, we will not be able to conduct the same level of due diligence on a borrower or the quality of the loan with respect to which we are buying a participation as we would conduct if we were investing directly in the loan. This difference may result in us being exposed to greater credit or fraud risk with respect to such loans than we expected when initially purchasing the participation.

Our investments in Internet and software companies are subject to many risks, including regulatory concerns, litigation risks and intense competition.
As of September 30, 2017, our investments in Internet and software companies represented 17.2% of our total portfolio, at fair value. Our investments in Internet and software companies are subject to substantial risks. For example, our portfolio companies face intense competition since their businesses are rapidly evolving and intensely competitive, and are subject to changing technology, shifting user needs, and frequent introductions of new products and services. Internet and software companies have many competitors in different industries, including general purpose search engines, vertical search engines and e-commerce sites, social networking sites, traditional media companies, and providers of online products and services. Potential competitors to our portfolio companies in the Internet and software industries range from large and established companies to emerging start-ups. Further, such companies are subject to laws that were adopted prior to the advent of the Internet and related technologies and, as a result, do not contemplate or address the unique issues of the Internet and related technologies. The laws that do reference the Internet are being interpreted by the courts, but their applicability and scope remain uncertain. For example, the laws relating to the liability of providers of online services are currently unsettled both within the United States and abroad. Claims have been threatened and filed under both U.S. and foreign laws for defamation, invasion of privacy and other tort claims, unlawful activity, copyright and trademark infringement, or other theories based on the nature and content of the materials searched and the ads posted by a company’s users, a company’s products and services, or content generated by a company’s users. Further, the growth of Internet and software companies into a variety of new fields implicate a variety of new regulatory issues and may subject such companies to increased regulatory scrutiny, particularly in the United States and Europe. As a result, these portfolio company investments face considerable risk. This could, in turn, materially adversely affect the value of the Internet and software companies in our portfolio.
Our investments in the healthcare sector face considerable uncertainties including substantial regulatory challenges.
As of September 30, 2017, our investments in portfolio companies that operate in the healthcare sector represented 10.8% of our total portfolio, at fair value. Our investments in the healthcare sector are subject to substantial risks. The laws and rules governing the business of healthcare companies and interpretations of those laws and rules are subject to frequent change. Broad latitude is given to the agencies administering those regulations. Existing or future laws and rules could force our portfolio companies that operate in the healthcare sector to change how they do business, restrict revenue, increase costs, change reserve levels and change business practices.
Healthcare companies often must obtain and maintain regulatory approvals to market many of their products, change prices for certain regulated products and consummate some of their acquisitions and divestitures. Delays in obtaining or failing to obtain or maintain these approvals could reduce revenue or increase costs. Policy changes on the local, state and federal level, such as the expansion of the government’s role in the healthcare arena and alternative assessments and tax increases specific to the healthcare industry or healthcare products as part of federal health care reform initiatives, could fundamentally change the dynamics of the healthcare industry. In addition, insurance company and other reimbursement rates may be subject to change, often with little notice, and decreases in such rates could materially adversely affect the value of the healthcare companies in our portfolio.
We generally do not, and do not expect to, control our portfolio companies.
We do not, and do not expect to, control most of our portfolio companies. As a result, we are subject to the risk that a portfolio company in which we invest may make business decisions with which we disagree and the management of such company, as representatives of the holders of their common equity, may take risks or otherwise act in ways that do not serve our interests as a debt investor, including actions that could decrease the value of our investment. Due to the lack of liquidity for the majority of our investments, in non-traded companies, we may not be able to dispose of our interests in our portfolio companies as readily as we would like or at an appropriate valuation.     
Defaults by our portfolio companies would harm our operating results.
A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize a portfolio company’s ability to meet its obligations under the debt or equity securities that we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms, which may include the waiver of certain financial covenants, with a defaulting portfolio company. In addition, we may write-down the value of a portfolio company investment upon the worsening of the financial condition of the portfolio company or in anticipation of a default, which could also have a material adverse effect on our business, financial condition and results of operations.
Our portfolio companies may experience financial distress and our investments in such companies may be restructured.

Our portfolio companies may experience financial distress from time to time. Debt investments in such companies may cease to be income-producing, may require us to bear certain expenses to protect our investment and may subject us to uncertainty as to when, in what manner and for what value such distressed debt will eventually be satisfied, including through liquidation, reorganization or bankruptcy. Any restructuring can fundamentally alter the nature of the related investment, and restructurings may not be subject to the same underwriting standards that our Investment Adviser employs in connection with the origination of an investment. In addition, we may write-down the value of our investment in any such company to reflect the status of financial distress and future prospects of the business. Any restructuring could alter, reduce or delay the payment of interest or principal on any investment, which could delay the timing and reduce the amount of payments made to us. For example, if an exchange offer is made or plan of reorganization is adopted with respect to the debt securities we currently hold, there can be no assurance that the securities or other assets received by us in connection with such exchange offer or plan of reorganization will have a value or income potential similar to what we anticipated when our original investment was made or even at the time of restructuring. Restructurings of investments might also result in extensions of the term thereof, which could delay the timing of payments made to us, or we may receive equity securities, which may require significantly more of our management’s time and attention or carry restrictions on their disposition. We cannot assure you that any particular restructuring strategy pursued by our Investment Adviser will maximize the value of or recovery on any investment.
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We may not realize gains from our equity investments.
Certain investments that we have made in the past and may make in the future include warrants or other equity securities. In addition, we have made in the past and may make in the future direct equity investments in companies. Our goal is ultimately to realize gains upon our disposition of such equity interests. However, the equity interests we receive may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience. We also may be unable to realize any value if a portfolio company does not have a liquidity event, such as a sale of the business, recapitalization or public offering, which would allow us to sell the underlying equity interests. We may seek puts or similar rights to give us the right to sell our equity securities back to the portfolio company issuer. We may be unable to exercise these put rights for the consideration provided in our investment documents if the issuer is in financial distress.
We are subject to certain risks associated with foreign investments.
We have made in the past and may make in the future investments in foreign companies. Investing in foreign companies may expose us to additional risks not typically associated with investing in U.S. companies. These risks include changes in foreign exchange rates, exchange control regulations, political and social instability, expropriation, imposition of foreign taxes, less liquid markets and less available information than is generally the case in the U.S., higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility. In addition, our foreign investments generally do not constitute "qualifying assets" under the 1940 Act, under which qualifying assets must represent at least 70% of our total assets. See “Business DevelopmentInvestment Company Regulations — Qualifying Assets.”Act.
Our success will depend, in part, on our ability to anticipate and effectively manage these and other risks. We cannot assure you that these and other factors will not have a material adverse effect on our business as a whole.
We may have foreign currency risks related to our investments denominated in currencies other than the U.S. dollar.
As of September 30, 2022, a portion of our investments are, and may continue to be, denominated in currencies other than the U.S. dollar. Changes in the rates of exchange between the U.S. dollar and other currencies will have an effect, which could be adverse, on our performance, amounts available for withdrawal and the value of securities distributed by us. Among the factors that may affect currency values are trade balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation and political developments. Additionally, a particular foreign country may impose exchange controls, devalue its currency or take other measures relating to its currency which could adversely affect us. Finally, we could incur costs in connection with conversions between various currencies.
We may expose ourselves to risks if we engage in hedging transactions.
Subject to applicable provisions of the 1940Investment Company Act and applicable regulations promulgated by the CommoditiesCommodity Futures Trading Commission, we have in the past and may in the future enter into hedging transactions, which may expose us to risks associated with such transactions. Such hedging may utilize instruments such as forward contracts, currency options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations in the relative values of our portfolio positions and amounts due under ourany credit facilitiesfacility from changes in currency exchange rates and market interest rates. Use of these hedging instruments may include counterparty credit risk. Hedging against a decline in the values of our portfolio positions does not eliminate the possibility of fluctuations in the values of such positions and amounts due under our credit facilities or prevent losses if the values of such positions decline. However, such hedging can establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such hedging transactions may also limit the opportunity for gain if the values of the underlying portfolio positions should increase. Moreover, it may not be possible to hedge against an exchange rate or interest rate fluctuation that is so generally anticipated that we are not able to enter into a hedging transaction at an acceptable price.
The success of any hedging transactions will depend on our ability to correctly predict movements in currencies and interest rates. Therefore, while we may enter into such transactions to seek to reduce currency exchange rate and interest rate risks, unanticipated changes in currency exchange rate or interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged may vary. Moreover,

for a variety of reasons, we may not seek to (or be able to) establish a perfect correlation between such hedging instruments and the portfolio holdings or credit facilities being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss. In addition, it may not be possible to hedge fully or perfectly against currency fluctuations affecting the value of securities denominated in non-U.S. currencies because the value of those securities is likely to fluctuate as a result of factors not related to currency fluctuations. See also “Risks Relating to Our Business and Structure- Changes in interest rates, changes in the method for determining LIBOR and the potential replacement of LIBOR may affect our cost of capital and net investment income.”
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We are a non-diversified investment company within the meaning of the 1940Investment Company Act, and therefore have few restrictions with respect to the proportion of our assets that may be invested in securities of a single industry or issuer.
We are classified as a non-diversified investment company within the meaning of the 1940Investment Company Act, which means that we are not limited by the 1940Investment Company Act with respect to the proportion of our assets that we may invest in securities of a single industry or issuer, excluding limitations on investments in other investment companies. We cannot predict the industries or sectors in which our investment strategy may cause us to concentrate and cannot predict the level of our diversification among industries or issuers. To the extent that we assume large positions in a certain type of security or the securities of a small number of industries or 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 security, industry or issuer. We may also be more susceptible to any single economic or regulatory occurrence than a diversified investment company. Beyond RIC diversification requirements, we do not have fixed guidelines for diversification, and our investments could be concentrated in relatively few industries or issuers.
Our portfolio may be concentrated in a limited number of portfolio companies and industries, which will subject us to a risk of significant loss if any of these companies defaults on its obligations under any of its debt instruments or if there is a downturn in a particular industry.

Our portfolio may be concentrated in a limited number of portfolio companies and industries. As a result, the aggregate returns we realize may be significantly and adversely affected if a small number of investments perform poorly or if we need to write down the value of any one investment. Additionally, while we are not targeting any specific industries, our investments may be concentrated in relatively few industries, including the healthcare and Internet and software industries. As a result, a downturn in any particular industry in which we are invested could also significantly impact the aggregate returns we realize.
We
Risks Relating to the Mergers

Sales of shares of our common stock after the completion of the Mergers may allocatecause the trading price of our common stock to decline.
At the effective time of the Merger, or the Effective Time, each share of common stock, par value $0.001 per share, of OSI 2, or the OSI 2 Common Stock, issued and outstanding immediately prior to the Effective Time (other than shares owned by us or any of our consolidated subsidiaries, or the Cancelled Shares), will be converted into the right to receive a number of shares of our common stock equal to the Exchange Ratio (as defined below), plus any cash (without interest) in lieu of fractional shares. For illustrative purposes, based on June 30, 2022 net proceeds from an offeringasset values and excluding transaction costs and other tax-related distributions, we would issue approximately 2.71 shares of our common stock for each share of OSI 2 Common Stock outstanding, resulting in ways with which youpro forma ownership of 79.5% for our current stockholders and 20.5% for current OSI 2 stockholders. Former OSI 2 stockholders may be required to or decide to sell the shares of our common stock that they receive pursuant to the Merger Agreement, particularly because they have not agree.
Wepreviously held liquid securities. In addition, our stockholders may decide not to hold their shares of our common stock after completion of the Mergers. In each case, such sales of our common stock could have significant flexibility in investing the net proceedseffect of an offering,depressing the trading price for our common stock and may take place promptly following the completion of the Mergers. If this occurs, it could impair our ability to raise additional capital through the sale of equity securities should we desire to do so in a way with which you may not agree. Additionally, our Investment Adviser will select our investments subsequent to the closingso.
Most of an offering, and our stockholders will haveexperience a reduction in percentage ownership and voting power in the combined company as a result of the Mergers.
Our stockholders will experience a reduction in their percentage ownership interests and effective voting power in respect of the combined company relative to their percentage ownership interests in us prior to the Mergers unless they hold a comparable or greater percentage ownership in OSI 2 as they do in us prior to the Mergers. Consequently, our stockholders should generally expect to exercise less influence over the management and policies of the combined company following the Mergers than they currently exercise over our management and policies. In addition, prior to completion of the Mergers, subject to certain restrictions in the Merger Agreement, we and OSI 2 may issue additional shares of our common stock and OSI 2 Common Stock, respectively, which would further reduce the percentage ownership of the combined company to be held by our current stockholders.
We may be unable to realize the benefits anticipated by the Mergers, including estimated cost savings, or it may take longer than anticipated to achieve such benefits.
The realization of certain benefits anticipated as a result of the Mergers will depend in part on the integration of OSI 2’s investment portfolio with our investment portfolio and the integration of OSI 2’s business with our business. There can be no input with respect
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assurance that OSI 2’s investment portfolio or business can be operated profitably going forward or integrated successfully into our operations in a timely fashion or at all. The dedication of management resources to such investment decisions. Further,integration may detract attention from the day-to-day business of the combined company and there can be no assurance that there will not be substantial costs associated with the transition process or there will not be other than general limitations that may be included in a future credit facility, the holders of our debt securities will generally not have veto power or a vote in approving any changes to our investment or operational policies. These factors increase the uncertainty, and thus the risk, of investing in our securities. In addition, pending such investments, we will invest the net proceeds from an offering primarily in high quality, short-term debt securities, consistent with our business development company election and our election to be taxedmaterial adverse effects as a RIC, at yields significantly belowresult of these integration efforts. Such effects, including incurring unexpected costs or delays in connection with such integration and failure of OSI 2’s investment portfolio to perform as expected, could have a material adverse effect on the returns which wefinancial results of the combined company.
We also expect to achieve certain synergies and cost savings from the Mergers when the two companies have fully integrated their portfolios. It is possible that the estimates of these synergies and potential cost savings could ultimately be incorrect. The cost savings estimates also assume we will be able to combine our portfolio isoperations and OSI 2’s operations in a manner that permits those cost savings to be fully invested in securities meeting our investment objective.realized. If the estimates turn out to be incorrect or if we are not able to identifysuccessfully combine the OSI 2 investment portfolio or gain accessbusiness with our operations, the anticipated synergies and cost savings may not be fully realized or realized at all or may take longer to suitable investments, our incomerealize than expected.
If the Mergers do not close, we will not benefit from the expenses incurred in pursuit of the Mergers.
If the Mergers do not close, we will have incurred substantial expenses for which no ultimate benefit will have been received. We have incurred out-of-pocket expenses in connection with the Mergers for investment banking, legal and accounting fees and financial printing and other related charges, much of which will be incurred even if the Mergers are not completed.
The termination of the Merger Agreement could negatively impact us.
If the Merger Agreement is terminated, there may be limited.various consequences, including:

•our business may have been adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the Mergers, without realizing any of the anticipated benefits of completing the Mergers; and
•the market price of our common stock might decline to the extent that the market price prior to termination reflects a market assumption that the Mergers will be completed.
The Merger Agreement limits our ability to pursue alternatives to the Mergers.
The Merger Agreement contains provisions that limit our ability to discuss, facilitate or commit to competing third party proposals to acquire all or a significant part of us. These provisions, which are typical for transactions of this type, include a termination fee of $37.9 million payable by third parties to OSI 2 under certain circumstances, might discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of us from considering or proposing that acquisition even if it were prepared to pay consideration with a higher per share market price than that proposed in the Mergers or might result in a potential competing acquirer proposing to pay a lower per share price to acquire us than it might otherwise have proposed to pay.
The Mergers are subject to closing conditions, including stockholder approvals, that, if not satisfied or (to the extent legally allowed) waived, will result in the Mergers not being completed, which may result in material adverse consequences to our business and operations.
The Mergers are subject to closing conditions, including certain approvals of our and OSI 2’s respective stockholders that, if not satisfied, will prevent the Mergers from being completed. The closing condition that OSI 2’s stockholders adopt the Merger Agreement and approve the Mergers may not be waived under applicable law and must be satisfied for the Mergers to be completed. If OSI 2 stockholders do not adopt the Merger Agreement and approve the Mergers and the Mergers are not completed, the resulting failure of the Mergers could have a material adverse impact on our business and operations. In addition, the closing condition that our stockholders approve the issuance of shares of our common stock pursuant to the Merger Agreement may not be waived and must be satisfied for the Mergers to be completed. If our stockholders do not approve the issuance of shares of our common stock pursuant to the Merger Agreement and the Mergers are not completed, the resulting failure of the Mergers could have a material adverse impact on our business and operations. In addition to the required approvals of our and OSI 2’s stockholders, the Mergers are subject to a number of other conditions beyond our control that may prevent, delay or otherwise materially adversely affect completion of the Mergers. We cannot predict whether and when these other conditions will be satisfied.
We may, to the extent legally allowed, waive one or more conditions to the Mergers without resoliciting stockholder approval.
Certain conditions to our obligations to complete the Mergers may be waived, in whole or in part, to the extent legally allowed, either unilaterally or by agreement with OSI 2. In the event that any such waiver does not require resolicitation of
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stockholders, we will have the discretion to complete the Mergers without seeking further stockholder approval. The conditions requiring the approval of our and OSI 2’s stockholders, however, cannot be waived.
We will be subject to operational uncertainties and contractual restrictions while the Mergers are pending.
Uncertainty about the effect of the Mergers may have an adverse effect on us and, consequently, on the combined company following completion of the Mergers.
These uncertainties may cause those that deal with us to seek to change their existing business relationships with us. In addition, the Merger Agreement restricts us from taking actions that we might otherwise consider to be in our best interests. These restrictions may prevent us from pursuing certain business opportunities that may arise prior to the completion of the Mergers.
The market price of our common stock after the Mergers may be affected by factors different from those affecting our common stock currently.
Our business and OSI 2’s business differ in some respects and, accordingly, the results of operations of the combined company and the market price of our common stock after the Mergers may be affected by factors different from those currently affecting the independent results of operations and trading price of each of us and OSI 2, such as a larger stockholder base, a different portfolio composition and a different capital structure. Accordingly, our historical trading prices and financial results may not be indicative of these matters for the combined company following the Mergers.

Risks Relating to Our Common Stock
Shares of closed-end investment companies, including business development companies,Business Development Companies, may trade at a discount to their net asset value.
Shares of closed-end investment companies, including business development companies,Business Development Companies, may trade at a discount from net asset value. This characteristic of closed-end investment companies and business development companiesBusiness Development Companies is separate and distinct from the risk that our net asset value per share may decline. During the last two years, shareshares of our common stock have regularly traded both above and below our net asset value. We cannot predict whether our common stock will trade at, above or below net asset value.
Investing in our common stock may involve an above average degree of risk.
The investments we make in accordance with our investment objective may result in a higher amount of risk than alternative investment options and a higher risk of volatility or loss of principal. Our investments in portfolio companies involve higher levels of risk, and therefore, an investment in our shares may not be suitable for someone with lower risk tolerance.

The market price of our common stock may fluctuate significantly.
The market price and liquidity of the market for shares of our common stock may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include:
•significant volatility in the market price and trading volume of securities of business development companiesBusiness Development Companies or other companies in our sector, which are not necessarily related to the operating performance of these companies;
•inability to obtain any exemptive relief that may be required by us from the SEC;
•changes in regulatory policies, accounting pronouncements or tax guidelines, particularly with respect to RICs business development companies and SBICs;Business Development Companies;
•loss of our business development companyBusiness Development Company or RIC status;
•changes in earnings or variations in operating results;results or distributions that exceed our net investment income;
•increases in expenses associated with defense of litigation and responding to SEC inquiries;
•changes in accounting guidelines governing valuation of our investments;
•changes in the value of our portfolio of investments;investments and any derivative instruments, including as a result of general economic conditions, interest rate shifts and changes in the performance of our portfolio companies;
•any shortfall in revenueinvestment income or net investment income or any increase in losses from levels expected by investors or securities analysts;
•departure of our Investment Adviser’s key personnel; and
•general economic trends and other external factors.
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Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock.
Sales of substantial amounts of our common stock, including by large stockholders, or the availability of such common stock for sale, could adversely affect the prevailing market prices for our common stock. If this occurs and continues for a sustained period of time, it could impair our ability to raise additional capital through the sale of securities should we desire to do so.
Certain provisions of our restated certificate of incorporation and thirdfourth amended and restated bylaws as well as the Delaware General Corporation Law could deter takeover attempts and have an adverse impact on the price of our common stock.
Our restated certificate of incorporation and our thirdfourth amended and restated bylaws as well as the Delaware General Corporation Law contain provisions that may have the effect of discouraging a third party from making an acquisition proposal for us. These anti-takeover provisions may inhibit a change in control in circumstances that could give the holders of our common stock the opportunity to realize a premium over the market price for our common stock.
Stockholders may incur dilution if we issue securities to subscribe to, convert to or purchase shares of our common stock.
The 1940Investment Company Act prohibits us from selling shares of our common stock at a price below the current net asset value per share of such stock with certain exceptions. One such exception is stockholder approval, within one year prior, of any such sales of common stock. On March 4, 2022, our stockholders approved a proposal to authorize us, with the approval of our Board of Directors, to sell or otherwise issue shares of our common stock at a price below its then current net asset value per share, provided that the number of shares issued does not exceed 25% of our then outstanding common stock. Such authorization will expire on March 3, 2023, but we expect to seek similar authorizations from our stockholders in the future. Any decision to sell common stock at a price below its then current net asset value will be subject to the determination by the Board of Directors that such issuance is in our and our stockholders’ best interests. If we were to sell shares of our common stock below net asset value per share, such sales would result in an immediate dilution to the net asset value per share. This dilution would occur as a result of the sale of shares at a price below the then current net asset value per share of our common stock and a proportionately greater decrease in a stockholder’s interest in our earnings and assets and voting interest in us than the increase in our assets resulting from such issuance. The greater the difference between the sales price and the net asset value per share at the time of the offering, the more significant the dilutive impact would be. Because the number of shares of common stock that could be so issued and the timing of any issuance is not currently known, the actual dilutive effect, if any, cannot be currently predicted. However, if, for example, we sold an additional 10% of our common stock at a 5% discount from net asset value, an existing stockholder who did not participate in that offering for its proportionate interest would suffer net asset value dilution of up to 0.5% or $5 per $1,000 of net asset value.

Another exception is prior stockholder approval of issuances of securities to subscribe to, convert to or purchase shares of our common stock even if the subscription, conversion or purchase price per share of our common stock is below the net asset value per share of our common stock at the time of any such subscription, conversion or purchase. At our 2011 annual meeting of stockholders, our stockholders approved a proposal to authorize us to issue securities to subscribe to, convert to, or purchase shares of our common stock in one or more offerings, including under such circumstance. Such authorization has no expiration. Any decision to sell securities to subscribe to, convert to, or purchase shares of our common stock will be subject to the determination by our boardBoard of directorsDirectors that such issuance is in our and our stockholders’ best interests. If we issue securities to subscribe to, convert to or purchase shares of common stock, the exercise or conversion of such securities would increase the number of outstanding shares of our common stock. Any such exercise or conversion would be dilutive on the voting power of existing stockholders, and could be dilutive with regard to distributions and our net asset value, and other economic aspects of the common stock.
Because the number of shares of common stock that could be so issued and the timing of any issuance is not currently known, the actual dilutive effect cannot be predicted; however, the table below illustrates the impact on the net asset value per common share of a business development companyBusiness Development Company that would be experienced upon the exercise of a subscription right to acquire shares of common stock of the business development company.Business Development Company.
Example of Impact of Exercise of Subscription Right to Acquire Common Stock on Net Asset Value Per Share
The example assumes that the business development companyBusiness Development Company has 1,000,000 shares of common stock outstanding, $15,000,000 in total assets and $5,000,000 in total liabilities at the time of the exercise of the subscription right. As a result, the net asset value and net asset value per common share of the business development companyBusiness Development Company are $10,000,000 and $10.00, respectively.

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Further, the example assumes that the subscription right permits the holder thereof to acquire 250,000 common shares under the following three different scenarios: (i) with an exercise price equal to a 10% premium to the business development company’sBusiness Development Company’s net asset value per share at the time of exercise, or $11.00 per share, (ii) with an exercise price equal to the business development company’sBusiness Development Company’s net asset value per share at the time of exercise, or $10.00 per share, and (iii) with an exercise price equal to a 10% discount to the business development company’sBusiness Development Company’s net asset value per share at the time of exercise, or $9.00 per share.
Subscription Rights Exercise PriceNet Asset Value Per Share
Prior To Exercise		Net Asset Value Per Share
After Exercise
10% premium to net asset value per common share$10.00 $10.20 
Net asset value per common share$10.00 $10.00 
10% discount to net asset value per common share$10.00 $9.80 

Although have we chosen to demonstrate the impact on the net asset value per common share of a business development companyBusiness Development Company that would be experienced by existing stockholders of the business development companyBusiness Development Company upon the exercise of a subscription right to acquire shares of common stock of the business development company,Business Development Company, the results noted above would be similar in connection with the exercise or conversion of other securities exercisable or convertible into shares of the business development company’sBusiness Development Company’s common stock. In addition, the example does not take into account the impact of other securities that may be issued in connection with the issuance of exercisable or convertible securities (e.g.(e.g., the issuance of shares of common stock in conjunction with the issuance of subscription rights to acquire shares of common stock).

Risks Related to Our Notes
The Notes are unsecured and therefore are effectively subordinated to any secured indebtedness we have currently incurred or may incur in the future.
Our 2028 Notes, 2024The 2025 Notes and 2019the 2027 Notes, or,which we refer to collectively as the Notes,"Notes", are not secured by any of our assets or any of the assets of our subsidiaries. As a result, the Notes are effectively subordinated to any secured indebtedness we or our subsidiaries have currently incurred and may incur in the future (or any indebtedness that is initially unsecured to which we subsequently grant security) to the extent of the value of the assets securing such indebtedness. In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future secured indebtedness and the secured indebtedness of our subsidiaries may assert rights against the assets pledged to secure that indebtedness in order to receive full payment of their indebtedness before the assets may be used to pay other creditors, including the holders of the Notes. As of September 30, 2017,2022, we had $226.5$700 million of outstanding borrowings under our ING facility and $29.5 millioncredit facilities, all of borrowings outstanding under our Sumitomo facility.which is secured.
The Notes are structurally subordinated to the indebtedness and other liabilities of our subsidiaries.subsidiaries

The Notes are obligations exclusively of Oaktree Specialty Lending Corporation and not of any of our subsidiaries. None of our subsidiaries is a guarantor of the Notes and the Notes are not required to be guaranteed by any subsidiaries we may acquire or create in the future. The assets of such subsidiaries are not directly available to satisfy the claims of our creditors, including holders of the Notes.
Except to the extent we are a creditor with recognized claims against our subsidiaries, all claims of creditors (including trade creditors) and holders of preferred stock, if any, of our subsidiaries have priority over our equity interests in such subsidiaries (and therefore the claims of our creditors, including holders of the Notes) with respect to the assets of such subsidiaries. Even if we are recognized as a creditor of one or more of our subsidiaries, our claims are effectively subordinated to any security interests in the assets of any such subsidiary and to any indebtedness or other liabilities of any such subsidiary senior to our claims. Consequently, the Notes are structurally subordinated to all indebtedness and other liabilities (including trade payables) of any of our subsidiaries and any subsidiaries that we may in the future acquire or establish as financing vehicles or otherwise. As of September 30, 2022, our subsidiaries had $160 million of outstanding borrowings under the Citibank Facility, all of which is structurally senior to the Notes.
In addition, our subsidiaries may incur substantial additional indebtedness in the future, all of which would be structurally senior to the Notes.

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The indentures under which the Notes are issued contains limited protection for holders of the Notes.
The indentures under which the Notes are issued offers limited protection to holders of the Notes. The terms of the indentures and the Notes do not restrict our or any of our subsidiaries’ ability to engage in, or otherwise be a party to, a variety of corporate transactions, circumstances or events that could have a material adverse impact on investments in the Notes. In particular, the terms of the indenture and the Notes do not place any restrictions on our or our subsidiaries’ ability to:
•issue securities or otherwise incur additional indebtedness or other obligations, including (1) any indebtedness or other obligations that would be equal in right of payment to the Notes, (2) any indebtedness or other obligations that would be secured and therefore rank effectively senior in right of payment to the Notes to the extent of the values of the assets securing such debt, (3) indebtedness of ours that is guaranteed by one or more of our subsidiaries and which therefore is structurally senior to the Notes and (4) securities, indebtedness or obligations issued or incurred by our subsidiaries that would be senior to our equity interests in our subsidiaries and therefore rank structurally senior to the Notes with respect to the assets of our subsidiaries, in each case other than an incurrence of indebtedness or other obligation that would cause a violation of Section 18(a)(1)(A) of the 1940Investment Company Act as modified by Section 61(a)(1) and (2) of the 1940Investment Company Act or any successor provisions, whether or not we continue to be subject to such provisions of the 1940Investment Company Act, but giving effect, in either case, to any exemptive relief granted to us by the SEC (currently, these provisions generally prohibit us from making additional borrowings, including through the issuance of additional debt or the sale of additional debt securities, unless our asset coverage, as defined in the 1940 Act, equals at least 200% after such borrowings);SEC;
•pay dividends on, or purchase or redeem or make any payments in respect of, capital stock or other securities ranking junior in right of payment to the Notes, including subordinated indebtedness, in each case, while the Notes remain outstanding, other than dividends, purchases, redemptions or payments that would cause a violation of Section 18(a)(1)(B) of the 1940 Act as modified by Section 61(a)(1) of the 1940 Act, or any successor provisions giving effect to any exemptive relief granted to us by the SEC (these provisions generally prohibit us from declaring any cash dividend or distribution upon any class of our capital stock, or purchasing any such capital stock if our asset coverage, as defined in the 1940 Act, is below 200% at the time of the declaration of the dividend or distribution or the purchase and after deducting the amount of such dividend, distribution or purchase);Notes;
•sell assets (other than certain limited restrictions on our ability to consolidate, merge or sell all or substantially all of our assets);
•enter into transactions with affiliates;
•create liens (including liens on the shares of our subsidiaries) or enter into sale and leaseback transactions;
•make investments; or
•create restrictions on the payment of dividends or other amounts to us from our subsidiaries and maintain our ability to be subject to tax as a RIC.subsidiaries.
Furthermore, the terms of the indenture and the Notes do not protect holders of the Notes in the event that we experience changes (including significant adverse changes) in our financial condition, results of operations or credit ratings, as they do not require that we or our subsidiaries adhere to any financial tests or ratios or specified levels of net worth, revenues, income, cash flow or liquidity.
Our ability to recapitalize, incur additional debt and take a number of other actions that are not limited by the terms of the Notes may have important consequences for holders of the Notes, including making it more difficult for us to satisfy our obligations with respect to the Notes or negatively affecting the trading value of the Notes.
Certain of our current debt instruments include more protections for their holders than the indenture and the Notes. In addition, other debt we issue or incur in the future could contain more protections for its holders than the indenture and the Notes, including additional covenants and events of default. The issuance or incurrence of any such debt with incremental protections could affect the market for and trading levels and prices of the Notes.
An active trading market for the Notes may not exist, which could limit your ability to sell the Notes or affect the market price of the Notes.
We cannot provide any assurances that an active trading market for the Notes will exist in the future or that holders will be able to sell their Notes. Even if an active trading market does exist, the Notes may trade at a discount from their initial offering price depending on prevailing interest rates, the market for similar securities, our credit ratings, if any, general economic conditions, our financial condition, performance and prospects and other factors. To the extent an active trading market does not exist, the liquidity and trading price for the Notes may be harmed. Accordingly, holder of the Notes may be required to bear the financial risk of an investment in the Notes for an indefinite period of time.

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If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the Notes.
Any default under the agreements governing our indebtedness, including the ING facilityour credit facilities and our Notes or other indebtedness to which we may be a party that is not waived by the required lenders or holders, and the remedies sought by the holders of such indebtedness could make us unable to pay principal, premium, if any, and interest on the Notes and substantially decrease the market value of the Notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, in the instruments governing our indebtedness, we could be in default under the terms of the agreements governing such indebtedness. In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders under the ING facilityour credit facilities or other debt we may incur in the future could elect to terminate their commitments, cease making further loans and institute foreclosure proceedings against our assets, and we could be forced into bankruptcy or liquidation. If our operating performance declines, we may in the future need to seek to obtain waivers from the required lenders under the ING facilityour credit facilities or the required holders of our Notes or other debt that we may incur in the future to avoid being in default. If we breach our covenants under the ING facility,our credit facilities, our Notes or other debt and seek a waiver, we may not be able to obtain a waiver from the required lenders or holders. If this occurs, we would be in default and our lenders or debt holders could exercise their rights as described above, and we could be forced into bankruptcy or liquidation. If we are unable to repay debt, lenders having secured obligations, including the lenders under the ING facility,our credit facilities, could proceed against the collateral securing the debt. Because the ING facilityour credit facilities and our Notes have, and any future credit facilities will likely have, customary cross-default provisions, if the indebtedness thereunder or under any future credit facility is accelerated, we may be unable to repay or finance the amounts due. In the event holders of any debt securities we have outstanding exercise their rights to accelerate following a cross-default, those holders would be entitled to receive the principal amount of their investment, subject to any subordination arrangements that may be in place. We cannot assure you that we will have sufficient liquidity to be able to repay such amounts, in which case we would be in default under the accelerated debt and holders would have the ability to sue us to recover amounts then owing.



General Risk Factors




Economic recessions or downturns may have a material adverse effect on our business, financial condition and results of operations, and could impair the ability of our portfolio companies to repay debt or pay interest.

Economic recessions or downturns may result in a prolonged period of market illiquidity which could have a material adverse effect on our business, financial condition and results of operations. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could limit our investment originations, limit our ability to grow and negatively impact our operating results. In addition, uncertainty with regard to economic recovery from recessions or downturns could also have a negative impact on our business, financial condition and results of operations.
When recessionary conditions exist, the financial results of middle-market companies, like those in which we invest, typically experience deterioration, which could ultimately lead to difficulty in meeting debt service requirements and an increase in defaults. Additionally, there can be reduced demand for certain of our portfolio companies’ products and services and/or other economic consequences, such as decreased margins or extended payment terms. Further, adverse economic conditions may decrease the value of collateral securing some of our loans and the value of our equity investments. Such conditions may require us to modify the payment terms of our investments, including changes in PIK interest provisions and/or cash interest rates. The performance of certain of our portfolio companies has been, and in the future may be, negatively impacted by these economic or other conditions, which may result in our receipt of reduced interest income from our portfolio companies and/or realized and unrealized losses related to our investments, and, in turn, may adversely affect distributable income and have a material adverse effect on our results of operations.

Global economic, political and market conditions, including downgrades of the U.S. credit rating, may adversely affect our business, results of operations and financial condition.

The current global financial market situation, as well as various social and political tensions in the United States and around the world, may contribute to increased market volatility, may have long-term effects on the United States and worldwide financial markets and may cause economic uncertainties or deterioration in the U.S. and worldwide. The impact of downgrades by rating agencies to the U.S. government’s sovereign credit rating or its perceived creditworthiness as well as potential government shutdowns and uncertainty surrounding transfers of power could adversely affect the U.S. and global financial markets and economic conditions. Several European Union, or EU, countries have faced budget issues, some of which may
46



have negative long-term effects for the economies of those countries and other EU countries. In addition, the fiscal policy of large foreign nations, may have a severe impact on the worldwide and U.S. financial markets. Additionally, trade wars and volatility in the U.S. repo market, the U.S. high yield bond markets, the global stock markets and global markets for commodities may affect other financial markets worldwide. In addition, while governments worldwide have used stimulus measures recently to reduce volatility in the financial markets, volatility has returned as such measures are phased out, and the long-term impacts of such stimulus on fiscal policy and inflation remain unknown. We cannot predict the effects of these or similar events in the future on the U.S. and global economies and securities markets or on our investments. We monitor developments in economic, political and market conditions and seek to manage our investments in a manner consistent with achieving our investment objective, but there can be no assurance that we will be successful in doing so.

We may experience fluctuations in our quarterly originations and results.

We could experience fluctuations in our quarterly originations and results due to a number of factors, including our ability or inability to make investments in companies that meet our investment criteria, the interest rate payable on the debt securities we acquire, changes in accrual status of our portfolio company investments, distributions, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our market and general economic conditions. In addition, expected originations for a given quarter may be delayed past quarter-end and into the next quarter as a result of factors outside of our control. As a result of these factors, originations or results for any period should not be relied upon as being indicative of performance in future periods.
Control deficiencies could prevent us from accurately and timely reporting our financial results.

We may identify deficiencies in our internal control over financial reporting in the future, including significant deficiencies and material weaknesses. A “significant deficiency” is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of a company’s financial reporting. A "material weakness" is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis.
Our failure to identify deficiencies in our internal control over financial reporting in a timely manner or remediate any deficiencies, or the identification of material weaknesses or significant deficiencies in the future could prevent us from accurately and timely reporting our financial results.

We incur significant costs as a result of being a publicly traded company.

As a publicly-traded company, we incur legal, accounting and other expenses, including costs associated with the periodic reporting requirements applicable to a company whose securities are registered under the Exchange Act, as well as additional corporate governance requirements, including requirements under the Sarbanes-Oxley Act, and other rules implemented by the SEC and the listing standards of the Nasdaq Global Select Market.

We may be the target of litigation or similar proceedings in the future.

We could generally be subject to litigation or similar proceedings in the future, including securities litigation and derivative actions by our stockholders whether as a result of the Mergers or otherwise . Any litigation or similar proceedings could result in substantial costs, divert management’s attention and resources from our business or otherwise have a material adverse effect on our business, financial condition and results of operations.

Item 1B. Unresolved Staff Comments
None.


Item 2. Properties
We do not own any real estate or other physical properties material to our operations. Our administrative and principal executive offices are located at 333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071. We believe that our office facilities are suitable and adequate for our business as it is presently conducted.

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Item 3.     Legal Proceedings
Although we may, from time to time, be involved in litigation arising out of our operations in the normal course of business or otherwise, weWe are currently not a party to any pending material legal proceedings except as described below.proceedings.
SEC Examination and Investigation
On March 23, 2016, the Division of Enforcement of the SEC sent document subpoenas and document preservation notices to us, FSAM, FSCO GP LLC - General Partner of Fifth Street Opportunities Fund, L.P., or FSOF, and OCSI. The subpoenas sought production of documents relating to a variety of issues principally related to the activities of our Former Adviser, including those raised in an ordinary-course examination of the Former Adviser by the SEC’s Office of Compliance Inspections and Examinations that began in October 2015, and in the previously disclosed securities class actions and other previously disclosed litigation. The subpoenas were issued pursuant to a formal order of private investigation captioned In the Matter of the Fifth Street Group of Companies, No. HO-12925, dated March 23, 2016, which addresses (among other things) (i) the valuation of our portfolio companies and investments, (ii) the expenses allocated or charged to us and OCSI, (iii) FSOF’s trading in the securities of publicly traded business development companies, (iv) statements to our board of directors, other representatives of pooled investment vehicles, investors, or prospective investors concerning the fair value of our portfolio companies or investments as well as expenses allocated or charged to us and OCSI, (v) various issues relating to adoption and implementation of policies and procedures under the Advisers Act, (vi) statements and/or potential omissions in the entities’ SEC filings, (vii) the entities’ books, records, and accounts and whether they fairly and accurately reflected the entities’ transactions and dispositions of assets, and (viii) several other issues relating to corporate books and records. The formal order cites various provisions of the Securities Act, the Exchange Act and the Advisers Act, as well as rules promulgated under those Acts, as the bases of the investigation. We are cooperating with the Division of Enforcement investigation, have produced requested documents, and have been communicating with Division of Enforcement personnel. Our Investment Adviser is not subject to these subpoenas.

Item 4.     Mine Safety Disclosures
Not applicable.


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PART II


Item 5.     Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities



Price Range of Common Stock
Our common stock currently trades on the NASDAQNasdaq Global Select Market under the symbol "OCSL." Through October 17, 2017, our common stock traded under the symbol "FSC." The following table sets forth, for each fiscal quarter during the last two most recently completed fiscal years and for the current fiscal year, the range of high and low sales prices of our common stock as reported on the NASDAQNasdaq Global Select Market:Market, the premium (discount) of sales price to our net asset value, or NAV, and the distributions declared by us for each fiscal quarter.
 

Sale Price
NAV (1)HighLowPremium (Discount) of High Sales Price to NAV (2)Premium (Discount) of Low Sales Price to NAV (2)Cash Distribution per Share (3)
Year ended September 30, 2021
First quarter$6.85$5.66 $4.52 (17.4)%(34.0)%$0.110 
Second quarter$7.09$6.36 $5.47 (10.3)%(22.8)%$0.120 
Third quarter$7.22$6.92 $6.19 (4.2)%(14.3)%$0.130 
Fourth quarter$7.28$7.40 $6.58 1.6 %(9.6)%$0.145 
Year ended September 30, 2022
First quarter$7.34$7.62 $7.03 3.8 %(4.2)%$0.155 
Second quarter$7.26$7.81 $7.13 7.6 %(1.8)%$0.016 
Third quarter$6.89$7.61 $6.20 10.4 %(10.0)%$0.165 
Fourth quarter$6.79$7.25 $5.87 6.8 %(13.5)%$0.170 
Year ending September 30, 2023
First quarter (through November 11, 2022)*$6.89 $5.86 **
$0.32 (4)
__________ 
  High Low
Fiscal year ended September 30, 2017    
First quarter $5.95
 $5.10
Second quarter $5.71
 $4.31
Third quarter $5.00
 $3.90
Fourth quarter $5.72
 $4.51
Fiscal year ended September 30, 2016    
First quarter $6.53
 $5.53
Second quarter $6.52
 $4.40
Third quarter $5.53
 $4.71
Fourth quarter $6.32
 $4.86
* Not determinable at the time of filing.
(1)NAV per share is determined as of the last day in the relevant quarter and therefore may not reflect the NAV per share on the date of the high and low sales prices. The NAVs shown are based on outstanding shares at the end of each period.
(2)Calculated as the respective high or low sales price less NAV, divided by NAV.
(3)Represents the distribution declared in the specified quarter. We have adopted an “opt out” dividend reinvestment plan for our common stockholders. Distributions by us are generally taxable to U.S. stockholders as ordinary income or capital gains.
(4)On November 10, 2022, our Board of Directors declared a quarterly distribution of $0.18 per share payable on December 30, 2022 to stockholders of record on December 15, 2022. On November 10, 2022, our Board of Directors also declared a special distribution of $0.14 per share payable on December 30, 2022 to stockholders of record on December 15, 2022.
The last reported price for our common stock on November 28, 201711, 2022 was $5.20$6.66 per share.share, which represented a 1.9 % discount to our NAV as of September 30, 2022. As of November 28, 2017,11, 2022, we had 6658 stockholders of record, which did not include stockholders for whom shares are held in nominee or “street” name.
Sales of Unregistered Securities
We did not engage in any sales of unregistered securities during the fiscal year ended September 30, 2017.
Distributions
Our distributions, if any, are determined by our Board of Directors.
In addition, we have elected to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code. As long as we continue to qualify as a RIC, we will not be subject to tax on our investment company taxable income or realized net capital gains, to the extent that such taxable income or gains are distributed as dividends for U.S. federal income tax purposes, or deemed to be distributed, to our stockholders on a timely basis.
To maintain RIC tax treatment, we must, among other things, distribute dividends to our stockholders each taxable year of an amount generally, with respect to each taxable year, at least equal to 90% of our investment company net taxable income (i.e., the sum of our net ordinary income plus our realized net short-term capital gains in excess of realized net long-term capital losses determined without regard to any deduction for dividends paid). Depending on the level of taxable income earned in a taxable year, we may choose to carry forward taxable income in excess of current year distributions into the next taxable year and incur a 4% U.S. federal excise tax on such income. Any such carryover taxable income must be distributed through a dividend declared prior to filing the final tax return related to the taxable year in which such taxable income was generated. We may, in the future, make actual distributions to our stockholders of our net capital gains. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and we may be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings. See “Business -Taxation as a Regulated Investment Company” and “Management's Discussion and Analysis of Financial Condition and Results of Operations -Regulated Investment Company Status and Distributions."
We have adopted an “opt out” dividend reinvestment plan, or DRIP, for our common stockholders. As a result, if we make a cash distribution, then stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock, unless they specifically “opt out” of the DRIP so as to receive cash distributions.
In accordance with certain applicable Treasury regulations and related administrative authorities issued by the IRS, a RIC may treat a distribution of its own stock as fulfilling its RIC distribution requirements if each stockholder may elect to receive his or her entire distribution in either cash or stock of the RIC, subject to certain requirements, including those relating to the amount of cash to be distributed to all stockholders in connection with such distributions. If too many stockholders elect to receive cash (which generally may not be less than 20% of the value of the overall distribution), each stockholder electing to receive cash must receive a pro rata amount of cash (with the balance of the distribution paid in stock). If these and certain other requirements are met, for U.S federal income tax purposes, the amount of the dividend paid in stock will be equal to the amount of cash that could have been received instead of stock. We have no current intention of paying dividends in shares of our stock in accordance with these Treasury regulations or administrative authorities.
The following table reflects the distributions per share, including any return of capital, that our Board of Directors has declared, including shares issued under our DRIP, on our common stock since October 1, 2015:


Date Declared Record Date Payment Date Amount
per Share		 Cash
Distribution		 DRIP Shares
Issued		   DRIP Shares
Value
August 4, 2015 October 15, 2015 October 30, 2015 $0.06
 $ 8.4 million 106,185
 (1) $ 0.6 million
August 4, 2015 November 16, 2015 November 30, 2015 0.06
 8.4 million 91,335
 (1) 0.6 million
November 30, 2015 December 15, 2015 December 30, 2015 0.06
 8.4 million 99,673
 (1) 0.6 million
November 30, 2015 January 15, 2016 January 28, 2016 0.06
 8.4 million 113,905
 (1) 0.7 million
November 30, 2015 February 12, 2016 February 26, 2016 0.06
 8.4 million 123,342
 (1) 0.6 million
February 8, 2016 March 15, 2016 March 31, 2016 0.06
 8.6 million 86,806
 (1) 0.4 million
February 8, 2016 April 15, 2016 April 29, 2016 0.06
 8.2 million 112,569
 (1) 0.6 million
February 8, 2016 May 13, 2016 May 31, 2016 0.06
 8.4 million 76,432
 (1) 0.4 million
May 5, 2016 June 15, 2016 June 30, 2016 0.06
 8.2 million 108,629
 (1) 0.5 million
May 5, 2016 July 15, 2016 July 29, 2016 0.06
 8.2 million 100,268
 (1) 0.6 million
May 5, 2016 August 15, 2016 August 31, 2016 0.06
 8.3 million 59,026
 (1) 0.4 million
August 3, 2016 September 15, 2016 September 30, 2016 0.06
 8.3 million 65,170
 (1) 0.4 million
August 3, 2016 October 14, 2016 October 31, 2016 0.06
 8.2 million 81,391
 (1) 0.4 million
August 3, 2016 November 15, 2016 November 30, 2016 0.06
 8.2 million 80,962
 (1) 0.4 million
October 18, 2016 December 15, 2016 December 30, 2016 0.06
 7.7 million 70,316
 (1) 0.4 million
October 18, 2016 January 13, 2017 January 31, 2017 0.06
 8.0 million 73,940
 (1) 0.4 million
October 18, 2016 February 15, 2017 February 28, 2017 0.06
 8.0 million 86,120
 (1) 0.4 million
February 6, 2017 March 15, 2017 March 31, 2017 0.02
 2.7 million 27,891
 (1) 0.1 million
February 6, 2017 June 15, 2017 June 30, 2017 0.02
 2.7 million 20,502
 (1) 0.1 million
February 6, 2017 September 15, 2017 September 29, 2017 0.125
 17.0 million 118,992
 (1) 0.7 million
August 7, 2017 December 15, 2017 December 29, 2017 0.125
 
 

   
(1)Shares were purchased on the open market and distributed.

2022.
Stock Performance Graph
The following graph compares the cumulative 5-year total return provided to shareholders on Oaktree Specialty Lending Corporation’s common stock relative to the cumulative total returns of the NYSE Composite index,Standard & Poor’s 500 Index, the NASDAQRussell 2000 Financial indexServices Index and a customized peer group of six companies that includes: Apollo Investment Corp., Ares Capital Corp., Blackrock Capital Investment Corp., Gladstone Capital Corp. and MVC Capital Inc.the S&P BDC Index. An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock and in each index and in the peer group onSeptember 30, 20122017 and its relative performance is tracked through September 30, 2017.2022. The stock performance graph shows returns during management by Fifth Street Management LLC, or the Former Adviser.
49

  Sep 2012
Dec 2012
Mar 2013
Jun 2013
Sep 2013
Dec 2013
Mar 2014
Jun 2014
Sep 2014
Dec 2014
Oaktree Specialty Lending Corporation 100.00
97.52
105.90
103.19
104.32
96.13
100.93
107.72
103.27
93.02
NYSE Composite 100.00
102.95
111.75
113.23
119.62
130.01
132.40
138.99
136.26
138.78
NASDAQ Financial 100.00
101.10
116.33
123.33
129.19
144.60
146.42
145.11
141.78
153.14
Peer Group 100.00
105.20
110.14
106.29
110.83
116.78
118.39
122.82
114.86
111.82
Former Adviser, for the periods from September 30, 2017 through October 16, 2017 and during management by Oaktree and its affiliates for the period from October 17, 2017 through September 30, 2022.
ocsl-20220930_g2.jpg


September 30, 2017September 30, 2018September 30, 2019September 30, 2020September 30, 2021September 30, 2022
Oaktree Specialty Lending Corporation$100.00 $98.62 $111.04 $112.83 $177.97 $166.19 
S&P 500$100.00 $117.91 $122.93 $141.55 $184.02 $155.55 
Russell 2000 Financial Services$100.00 $106.79 $105.34 $81.07 $134.44 $113.96 
S&P BDC Index$100.00 $104.06 $112.05 $89.94 $138.81 $118.23 
 
50

  Mar 2015
Jun 2015
Sep 2015
Dec 2015
Mar 2016
Jun 2016
Sep 2016
Dec 2016
Mar 2017
Jun 2017
Sep 2017
Oaktree Specialty Lending Corporation
 (cont.)
 86.49
79.62
77.10
82.07
66.93
66.97
82.83
79.03
69.95
73.95
85.17
NYSE Composite (cont.) 140.37
140.10
127.85
133.11
134.88
139.62
143.64
149.00
155.83
160.59
167.69
NASDAQ Financial (cont.) 156.01
162.51
151.30
158.00
154.11
156.68
170.11
199.15
198.43
208.84
223.04
Peer Group (cont.) 123.87
121.31
107.83
108.86
116.36
114.26
126.45
134.32
146.31
143.00
145.47
Stock Repurchase Program


Selected unaudited quarterly financial data for Oaktree Specialty Lending Corporation forWe did not repurchase shares of our common stock during the years ended September 30, 2017, 20162022 and 2015 are below:2021.
Fee and Expenses
 For the three months ended
(dollars in thousands,
except per share
amounts)
September  30, 2017June 30,
2017		March 31,
2017		December  31, 2016September  30, 2016June 30,
2016		March 31,
2016		December  31, 2015September  30, 2015June 30,
2015		March 31,
2015		December  31, 2014
Total investment income$35,732
$44,917
$45,555
$51,760
$59,160
$64,026
$59,563
$65,122
$63,770
$69,900
$66,467
$65,338
Net investment income11,464
19,390
18,504
23,294
25,695
29,106
25,343
26,582
28,159
32,251
28,123
26,407
Net realized and unrealized loss(136,935)(25,447)(9,703)(97,536)(29,128)(34,324)(20,363)(89,468)(30,548)(11,740)(2,380)(54,877)
Net increase (decrease) in net assets resulting from operations(125,471)(6,057)8,801
(74,242)(3,433)(5,218)4,980
(62,886)(2,389)20,511
25,743
(28,470)
Net assets867,657
1,010,750
1,019,626
1,030,272
1,142,288
1,184,376
1,225,974
1,263,113
1,353,094
1,403,213
1,410,302
1,407,822
Total investment income per common share$0.25
$0.32
$0.32
$0.36
$0.41
$0.44
$0.40
$0.43
$0.42
$0.46
$0.43
$0.43
Net investment income per common share0.08
0.14
0.13
0.16
0.18
0.20
0.17
0.18
0.18
0.21
0.18
0.17
Earnings (loss) per common share(0.89)(0.04)0.06
(0.52)(0.02)(0.04)0.03
(0.42)(0.02)0.13
0.17
(0.19)
Net asset value per common share at period end6.16
7.17
7.23
7.31
7.97
8.15
8.33
8.41
9.00
9.15
9.20
9.18
Stock Repurchase Program
On November 20, 2014,The following table is intended to assist stockholders in understanding the costs and expenses that an investor in shares of our Board of Directors terminated our previous $100 million common stock repurchase programwill bear directly or indirectly. We caution you that some of the percentages indicated in the table below are estimates and approvedmay vary. Except where the context suggests otherwise, whenever this Form 10-K contains a new $100 millionreference to fees or expenses paid by “you” or “us”, or that “we” will pay fees or expenses, stockholders will indirectly bear such fees or expenses as investors in us. Such expenses also include those of our consolidated subsidiaries.
Stockholder transaction expenses:
Sales load (as a percentage of offering price)—%(1)
Offering expenses (as a percentage of offering price)—%(2)
Dividend reinvestment plan feesUp to $15(3)
Total stockholder transaction expenses (as a percentage of offering price)—%(4)
Annual expenses (as a percentage of net assets attributable to common stock):
Base management fees3.10%(5)
Incentive fees (17.5%)2.24%(6)
Interest payments on borrowed funds (including other costs of servicing and offering debt securities)5.28%(7)
Other expenses0.74%(8)
Acquired fund fees and expenses1.36%(9)
Total annual expenses12.72%(10)
__________ 
(1)If applicable, the prospectus or prospectus supplement relating to an offering of our common stock repurchase program. will disclose the applicable sales load.
(2)In the event that we conduct an offering of our securities, the related prospectus or prospectus supplement will disclose the estimated offering expenses.
(3)The program expiredexpenses of administering our dividend reinvestment plan are included in “Other expenses.” The plan administrator’s fees under the plan are paid by us. If a participant elects by notice to the plan administrator in advance of termination to have the plan administrator sell part or all of the shares held by the plan administrator in the participant’s account and remit the proceeds to the participant, the plan administrator is authorized to deduct a transaction fee of up to $15 plus a $0.10 per share fee from the proceeds.
(4)Total stockholder transaction expenses may include sales load and will be disclosed in a future prospectus supplement, if any.
(5)Under the Investment Advisory Agreement, the base management fee is calculated at an annual rate of 1.50% of our total gross assets at the end of each quarter, including any investments made with borrowings, but excluding cash and cash equivalents; provided, however, the base management fee will be calculated at an annual rate of 1.00% of the value of our total gross assets, including any investments made with borrowings, but excluding cash and cash equivalents, that exceeds the product of (i) 200% (calculated in accordance with the Investment Company Act and giving effect to exemptive relief we have received with respect to debentures issued by a small business investment company subsidiary) and (ii) our net assets. For purposes of this table, we have assumed $2.6 billion of total gross assets (excluding cash and cash equivalents), which was the actual amount of our total gross assets as of September 30, 2022 and does not reflect the waiver by Oaktree of $750,000 of base management fees in each quarter or the waiver of fees following completion of the OCSI Merger. The base management fee net of such waiver would be 2.99% of net assets attributable to common stock. See “Item 1. Business - Investment Advisory Agreement - Management and Incentive Fee.”
(6)The incentive fee consists of two parts. Under the Investment Advisory Agreement, the incentive fee on November 20, 2015income is calculated and payable quarterly in arrears based upon our pre-incentive fee net investment income for the immediately preceding quarter. The payment of the incentive fee on November 30, 2015,income is subject to payment of a preferred return to investors each quarter (i.e., a “hurdle rate”), expressed as a rate of return on the value of our Boardnet assets at the end of Directors approvedthe most recently completed quarter, of 1.50%, subject to a new $100 million common stock repurchase program through November 30, 2016. For“catch up” feature. In addition, pre-incentive fee net investment income does not include any amortization or accretion of any purchase premium or purchase discount to interest income resulting solely from merger-related accounting adjustments in connection with the assets acquired in the OCSI Merger, including any premium or discount paid for the acquisition of such assets, solely to the extent that the inclusion of such
51

merger-related accounting adjustments, in the aggregate, would result in an increase in pre-incentive fee net investment income. See “Item 1. Business - Investment Advisory Agreement - Management and Incentive Fee” for additional information.

Under the Investment Advisory Agreement, the second part of the incentive fee (the “capital gains incentive fee”) is determined and payable in arrears as of the end of each fiscal year (or upon termination of the Investment Advisory Agreement, as of the termination date) commencing with the fiscal year ended September 30, 2016, we repurchased7,004,139 shares at the weighted average price of $5.34 per share, resulting in $37.6 million of cash paid under the stock repurchase program.
On November 28, 2016, our Board of Directors approved a new common stock repurchase program authorizing us to repurchase up to $12.5 million in the aggregate2019 and equals 17.5% of our outstanding common stock through November 28, 2017. Common stock repurchases underrealized capital gains, if any, on a cumulative basis from the program were made inbeginning of the open market. During thefiscal year ended September 30, 2017,2019 through the end of each fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gains incentive fees under the Investment Advisory Agreement. Any realized capital gains or losses and unrealized capital depreciation with respect to our portfolio as of the end of the fiscal year ended September 30, 2018 are excluded from the calculations of the second part of the incentive fee. In addition, the calculation of realized capital gains, realized capital losses and unrealized capital depreciation does (1) not include any such amounts resulting solely from merger-related accounting adjustments in connection with the assets acquired in the OCSI Merger, including any premium or discount paid for the acquisition of such assets, solely to the extent that the inclusion of such merger-related accounting adjustments, in the aggregate, would result in an increase in the capital gains incentive fee and (2) include any such amounts associated with the investments acquired in the OCSI Merger for the period from October 1, 2018 to the date of closing of the OCSI Merger, solely to the extent that the exclusion of such amounts, in the aggregate, would result in an increase in the capital gains incentive fee. See “Item 1. Business - Investment Advisory Agreement - Management and Incentive Fee” for additional information.     

The incentive fee referenced in the table above is based on annualized actual amounts of the incentive fee on income incurred during the three months ended September 30, 2022 and the capital gains incentive fee payable under the Investment Advisory Agreement as of September 30, 2022.
(7)“Interest payments on borrowed funds (including other costs of servicing and offering debt securities)” is calculated as (1) the weighted average interest rate in effect as of September 30, 2022 multiplied by the actual debt outstanding as of September 30, 2022 of $1,350.0 million plus (2) unused fees and the expected amortization of deferred financing costs and discounts based on the unamortized financing costs and discounts as of September 30, 2022. The weighted average interest rate for our borrowings as of September 30, 2022 was 4.4% (exclusive of deferred financing costs and inclusive of the impact of an interest rate swap designated as a hedging instrument). The amount of leverage that we repurchased 2,298,247employ at any particular time will depend on, among other things, our Board of Directors’ assessment of market and other factors at the time of any proposed borrowing.
(8)“Other expenses” are based on estimated amounts for the current fiscal year. These expenses include certain expenses allocated to us under the Investment Advisory Agreement, including travel expenses incurred by the Adviser’s personnel in connection with investigating and monitoring our investments, such as investment due diligence.
(9)Our stockholders indirectly bear the expenses of underlying funds or other investment vehicles that would be an investment company under section 3(a) of the Investment Company Act but for the exceptions to that definition provided for in sections 3(c)(1) and 3(c)(7) of the Investment Company Act ("Acquired Funds") in which we invest. This amount includes the annual expenses of SLF JV I and the Glick JV, which we refer to collectively as the "JVs". There are no fees paid by the JVs to the Adviser. See Note 3 to our Consolidated Financial Statements in this Form 10-K for more information on the JVs. The annual expenses of the JVs include interest payments on the subordinated notes held by Kemper and GF Debt Funding 2014 LLC, or GF Debt Funding, an entity advised by affiliates of GF Equity Funding, as applicable, which represented 10.3% of such expenses, and exclude interest payments on the subordinated notes held by us.
(10) “Total annual expenses” is presented as a percentage of net assets attributable to common stockholders because our common stockholders bear all of our fees and expenses and includes all fees and expenses of our consolidated subsidiaries. “Total annual expenses” does not reflect any potential provision (benefit) for income taxes because of the uncertainties associated with determining such amounts in future periods.


52

Example
The following example demonstrates the projected dollar amount of total cumulative expenses that would be incurred over various periods with respect to a hypothetical investment in our common stock assuming that we hold no cash or liabilities other than debt. In calculating the following expense amounts, we have assumed that our annual operating expenses remain at the levels set forth in the table above. The example does not include any sales load or offering expenses.
An investor would pay the following expenses on a $1,000 investment1 Year3 Years5 Years10 Years
Assuming a 5% annual return (assumes no return from net realized capital gains)$100$292$474$885
Assuming a 5% annual return (assumes return entirely from net realized capital gains)$108$314$507$929
The example and the expenses in the tables above should not be considered a representation of our future expenses, and actual expenses may be greater or less than those shown. While the example assumes, as required by the SEC, a 5% annual return, our performance will vary and may result in a return greater or less than 5%. The incentive fee based on pre-incentive fee net investment income under the Investment Advisory Agreement, which, assuming a 5% annual return, would either not be payable or would have an insignificant impact on the expense amounts shown above, is not included in the example. If we achieve sufficient returns on our investments, including through the realization of capital gains, to trigger a greater incentive fee, our expenses, and returns to our investors, would be higher. For purposes of this example, we have assumed that as of October 1, 2021, the sum of our realized capital losses and unrealized capital depreciation on a cumulative basis since October 1, 2018 equaled zero. In addition, while the example assumes reinvestment of all distributions at NAV, participants in our dividend reinvestment plan will receive a number of shares of our common stock, for $12.5 million, including commissions. Asdetermined by dividing the total dollar amount of September 30, 2017, there is no availabilitythe cash distribution payable to repurchase additionala participant by either (i) the greater of (a) the current NAV per share of our common stock.
The following table presentsstock and (b) 95% of the numbermarket price per share of our common stock at the close of trading on the payment date fixed by our Board of Directors in the event that we use newly issued shares purchased duringto satisfy the year ended September 30, 2017,share requirements of the dividend reinvestment plan or (ii) the average purchase price, paid perexcluding any brokerage charges or other charges, of all shares of common stock purchased by the administrator of the dividend reinvestment plan in the event that shares are purchased in the open market to satisfy the share requirements of the number of shares that were purchased and the dollar value of shares that still could have been purchased, pursuant to our repurchase authorization:


dividend reinvestment plan, which may be at, above or below NAV.
53

Period 
Total Number of
Shares Purchased
Average Price Paid
per Share
 
Total Number of Shares
Purchased as Part of
Publicly Announced Programs
 Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs
October 1 - October 31 —
  $—
  —    
November 1 - November 30 —
  —
  —    
December 1 - December 31 2,298,247
  5.44
  2,298,247    
January 1 - January 31 —
  —
  —    
February 1 - February 29 —
  —
  —    
March 1- March 31 —
  —
  —    
April 1 - April 30 —
  —
  —    
May 1 - May 31 —
  —
  —    
June 1- June 30 —
  —
  —    
July 1 - July 31 —
  —
  —    
August 1 - August 31 —
  —
  —    
September 1 - September 30 —
  —
  —    
Total 2,298,247
  $5.44
  2,298,247   $—
Financial Highlights


Item 6.     Selected Financial Data
The following selected financial data should be read together with our Consolidated Financial Statements and the related notes and the discussion under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” which is included elsewhere in this annual report on Form 10-K. The financial information as of and for the fiscal years ended September 30, 2017, 2016, 2015, 2014 and 2013 set forth below was derived from our audited financial statements and related notes for Oaktree Specialty Lending Corporation.


  As of and for the Years Ended
(dollars in thousands, except per share amounts) 

September 30,
2017
 

September 30,
2016
 

September 30,
2015
 
September 30,
2014		 
September 30,
2013
Statement of Operations data:          
Total investment income $177,964 $247,872 $265,475 $293,954 $221,612
Base management fee, net 31,129 41,145 51,069 51,048 33,427
Incentive fee 10,713 22,091 28,575 35,472 28,158
All other expenses 64,729 97,338 70,891 64,860 45,074
Gain on extinguishment of unsecured convertible notes —
 —
 — — —
Insurance recoveries 1,259 19,429 — — —
Net investment income 72,652 106,727 114,940 142,574 114,953
Net unrealized appreciation (depreciation) on investments (97,543) (47,924) (71,674) (32,164) 13,397
Net unrealized (appreciation) depreciation on secured borrowings (296) (76) 658 (53) —
Realized gain (loss) on investments (171,782) (125,283) (28,529) 2,175 (26,529)
Net increase (decrease) in net assets resulting from operations (196,969) (66,556) 15,395 112,532 101,821
Per share data:          
Net asset value per common share at period end $6.16 $7.97 $9.00 $9.64 $9.85
Market price at period end 5.47 5.81 6.17 9.18 10.29
Net investment income 0.51 0.72 0.75 1.00 1.04
Net realized and unrealized loss on investments and secured borrowings (1.90) (1.17) (0.65) (0.21) (0.12)
Net increase (decrease) in net assets resulting from operations (1.39) (0.45) 0.10 0.79 0.92
Distributions per common share 0.465 0.72 0.79 1.00 1.15
Balance Sheet data at period end:          
Total investments at fair value $1,541,755 $2,165,491 $2,402,495 $2,495,914 $1,893,046
Cash, cash equivalents and restricted cash 59,913 130,362 143,484 109,046 147,359
Other assets 14,380 47,432 39,678 63,258 31,928
Total assets 1,616,048 2,343,285 2,585,657 2,668,218 2,072,333
Total liabilities 748,391 1,200,997 1,232,563 1,189,743 703,461
Total net assets 867,657 1,142,288 1,353,094 1,478,475 1,368,872
Other data:          
Weighted average yield on debt investments (1) 9.6% 10.4% 10.8% 11.1% 11.1%
Number of portfolio companies at period end 125 129 135 124 99
(Share amounts in thousands)Year ended
September 30,
2022		Year ended
September 30,
2021		Year ended
September 30,
2020		Year ended
September 30,
2019		Year ended
September 30,
2018 (1)
Net asset value per share at beginning of period$7.28$6.49$6.60$6.09$6.16
Net investment income (2)0.820.600.510.480.43
Net unrealized appreciation (depreciation) (2)(5)(0.75)0.73(0.14)0.270.73
Net realized gains (losses) (2)0.090.16(0.10)0.14(0.83)
(Provision) benefit for taxes on realized and unrealized gains (losses) (2)——0.01——
Distributions of net investment income to stockholders(0.65)(0.51)(0.39)(0.38)(0.27)
Tax return of capital————(0.13)
Issuance of common stock—(0.19)———
Net asset value per share at end of period$6.79$7.28$6.49$6.60$6.09
Per share market value at beginning of period$7.06$4.84$5.18$4.96$5.47
Per share market value at end of period$6.00$7.06$4.84$5.18$4.96
Total return (3)(6.71)%57.61%2.10%12.56%(1.49)%
Common shares outstanding at beginning of period180,361140,961140,961140,961140,961
Common shares outstanding at end of period183,374180,361140,961140,961140,961
Net assets at beginning of period$1,312,823$914,879$930,630$858,035$867,657
Net assets at end of period$1,245,563$1,312,823$914,879$930,630$858,035
Average net assets (4)$1,308,518$1,150,662$871,305$909,264$841,583
Ratio of net investment income to average net assets (4)11.36%8.44%8.26%7.47%7.13%
Ratio of total expenses to average net assets (4)8.68%9.65%7.57%9.65%9.51%
Ratio of net expenses to average net assets (4)8.45%9.51%8.16%8.78%9.35%
Ratio of portfolio turnover to average investments at fair value26.99%39.66%38.99%32.50%67.66%
Weighted average outstanding debt (6)$1,361,151$964,390$647,080$573,891$608,553
Average debt per share (2)$7.47$5.95$4.59$4.07$4.32
Asset coverage ratio at end of period (7)188.64%201.68%227.22%294.91%232.98%
 __________
(1)Weighted average yieldBeginning on October 17, 2017, the Company is calculatedexternally managed by Oaktree or its affiliates. Prior to October 17, 2017, the Company was externally managed by the Former Adviser.
(2)Calculated based upon our debt investments, includingweighted average shares outstanding for the period.
(3)Total return onequals the subordinated note investment in SLF JV I, atincrease or decrease of ending market value over beginning market value, plus distributions, divided by the endbeginning market value, assuming dividend reinvestment prices obtained under the Company's DRIP. Total return does not include sales load.
(4)Calculated based upon the weighted average net assets for the period.
(5)For the year ended September 30, 2021, the amount shown for net unrealized appreciation (depreciation) includes the effect of the timing of common stock issuances in connection with the OCSI Merger.
(6)Calculated based upon the weighted average of principal debt outstanding for the period.
(7)Based on outstanding senior securities of $1,350.0 million, $1,280.0 million, $714.8 million, $476.1 million and $643.4 million as of September 30, 2022, 2021, 2020, 2019 and 2018, respectively.


54


Year ended
September 30,
2017		Year ended
September 30,
2016		Year Ended
September 30,
2015		Year Ended
September 30,
2014		Year Ended
September 30,
2013
Net asset value at beginning of period$7.97$9.00$9.64$9.85$9.92
Net investment income (4)0.510.720.751.001.04
Net unrealized appreciation (depreciation) (4)(0.69)(0.33)(0.46)(0.23)0.12
Net realized gains (losses) (4)(1.21)(0.84)(0.19)0.02(0.24)
Distributions of net investment income to stockholders(0.47)(0.67)(0.79)(0.94)(0.90)
Tax return of capital—(0.05)—(0.06)(0.25)
Net issuance/repurchase of common stock0.050.140.05—0.16
Net asset value at end of period$6.16$7.97$9.00$9.64$9.85
Per share market value at beginning of period$5.81$6.17$9.18$10.29$10.98
Per share market value at end of period$5.47$5.81$6.17$9.18$10.29
Total return (1)2.84%7.02%(27.18)%(0.97)%4.89%
Common shares outstanding at beginning of period143,259150,263153,340139,04191,048
Common shares outstanding at end of period140,961143,259150,263153,340139,041
Net assets at beginning of period$1,142,288$1,353,094$1,478,475$1,368,872$903,570
Net assets at end of period$867,657$1,142,288$1,353,094$1,478,475$1,368,872
Average net assets (2)$1,018,498$1,229,639$1,413,357$1,393,635$1,095,225
Ratio of net investment income to average net assets (2)7.13%8.68%8.13%10.23%10.50%
Ratio of total expenses to average net assets (2)10.49%13.09%10.69%10.91%9.95%
Ratio of net expenses to average net assets (2)10.35%11.48%10.65%10.86%9.74%
Ratio of portfolio turnover to average investments at fair value39.06%23.39%23.02%25.50%38.22%
Weighted average outstanding debt (3)$982,372$1,190,105$1,228,413$1,110,021$597,596
Average debt per share (4)$6.95$8.07$8.02$7.82$5.42
Asset coverage ratio at end of period (5)227.40%220.84%238.95%259.50%394.86%
 __________
(1)Total return equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming dividend reinvestment prices obtained under the Company's DRIP. Total return does not include sales load.
(2)Calculated based upon the weighted average net assets for the period.
(3)Calculated based upon the weighted average of principal debt outstanding for the period.
(4)Calculated based upon weighted average shares outstanding for the period.
(5)Based on outstanding senior securities of $680.7 million, $946.5 million, $975.3 million, $928.4 million and $464.3 million as of September 30, 2017, 2016, 2015, 2014 and 2013, respectively.

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Item 6.     Selected Financial Data
Not applicable.

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Item 7.     Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunctionconnection with theour Consolidated Financial Statements and the notes thereto included elsewhere in this annual report on Form 10-K.
Some of the statements in this annual report on Form 10-K constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this annual report on Form 10-K may include statements as to:


•the ability of the parties to consummate the Mergers on the expected timeline, or at all;
•the expected synergies and savings associated with the Mergers;
•the ability to realize the anticipated benefits of the Mergers including the expected elimination of certain expenses and costs due to the Mergers;
•the percentage of our stockholders and OSI 2’s stockholders voting in favor of the proposals submitted for their approval;
•the possibility that competing offers or acquisition proposals will be made;
•the possibility that any or all of the various conditions to the consummation of the Mergers may not be satisfied or waived;
•risks related to diverting management’s attention from ongoing business operations;
•the combined company’s plans, expectations, objectives and intentions, as a result of the Mergers;
•any potential termination of the Merger Agreement;
•the actions of our stockholders or OSI 2’s stockholders with respect to any of the proposals submitted for their approval;
•our future operating results and distribution projections;
•the ability of our Investment Adviser to find lower-risk investmentsOaktree to reposition our portfolio and to implement our Investment Adviser’sOaktree's future plans with respect to our business;
•the ability of Oaktree and its affiliates to attract and retain highly talented professionals;
•our business prospects and the prospects of our portfolio companies;


•the impact of the investments that we expect to make;
•the ability of our portfolio companies to achieve their objectives;
•our expected financings and investments;investments and additional leverage we may seek to incur in the future;
•the adequacy of our cash resources and working capital;
•the timing of cash flows, if any, from the operations of our portfolio companies; and
•the cost or potential outcome of any litigation to which we may be a party.
In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this annual report on Form 10-K involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Item“Item 1A. Risk Factors” and elsewhereFactors” in this annual report on Form 10-K.
Other factors that could cause actual results to differ materially include:
•changes or potential disruptions in our operations, the economy, financial markets or political environment, including the impacts of inflation and political environment;rising interest rates;
•risks associated with possible disruption in our operations or the economy generally due to terrorism, war or other geopolitical conflict (including the current conflict between Russia and Ukraine), natural disasters;disasters or pandemics;
•future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our operating areas, particularly with respect to business development companiesBusiness Development Companies or RICs; and
•other considerations that may be disclosed from time to time in our publicly disseminated documents and filings.
We have based the forward-looking statements included in this annual report on Form 10-K on information available to us on the date of this annual report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the Securities and Exchange Commission, or the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
Except as otherwise specified, references to the “Company,” “we,” “us,” and “our,” refer to Oaktree Specialty Lending Corporation and its consolidated subsidiaries.
All dollar amounts in tables are in thousands, except share and per share amounts percentages and as otherwise indicated.
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Business Overview
We are a specialty finance company dedicated to providing customized, one-stop credit solutions to companies with limited access to public or syndicated capital markets. We are a closed-end, externally managed, non-diversified management investment company that has elected to be regulated as a business development companyBusiness Development Company under the 1940Investment Company Act. In addition, we have qualified and elected to be treated as a RIC under the Code, for U.S. federal income tax purposes.
As of October 17, 2017, weWe are externally managed by Oaktree a subsidiary of OCG, a global investment manager specializing in alternative investments, pursuant to the New Investment Advisory Agreement. OFA, a subsidiaryOaktree Administrator, an affiliate of our Investment Adviser, alsoOaktree, provides certain administrative and other services necessary for us to operate. Prioroperate pursuant to October 17, 2017, we were externally managed and advised by our Former Adviser, and we were named Fifth Street Finance Corp.the Administration Agreement.
We generally lend to and invest in small and mid-sized companies, primarily in connection with investments by private equity sponsors. Our Former Adviser defined small and mid-sized companies as those with annual EBITDA between $10 million and $120 million. Our investment objective is to maximize our portfolio’s total return by generatinggenerate current income from our debt investments, and to a lesser extent, capital appreciation by providing companies with flexible and innovative financing solutions, including first and second lien loans, unsecured and mezzanine loans, bonds, preferred equity and certain equity co-investments. We may also seek to generate capital appreciation and income through secondary investments at discounts to par in either private or syndicated transactions. Our portfolio may also include certain structured finance and other non-traditional structures. We invest in companies that typically possess resilient business models with strong underlying fundamentals. We intend to deploy capital across credit and economic cycles with a focus on long-term results, which we believe will enable us to build lasting partnerships with financial sponsors and management teams, and we may seek to opportunistically take advantage of dislocations in the financial markets and other situations that may benefit from ourOaktree’s credit and structuring expertise. Sponsors may include financial sponsors, such as an institutional investor or a private equity investments.
Following entry into the New Investment Advisory Agreement, our Investment Adviser intendsfirm, or a strategic entity seeking to reposition ourinvest in a portfolio into investments that are better aligned with our Investment Adviser's overall approach to credit investing. We expect that our Investment Adviser will focuscompany. Oaktree is generally focused on middle-market companies, which we define as companies with enterprise values of between $100 million and $750 million. Going forward, we expect our portfolio to include a mix of first and second lien loans, including asset backed loans, unitranche loans, unsecured and mezzanine loans, preferred equity and certain equity co-investments as well as certain structured finance and other non-traditional structures. We generally invest in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as “high yield” and “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.



Business Environment and Developments
The opportunity set in credit is still dominated byIn the search for yield as central banks in Japan and Europe continue their accommodative monetary policies. This glut of capital is resulting in significant inflows into sub-investment grade credit from investors seeking higher spreads as investment grade and highly rated sub-investment grade credit trade at close-to-historically tight levels.
During the fiscal year 2017, the spreadcurrent market environment, Oaktree intends to focus on the BAML High Yield Single B Index ranged between 3.43%following area, in which Oaktree believes there is less competition and 5.34%thus potential for greater returns, for our new investment opportunities: (1) situational lending, which we define to include directly originated loans to non-sponsor companies that are hard to understand and was 3.57%value using traditional underwriting techniques, (2) select sponsor lending, which we define to include financing to support leveraged buyouts of companies with specialized sponsors that have expertise in certain industries, and (3) stressed sector and rescue lending, which we define to include opportunistic private loans in industries experiencing stress or limited access to capital.
Oaktree intends to continue to rotate our portfolio into investments that are better aligned with Oaktree's overall approach to credit investing and that it believes have the potential to generate attractive returns across market cycles (which we call "core investments"). Oaktree has performed a comprehensive review of our portfolio and categorized our portfolio into core investments, non-core performing investments and underperforming investments. Certain additional information on such categorization and our portfolio composition is included in investor presentations that we file with the SEC. Since an Oaktree affiliate became our investment adviser in October 2017, Oaktree and its affiliates have reduced the investments identified as non-core by approximately $800 million at fair value. Over time, Oaktree intends to rotate us out of the remaining non-core investments, which were approximately $71 million at fair value as of September 30, 2017.  In addition, during fiscal year 20172022. Oaktree periodically reviews designations of investments as core and non-core and may change such designations over time.

On March 19, 2021, we acquired Oaktree Strategic Income Corporation, or OCSI, pursuant to the Credit Suisse Leveraged Loan Index spread ranged between 3.64% and 4.57% and was 3.87%OCSI Merger Agreement, dated as of October 28, 2020, by and among OCSI, us, Lion Merger Sub, Inc., our wholly-owned subsidiary, and, solely for the limited purposes set forth therein, Oaktree. As a result of the OCSI Merger, we issued an aggregate of 39,400,011 shares of our common stock to former OCSI stockholders.

Merger Agreement

On September 30, 2017. The weighted average annual yield14, 2022, we entered into the Merger Agreement, which provides that, subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into OSI 2, with OSI 2 continuing as the surviving company and as our wholly-owned subsidiary and, immediately thereafter, OSI 2 will merge with and into us, with us continuing as the surviving company. Both our Board of Directors and the Board of Directors of OSI 2, in each case, on the recommendation of a special committee comprised solely of certain independent directors of us or OSI 2, as applicable, have approved the Merger Agreement and the transactions contemplated thereby.

At the Effective Time, each share of OSI 2 Common Stock issued and outstanding immediately prior to the Effective Time (other than Cancelled Shares) will be converted into the right to receive a number of shares of our common stock equal to the Exchange Ratio (as defined below), plus any cash (without interest) in lieu of fractional shares.

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As of a mutually agreed date no earlier than 48 hours (excluding Sundays and holidays) prior to the Effective Time, which we refer as the “Determination Date”, each of us and OSI 2 will deliver to the other a calculation of its net asset value as of such date, in each case using a pre-agreed set of assumptions, methodologies and adjustments. We refer to such calculation with respect to OSI 2 as the “Closing OSI 2 Net Asset Value” and with respect to us as the “Closing OCSL portfolioNet Asset Value”. Based on such calculations, the parties will calculate the “OSI 2 Per Share NAV”, which will be equal to (i) the Closing OSI 2 Net Asset Value divided by (ii) the number of 9.6% compares favorablyshares of OSI 2 Common Stock issued and outstanding as of the Determination Date (excluding any Cancelled Shares), and the “OCSL Per Share NAV”, which will be equal to (A) the Closing OCSL Net Asset Value divided by (B) the number of shares of our common stock issued and outstanding as of the Determination Date. The “Exchange Ratio” will be equal to the quotient (rounded to four decimal places) of (i) the OSI 2 Per Share NAV divided by (ii) the OCSL Per Share NAV.

We and OSI 2 will update and redeliver the Closing OCSL Net Asset Value or the Closing OSI 2 Net Asset Value, respectively, in the current environment.event of a material change to such calculation between the Determination Date and the closing of the Mergers and if needed to ensure that the calculation is determined within 48 hours (excluding Sundays and holidays) prior to the Effective Time.

The Merger Agreement contains customary representations and warranties by each of us, OSI 2 and Oaktree. The Merger Agreement also contains customary covenants, including, among others, covenants relating to the operation of each of our and OSI 2’s businesses during the period prior to the closing of the Mergers.

Consummation of the Mergers, which is currently anticipated to occur during the second fiscal quarter of 2023, is subject to certain closing conditions, including requisite approvals of our and OSI 2’s stockholders and certain other closing conditions.

The Merger Agreement also contains certain termination rights in favor of us and OSI 2, including if the Mergers are not completed on or before June 30, 2023 or if the requisite approvals of our or OSI 2’s stockholders are not obtained. The Merger Agreement provides that, upon the termination of the Merger Agreement under certain circumstances, a third party acquiring OSI 2 may be required to pay us a termination fee of approximately $9.8 million. The Merger Agreement provides that, upon the termination of the Merger Agreement under certain circumstances, a third party acquiring us may be required to pay OSI 2 a termination fee of approximately $37.9 million.

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement. The representations, warranties, covenants and agreements contained in the Merger Agreement were made only for purposes of the Merger Agreement and as of specific dates; were solely for the benefit of the parties to the Merger Agreement (except as may be expressly set forth in the Merger Agreement); may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors and security holders should not rely on such representations, warranties, covenants or agreements, or any descriptions thereof, as characterizations of the actual state of facts or condition of any of the parties to the Merger Agreement or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties, covenants and agreements may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in public disclosures by the parties to the Merger Agreement.

Management Fee Waiver

In connection with entry into the Merger Agreement and subject to completion of the transactions contemplated thereby, Oaktree has agreed to waive $9.0 million of base management fees payable to it under the Investment Advisory Agreement as follows: $6.0 million at a rate of $1.5 million per quarter (with such amount appropriately prorated for any partial quarter) in the first year following closing of the Mergers and $3.0 million at a rate of $750,000 per quarter (with such amount appropriately prorated for any partial quarter) in the second year following closing of the Mergers.
Business Environment and Developments

Global financial markets have experienced an increase in volatility as concerns about the impact of higher inflation, rising interest rates, a potential recession and the current conflict in Ukraine have weighed on market participants. These factors have created disruptions in supply chains and economic activity and have had a particularly adverse impact on certain companies in the energy, raw materials and transportation sectors, among others. These uncertainties can ultimately impact the overall supply and demand of the market through changing spreads, deal terms and structures and equity purchase price multiples.

We are unable to predict the full effects of these macroeconomic events or how long any further market disruptions or volatility might last. We continue to closely monitor the impact these events have on our business, industry and portfolio companies and will provide constructive solutions where necessary.
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Against this environment,uncertain macroeconomic backdrop, we believe attractive risk-adjusted returns can be achieved by investing inmaking loans to middle market companies that cannot efficiently access traditional debt capital markets. Wetypically possess resilient business models with strong underlying fundamentals. Given the breadth of the investment platform and decades of credit investing experience of Oaktree and its affiliates, we believe that the Company haswe have the resources and experience to source, diligence and structure investments in these companies and isare well placed to generate attractive returns for investors.

New Investment Advisory Agreement with Oaktree
UponAs of September 30, 2022, 86.5% of our debt investment portfolio (at fair value) and 86.3% of our debt investment portfolio (at cost) bore interest at floating rates. Most of our floating rate loans are indexed to the closingLIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly or monthly at the borrower’s option. Certain loans may also be indexed to SOFR or SONIA. Most U.S. dollar LIBOR rates will continue to be published through June 30, 2023. The FCA no longer compels panel banks to continue to contribute to LIBOR and the Federal Reserve Board, the Office of the Transaction on October 17, 2017, Oaktree became the investment adviser to each of OCSI and us, and Oaktree paid gross cash consideration of $320 million to our Former Adviser. The closingComptroller of the Transaction resultedCurrency, and the Federal Deposit Insurance Corporation have encouraged banks to cease entering into new contracts that use U.S. dollar LIBOR as a reference rate. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, supports replacing U.S.-dollar LIBOR with SOFR. Although there are an assignmentincreasing number of issuances utilizing SOFR or SONIA, these alternative reference rates may not attain market acceptance as replacements for purposesLIBOR. In anticipation of the 1940 Actcessation of LIBOR, we may need to renegotiate any credit agreements extending beyond the applicable phase out date with our prospective portfolio companies that utilize LIBOR as a factor in determining the interest rate. Certain of the Former Investment Advisory Agreement and, asloan agreements with our portfolio companies have included fallback language in the event that LIBOR becomes unavailable. This language generally provides that the administrative agent may identify a result, its immediate termination. The material termsreplacement reference rate, typically with the consent of (or prior consultation with) the borrower. In certain cases, the administrative agent will be required to obtain the consent of either a majority of the services to be providedlenders under the New Investment Advisory Agreement, other thanfacility, or the fee structure, are substantiallyconsent of each lender, prior to identifying a replacement reference rate. Certain of the same asloan agreements with our portfolio companies do not include any fallback language providing a mechanism for the Former Investment Advisory Agreement, except that services are provided by Oaktree. See “Business-The Investment Adviser”parties to negotiate a new reference interest rate and “-New Investment Advisory Agreement.”will instead revert to the base rate in the event LIBOR ceases to exist.

Critical Accounting PoliciesEstimates

Investment Valuation
Basis of Presentation
Our Consolidated Financial Statements have been preparedWe value our investments in accordance with accounting principles generally accepted in the United States of America, or GAAP, and pursuant to the requirements for reporting on Form 10-K and Regulation S-X. All intercompany balances and transactions have been eliminated. We are an investment company following the accounting and reporting guidance in Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 946, Financial Services-Investment Companies, or ASC 946.
Investment Valuation
We report our investments for which current market values are not readily available at fair value. We value our investments in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820, which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. ASC 820 prioritizes the use of observable market prices derived from such prices over entity-specific inputs. Where observable prices or inputs are not available or reliable, valuation techniques are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments’ complexity.
Hierarchical levels, defined by ASC 820 and directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follow:follows:
 
•Level 1 — Unadjusted, quoted prices in active markets for identical assets or liabilities atas of the measurement date.
•Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data at the measurement date for substantially the full term of the assets or liabilities.
•Level 3 — Unobservable inputs that reflect management’sOaktree’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
If inputs used to measure fair value fall into different levels of the fair value hierarchy, an investment's level is based on the lowest level of input that is significant to the fair value measurement. OurOaktree's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. This includes investment securities that are valued using “bid”"bid" and “ask”"ask" prices obtained from independent third party pricing services or directly from brokers. These investments


may be classified as Level 3 because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities or may require adjustments for investment-specific factors or restrictions.
Financial instruments with readily available quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. As such, our Investment AdviserOaktree obtains and analyzes readily available market quotations provided by independent pricing servicesvendors and brokers for all of our first lien and second lien, or senior secured, debt investments for which quotations are
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available. In determining the fair value of a particular investment, pricing servicesvendors and brokers use observable market information, including both binding and non-binding indicative quotations.
Our Investment Adviser evaluatesOaktree seeks to obtain at least two quotations for the subject or similar securities, typically from pricing vendors. If Oaktree is unable to obtain two quotes from pricing vendors, or if the prices obtained from independent pricing servicesvendors are not within our set threshold, Oaktree seeks to obtain a quote directly from a broker making a market for the asset. Oaktree evaluates the quotations provided by pricing vendors and company specific data that could affect the credit quality and/or fair valuebrokers based on available market information, including trading activity of the investment. Investments for which market quotationssubject or similar securities, or by performing a comparable security analysis to ensure that fair values are readily available may be valued at such market quotations.reasonably estimated. Oaktree also performs back-testing of valuation information obtained from pricing vendors and brokers against actual prices received in transactions. In orderaddition to validate market quotations, our Investment Adviser looks at a number of factorsongoing monitoring and back-testing, Oaktree performs due diligence procedures over pricing vendors to determine ifunderstand their methodology and controls to support their use in the quotations are representative of fair value, including the source and nature of the quotations. Our Investment Adviservaluation process. Generally, Oaktree does not adjust any of the prices unless it has a reason to believe marketreceived from these sources.
If the quotations obtained from pricing vendors or brokers are not reflective of the fair value of an investment. Examples of events that would cause market quotationsdetermined to not reflect fair value could include cases when a security trades infrequently causing a quoted purchasebe reliable or sale price to become stale or in the event of a “fire sale” by a distressed seller. In these instances, we value such investments by using the valuation procedure that we use with respect to assets for which market quotations are not readily available, (as discussed below).
If the quotation provided by the pricing service is based on only one or two market sources, we perform additional procedures to corroborateOaktree values such information, which may include the market yield technique discussed below and a quantitative and qualitative assessmentinvestments using any of the credit quality and market trends affecting the portfolio company.
We perform detailed valuations of our debt and equity investments for which market quotations are not readily available or are deemed not to represent fair value of the investments. We typically use three different valuation techniques. The first valuation technique is the transaction precedent technique, which utilizes recent or expected future transactions of the investment to determine fair value, to the extent applicable. The second valuation technique is an analysis of the enterprise value, or EV, of the portfolio company. EV means the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time. The EV analysis is typically performed to determine (i) the value of equity investments, to determine if(ii) whether there is credit impairment for debt investments and to determine(iii) the value for debt investments that we are deemed to control under the 1940Investment Company Act. To estimate the EV of a portfolio company, the Investment AdviserOaktree analyzes various factors, including the portfolio company’s historical and projected financial results, macroeconomic impacts on the company and competitive dynamics in the company’s industry. The Investment AdviserOaktree also utilizes some or all of the following information based on the individual circumstances of the portfolio company, including:company: (i) valuations of comparable public companies, (ii) recent sales of private and public comparable companies in similar industries or having similar business or earnings characteristics, (iii) purchase price multiplesprices as a multiple of their earnings or cash flow, (iv) the portfolio company’s ability to meet its forecasts and its business prospects, (v) a discounted cash flow analysis, (vi) estimated liquidation or collateral value of the portfolio company’s assets and (vii) offers from third parties to buy the portfolio company. WeOaktree may probability weight potential sale outcomes with respect to a portfolio company due to thewhen uncertainty that exists as of the valuation date. Under the EV technique, the significant unobservable input used in the fair value measurement of our investments in debt or equity securities is the EBITDA, revenue or asset multiple, as applicable. Increases or decreases in the valuation multiples in isolation may result in a higher or lower fair value measurement, respectively. The third valuation technique is a market yield technique, which is typically performed for non-credit impaired debt investments. To determine fair value using aIn the market yield technique, a current price is imputed for the investment based upon an assessment of the expected market yield for a similarly structured investment with a similar level of risk. In the market yield technique,risk, and we consider the current contractual interest rate, the capital structure and other terms of the investment relative to risk of the company and the specific investment. A key determinant of risk, among other things, is the leverage through the investment relative to the EV of the portfolio company. As debt investments held by us are substantially illiquid with no active transaction market, we dependOaktree depends on primary market data, including newly funded transactions and industry-specific market movements, as well as secondary market data with respect to high yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable. Under the market yield technique, the significant unobservable input used in the fair value measurement of our investments in debt securities is the market yield. Increases or decreases in the market yield may result in a lower or higher fair value measurement, respectively.
In accordance with ASC 820-10, certain investments that qualify as investment companies in accordance with ASC 946 may be valued using net asset value as a practical expedient for fair value. Consistent with FASB guidance under ASC 820, these investments are excluded from the hierarchical levels. These investments are generally not redeemable.
We estimateOaktree estimates the fair value of certain privately held warrants using a Black Scholes pricing model, which includes an analysis of various factors and subjective assumptions, including the current stock price (by using an EV analysis as described above), the expected period until exercise, expected volatility of the underlying stock price, expected dividends and the risk-free rate. Changes in the subjective input assumptions can materially affect the fair value estimates.
Our Board of Directors undertakes a multi-step valuation process each quarter in connection with determining the fair value of our investments:
The quarterly valuation process begins with each portfolio company or investment being initially valued by our Investment Adviser’s valuation team in conjunction with the Investment Adviser’s portfolio management team and investment professionals responsible for each portfolio investment;
•Preliminary valuations are then reviewed and discussed with management of our Investment Adviser;


Separately, independent valuation firms engaged by our Board of Directors prepare valuations of our investments, on a selected basis, for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment, and submit the reports to us and provide such reports to our Investment Adviser and the Audit Committee of our Board of Directors;
The Investment Adviser compares and contrasts its preliminary valuations to the valuations of the independent valuation firms and prepares a valuation report for the Audit Committee of our Board of Directors;
The Audit Committee of our Board of Directors reviews the preliminary valuations with our Investment Adviser, and our Investment Adviser responds and supplements the preliminary valuations to reflect any discussions between our Investment Adviser and the Audit Committee;
The Audit Committee of our Board of Directors makes a recommendation to our Board of Directors regarding the fair value of the investments in our portfolio; and
Our Board of Directors discusses valuations and determines the fair value of each investment in our portfolio.
The fair value of our investments atas of September 30, 20172022 was determined by our Adviser, as our valuation designee, and the fair value of our investments as of September 30, 20162021 was determined in good faith by our Board of Directors. Our Board of Directors has authorized the engagement of independent valuation firms to provide valuation assistance. We have and will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of a portion of our portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter, and the Board of Directors may reasonably rely on that assistance.quarter. As of September 30, 2017, 76.6%2022, 93.2% of our portfolio at fair value was valued either based on market quotations, the transactions precedent approach or corroborated by independent valuation firms. The percentage
Certain factors that may be considered in determining the fair value of our investments include the nature and realizable value of any collateral, the portfolio valued by independent valuation firmscompany’s earnings and its ability to make payments on its indebtedness, the markets in which the portfolio company does business, comparison to comparable publicly-traded companies, discounted cash flow and
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other relevant factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may vary from period to periodfluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the availabilityvalues that would have been used if a ready market for these securities existed. Due to these uncertainties, Oaktree's fair value determinations may cause our net asset value on a given date to materially understate or overstate the value that we may ultimately realize upon the sale of market quotations for our portfolio investments during the respective periods. Typically, a higher percentageone or more of our portfolio is valued by independent valuation firms in our fiscal fourth quarter due to additional year-end procedures. However, our Board of Directors is responsible for the ultimate valuation of the portfolio investments at fair value as determined in good faith pursuant to our valuation policy and a consistently applied valuation process.
The percentages of our portfolio, at fair value, valued by independent valuation firms as of the end of each period during the current and two preceding fiscal years were as follows:
As of December 31, 201478.5%
As of March 31, 201572.9%
As of June 30, 201573.1%
As of September 30, 201588.3%
As of December 31, 201577.1%
As of March 31, 201669.2%
As of June 30, 201667.8%
As of September 30, 201689.8%
As of December 31, 201669.4%
As of March 31, 201768.6%
As of June 30, 201767.3%
As of September 30, 201776.6%
investments.
As of September 30, 20172022, we held $2,494.1 million of investments at fair value, down from $2,556.6 million held at September 30, 2021, primarily driven by unrealized losses related to credit spread widening and partially offset by new originations. As of September 30, 2022 and September 30, 2016,2021, approximately 95.4%94.2% and 92.4%97.0%, respectively, of our total assets represented investments in portfolio companies valued at prices equal to fair value.
Revenue Recognition
Interest and Dividend Income
Interest income, adjusted for accretion of OID is recorded on thean accrual basis to the extent that such amounts are expected to be collected. We stop accruing interest on investments when it is determined that interest is no longer collectible. Investments that are expected to pay regularly scheduled interest in cash are generally placed on non-accrual status when there is reasonable doubt that principal or interest cash payments will be collected. Cash interest payments received on investments may be recognized as income or a return of capital depending upon management’s judgment. SuchA non-accrual investments areinvestment is restored to accrual status if past due principal and interest are paid in cash, and the portfolio companies,company, in management’s judgment, areis likely to continue timely payment of theirits remaining interest.obligations. As of each of September 30, 2017,2022 and September 30, 2021, there were eightno investments on which we had stopped accruing cash and/or PIK interest or OID income.


non-accrual status.
In connection with our investment in a portfolio company, we sometimes receive nominal cost equity that is valued as part of the negotiation process with the portfolio company. When we receive nominal cost equity, we allocate our cost basis in the investment between debt securities and the nominal cost equity at the time of origination. Any resulting discount from recording the loan, or otherwise purchasing a security at a discount, is accreted into interest income over the life of the loan.
We generally recognize dividend income on the ex-dividend date. Distributions received from equity investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, we will not record distributions from such equity investments as dividend income unless there are sufficient earnings at the portfolio company prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.
Fee Income
We receive a variety of fees in the ordinary course of business, including servicing, advisory, amendment, structuring and prepayment fees, which are classified as fee income and recognized as they are earned.
We have also structured exit fees across certain of our portfolio investments to be received upon the future exit of those investments. Exit fees are payable upon the exit of a debt security. These fees are to be paid to us upon the sooner to occur of (i) a sale of the borrower or substantially all of the assets of the borrower, (ii) the maturity date of the loan or (iii) the date when full prepayment of the loan occurs. The receipt of such fees is contingent upon the occurrence of one of the events listed above for each of the investments. A percentage of these fees is included in net investment income over the life of the loan. As of September 30, 2017, we had a receivable for $1.5 million in aggregate exit fees of one portfolio investment upon the future exit of this investment.
PIK Interest Income
Our loansinvestments in debt securities may contain contractual PIK interest provisions. The PIK interest, which typically represents contractually deferred interest added to the loan balance that is generally due at the end of the loan term, is generally recorded on the accrual basis to the extent such amounts are expected to be collected. We generally cease accruing PIK interest if there is insufficient value to support the accrual or if we do not expect the portfolio company to be able to pay all principal and interest due. Our decision to cease accruing PIK interest on a loan or debt security involves subjective judgments and determinations based on available information about a particular portfolio company, including whether the portfolio company is current with respect to its payment of principal and interest on its loans and debt securities; financial statements and financial projections for the portfolio company; our assessment of the portfolio company's business development success; information obtained by us in connection with periodic formal update interviews with the portfolio company's management and, if appropriate, the private equity sponsor; and information about the general economic and market conditions in which the portfolio company operates. Based on this and other information, we determine whether to cease accruing PIK interest on a loan or debt security when it is determined that PIK interest is no longer collectible. Our determination to cease accruing PIK interest on a loan or debt security is generally made well before our full write-down of sucha loan or debt security. In addition, if it is subsequently determined that we will not be able to collect any previously accrued PIK interest, the fair value of ourthe loans or debt securities would be reduced by the amount of such previously accrued, but uncollectible, PIK interest. The accrual of PIK interest on our debt investments increases the recorded cost bases of these investments in our Consolidated Financial Statements and, as a result, increases the cost bases of these investmentsincluding for purposes of computing the capital gains incentive fee payable by us to our Investment Adviser.
For a discussion of risks we are subject to as a result of our use of PIK interest in connection with our investments, see “Risk Factors - Risks Relating to Our Business and Structure - We may have difficulty paying our required distributions if we are required to recognize income for U.S. federal income tax purposes before or without receiving cash representing such income,” “- We may in the future choose to pay distributions partly in our own stock, in which case you may be subject to tax in excess of the cash you receive” and “- Our incentive fee may induce our Investment Adviser to make speculative investments” elsewhere in this annual report.
Oaktree. To maintain our status as a RIC, certain income from PIK interest mustmay be paid outrequired to be distributed to our stockholders, as distributions, even though we have not yet collected the cash and may never collect the cash relating to the PIK interest. Accumulated PIK interest was $69.4 million, or 4.5%, of the fair value of our portfolio of investments as of September 30, 2017 and $62.6 million, or 2.9%, of fair value of our portfolio investments as of September 30, 2016. The net increases in loan balances as a result of contractual PIK arrangements are separately identified in our Consolidated Statements of Cash Flows.do so.
Portfolio Composition
Our investments principally consist of loans, purchasedcommon and preferred equity investments and equity grantswarrants in privately-held companies, and SLF JV I.I and Glick JV. Our loans are typically secured by a first, second or subordinated lien on the assets of the portfolio company and generally have terms of up to ten years (but an expected average life of between three and four years). We believe the environment for direct lending remains active, and, as a result, a number of our portfolio companies were able to refinance and repay their loans during
During the fiscal year ended September 30, 2017.


During the year ended September 30, 2017,2022, we originated $574.9$756.7 million of investment commitments in 4546 new and 1239 existing portfolio companies and funded $568.3$691.5 million of investments.
During the fiscal year ended September 30, 2017,2022, we received $800.9$691.1 million in connection with the full repayments andof proceeds from prepayments, exits, of 47 of our investments and an additional $144.5 million in connection with other paydowns and sales of investments.and exited 35 portfolio companies.
62

A summary of the composition of our investment portfolio at cost and fair value as a percentage of total investments is shown in the following tables:
September 30, 2022September 30, 2021
Cost:
Senior secured debt85.08 %85.85 %
Debt investments in the JVs5.59 5.79 
Preferred equity3.26 2.60 
Subordinated debt2.57 1.67 
LLC equity interests of the JVs1.88 1.94 
Common equity and warrants1.62 2.15 
Total100.00 %100.00 %
 
September 30, 2022September 30, 2021
Fair value:
Senior secured debt86.86 %86.72 %
Debt investments in the JVs5.88 5.94 
Preferred equity3.19 2.49 
Subordinated debt2.28 1.67 
Common equity and warrants0.96 1.71 
LLC equity interests of the JVs0.83 1.47 
Total100.00 %100.00 %
  September 30, 2017 September 30, 2016
Cost:    
Senior secured debt 74.73% 78.36%
Subordinated debt 6.42
 7.49
Debt investments in SLF JV I 7.32
 6.34
LLC equity interests of SLF JV I 0.92
 0.70
Purchased equity 6.40
 3.61
Equity grants 2.78
 2.40
Limited partnership interests 1.43
 1.10
Total 100.00% 100.00%

63
  September 30, 2017 September 30, 2016
Fair value:    
Senior secured debt 78.01% 78.02%
Subordinated debt 6.06
 7.22
Debt investments in SLF JV I 8.35
 5.96
LLC equity interests of SLF JV I 0.36
 0.63
Purchased equity 5.10
 5.27
Equity grants 0.45
 1.86
Limited partnership interests 1.67
 1.04
Total 100.00% 100.00%



The industry composition of our portfolio at cost and fair value as a percentage of total investments was as follows:
September 30, 2022September 30, 2021
Cost:
Application Software14.98 %14.49 %
Multi-Sector Holdings (1)7.48 7.73 
Pharmaceuticals4.83 5.44 
Data Processing & Outsourced Services4.60 4.74 
Biotechnology4.20 4.41 
Health Care Technology3.82 0.55 
Industrial Machinery3.12 3.47 
Specialized Finance3.09 2.70 
Internet & Direct Marketing Retail2.59 2.45 
Aerospace & Defense2.37 2.66 
Construction & Engineering2.33 2.44 
Automotive Retail2.26 1.65 
Health Care Services2.24 3.34 
Health Care Distributors2.18 0.78 
Internet Services & Infrastructure2.07 1.85 
Personal Products2.03 4.08 
Fertilizers & Agricultural Chemicals1.88 2.63 
Metal & Glass Containers1.82 0.69 
Real Estate Operating Companies1.82 1.08 
Home Improvement Retail1.75 1.83 
Airport Services1.65 1.64 
Real Estate Services1.54 1.59 
Leisure Facilities1.52 0.99 
Diversified Support Services1.45 1.60 
Specialty Chemicals1.43 1.84 
Health Care Supplies1.39 1.17 
Insurance Brokers1.36 1.00 
Integrated Telecommunication Services1.32 1.85 
Soft Drinks1.31 1.32 
Electrical Components & Equipment1.29 1.27 
Other Diversified Financial Services1.12 0.63 
Advertising1.08 1.13 
Movies & Entertainment1.00 1.02 
Distributors0.97 — 
Health Care Equipment0.93 0.93 
Oil & Gas Storage & Transportation0.85 1.44 
Environmental & Facilities Services0.80 — 
Cable & Satellite0.79 1.05 
Home Furnishings0.75 0.77 
Systems Software0.57 0.26 
Consumer Finance0.55 — 
Hotels, Resorts & Cruise Lines0.53 — 
Auto Parts & Equipment0.48 0.49 
IT Consulting & Other Services0.45 0.30 
Restaurants0.36 0.37 
Research & Consulting Services0.35 0.29 
Education Services0.35 0.04 
Oil & Gas Refining & Marketing0.33 1.42 
Trading Companies & Distributors0.29 — 
Air Freight & Logistics0.28 0.19 
Apparel Retail0.20 — 
Apparel, Accessories & Luxury Goods0.20 0.20 
Integrated Oil & Gas0.19 0.19 
Food Distributors0.18 0.18 
Specialized REITs0.16 — 
Diversified Banks0.13 0.14 
Technology Distributors0.12 0.12 
Construction Materials0.09 0.09 
Housewares & Specialties0.09 0.07 
Electronic Components0.08 0.40 
Alternative Carriers0.01 0.26 
Independent Power Producers & Energy Traders— 0.92 
Airlines— 0.88 
Commercial Printing— 0.78 
Managed Health Care— 0.73 
Thrifts & Mortgage Finance— 0.63 
Property & Casualty Insurance— 0.39 
Leisure Products— 0.26 
Food Retail— 0.15 
Total100.00 %100.00 %
64

  September 30, 2017 September 30, 2016
Cost:    
 Internet software & services 15.37% 15.80%
 Healthcare services 11.98
 16.60
 Multi-sector holdings (1) 9.87
 7.80
 Healthcare equipment 5.67
 5.24
 Advertising 4.82
 7.47
 Data processing & outsourced services 4.42
 3.68
 Construction & engineering 3.86
 2.90
 Pharmaceuticals 3.46
 2.61
 Specialty stores 3.33
 2.04
 Airlines 3.28
 3.11
 Application software 2.93
 2.13
 Education services 2.85
 1.03
 Environmental & facilities services 2.84
 4.34
 Research & consulting services 2.16
 2.76
 Air freight and logistics 1.85
 1.39
 Leisure facilities 1.76
 1.49
 Integrated telecommunication services 1.75
 2.47
 Housewares & specialties 1.70
 —
 Oil & gas equipment services 1.57
 2.00
 Casinos & gaming 1.33
 —
 Consumer electronics 1.32
 1.09
 Home improvement retail 1.31
 1.07
 Diversified support services 1.29
 3.73
 Auto parts & equipment 1.21
 0.73
 Industrial machinery 0.86
 2.04
 Distributors 0.85
 —
 Security & alarm services 0.75
 0.59
 Real Estate Services 0.74
 —
 Other diversified financial services 0.69
 0.65
 Hypermarkets & super centers 0.68
 —
 Precious metals & minerals 0.42
 —
 Thrift & mortgage finance 0.41
 0.35
 Trucking 0.40
 —
 Computer & electronics retail 0.36
 —
 Multi-utilities 0.35
 —
 Commercial printing 0.34
 0.27
 Apparel, accessories & luxury goods 0.29
 0.69
 Restaurants 0.28
 0.22
 Food retail 0.24
 0.18
 IT consulting & other services 0.23
 2.27
 Specialized finance 0.18
 —
 Food distributors —
 0.52
 Specialized consumer services —
 0.39
 Healthcare technology —
 0.35
Total 100.00% 100.00%


  September 30, 2017 September 30, 2016
Fair value:    
 Internet software & services 17.20% 15.09%
 Multi-sector holdings (1) 10.67
 7.37
 Healthcare services 6.09
 16.64
 Advertising 5.43
 6.90
 Healthcare equipment 4.73
 5.58
 Data processing & outsourced services 4.43
 3.71
 Pharmaceuticals 4.07
 2.79
 Airlines 3.86
 3.56
 Specialty stores 3.69
 2.09
 Application software 3.50
 2.35
 Environmental & facilities services 3.29
 4.66
 Construction & engineering 3.26
 2.90
 Research & consulting services 2.50
 2.93
 Education services 2.48
 0.91
 Leisure facilities 2.11
 1.59
 Integrated telecommunication services 2.03
 2.45
 Housewares & specialties 1.93
 —
 Oil & gas equipment services 1.84
 0.78
 Home improvement retail 1.61
 1.21
 Consumer electronics 1.56
 1.16
 Casinos & gaming 1.52
 —
 Diversified support services 1.46
 3.50
 Auto parts & equipment 1.41
 0.86
 Industrial machinery 0.97
 2.38
 Distributors 0.96
 —
 Security & alarm services 0.85
 0.64
 Real Estate Services 0.84
 —
 Other diversified financial services 0.76
 0.68
 Hypermarkets & super centers 0.75
 —
 Precious metals & minerals 0.48
 —
 Trucking 0.46
 —
 Computer & electronics retail 0.42
 —
 Multi-utilities 0.41
 —
 Thrift & mortgage finance 0.40
 0.27
 Commercial printing 0.39
 0.28
 Leisure products 0.38
 1.62
 Restaurants 0.32
 0.23
 Food retail 0.28
 0.19
 IT consulting & other services 0.25
 2.38
 Specialized finance 0.21
 —
 Air freight and logistics 0.12
 0.33
 Apparel, accessories & luxury goods 0.08
 0.68
 Food distributors —
 0.53
 Specialized consumer services —
 0.42
 Healthcare technology —
 0.34
Total 100.00% 100.00%
September 30, 2022September 30, 2021
Fair value:
Application Software15.43 %14.58 %
Multi-Sector Holdings (1)6.71 7.41 
Pharmaceuticals4.79 5.56 
Data Processing & Outsourced Services4.46 4.46 
Biotechnology4.35 4.44 
Health Care Technology3.90 0.55 
Industrial Machinery3.25 3.53 
Specialized Finance2.93 2.69 
Internet & Direct Marketing Retail2.82 2.68 
Aerospace & Defense2.48 2.72 
Construction & Engineering2.45 2.47 
Automotive Retail2.31 1.65 
Health Care Distributors2.19 0.77 
Internet Services & Infrastructure2.16 1.87 
Fertilizers & Agricultural Chemicals2.08 2.64 
Personal Products2.01 4.13 
Real Estate Operating Companies1.93 1.11 
Metal & Glass Containers1.91 0.68 
Health Care Services1.84 3.31 
Home Improvement Retail1.82 1.82 
Airport Services1.72 1.59 
Real Estate Services1.59 1.61 
Leisure Facilities1.57 0.90 
Diversified Support Services1.47 1.60 
Health Care Supplies1.47 1.18 
Specialty Chemicals1.36 1.82 
Soft Drinks1.35 1.31 
Insurance Brokers1.33 1.08 
Electrical Components & Equipment1.32 1.26 
Integrated Telecommunication Services1.29 1.94 
Advertising1.08 1.19 
Movies & Entertainment1.07 1.06 
Distributors0.98 — 
Other Diversified Financial Services0.98 0.62 
Health Care Equipment0.97 0.93 
Oil & Gas Storage & Transportation0.84 1.35 
Environmental & Facilities Services0.83 — 
Cable & Satellite0.78 1.06 
Home Furnishings0.73 0.77 
Hotels, Resorts & Cruise Lines0.56 — 
Consumer Finance0.53 — 
Systems Software0.51 0.26 
Auto Parts & Equipment0.46 0.48 
Restaurants0.35 0.37 
Oil & Gas Refining & Marketing0.34 1.43 
IT Consulting & Other Services0.34 0.29 
Education Services0.34 0.04 
Research & Consulting Services0.34 0.30 
Air Freight & Logistics0.26 0.19 
Trading Companies & Distributors0.22 — 
Apparel Retail0.21 — 
Integrated Oil & Gas0.20 0.19 
Diversified Banks0.14 0.14 
Food Distributors0.13 0.18 
Specialized REITs0.13 — 
Technology Distributors0.12 0.12 
Housewares & Specialties0.10 0.08 
Construction Materials0.08 0.09 
Electronic Components0.08 0.40 
Alternative Carriers0.01 0.27 
Airlines— 0.96 
Independent Power Producers & Energy Traders— 0.92 
Commercial Printing— 0.79 
Managed Health Care— 0.74 
Thrifts & Mortgage Finance— 0.62 
Property & Casualty Insurance— 0.39 
Leisure Products— 0.26 
Food Retail— 0.15 
Total100.00 %100.00 %
___________________
(1)This industry includes our investment in SLF JV I.

(1)This industry includes our investments in the JVs and certain limited partnership interests.



65

Loans and Debt Securities on Non-Accrual Status
As of September 30, 2017, there were eight investments on which we had stopped accruing cash and/or PIK interest or OID income. As of September 30, 2016, there were five investments on which we had stopped accruing cash and/or PIK interest or OID income. As of September 30, 2015, there were four investments on which we had stopped accruing cash and/or PIK interest or OID income.
The percentages of our debt investments at cost and fair value by accrual status as of September 30, 2017, September 30, 2016 and September 30, 2015 were as follows:Joint Ventures
  September 30, 2017 September 30, 2016 September 30, 2015
  Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio
Accrual $1,299,793
 83.59% $1,357,794
 95.29% $1,890,606
 89.80% $1,854,228
 93.89% $2,226,334
 95.08% $2,206,418
 97.97%
PIK non-accrual (1) 10,227
 0.66
 379
 0.03
 40,187
 1.91
 31,548
 1.60
 66,579
 2.84
 28,145
 1.25
Cash non-accrual (2) 244,952
 15.75
 66,636
 4.68
 174,629
 8.29
 89,036
 4.51
 48,694
 2.08
 17,600
 0.78
Total $1,554,972
 100.00% $1,424,809
 100.00% $2,105,422
 100.00% $1,974,812
 100.00% $2,341,607
 100.00% $2,252,163
 100.00%
 ___________________
(1)PIK non-accrual status is inclusive of other non-cash income, where applicable.
(2)Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.

The non-accrual status of our portfolio investments as of September 30, 2017, September 30, 2016 and September 30, 2015 was as follows:
September 30, 2017September 30, 2016September 30, 2015
Phoenix Brands Merger Sub LLC - subordinated term loan (2)——PIK non-accrual (1)
CCCG, LLC (3)——Cash non-accrual (1)
JTC Education, Inc. (2)——Cash non-accrual (1)
Answers Corporation (4)(5)—Cash non-accrual (1)PIK non-accrual (1)
 Dominion Diagnostics, LLC - subordinated term loanCash non-accrual (1)Cash non-accrual (1)—
 Express Group Holdings LLC (3)—Cash non-accrual (1)—
 AdVenture Interactive, Corp. (6)—Cash non-accrual (1)—
 ERS Acquisition Corp. (4)—PIK non-accrual (1)—
TransTrade Operators, Inc.Cash non-accrual (1)——
Ameritox Ltd.Cash non-accrual (1)——
Cenegenics, LLCCash non-accrual (1)——
Maverick Healthcare Group, LLCCash non-accrual (1)——
Edmentum, Inc. - unsecured junior PIK notePIK non-accrual (1)——
Advanced Pain ManagementCash non-accrual (1)——
Metamorph US 3, LLCCash non-accrual (1)——
 __________________
(1)PIK non-accrual status is inclusive of other non-cash income, where applicable. Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.
(2)We no longer held this investment as of September 30, 2017 and September 30, 2016.
(3)In March 2016, we restructured our investment in CCCG, LLC. As part of the restructuring, we exchanged cash and our debt securities for debt and equity securities in a newly restructured entity, Express Group Holdings LLC. As of September 30, 2017, we no longer held an investment in Express Group Holdings LLC.
(4)We no longer held this investment as of September 30, 2017.
(5)As of September 30, 2016, both the first lien term loan and the second lien term loan were on cash non-accrual. As of September 30, 2015, only the second lien term loan was on PIK non-accrual.
(6)In March 2017, we restructured our investment in AdVenture Interactive, Corp. As part of the restructuring, we exchanged a portion of our debt securities for equity securities in the restructured entity.




Income non-accrual amounts, which may include amounts for investments that were no longer held at the end of the period, for the years ended September 30, 2017, September 30, 2016 and September 30, 2015 were as follows:

  Year ended
September 30, 2017		 Year ended
September 30, 2016		 Year ended
September 30, 2015
Cash interest income $18,327
 $13,737
 $5,179
PIK interest income 7,801
 7,225
 8,423
OID income 154
 27,886
 4,627
Total $26,282
 $48,848
 $18,229


Senior Loan Fund JV I, LLC

In May 2014, we entered into a limited liability company, oran LLC agreement with Kemper to form SLF JV I. On July 1, 2014, SLF JV I began investingWe co-invest in senior secured loans of middle-market companies and other corporate debt securities. We co-invest in these securities with Kemper through our investment in SLF JV I. SLF JV I is managed by a four person boardBoard of directors,Directors, two of whom are selected by us and two of whom are selected by Kemper. All portfolio decisions and investment decisions in respect of SLF JV I must be approved by the SLF JV I investment committee, which consists of one representative selected by us and one representative selected by Kemper (with approval from a representative of each required). Since we do not have a controlling financial interest in SLF JV I, we do not consolidate SLF JV I. SLF JV I is not an "eligible portfolio company" as defined in section 2(a)(46) of the Investment Company Act. SLF JV I is capitalized pro rata with LLC equity interests as transactions are completed and may be capitalized with additional Class A mezzanine senior secured deferrable floating rate notes and Class B mezzanine senior secured deferrable fixed rate notes, or, collectively, the mezzanine notes,SLF JV I Notes issued to the Companyus and Kemper by SLF Repack Issuer 2016 LLC, a wholly-owned subsidiary of SLF JV I. The mezzanine notes mature on October 12, 2036. SLF JV I Notes are senior in right of payment to SLF JV I LLC equity interests and subordinated in right of payment to SLF JV I’s secured debt.
As of September 30, 20172022 and September 30, 2016,2021, we and Kemper owned, in the aggregate, 87.5% and 12.5%, respectively, of the LLC equity interests of SLF JV I.I and the outstanding SLF JV I Notes. As of each of September 30, 20172022 and September 30, 2016, we owned 87.5% of the outstanding mezzanine notes and subordinated notes, respectively, and Kemper owned 12.5% of the outstanding mezzanine notes and subordinated notes, respectively.
SLF JV I's portfolio consisted of middle-market and other corporate debt securities of 32 and 37 "eligible portfolio companies" (as defined in the Section 2(a)(46) of the 1940 Act) as of September 30, 2017 and September 30, 2016, respectively. The portfolio companies in SLF JV I are in industries similar to those in which we may invest directly.
SLF JV I has the $200.0 million Deutsche Bank I facility with Deutsche Bank AG, New York Branch with a maturity date of July 1, 2019. Borrowings under the Deutsche Bank I facility bear interest at a rate equal to LIBOR plus 2.50% per annum. There was$71.5 million and $100.0 million outstanding under this facility as of September 30, 2017 and September 30, 2016, respectively.
SLF JV I also has the $200.0 million Deutsche Bank II facility with Deutsche Bank AG, New York Branch, or the Deutsche Bank II facility, bringing SLF JV I’s total debt capacity to $400.0 million. On June 29, 2017, the Deutsche Bank II facility was assigned by Credit Suisse AG, Cayman Islands Branch to Deutsche Bank AG, New York Branch. The Deutsche Bank II facility has a maturity date of July 7, 2023 and borrowings under the facility bear interest at a rate equal to LIBOR plus 2.50% per annum. There was $41.6 million and $67.0 million outstanding under this facility as of September 30, 2017 and September 30, 2016, respectively.
Borrowings under the Deutsche Bank I facility and Deutsche Bank II facility are secured by all of the assets of the respective special purpose financing vehicles of SLF JV I.
We have determined that SLF JV I is an investment company under ASC 946, however, in accordance with such guidance, we will generally not consolidate our investment in a company other than a wholly-owned investment company subsidiary or a controlled operating company whose business consists of providing services to us. Accordingly, we do not consolidate our non-controlling interest in SLF JV I.
As of September 30, 2017 and September 30, 2016, SLF JV I had total assets of $276.8 million and $338.5 million. As of September 30, 2017, our investment in SLF JV I consisted of LLC equity interests of $5.5 million, at fair value, and Class A mezzanine secured deferrable floating rate notes and Class B mezzanine secured deferrable fixed rate notes of approximately $101.0 million and $27.6 million, at fair value, respectively. As of September 30, 2016, our investment in SLF JV I consisted of LLC equity interests of $13.7 million and subordinated notes of $129.0 million, at fair value. In connection with the restructuring of our and Kemper’s investment in SLF JV I, we and Kemper exchanged our holdings of subordinated notes of SLF JV I for the mezzanine notes issued by SLF Repack Issuer 2016 LLC, a newly formed, wholly-owned, special purpose issuer subsidiary of SLF JV I, which are secured by SLF JV I’s LLC equity interests in the special purpose entities serving as borrowers under the Deutsche Bank I facility and Deutsche Bank II facility described above. The mezzanine notes are senior in right of payment to the SLF JV I LLC equity interests and any contributions we make to fund investments of SLF JV I through SLF Repack Issuer 2016 LLC.


As of September 30, 2017 and September 30, 2016,2021, we and Kemper had funded approximately $165.5 million and $183.9 million, respectively, to SLF JV I, of which $144.8 million and $160.9 million, respectively, was from us. As of September 30, 2017, we and Kemper had the option to fund additional mezzanine notes, subject to additional equity funding to SLF JV I. Aseach of September 30, 2016,2022 and September 30, 2021, we had aggregate commitments to fund subordinated notes to SLF JV I of $157.5$35.0 million, of which $12.7approximately $26.2 million was unfunded. As of September 30, 2017to fund additional SLF JV I Notes and September 30, 2016, we had commitmentsapproximately $8.8 million was to fund LLC equity interests in SLF JV I of $17.5 million, of which $1.3 million and $1.4 million was unfunded, respectively.I.
Below is a summary of SLF JV I's portfolio, followed by a listing ofBoth the individual loans in SLF JV I's portfolio as of September 30, 2017 and September 30, 2016:

  September 30, 2017 September 30, 2016
Senior secured loans (1) $245,063 $324,406
Weighted average interest rate on senior secured loans (2) 7.70% 7.84%
Number of borrowers in SLF JV I 32 37
Largest exposure to a single borrower (1) $18,374 $19,775
Total of five largest loan exposures to borrowers (1) $82,728 $93,926
__________________
(1) At principal amount.
(2) Computed using the annual interest rate on accruing senior secured loans.

SLF JV I Portfolio as of September 30, 2017
Portfolio Company Industry Investment Type Maturity Date Current Interest Rate(1)(4)  Cash Interest Rate Principal Cost Fair Value (2)
AdVenture Interactive, Corp. (3) Advertising 927 Common Stock Shares 
 
   
 $1,088
 $1,412
Allied Universal Holdco LLC (3) Security & alarm services First Lien 7/28/2022 LIBOR+3.75% (1% floor) 5.08% $6,982
 7,040
 6,976
Ameritox Ltd. (3)(5) Healthcare services First Lien 4/11/2021 LIBOR+5% (1% floor) 3% PIK 6.33% 5,759
 5,638
 668
    301,913.06 Class B Preferred Units         302
 —
    928.96 Class A Common Units         5,474
 —
Total Ameritox, Ltd.           5,759
 11,414
 668
BeyondTrust Software, Inc. (3) Application software First Lien 9/25/2019 LIBOR+7% (1% floor) 8.33% 15,330
 15,231
 15,329
BJ's Wholesale Club, Inc. (3) Hypermarkets & super centers First Lien 1/26/2024 LIBOR+3.75% (1% floor) 4.99% 4,988
 4,993
 4,793
Compuware Corporation Internet software & services First Lien B3 12/15/2021 LIBOR+4.25% (1% floor) 5.49% 11,154
 11,041
 11,293
DFT Intermediate LLC (3) Specialized finance First Lien 3/1/2023 LIBOR+5.5% (1% floor) 6.74% 10,723
 10,474
 10,652
Digital River, Inc. Internet software & services First Lien 2/12/2021 LIBOR+6.5% (1% floor) 7.82% 4,524
 4,541
 4,546
Dodge Data & Analytics LLC (3) Data processing & outsourced services First Lien 10/31/2019 LIBOR+8.75% (1% floor) 10.13% 9,339
 9,372
 8,744
DTZ U.S. Borrower, LLC (3) Real estate services First Lien 11/4/2021 LIBOR+3.25% (1% floor) 4.57% 6,964
 6,998
 6,990
Edge Fitness, LLC Leisure facilities First Lien 12/31/2019 LIBOR+7.75% (1% floor) 9.05% 10,600
 10,602
 10,600
EOS Fitness Opco Holdings, LLC (3) Leisure facilities First Lien 12/30/2019 LIBOR+8.75% (0.75% floor) 9.99% 18,374
 18,182
 18,557
Everi Payments Inc.(3) Casinos & gaming First Lien 5/9/2024 LIBOR+4.5% (1% floor) 5.74% 4,988
 4,964
 5,039
Falmouth Group Holdings Corp. Specialty chemicals First Lien 12/13/2021 LIBOR+6.75% (1% floor) 8.08% 4,610
 4,578
 4,610
Garretson Resolution Group, Inc. Diversified support services First Lien 5/22/2021 LIBOR+6.5% (1% floor) 7.83% 5,836
 5,818
 5,766


Portfolio Company Industry Investment Type Maturity Date Current Interest Rate (1)(4)  Cash Interest Rate Principal Cost Fair Value (2)
InMotion Entertainment Group, LLC (3) Consumer electronics First Lien 10/1/2018 LIBOR+7.75% (1.25% floor) 9.09% 8,875
 8,884
 8,875
    First Lien B 10/1/2018 LIBOR+7.75% (1.25% floor) 9.09% 8,875
 8,828
 8,871
Total InMotion Entertainment Group, LLC           17,750
 17,712
 17,746
 Keypath Education, Inc. (3)  Advertising First Lien 4/3/2022 LIBOR+7% (1.00% floor) 8.33% 2,040
 2,040
 2,039
    927 shares Common Stock         1,391
 809
            2,040
 3,431
 2,848
Lift Brands, Inc. (3) Leisure facilities First Lien 12/23/2019 LIBOR+7.5% (1% floor) 8.83% 18,276
 18,257
 18,275
Metamorph US 3, LLC (3)(5) Internet software & services First Lien 12/1/2020 LIBOR+5.5% (1% floor) 2% PIK 6.74% 9,969
 9,481
 3,786
Motion Recruitment Partners LLC Human resources & employment services First Lien 2/13/2020 LIBOR+6% (1% floor) 7.24% 4,330
 4,281
 4,330
NAVEX Global, Inc. Internet software & services First Lien 11/19/2021 LIBOR+4.75% (1% floor) 5.49% 5,959
 5,925
 5,982
New IPT, Inc. (3)  Oil & gas equipment & services First Lien 3/17/2021 LIBOR+5% (1% floor) 6.33% 1,794
 1,794
 1,794
    Second Lien 9/17/2021 LIBOR+5.1% (1% floor) 6.43% 1,094
 1,094
 1,094
    21.876 Class A Common Units       
 —
 321
Total New IPT, Inc.           2,888
 2,888
 3,209
Novetta Solutions, LLC Internet software & services First Lien 9/30/2022 LIBOR+5% (1% floor) 6.34% 6,118
 6,066
 5,950
OmniSYS Acquisition Corporation (3) Diversified support services First Lien 11/21/2018 LIBOR+7.5% (1% floor) 8.83% 10,896
 10,900
 10,833
Refac Optical Group (3) Specialty stores First Lien A 9/30/2018 LIBOR+8% 9.23% 4,623
 4,605
 4,623
Salient CRGT, Inc. (3)  IT consulting & other services First Lien 2/28/2022 LIBOR+5.75% (1% floor) 6.99% 2,457
 2,412
 2,440
Scientific Games International, Inc. (3) Casinos & gaming First Lien 8/14/2024 LIBOR+3.25% (1% floor) 4.58% 6,632
 6,598
 6,651
SHO Holding I Corporation Footwear First Lien 10/27/2022 LIBOR+5% (1% floor) 6.24% 8,594
 8,566
 8,487
TravelClick, Inc. (3) Internet software & services Second Lien 11/6/2021 LIBOR+7.75% (1% floor) 8.99% 5,127
 5,127
 5,153
TV Borrower US, LLC Integrated telecommunications services First Lien 2/22/2024 LIBOR+4.75% (1% floor) 6.08% 3,582
 3,565
 3,607
Valet Merger Sub, Inc. (3) Environmental & facilities services First Lien 9/24/2021 LIBOR+7% (1% floor) 8.24% 12,998
 12,862
 12,998
Vubiquity, Inc. Application software First Lien 8/12/2021 LIBOR+5.5% (1% floor) 6.83% 2,653
 2,636
 2,633
            $245,063
 $251,648
 $235,526
__________________
(1) Represents the current interest rate as of September 30, 2017. All interest rates are payable in cash, unless otherwise noted.
(2) Represents the current determination of fair value as of September 30, 2017 utilizing a similar technique as us in accordance with ASC 820. However, the determination of such fair value is not included in our Board of Directors' valuation process described elsewhere herein.
(3) This investment is held by both us and SLF JV I as of September 30, 2017.
(4) The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, we have provided the applicable margin over LIBOR based on each respective credit agreement.
(5) This investment was on cash non-accrual status as of September 30, 2017.



SLF JV I Portfolio as of September 30, 2016
Portfolio Company Industry Investment Type Maturity Date Current Interest Rate (1)(4)  Cash Interest Rate Principal Cost Fair Value (2)
AccentCare, Inc. Healthcare services First Lien 9/3/2021 LIBOR+5.75% (1% floor) 6.75% $4,906
 $4,837
 $4,830
AdVenture Interactive, Corp. (3) (5) Advertising First Lien 3/22/2018 LIBOR+7.75% (1% floor) 8.75% 9,178
 9,150
 7,066
AF Borrower, LLC IT consulting & other services First Lien 1/28/2022 LIBOR+5.25% (1% floor) 6.25% 8,083
 8,105
 8,121
Ameritox Ltd. (3) Healthcare services First Lien 4/11/2021 LIBOR+5% (1% floor) 3% PIK 6.00% 5,890
 5,884
 5,848
    301,913.06 Class B Preferred Units         302
 331
    928.96 Class A Common Units         5,474
 2,471
Total Ameritox, Ltd.           5,890
 11,660
 8,650
BeyondTrust Software, Inc. (3) Application software First Lien 9/25/2019 LIBOR+7% (1% floor) 8.00% 17,198
 17,038
 17,059
Compuware Corporation Internet software & services First Lien B1 12/15/2019 LIBOR+5.25% (1% floor) 6.25% 3,194
 3,164
 3,206
    First Lien B2 12/15/2021 LIBOR+5.25% (1% floor) 6.25% 9,825
 9,689
 9,806
Total Compuware Corporation           13,019
 12,853
 13,012
CRGT, Inc. IT consulting & other services First Lien 12/21/2020 LIBOR+6.5% (1% floor) 7.50% 2,294
 2,289
 2,300
Digital River, Inc. Internet software & services First Lien 2/12/2021 LIBOR+6.5% (1% floor) 7.50% 4,524
 4,563
 4,515
Dodge Data & Analytics LLC (3) Data processing & outsourced services First Lien 10/31/2019 LIBOR+8.75% (1% floor) 9.75% 9,688
 9,740
 9,810
Edge Fitness, LLC Leisure facilities First Lien 12/31/2019 LIBOR+8.75% (1% floor) 9.75% 10,600
 10,602
 10,565
EOS Fitness Opco Holdings, LLC (3) Leisure facilities First Lien 12/30/2019 LIBOR+8.75% (0.75% floor) 9.50% 19,160
 18,869
 18,672
Falmouth Group Holdings Corp. Specialty chemicals First Lien 12/13/2021 LIBOR+6.75% (1% floor) 7.75% 4,963
 4,920
 4,968
Garretson Resolution Group, Inc. Diversified support services First Lien 5/22/2021 LIBOR+6.5% (1% floor) 7.50% 5,991
 5,966
 5,946
InMotion Entertainment Group, LLC (3) Consumer electronics First Lien 10/1/2018 LIBOR+7.75% (1.25% floor) 9.00% 9,375
 9,394
 9,252
    First Lien B 10/1/2018 LIBOR+7.75% (1.25% floor) 9.00% 9,375
 9,270
 9,252
Total InMotion Entertainment Group, LLC           18,750
 18,664
 18,504
Integrated Petroleum Technologies, Inc. (3) Oil & gas equipment services First Lien 3/31/2019 LIBOR+7.5% (1% floor) 8.50% 8,267
 8,267
 2,839
Legalzoom.com, Inc. (3) Specialized consumer services First Lien 5/13/2020 LIBOR+7% (1% floor) 8.00% 19,775
 19,410
 19,660
Lift Brands, Inc. (3) Leisure facilities First Lien 12/23/2019 LIBOR+7.5% (1% floor) 9.00% 19,043
 19,015
 18,858
Lytx, Inc. (3) Research & consulting services First Lien 3/15/2023 LIBOR+8.5% (1% floor) 9.50% 7,981
 7,981
 7,981
MedTech Group, Inc. Healthcare equipment First Lien 1/1/2019 LIBOR+5.25% (1% floor) 6.25% 11,910
 11,910
 11,696
Metamorph US 3, LLC (3) Internet software & services First Lien 12/1/2020 LIBOR+6.5% (1% floor) 7.50% 10,078
 9,945
 8,390
Motion Recruitment Partners LLC Human resources & employment services First Lien 2/13/2020 LIBOR+6% (1% floor) 7.00% 4,563
 4,487
 4,550
My Alarm Center, LLC Security & alarm services First Lien A 1/9/2019 LIBOR+8% (1% floor) 9.00% 3,000
 2,993
 3,005
    First Lien B 1/9/2019 LIBOR+8% (1% floor) 9.00% 4,506
 4,493
 4,514
    First Lien C 1/9/2019 LIBOR+8% (1% floor) 9.00% 1,136
 1,128
 1,133
Total My Alarm Center, LLC           8,642
 8,614
 8,652


Portfolio Company Industry Investment Type Maturity Date Current Interest Rate (1)(4)  Cash Interest Rate Principal Cost Fair Value (2)
NAVEX Global, Inc. Internet software & services First Lien 11/19/2021 LIBOR+4.75% (1% floor) 5.75% 995
 943
 990
Novetta Solutions, LLC Internet software & services First Lien 9/30/2022 LIBOR+5% (1% floor) 6.00% 6,614
 6,528
 6,357
OmniSYS Acquisition Corporation (3) Diversified support services First Lien 11/21/2018 LIBOR+7.5% (1% floor) 8.50% 10,896
 10,903
 10,743
Refac Optical Group (3) Specialty stores First Lien A 9/30/2018 LIBOR+7.5% 8.02% 7,116
 7,049
 7,107
SHO Holding I Corporation Footwear First Lien 10/27/2022 LIBOR+5% (1% floor) 6.00% 4,466
 4,426
 4,461
TIBCO Software, Inc. Internet software & services First Lien 12/4/2020 LIBOR+5.5% (1% floor) 6.50% 4,748
 4,548
 4,691
Too Faced Cosmetics, LLC Personal products First Lien 7/7/2021 LIBOR+5% (1% floor) 6.00% 1,135
 1,028
 1,140
TravelClick, Inc. (3) Internet software & services Second Lien 11/8/2021 LIBOR+7.75% (1% floor) 8.75% 8,460
 8,460
 7,576
TrialCard Incorporated Healthcare services First Lien 12/31/2019 LIBOR+4.5% (1% floor) 5.50% 13,319
 13,222
 13,255
TV Borrower US, LLC Integrated telecommunications services First Lien 1/8/2021 LIBOR+5% (1% floor) 6.00% 9,800
 9,633
 9,763
Valet Merger Sub, Inc. (3) Environmental & facilities services First Lien 9/24/2021 LIBOR+7% (1% floor) 8.00% 14,887
 14,692
 15,138
Vitera Healthcare Solutions, LLC Healthcare technology First Lien 11/4/2020 LIBOR+5% (1% floor) 6.00% 4,863
 4,863
 4,747
Vubiquity, Inc. Application software First Lien 8/12/2021 LIBOR+5.5% (1% floor) 6.50% 2,680
 2,658
 2,666
Worley Claims Services, LLC (3) Internet software & services First Lien 10/31/2020 LIBOR+8% (1% floor) 9.00% 9,924
 9,882
 9,875
            $324,406
 $327,720
 $315,153
 ___________________
(1) Represents the current interest rate as of September 30, 2016. All interest rates are payable in cash, unless otherwise noted.
(2) Represents the current determination of fair value as of September 30, 2016 utilizing a similar technique as us in accordance with ASC 820. However, the determination of such fair value is not included in our Board of Directors' valuation process described elsewhere herein.
(3) This investment is held by both us and SLF JV I as of September 30, 2016.
(4) The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, we have provided the applicable margin over LIBOR based on each respective credit agreement.
(5) This investment is on cash non-accrual status as of September 30, 2016.
The cost and fair value of the Class A mezzanine secured deferrable floating rate notes ofour SLF JV I held by us was $101.0Notes were $96.3 million as of each of September 30, 2017.2022 and September 30, 2021. We earned interest income of $5.2$8.0 million, $7.4 million and $8.1 million on its investments in these notesthe SLF JV I Notes for the yearyears ended September 30, 2017. The cost2022, 2021 and fair value2020, respectively. As of September 30, 2022, the Class B mezzanine secured deferrable fixed rate notes of SLF JV I held by us was $27.6 million as of September 30, 2017. We earned PIK interest of $3.0 million on our investments in these notes for the year ended September 30, 2017. The cost and fair value of the subordinated notes of SLF JV I held by us was $144.8 million and $129.0 million as of September 30, 2016. Prior to their repayment, the subordinated notesNotes bore interest at a rate of one-month LIBOR plus 8.0%7.00% per annum with a LIBOR floor of 1.00% and we earned interest income of $2.9 million, $12.0 million and $6.9 millionwill mature on its investments in these notes for the years ended September 30, 2017, September 30, 2016 and September 30, 2015, respectively. December 29, 2028.
The cost and fair value of the LLC equity interests in SLF JV I held by us was $16.2$49.3 million and $5.5$20.7 million, respectively, as of September 30, 2017,2022, and $16.1$49.3 million and $13.7$37.7 million, respectively, as of September 30, 2016.2021. We earned dividend income of earned dividend income of $1.1 million, $5.8$2.9 million and $7.9$0.9 million in dividend income for the years ended September 30, 2017, 20162022 and 2015,September 30, 2021, respectively, with respect to its LLC equity interests. Theour investment in the LLC equity interests are dividend producing to the extent SLF JV I has residual cash to be distributed on a quarterly basis.


Below is certain summarized financial information for SLF JV I as of September 30, 2017 and September 30, 2016 and for the years ended September 30, 2017 and September 30, 2016:
  September 30, 2017 September 30, 2016
Selected Balance Sheet Information:    
Investments in loans at fair value (cost September 30, 2017: $251,648; cost September 30, 2016: $327,720) $235,526
 $315,153
Receivables from secured financing arrangements at fair value (cost September 30, 2017: $9,783; cost September 30, 2016: $10,014) 8,305
 9,672
Cash and cash equivalents 24,389
 1,878
Restricted cash 5,097
 7,080
Other assets 3,485
 4,700
Total assets $276,802
 $338,483
     
Senior credit facilities payable $113,053
 $167,012
Debt securities payable at fair value (proceeds September 30, 2017: $147,052; proceeds September 30, 2016: $165,533) 147,052
 147,433
Other liabilities 10,383
 8,371
Total liabilities $270,488
 $322,816
Members' equity 6,314
 15,667
Total liabilities and members' equity $276,802
 $338,483

  Year ended September 30, 2017 Year ended September 30, 2016
Selected Statements of Operations Information:    
Interest income $23,222
 $30,156
Other income 869
 840
Total investment income 24,091
 30,996
Interest expense 22,195
 23,262
Other expenses 700
 501
Total expenses (1) 22,895
 23,763
Net unrealized appreciation (depreciation) (22,789) 7,438
Net realized gain (loss) 13,350
 (7,771)
Net income (loss) $(8,243) $6,900
 __________
(1) There are no management fees or incentive fees charged at SLF JV I.

SLF JV I has elected to fair value the debt securities issued to us and Kemper under ASC Topic 825 — Financial Instruments, or ASC 825. The debt securities are valued based on the total assets less the total liabilities senior to the mezzanine notes of SLF JV I in an amountI. We did not exceeding par under the enterprise value technique.
Duringearn dividend income for the year ended September 30, 2017, we sold $10.5 million2020 with respect to our investment in the LLC equity interests of SLF JV I.
Below is a summary of SLF JV I's portfolio as of September 30, 2022 and September 30, 2021:
September 30, 2022September 30, 2021
Senior secured loans (1)$383,194$344,196
Weighted average interest rate on senior secured loans (2)8.33%5.60%
Number of borrowers in SLF JV I6055
Largest exposure to a single borrower (1)$10,093$9,875
Total of five largest loan exposures to borrowers (1)$48,139$46,984
__________________
(1) At principal amount.
(2) Computed using the weighted average annual interest rate on accruing senior secured debt investmentsloans at fair value.

See "Note 3. Portfolio Investments" in the notes to the accompanying financial statements for more information on SLF JV I at fair valueand its portfolio.
66

OCSI Glick JV LLC
On March 19, 2021, we became party to the LLC agreement of the Glick JV. The Glick JV invests primarily in senior secured loans of middle-market companies. We co-invest in these securities with GF Equity Funding through the Glick JV. The Glick JV is managed by a four person Board of Directors, two of whom are selected by us and two of whom are selected by GF Equity Funding. All portfolio decisions and investment decisions in respect of the Glick JV must be approved by the Glick JV investment committee, consisting of one representative selected by us and one representative selected by GF Equity Funding (with approval from a representative of each required). Since we do not have a controlling financial interest in the Glick JV, we do not consolidate the Glick JV. The Glick JV is not an "eligible portfolio company" as defined in section 2(a)(46) of the Investment Company Act. The Glick JV is capitalized as transactions are completed. The members provide capital to the Glick JV in exchange for $10.5LLC equity interests, and we and GF Debt Funding, an entity advised by affiliates of GF Equity Funding, provide capital to the Glick JV in exchange for Glick JV Notes. The Glick JV Notes are junior in right of payment to the repayment of temporary contributions made by us to fund investments of the Glick JV that are repaid when GF Equity Funding and GF Debt Funding make their capital contributions and fund their Glick JV Notes, respectively.
As of September 30, 2022 and September 30, 2021, we and GF Equity Funding owned 87.5% and 12.5%, respectively, of the outstanding LLC equity interests, and we and GF Debt Funding owned 87.5% and 12.5%, respectively, of the Glick JV Notes. Approximately $84.0 million cash consideration. Duringin aggregate commitments was funded as of each of September 30, 2022 and September 30, 2021, of which $73.5 million was from us. As of September 30, 2022 and September 30, 2021, we had commitments to fund Glick JV Notes of $78.8 million, of which $12.4 million was unfunded. As of each of September 30, 2022 and September 30, 2021, we had commitments to fund LLC equity interests in the Glick JV of $8.7 million, of which $1.6 million was unfunded.

The cost and fair value of our aggregate investment in the Glick JV was $50.2 million and $50.3 million, respectively, as of September 30, 2022. The cost and fair value of our aggregate investment in the Glick JV was $50.7 million and $55.6 million, respectively, as of September 30, 2021. For the year ended September 30, 2016,2022 and for the Company sold $99.4period from March 19, 2021 to September 30, 2021, our investment in the Glick JV Notes earned interest income of $4.7 million of senior secured debt investments at fair valueand $2.4 million, respectively. We did not earn any dividend income for the year ended September 30, 2022 and for the period from March 19, 2021 to SLF JV ISeptember 30, 2021 with respect to our investment in exchange for $92.8 million cash consideration, $5.9 million of subordinated notes and $0.7 million ofthe LLC equity interests of the Glick JV.
Below is a summary of the Glick JV's portfolio as of September 30, 2022 and September 30, 2021:
September 30, 2022September 30, 2021
Senior secured loans (1)$143,225$126,512
Weighted average current interest rate on senior secured loans (2)8.52%5.86%
Number of borrowers in the Glick JV4337
Largest loan exposure to a single borrower (1)$6,562$6,907
Total of five largest loan exposures to borrowers (1)$28,973$28,324
__________
(1) At principal amount.
(2) Computed using the weighted average annual interest rate on accruing senior secured loans at fair value.
See "Note 3. Portfolio Investments" in SLFthe notes to the accompanying financial statements for more information on the Glick JV I. The Company recognized a $0.9 million realized loss on these transactions.and its portfolio.
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Discussion and Analysis of Results and Operations
Results of Operations
The principal measure of our financial performance is the netNet increase (decrease) in net assets resulting from operations which includes net investment income, net realized gain (loss)gains (losses) and net unrealized appreciation (depreciation). Net investment income is the difference between our income from interest, dividends and fees and other investment income and totalnet expenses. Net realized gain (loss) on investments and secured borrowingsgains (losses) is the difference between the proceeds received from dispositions of portfolio investmentsinvestment related assets and secured borrowingsliabilities and their stated costs. Net unrealized appreciation (depreciation) is the net change in the fair value of our investment


portfolio related assets and secured borrowingsliabilities carried at fair value during the reporting period, including the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized.
Comparison of Years ended September 30, 20172022 and September 30, 20162021
Total Investment Income
Total investment income includes interest on our investments, fee income and other investmentdividend income.
Total investment income for the years ended September 30, 20172022 and September 30, 20162021 was $178.0$262.5 million and $247.9$209.4 million, respectively. For the year ended September 30, 2017,2022, this amount primarily consisted of $163.4$249.4 million of interest income from portfolio investments (which included $11.1$20.5 million of PIK interest), $10.5$6.6 million of fee income and $4.0$6.4 million of dividend income. For the year ended September 30, 2016,2021, this amount primarily consisted of $211.2$190.8 million of interest income from portfolio investments (which included $14.0$16.4 million of PIK interest), $22.7$14.1 million of fee income and $14.0$4.5 million of dividend income.
The decreaseincrease of $69.9$53.1 million, or 25.4%, in our total investment income for the year ended September 30, 2017,2022, as compared to the year ended September 30, 2016,2021, was due primarily to (1) a $47.8$58.6 million decreaseincrease in interest income, which was attributable toprimarily driven by the impact of rising reference rates on interest income and a decreaselarger average investment portfolio as a result of the increase in assets resulting from the OCSI Merger and new originations and (2) a $2.0 million increase in dividend income mainly driven by larger dividends received from our equity investment in the size of our investment portfolio,SLF JV I. This was partially offset by a $12.2$7.5 million decrease in fee income which was attributable to a lower number of direct originations during the current year, and a $10.0 million decrease in dividend income, which was attributableprimarily due to lower dividend income earned on our investments in Yeti Acquisition, LLCprepayment and SLF JV I in the current year.amendment fees.
Expenses
Net expenses (expenses net of base management fee waivers and insurance recoveries)waivers) for the years ended September 30, 20172022 and September 30, 20162021 were $105.3$110.6 million and $141.1$109.5 million, respectively. Net expenses decreasedincreased for the year ended September 30, 2017,2022, as compared to the year ended September 30, 2016,2021, by $35.8$1.1 million, or 25.4%1.0%, primarily due primarily to (1) a $10.1$16.4 million decreaseincrease in base management fees, which was attributableinterest expense due to higher borrowings outstanding and the impact of rising reference rates, (2) a reduction in the size of our portfolio, an $11.4$5.0 million decreaseincrease in Part I incentive fees which was attributablemainly due to lower pre-incentive fee nethigher total investment income, partially offset by higher interest expense and management fees and (3) a $5.9 million increase in base management fees (net of management fee waivers) primarily as a result of a larger average investment portfolio. These were partially offset by $26.4 million of lower accrued Part II incentive fees as a result of a reversal of previously accrued capital gains incentive fees driven by unrealized losses during the current year, a $9.5 million decrease in professional fees due to the settlement of litigation matters and a $4.7 million decrease in interest expense attributable to lower levels of outstanding debt in the current year.period.
Net Investment Income
AsPrimarily as a result of the $69.9$53.1 milliondecrease increase in total investment income, and the $35.8$1.1 million decreaseincrease in net expenses and a $0.5 million increase in the provision for taxes on net investment income, net investment income for the year ended September 30, 2017 decreased2022 increased by $34.1$51.5 million or 31.9%, compared to the year ended September 30, 2016.2021.
Realized Gain (Loss) on Investments and Secured Borrowings
Realized gain (loss) isgains or losses are measured by the difference between the net proceeds received from dispositionsthe sale or redemption of portfolio investments and secured borrowingsforeign currency and their stated costs.the cost basis without regard to unrealized appreciation or depreciation previously recognized, and includes investments written-off during the period, net of recoveries. Realized losses may also be recorded in connection with our determination that certain investments are considered worthless securities and/or meet the conditions for loss recognition per the applicable tax rules.
Realized losses on investments and secured borrowings increased from $125.3 million forDuring the yearyears ended September 30, 2016 to $171.82022, 2021 and 2020, we recorded aggregate net realized gains (losses) of $17.2 million, for$26.4 million and $(13.9) million, respectively, in connection with the year ended September 30, 2017. Realized losses for the year ended September 30, 2017 were primarily the resultexits of the restructuring or disposition ofvarious investments in five portfolio companies on non-accrual status as well as the restructuring of SLF JV I. For the year ended September 30, 2016, realized losses were driven primarily by the restructuring or disposition of investments in four portfolio companies on non-accrual status.
and foreign currency forward contracts. See “Note 9.“Note 8. Realized Gains or Losses and Net Unrealized Appreciation or Depreciation on Investments and Secured Borrowings”” in the notes to the accompanying Consolidated Financial Statements for more details regarding investment realization events for the years ended September 30, 20172022, 2021 and September 30, 2016.2020.
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Net Unrealized Appreciation (Depreciation) on Investments and Secured Borrowings

Net unrealized appreciation or depreciation is the net change in the fair value of our investments and secured borrowingsforeign currency during the reporting period, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.

Net unrealized depreciation on investments and secured borrowings increased from $48.0 million for the year ended September 30, 2016 to $97.8 million for the year ended September 30, 2017. Net unrealized depreciation for the year ended September 30, 2017 was primarily the result of significant write-downs on our investment portfolio, including $111.9 million of aggregate write-downs on four investments, partially offset by net reclassifications to realized losses (resulting in unrealized appreciation). Net unrealized depreciation for the year ended September 30, 2016 was primarily the result of significant write-downs on our investment portfolio, including $67.4 million


of aggregate write-downs on four investments, partially offset by net reclassifications to realized losses (resulting in unrealized appreciation).
See “Note 9. Realized Gains or Losses and Net Unrealized Appreciation or Depreciation on Investments and Secured Borrowings” in the Consolidated Financial Statements for more details regarding unrealized appreciation (depreciation) on investments and secured borrowings forDuring the years ended September 30, 20172022, 2021 and September 30, 2016.
Comparison2020, we recorded net unrealized appreciation (depreciation) of Years ended September 30, 2016 and September 30, 2015
Total Investment Income
Total investment income for the years ended September 30, 2016 and September 30, 2015 was $247.9$(136.2) million, $114.5 million and $265.5$(20.6) million, respectively. For the year ended September 30, 2016,2022, this amount primarily consisted of $211.2$94.1 million of interest income from portfolionet unrealized depreciation on debt investments, (which included $14.0$35.4 million of PIK interest)net unrealized depreciation on equity investments and $22.7$11.7 million of fee income.net unrealized depreciation related to exited investments (a portion of which resulted in a reclassification to realized gains), partially offset by $4.9 million of net unrealized appreciation of foreign currency forward contracts. For the year ended September 30, 2015,2021, this amount primarily consisted of $229.3$70.0 million of interest income from portfolionet unrealized appreciation on debt investments, (which included $13.4$36.3 million of PIK interest) and $22.3net unrealized appreciation on equity investments, $6.6 million of fee income.
The decrease of $17.6 million in our total investment income for the year ended September 30, 2016, as compared to the year ended September 30, 2015, was primarily due to a decrease in interest income, which was attributable to a decrease in the size of our investment portfolio and, to a lesser extent, additional investments on which we stopped accruing cash and/or PIK interest or OID income.
Expenses
Net expenses (expenses net of base management fee waivers and insurance recoveries) for the years ended September 30, 2016 and September 30, 2015 were $141.1 million and $150.5 million, respectively. Net expenses decreased for the year ended September 30, 2016, as compared to the year ended September 30, 2015, by $9.4 million, or 6.2%, due primarily to a $9.9 million decrease in base management fees, which was attributable to the permanent fee reduction that we agreed to with our Former Adviser effective January 1, 2016, a $6.5 million decrease in Part I incentive fees, which was attributable to lower pre-incentive fee net investment income in the year ended September 30, 2016, and a $2.0 million decrease in interest expense, which was attributable to the repayment of our convertible notes on April 1, 2016, partially offset by a $9.9 million increase in professional feesunrealized appreciation related to litigationexited investments (a portion of which resulted in a reclassification to realized losses) and matters related to the solicitation$1.7 million of proxies in connection with meetingsnet unrealized appreciation of our stockholders.
Net Investment Income
As a result of the $17.6 milliondecrease in total investment income and the $9.4 million decrease in net expenses, net investment income for the year ended September 30, 2016 decreased by$8.2 million, or 7.1%, compared to the year ended September 30, 2015.
Realized Gain (Loss) on Investments and Secured Borrowings
Realized losses on investments and secured borrowings increased from $28.5 million for the year ended September 30, 2015 to $125.3 million for the year ended September 30, 2016.foreign currency forward contracts. For the year ended September 30, 2016,2020, this consisted of $35.3 million of net unrealized depreciation on equity investments, $12.0 million of net unrealized depreciation on debt investments and $0.3 million of net unrealized depreciation of foreign currency forward contracts, partially offset by $26.9 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses were driven primarily by the restructuring or disposition of investments in four portfolio companies on non-accrual status. losses).
For the year ended September 30, 2015,2021, there were $22.8 million of net realized loss was primarilyand unrealized gains (losses) that resulted solely from accounting adjustments related to the resultOCSI Merger.
Comparison of Years ended September 30, 2021 and September 30, 2020
The comparison of the restructuring of one portfolio company on non-accrual status and the disposition of one portfolio company.
See “Note 9. Realized Gains or Losses and Net Unrealized Appreciation or Depreciation on Investments and Secured Borrowings” in the Consolidated Financial Statements for more details regarding investment realization events for thefiscal years ended September 30, 20162021 and September 30, 2015.
Net Unrealized Appreciation (Depreciation)2020 can be found within Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our annual report on Investments and Secured Borrowings

Net unrealized depreciation on investments and secured borrowings decreased from $71.0 millionForm 10-K for the fiscal year ended September 30, 2015 to $48.0 million for the year ended September 30, 2016. Net unrealized depreciation for the year ended September 30, 2016 was primarily the result of significant write-downs on our investment portfolio, including $67.4 million of aggregate write-downs on four investments, partially offset by net reclassifications to realized losses (resulting in unrealized appreciation). Net unrealized depreciation for the year ended September 30, 2015 was primarily the result of significant write-downs on our investment portfolio, including $71.9 million of aggregate write-downs on four investments, partially offset by net reclassifications to realized losses (resulting in unrealized appreciation).


See “Note 9. Realized Gains or Losses and Net Unrealized Appreciation or Depreciation on Investments and Secured Borrowings” in the Consolidated Financial Statements for more details regarding unrealized appreciation (depreciation) on investments and secured borrowings for the years ended September 30, 2016 and September 30, 2015.

2021.
Financial Condition, Liquidity and Capital Resources
We have a number of alternatives available to fund our investment portfolio and our operations, including raising equity, increasing or refinancing debt and funding from operational cash flow. Additionally,We generally expect to generate liquidity wefund the growth of our investment portfolio through additional debt and equity capital, which may reduce investment size by syndicatinginclude securitizing a portion of any given transaction.our investments. We cannot assure you, however, that our efforts to grow our portfolio will be successful. For example, our common stock has generally traded at prices below net asset value for the past several years, and we may not be able to raise additional equity at prices below the then-current net asset value per share. We intend to continue to generate cash primarily from cash flows from operations, including interest earned, and future borrowings. We may also from time to time issue securities in publicborrowings or private offerings, which offerings will depend on future market conditions, funding needs and other factors.equity offerings. We intend to fund our future distribution obligations through operating cash flow or with funds obtained through future equity and debt offerings or credit facilities, as we deem appropriate.
In the future, we may also securitize a portion of our investments to the extent permitted by applicable law and regulation. To securitize investments, we would likely create a wholly-owned subsidiary and contribute a pool of loans to the subsidiary. We would then sell interests in the subsidiary on a non-recourse basis to purchasers and we would retain all or a portion of the equity in the subsidiary. Our primary uses of funds are investments in our targeted asset classes and cash distributions to holders of our common stock. We may also from time to time repurchase or redeem some or all of our outstanding Notes in open-market transactions, privately negotiated transactions or otherwise.
Although we may fund the growthnotes. At a special meeting of our investment portfolio throughstockholders held on June 28, 2019, our stockholders approved the application of the reduced asset coverage requirements in Section 61(a)(2) of the Investment Company Act to us effective as of June 29, 2019. As a result of the reduced asset coverage requirement, we can incur $2 of debt for each $1 of equity offerings,as compared to $1 of debt for each $1 of equity. As of September 30, 2022, we had $1,350.0 million in senior securities and our plansasset coverage ratio was 188.6%. During the year, we increased our target debt to do so may not be successful. In this regard, becauseequity ratio from 0.85x to 1.0x to 0.90x to 1.25x (i.e., one dollar of equity for each $0.90 to $1.25 of debt outstanding) to provide us with increased capacity to opportunistically deploy capital into the markets. As of September 30, 2022, our common stock has at times traded at a price below our then-current net asset value per share (which has primarily been the case for several years) and we are limited in our abilitydebt to sell our common stock at a price below net asset value per share, we are currently limited in our ability to raise equity capital absent stockholder approval to issue shares of our common stock at prices below then-current net asset value per share.ratio was 1.08x.
For the year ended September 30, 2017,2022, we experienced a net decrease in cash and cash equivalents (including restricted cash) of $64.9$5.3 million. During that period, net cash provided by operating activities was $22.4 million, primarily from $693.7 million of principal payments and sale proceeds received, $22.4 million of net increase in payables from unsettled transactions and the cash activities related to $148.6 million of net investment income, partially offset by funding $702.1 million of investments, $43.9 million of increase in due from broker (cash held at a broker to cover collateral obligations under the interest swap agreement) and $20.5 million increase in due from portfolio companies. During the same period, net cash used in financing activities was $26.8 million, primarily consisting of $115.2 million of cash distributions paid to our stockholders, $1.9 million of repurchases of common stock under our dividend reinvestment plan, DRIP, and $0.3 million of deferred financing costs paid, partially offset by $70.0 million of net borrowings under the credit facilities and $20.6 million of proceeds (net of offering costs) from shares issued under the "at the market" offering.
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For the year ended September 30, 2021, we experienced a net decrease in cash and cash equivalents (including restricted cash) of $7.5 million. During that period, we received $492.4used $230.5 million of net cash from operating activities, primarily from $945.4funding $1,120.2 million of investments, partially offset by $792.2 million of principal payments PIKand sale proceeds received, $20.9 million of cash acquired in the OCSI Merger, the cash activities related to $97.1 million of net investment income and $10.1 million of net increases in payables and net decreases in receivables from unsettled transactions. During the same period, net cash provided by financing activities was $224.2 million, primarily consisting of $349.0 million of borrowings of unsecured notes (net of OID), partially offset by $24.6 million of net repayments under the credit facilities, $79.9 million of cash distributions paid to our stockholders, $9.3 million of repayments of secured borrowings, $2.2 million of repurchases of common stock under our DRIP and $8.9 million of deferred financing costs paid.
For the year ended September 30, 2020, we experienced a net increase in cash and cash equivalents of $23.7 million. During that period, we used $152.9 million of net cash from operating activities, primarily from funding $727.2 million of investments, a $63.7 million of net decrease in payables from unsettled transactions, partially offset by $579.6 million of principal payments and sale proceeds received and the cash activities related to $72.7$72.0 million of net investment income, partially offset by funding $568.3 million of investments and net revolvers.income. During the same period, net cash usedprovided by financing activities was $557.3$176.3 million, primarily consisting of $260.3$100.0 million of net repayments under our credit facilities, $213.3 million of repayments of borrowings under SBA debentures payable, $62.5the Credit Facility (as defined below) and $136.2 million net incurrence of unsecured notes, partially offset by $53.1 million of cash distributions paid to our stockholders, $14.8$4.8 million of deferred financing costs paid and $1.9 million of repurchases of common stock under our stock repurchase program and DRIP, and $5.4 million of repayments of secured borrowings.
For the year ended September 30, 2016, we experienced a net decrease in cash and cash equivalents of $20.5 million. During that period, we received $164.8 million of net cash from operating activities, primarily from $818.2 million of principal payments, PIK payments and sale proceeds received and the cash activities related to $106.7 million of net investment income, partially offset by funding $735.5 million of investments and net revolvers. During the same period, net cash used by financing activities was $185.2 million, primarily consisting of $100.3 million of cash distributions paid to our stockholders, $37.6 million of repurchases of common stock under stock repurchase program, $11.7 million of repayments of SBA debentures payable, $6.4 million of repurchases of common stock under our DRIP and $2.9 million of repayments of secured borrowings, partially offset by $89.0 million of net borrowings under our credit facilities (including borrowings to repay the $115.0 million Convertible Notes at maturity).
For the year ended September 30, 2015, we experienced a net increase in cash and cash equivalents of $51.6 million. During that period, we received $146.2 million of net cash from operating activities, primarily from $1.4 billion of principal payments, PIK payments and sale proceeds received and cash activities related to $114.9 million of net investment income, partially offset by funding $1.4 billion of investments and net revolvers. During the same period, net cash used by financing activities was $94.5 million, primarily consisting of $114.7 million of cash distributions paid to our stockholders, $62.8 million of repayments of secured borrowings, $20.0 million of repurchases of common stock under our share repurchase program (including treasury shares) and $6.0 million of repurchases of common stock under our DRIP, partially offset by $109.9 million of net borrowings under our credit facilities.DRIP.
As of September 30, 2017,2022, we had $59.9$26.4 million in cash and cash equivalents (including $6.9$2.8 million of restricted cash), portfolio investments (at fair value) of $1.5$2.5 billion, $6.9$35.6 million of interest, dividends and fees receivable, $58.7$22.5 million of due from portfolio companies, $500.0 million of undrawn capacity on our credit facilities (subject to borrowing base and other limitations), $22.3 million of net payables from unsettled transactions, $256.0$700.0 million of borrowings outstanding under our credit facilities $406.1and $601.0 million of unsecured notes payable (net of unamortized financing costs), $13.3 million of secured borrowings (atcosts, unaccreted discount and interest rate swap fair value) and unfunded commitments of $118.1 million. As of September 30, 2017, included in restricted cash was $6.8 million that was held at U.S. Bank, National Association in connection with our credit facility with SMBC.value adjustment).
As of September 30, 2016,2021, we had $130.4$31.6 million in cash and cash equivalents (including $12.4$2.3 million of restricted cash), portfolio investments (at fair value) of $2.2$2.6 billion, $15.6$22.1 million of interest, dividends and fees receivable, $210.0$470.0 million of SBA debentures payable (netundrawn capacity on our credit facilities (subject to borrowing base and other limitations), $0.1 million of unamortized financing costs), $516.3net receivables from unsettled transactions, $630.0 million of borrowings outstanding under our credit facilities $404.6and $638.7 million of


unsecured notes payable (net of unamortized financing costs), $18.4 millioncosts, unaccreted discount and interest rate swap fair value adjustment).
We may be a party to financial instruments with off-balance sheet risk in the normal course of secured borrowings (at fair value) and unfunded commitmentsbusiness to meet the financial needs of $215.7 million.our portfolio companies. As of September 30, 2016, included2022, our only off-balance sheet arrangements consisted of $224.2 million of unfunded commitments, which was comprised of $175.2 million to provide debt and equity financing to certain of our portfolio companies and $49.0 million to provide financing to the JVs. As of September 30, 2021, our only off-balance sheet arrangements consisted of $264.9 million of unfunded commitments, which was comprised of $212.4 million to provide debt and equity financing to certain of our portfolio companies, $49.0 million to provide financing to the JVs and $3.5 million related to unfunded limited partnership interests. Such commitments are subject to our portfolio companies' satisfaction
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of certain financial and nonfinancial covenants and may involve, to varying degrees, elements of credit risk in restrictedexcess of the amount recognized in our Consolidated Statements of Assets and Liabilities.
As of September 30, 2022, we have analyzed cash and cash equivalents, availability under our credit facilities, the ability to rotate out of certain assets and amounts of unfunded commitments that could be drawn and believe our liquidity and capital resources are sufficient to take advantage of market opportunities in the current economic climate.
Contractual Obligations
The following table reflects information pertaining to our principal debt outstanding under the Syndicated Facility (as defined below), Citibank Facility (as defined below), the 2025 Notes and the 2027 Notes:
Debt Outstanding
as of September 30, 2021		Debt Outstanding
as of September 30, 2022		Weighted average debt
outstanding for the
year ended
September 30, 2022		Maximum debt
outstanding for the year ended
September 30, 2022
Syndicated Facility$495,000 $540,000 $550,165 $620,000 
Citibank Facility135,000 160,000 160,986 185,000 
2025 Notes300,000 300,000 300,000 300,000 
2027 Notes350,000 350,000 350,000 350,000 
Total debt$1,280,000 $1,350,000 $1,361,151 
The following table reflects our contractual obligations arising from the Syndicated Facility, Citibank Facility, 2025 Notes and 2027 Notes:
 Payments due by period as of September 30, 2022
Contractual ObligationsTotalLess than 1 year1-3 years3-5 years
Syndicated Facility$540,000 $— $— $540,000 
Interest due on Syndicated Facility90,986 25,313 50,626 15,047 
Citibank Facility160,000 — 160,000 — 
Interest due on Citibank Facility19,225 8,996 10,229 — 
2025 Notes300,000 — 300,000 — 
Interest due on 2025 Notes25,286 10,500 14,786 — 
2027 Notes350,000 — — 350,000 
Interest due on 2027 Notes (a)62,699 14,595 29,190 18,914 
Total$1,548,196 $59,404 $564,831 $923,961 
__________ 
(a) The interest due on the 2027 Notes was $12.4 million that was held at U.S. Bank, National Associationcalculated net of the interest rate swap.
Equity Issuances
During the year ended September 30, 2022, we issued an aggregate of 212,382 shares of common stock as part of the DRIP.
On February 7, 2022, we entered into an equity distribution agreement by and among us, Oaktree, Oaktree Administrator and Keefe, Bruyette & Woods, Inc., JMP Securities LLC, Raymond James & Associates, Inc. and SMBC Nikko Securities America, Inc., as placement agents, in connection with our credit facilitythe issuance and sale by us of shares of common stock, having an aggregate offering price of up to $125.0 million. Sales of the common stock, if any, may be made in negotiated transactions or transactions that are deemed to be “at the market,” as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on the Nasdaq Global Select Market or similar securities exchanges or sales made to or through a market maker other than on an exchange, at prices related to the prevailing market prices or at negotiated prices.
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In connection with SMBC.the "at the market" offering, we issued and sold the following shares of common stock during the year ended September 30, 2022:
Significant Capital Transactions
Number of Shares IssuedGross ProceedsPlacement Agent FeesNet Proceeds (1)Average Sales Price per Share (2)
"At the market" offering2,801,206 $21,049 $210 $20,839 $7.51 
 __________
(1) Net proceeds excludes offering costs of $0.2 million.
(2) Represents the gross sales price before deducting placement agent fees and estimated offering expenses.
On March 19, 2021, in connection with the OCSI Merger, we issued an aggregate of 39,400,011 shares of common stock to former OCSI stockholders. There were no other common stock issuances during the year ended September 30, 2021.

Distributions
The following table reflects the distributions per share that our Board of Directors has declared,we have paid, including shares issued under our DRIP, on our common stock since October 1, 2015:2020:
Date Declared Record Date Payment Date 
Amount
per Share
 
Cash
Distribution
 DRIP Shares
Issued (1)		 
DRIP Shares
Value
August 4, 2015 October 15, 2015 October 30, 2015 $0.06
 $ 8.4 million 106,185
 $ 0.6 million
August 4, 2015 November 16, 2015 November 30, 2015 0.06
 8.4 million 91,335
 0.6 million
November 30, 2015
December 15, 2015
December 30, 2015
0.06

8.4 million
99,673

0.6 million
November 30, 2015 January 15, 2016 January 28, 2016 0.06
 8.4 million 113,905
 0.7 million
November 30, 2015 February 12, 2016 February 26, 2016 0.06
 8.4 million 123,342
 0.6 million
February 8, 2016 March 15, 2016 March 31, 2016 0.06
 8.6 million 86,806
 0.4 million
February 8, 2016 April 15, 2016 April 29, 2016 0.06
 8.2 million 112,569
 0.6 million
February 8, 2016 May 13, 2016 May 31, 2016 0.06
 8.4 million 76,432
 0.4 million
May 5, 2016 June 15, 2016 June 30, 2016 0.06
 8.2 million 108,629
 0.5 million
May 5, 2016 July 15, 2016 July 29, 2016 0.06
 8.2 million 100,268
 0.6 million
May 5, 2016 August 15, 2016 August 31, 2016 0.06
 8.3 million 59,026
 0.4 million
August 3, 2016 September 15, 2016 September 30, 2016 0.06
 8.3 million 65,170
 0.4 million
August 3, 2016 October 14, 2016 October 31, 2016 0.06
 8.2 million 81,391
 0.4 million
August 3, 2016 November 15, 2016 November 30, 2016 0.06
 8.2 million 80,962
 0.4 million
October 18, 2016 December 15, 2016 December 30, 2016 0.06
 7.7 million 70,316
 0.4 million
October 18, 2016 January 13, 2017 January 31, 2017 0.06
 8.0 million 73,940
 0.4 million
October 18, 2016 February 15, 2017 February 28, 2017 0.06
 8.0 million 86,120
 0.4 million
February 6, 2017 March 15, 2017 March 31, 2017 0.02
 2.7 million 27,891
 0.1 million
February 6, 2017 June 15, 2017 June 30, 2017 0.02
 2.7 million 20,502
 0.1 million
February 6, 2017 September 15, 2017 September 29, 2017 0.125
 17.0 million 118,992
 0.7 million
August 7, 2017 December 15, 2017 December 29, 2017 0.125
 
 

 
Date DeclaredRecord DatePayment DateAmount
per Share		Cash
Distribution		DRIP Shares
Issued (1)		DRIP Shares
Value
November 13, 2020December 15, 2020December 31, 2020$0.11 $ 15.0 million93,964 $ 0.5 million
January 29, 2021March 15, 2021March 31, 20210.12 16.4 million81,702 0.5 million
April 30, 2021June 15, 2021June 30, 20210.13 22.9 million76,979 0.5 million
July 30, 2021September 15, 2021September 30, 20210.145 25.5 million85,075 0.6 million
October 13, 2021December 15, 2021December 31, 20210.155 27.2 million107,971 0.8 million
January 28, 2022March 15, 2022March 31, 20220.16 28.5 million104,411 0.8 million
April 29, 2022June 15, 2022June 30, 20220.165 29.4 million131,028 0.9 million
July 29, 2022September 15, 2022September 30, 20220.17 30.2 million153,544 1.0 million
 ______________
(1)
(1)Shares were purchased on the open market and distributed.
On November 30, 2015, our Board of Directors approved a common stock repurchase program authorizing us to repurchase up to $100 million in the aggregate of the outstanding shares of our common stock through November 30, 2016. For the fiscal year ended September 30, 2016, we repurchased7,004,139 shares at the weighted average price of $5.34 per share, resulting in $37.6 million of cash paid under the stock repurchase program.
On November 28, 2016, our Board of Directors approved a new common stock repurchase program authorizing us to repurchase up to $12.5 million in the aggregate of our outstanding common stock through November 28, 2017. Common stock repurchases under the program were made in the open market. Duringmarket and distributed other than with respect to the yeardistributions paid on December 31, 2021 and March 31, 2022. New shares were issued and distributed during the quarters ended September 30, 2017, we repurchased 2,298,247 shares of our common stock for $12.5 million, including commissions, under the new common stock repurchase program. As of September 30, 2017, there is no availability under the new common stock repurchase program to repurchase additional common stock.December 31, 2021 and March 31, 2022.


Indebtedness
See “Note“Note 6. Borrowings”Borrowings” in the Consolidated Financial Statements for more details regarding our indebtedness and secured borrowings.indebtedness.
SBIC SubsidiariesSyndicated Facility

As of September 30, 2017, FSMP IV had no SBA-guaranteed debentures outstanding, and we had commenced actions2022, (i) the size of the Syndicated Facility was $1.0 billion (with an “accordion” feature that permits us, under certain circumstances, to surrenderincrease the license for FSMP IVsize of the facility to up to the SBA. Duringgreater of $1.25 billion and our net worth (as defined in the year ended September 30, 2017, FSMP IV repaid $138.3 millionSyndicated Facility) on the date of SBA-guaranteed


debentures. As of September 30, 2016, FSMP IV had $75.0 million in regulatory capitalsuch increase), (ii) the period during which we may make drawings will expire on May 4, 2025 and $138.3 million in SBA-guaranteed debentures outstanding, which had a carrying value of $136.6 million (net of unamortized financing costs)the maturity date was May 4, 2026 and a fair value of $131.0 million.
As of September 30, 2017, FSMP V had no SBA-guaranteed debentures outstanding, and we had commenced actions to surrender(iii) the licenseinterest rate margin for FSMP V to the SBA. During the year ended September 30, 2017, FSMP V repaid $75.0 million of SBA-guaranteed debentures. As of September 30, 2016, FSMP V had $37.5 million in regulatory capital and $75.0 million in SBA-guaranteed debentures outstanding, which had a carrying value of $73.4 million (net of unamortized financing costs) and a fair value of $67.5 million.
For the years ended September 30, 2017, 2016 and 2015, we recorded aggregate interest expense of $9.3 million, $9.5 million and $9.3 million, respectively, related to the SBA-guaranteed debentures of both SBIC subsidiaries.
ING Facility
As of September 30, 2017, the ING facility permitted up to $525 million of borrowings, and borrowings under the facility bore interest at a rate equal to(a) LIBOR (1-loans (which may be 1-, 2-, 3- or 6-month, at our option) plus 2.25% per annum, with no LIBOR floor, assuming we maintain our current credit rating. As of September 30, 2017, the period during which the Company may makewas 2.00% and reinvest borrowings under the facility expires on January 31, 2018 and the maturity date of the facility is August 6, 2018.(b) alternate base rate loans was 1.00%.

Each loan or letter of credit originated or assumed under the ING facilitySyndicated Facility is subject to the satisfaction of certain conditions. Borrowings under the Syndicated Facility are subject to the facility’s various covenants and the leverage restrictions contained in the Investment Company Act. We cannot be assuredassure you that we will be able to borrow funds under the ING facilitySyndicated Facility at any particular time or at all.
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The following table describes significant financial covenants, as of September 30, 2017,2022, with which we must comply under the ING facilitySyndicated Facility on a quarterly basis:
Financial CovenantDescriptionTarget ValueJune 30, 20172022 Reported Value (1)
Minimum shareholders' equityNet assets shall not be less than the greatersum of (a) 40% of total assets and (b) $825(x) $600 million, plus (y) 50% of the aggregate net proceeds of all sales of equity interests after AugustMay 6, 20132020
$900610 million$1,0111,264 million
Asset coverage ratioAsset coverage ratio shall not be less than 2.10:the greater of 1.50:1 and the statutory test applicable to us2.10:1.50:12.32:1.88:1
Interest coverage ratioInterest coverage ratio shall not be less than 2.25:12.25:12.72:4.55:1
Minimum net worthNet worth shall not be less than $750$550 million$750550 million$8481,075 million
 ___________ 
(1) As contractually required, we report financial covenants based on the last filed quarterly or annual report, in this case our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2017.2022. We were also in compliance with all financial covenants under these credit facilitiesthe Syndicated Facility based on the financial information contained in this Annual Report on Form 10-K.
As of September 30, 2017,2022 and September 30, 2021, we had $226.5$540.0 million and $495.0 million of borrowings outstanding under the ING facility,Syndicated Facility, respectively, which had a fair value of $226.5 million.$540.0 million and $495.0 million, respectively. Our borrowings under the ING facilitySyndicated Facility bore interest at a weighted average interest rate of 3.191%2.876%, 2.781%2.197% and 2.557%3.028% for the years ended September 30, 2017, 20162022, 2021 and 2015.2020, respectively. For the years ended September 30, 2017, 20162022, 2021 and 2015,2020, we recorded interest expense (inclusive of $13.6fees) of $19.5 million, $15.1$13.8 million and $13.4$14.9 million, respectively, related to the ING facility.Syndicated Facility.
SumitomoCitibank Facility
On March 19, 2021, we became party to the Citibank Facility. As of September 30, 2022, we were able to borrow up to $200 million under the Citibank Facility (subject to borrowing base and other limitations). As of September 30, 2022, the reinvestment period under the Citibank Facility was scheduled to expire on November 18, 2023 and the maturity date for the Citibank Facility was November 18, 2024.
As of September 30, 2017,2022, borrowings under the Sumitomo facility boreCitibank Facility are subject to certain customary advance rates and accrue interest at a rate of either (i)equal to LIBOR (1-month) plus 2.00%between 1.25% and 2.20% per annum with noon broadly syndicated loans, subject to observable market depth and pricing, and LIBOR floor, if the borrowings under the Sumitomo facility are greater than 35% of the aggregate available borrowings under the Sumitomo facility or (ii) LIBOR (1-month) plus 2.25% per annum ifon all other eligible loans during the borrowings under the Sumitomo facility are less than or equal to 35% of the aggregate available borrowings under the Sumitomo facility. Asreinvestment period. In addition, as of September 30, 2017,2022, for the duration of the reinvestment period during which we may make and reinvest borrowingsthere is a non-usage fee payable of 0.50% per annum on the undrawn amount under the facility expired on September 16, 2017, andCitibank Facility. The minimum asset coverage ratio applicable to us under the maturity dateCitibank Facility is 150% as determined in accordance with the requirements of the facility is the earlier of (a) August 6, 2018 and (b) the date on which the ING facility is repaid, refinanced or terminated. As of September 30, 2017, we have no remaining availabilityInvestment Company Act. Borrowings under the Sumitomo facility.Citibank Facility are secured by all of the assets of OCSL Senior Funding II LLC and all of our equity interests in OCSL Senior Funding II LLC. We may use the Citibank Facility to fund a portion of our loan origination activities and for general corporate purposes. Each loan origination under the Citibank Facility is subject to the satisfaction of certain conditions.
As of September 30, 2017,2022 and September 30, 2021, we had $29.5$160.0 million of borrowingsand $135.0 million outstanding under the Sumitomo facility,Citibank Facility, respectively, which had a fair value of $29.5 million.$160.0 million and $135.0 million, respectively. Our borrowings under the Sumitomo facilityCitibank Facility bore interest at a weighted average interest rate of 3.108%, 2.432%3.179% and 2.433%2.086% for the yearsyear ended September 30, 2017, 20162022 and 2015.the period from March 19, 2021 to September 30, 2021, respectively. For the yearsyear ended September 30, 2017, 20162022 and 2015. For the years endedperiod from March 19, 2021 to September 30, 2017, 2016 and 2015,2021, we recorded interest expense (inclusive of $2.4 million, $1.9fees) of $5.8 million and $1.9 million, respectively, related to the Sumitomo facility.Citibank Facility.

20192025 Notes

On February 25, 2020, we issued $300.0 million in aggregate principal amount of the 2025 Notes for net proceeds of $293.8 million after deducting OID of $2.5 million, underwriting commissions and discounts of $3.0 million and offering costs of $0.7 million. The OID on the 2025 Notes is amortized based on the effective interest method over the term of the notes.

2027 Notes
ForOn May 18, 2021, we issued $350.0 million in aggregate principal amount of the years ended2027 Notes for net proceeds of $344.8 million after deducting OID of $1.0 million, underwriting commissions and discounts of $3.5 million and offering costs of $0.7 million. The OID on the 2027 Notes is amortized based on the effective interest method over the term of the notes.
In connection with the 2027 Notes, we entered into an interest rate swap to more closely align the interest rates of our liabilities with our investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, we receive a fixed interest rate of 2.700% and pay a floating interest rate of the three-month LIBOR plus 1.658% on
73

a notional amount of $350 million. We designated the interest rate swap as the hedging instrument in an effective hedge accounting relationship.
The below table presents the components of the carrying value of the 2025 Notes and the 2027 Notes as of September 30, 2017, 20162022 and 2015, we recordedSeptember 30, 2021:
 As of September 30, 2022As of September 30, 2021
($ in millions)2025 Notes2027 Notes2025 Notes2027 Notes
Principal$300.0 $350.0 $300.0 $350.0 
  Unamortized financing costs(1.8)(3.2)(2.6)(4.0)
  Unaccreted discount(1.2)(0.7)(1.7)(0.9)
  Interest rate swap fair value adjustment— (42.0)— (2.1)
Net carrying value$297.0 $304.1 $295.7 $343.0 
Fair Value$283.1 $294.0 $314.5 $351.1 
The below table presents the components of interest expense of $13.3 million, $13.3 million and $13.4 million, respectively,other debt expenses related to the 2019 Notes. During2025 Notes and the 2027 Notes for the year ended September 30, 2017, 20162022:
($ in millions)2025 Notes2027 Notes
Coupon interest$10.5 $9.5 
Amortization of financing costs and discount1.3 0.9 
Effect of interest rate swap— (0.4)
 Total interest expense$11.8 $10.0 
Coupon interest rate (net of effect of interest rate swap for 2027 Notes)3.500 %2.585 %
The below table presents the components of interest and 2015, we did not repurchase any of the 2019 Notes in the open market.
As of September 30, 2017, there were $250.0 million of 2019 Notes outstanding, which had a carrying value and fair value of $248.4 million and $250.6 million, respectively. As of September 30, 2016, there were $250.0 million of 2019 Notes outstanding, which had a carrying value and fair value of $247.3 million and $256.9 million, respectively.
2024 Notes
For each of the years ended September 30, 2017, 2016 and 2015, we recorded interest expense of $4.6 millionother debt expenses related to the 2024 Notes. During the years ended September 30, 2017, 2016 and 2015, we did not repurchase any of the 20242025 Notes in the open market.
As of September 30, 2017, there were $75.0 million of 2024 Notes outstanding, which had a carrying value and fair value of $73.5 million and $76.0 million, respectively. As of September 30, 2016, there were $75.0 million of 2024 Notes outstanding, which had a carrying value and fair value of $73.3 million and $76.7 million, respectively. As of September 30, 2017, the 2024 Notes were listed on the New York Stock Exchange under the trading symbol “FSCE.” As of October 17, 2017, the 2024 Notes were listed on the New York Stock Exchange under the trading symbol “OSLE” with a par value of $25.00 per note.
2028 Notes
For each of the years ended September 30, 2017, 2016 and 2015, we recorded interest expense of $5.5 million related to the 2028 Notes. During the years ended September 30, 2017, 2016 and 2015, we did not repurchase any of the 2028 Notes in the open market.
As of September 30, 2017, there were $84.2 million of 2028 Notes outstanding, which had a carrying value and fair value of $84.2 million and $87.5 million, respectively. As of September 30, 2016, there were $86.3 million of 2028 Notes outstanding, which had a carrying value and fair value of $84.0 and $88.7 million, respectively. As of September 30, 2017, the 2028 Notes were listed on the NASDAQ Global Select Market under the trading symbol “FSCFL.” As of October 17, 2017, the 2028 Notes were listed on the NASDAQ Global Select Market under the trading symbol “OCSLL” with a par value of $25.00 per note.
Secured Borrowings
We follow the guidance in ASC Topic 860, Transfers and Servicing when accounting for loan participations and other partial loan sales. Such guidance requires a participation or other partial loan sale to meet the definition of a "participating interest," as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest remain on our Consolidated Statements of Assets and Liabilities and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value.
As of September 30, 2017, secured borrowings at fair value totaled $13.3 million and the fair value of the loan that is associated with these secured borrowings was $40.9 million. These secured borrowings were the result of the completion of partial loan sales totaling $22.8 million of a senior secured debt investment during the fiscal year ended September 30, 2014 that did not meet the definition of a participating interest. As a result, sale treatment was not allowed and these partial loan sales were treated as secured borrowings. During2027 Notes for the year ended September 30, 2017, 20162021:
($ in millions)2025 Notes2027 Notes
Coupon interest$10.5 $3.5 
Amortization of financing costs and discount1.3 0.3 
Effect of interest rate swap— (1.1)
 Total interest expense$11.8 $2.7 
Coupon interest rate (net of effect of interest rate swap for 2027 Notes)3.500 %1.813 %
The below table presents the components of interest and 2015, there were $5.4 million, $2.9 million and $62.8 million of net repayments on secured borrowings, respectively.
Forother debt expenses related to the years2025 Notes for the year ended September 30, 2017, 2016 and 2015, the secured borrowings bore interest at a weighted average interest rate of 8.08%, 7.26% and 4.80%, respectively. For the years ended September 30, 2017, 2016 and 2015, the Company recorded interest expense of $1.2 million, $1.5 million and $1.7 million, respectively, related to the secured borrowings.2020:
As of September 30, 2017, there were $13.5 million of secured borrowings outstanding, which had a fair value of $13.3 million. As of September 30, 2016, there were $18.9 million of secured borrowings outstanding, which had a fair value of $18.4 million.
($ in millions)2025 Notes
Coupon interest$6.3 
Amortization of financing costs and discount0.7 
 Total interest expense$7.0
Coupon interest rate3.500 %
Off-Balance Sheet Arrangements
We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of September 30, 2017, our only off-balance sheet arrangements consisted of $118.1 million of unfunded commitments, which was comprised of $107.3 million to provide debt financing to certain of our portfolio companies, $1.3 million to provide equity financing to SLF JV I and $9.5 million related to unfunded limited partnership interests. As of September 30, 2016, our only off-balance sheet arrangements consisted of $215.7 million of unfunded commitments, which was comprised of $191.7 million to provide debt financing to certain of our portfolio companies, $14.1 million to provide debt and equity financing to SLF JV I and $9.9


million related to unfunded limited partnership interests. Such commitments are subject to our portfolio companies' satisfaction of certain financial and nonfinancial covenants and may involve, to varying degrees, elements of credit risk in excess of the amount recognized in our Consolidated Statements of Assets and Liabilities.
A list of unfunded commitments by investment (consisting of revolvers, term loans with delayed draw components, SLF JV I subordinated notes and LLC interests, and limited partnership interests) as of September 30, 2017 and September 30, 2016 is shown in the table below:
  September 30, 2017 September 30, 2016
 Lift Brands Holdings, Inc. $15,000
 $13,000
 P2 Upstream Acquisition Co. 10,000
 10,000
 Valet Merger Sub, Inc. 9,326
 5,596
 Edge Fitness, LLC 8,353
 8,353
 InMotion Entertainment Group, LLC 7,544
 6,856
 BeyondTrust Software, Inc. 5,995
 5,995
 EOS Fitness Opco Holdings, LLC 5,000
 5,000
 Dominion Diagnostics, LLC (1)(2) 4,180
 —
 Impact Sales, LLC 3,234
 —
 Systems, Inc. 3,030
 —
 Thing5, LLC 3,000
 5,000
 WeddingWire, Inc. 3,000
 3,000
 Keypath Education, Inc. 3,000
 —
 Traffic Solutions Holdings, Inc. 2,998
 2,682
 Motion Recruitment Partners LLC 2,900
 2,900
 Pingora MSR Opportunity Fund I, LP (limited partnership interest) 2,760
 2,054
 Edmentum, Inc.(1) 2,664
 2,664
 OmniSYS Acquisition Corporation 2,500
 2,500
 Ping Identity Corporation 2,500
 2,500
 4 Over International, LLC 2,232
 2,232
 New IPT, Inc. 2,229
 —
 Refac Optical Group 2,080
 6,400
 SPC Partners VI, L.P. (limited partnership interest) 2,000
 —
 Ministry Brands, LLC 1,708
 15,000
 Sailpoint Technologies, Inc. 1,500
 —
 Metamorph US 3, LLC (1) 1,470
 3,675
 Senior Loan Fund JV 1, LLC 1,328
 14,065
 TransTrade Operators, Inc. (1)(3) 1,052
 424
 Webster Capital III, L.P. (limited partnership) 736
 1,013
 Riverside Fund V, LP (limited partnership interest) 539
 853
 Garretson Firm Resolution Group, Inc. 508
 1,066
 Sterling Capital Partners IV, L.P. (limited partnership interest) 490
 485
 Beecken Petty O'Keefe Fund IV, L.P. (limited partnership interest) 472
 813
 Tailwind Capital Partners II, L.P. (limited partnership interest) 391
 1,005
 Moelis Capital Partners Opportunity Fund I-B, L.P. (limited partnership interest) 365
 476
 RCP Direct II, LP (limited partnership interest) 364
 654
 Cenegenics, LLC (1)(3) 297
 1,001
 Riverside Fund IV, LP (limited partnership interest) 254
 544
 ACON Equity Partners III, LP (limited partnership interest) 239
 204
 RCP Direct, LP (limited partnership interest) 184
 236
 Bunker Hill Capital II (QP), LP (limited partnership interest) 183
 190
 Milestone Partners IV, LP (limited partnership interest) 180
 261
 SPC Partners V, L.P. (limited partnership interest) 159
 602
 Riverlake Equity Partners II, LP (limited partnership interest) 129
 177
 L Squared Capital Partners (limited partnership interest) —
 308
 Legalzoom.com, Inc. —
 15,427
 TigerText, Inc. —
 10,000
 RP Crown Parent, LLC —
 9,414
 TIBCO Software, Inc. —
 5,800


 Integrated Petroleum Technologies, Inc. —
 5,397
 Trialcard Incorporated —
 4,900
 Adventure Interactive, Corp. (2) —
 4,846
 Baart Programs, Inc. —
 4,762
 Discovery Practice Management, Inc. —
 3,958
 OBHG Management Services, LLC —
 3,836
 First American Payment Systems, LP —
 3,000
 My Alarm Center, LLC —
 2,940
 Eagle Hospital Physicians, Inc. —
 2,753
 HealthDrive Corporation —
 2,534
 Teaching Strategies, LLC —
 2,400
 ExamSoft Worldwide, Inc. —
 2,000
 Accruent, LLC —
 1,900
Total $118,073
 $215,651
 ___________ 
(1) This investment was on cash or PIK non-accrual status as of September 30, 2017.
(2) This investment was on cash non-accrual status as of September 30, 2016.
(3) This portfolio company does not have the ability to draw on this unfunded commitment as of September 30, 2017.

Contractual Obligations
The following table reflects information pertaining to our debt outstanding under the SBA debentures, the ING facility, the Sumitomo facility, our 2019 Notes, our 2024 Notes, our 2028 Notes and our secured borrowings:
  Debt Outstanding
as of September 30, 2016		 
Debt Outstanding
as of September 30, 2017
 
Weighted average debt
outstanding for the
year ended
September 30, 2017
 
Maximum debt
outstanding
for the year ended
September 30, 2017
SBA debentures $213,300
 $—
 $159,201
 $213,300
ING facility 472,495
 226,495
 356,961
 530,495
Sumitomo facility 43,800
 29,500
 40,379
 44,000
2019 Notes 250,000
 250,000
 250,000
 250,000
2024 Notes 75,000
 75,000
 75,000
 75,000
2028 Notes 86,250
 86,250
 86,250
 86,250
Secured borrowings 18,929
 13,489
 14,581
 18,929
Total debt $1,159,774
 $680,734
 $982,372
 


The following table reflects our contractual obligations arising from the ING facility, the Sumitomo facility, our secured borrowings, our 2019 Notes, our 2024 Notes and our 2028 Notes:
  Payments due by period as of September 30, 2017
Contractual Obligations Total Less than 1 year 1-3 years 3-5 years More than 5 years
ING facility $226,495
 $226,495
 $—
 $—
 $—
Interest due on ING facility 6,733
 6,733
 —
 —
 —
Sumitomo facility 29,500
 29,500
 —
 —
 —
Interest due on Sumitomo facility 886
 886
 —
 —
 —
Secured borrowings 13,489
 —
 13,489
 —
 —
Interest due on secured borrowings 1,857
 612
 1,245
 —
 —
2019 Notes 250,000
 —
 250,000
 —
 —
Interest due on 2019 Notes 17,263
 12,188
 5,075
 —
 —
2024 Notes 75,000
 —
 —
 —
 75,000
Interest due on 2024 Notes 31,230
 4,406
 8,813
 8,813
 9,198
2028 Notes 86,250
 —
 —
 —
 86,250
Interest due on 2028 Notes 55,940
 5,283
 10,566
 10,566
 29,525
Total $794,643
 $286,103
 $289,188
 $19,379
 $199,973


Regulated Investment Company Status and Distributions

We have qualified and elected to be treated as a RIC under Subchapter M of the Code.Code for U.S. federal income tax purposes. As long as we continue to qualify as a RIC, we will not be subject to tax on our investment company taxable income (determined without regard to any deduction for dividends paid) or realized net capital gains, to the extent that such taxable income or gains is distributed, or deemed to be distributed as dividends, to stockholders on a timely basis.
Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation. Distributions declared and paid by us in a taxable year may differ from taxable income for that taxable year as such distributions may include the distribution of taxable income derived from the current taxable year or the distribution of taxable
74

income derived from the prior taxable year carried forward into and distributed in the current taxable year. Distributions also may include returns of capital.
To maintain RIC tax treatment, we must, among other things, distribute dividends, with respect to each taxable year, of an amount at least equal to 90% of our investment company taxable income (i.e., our net ordinary income and our realized net short-term capital gains in excess of realized net long-term capital losses, if any), determined without regard to any deduction for dividends paid. As a RIC, we are also subject to a federal excise tax, based on distribution requirements of our taxable income on a calendar year basis. We anticipate timely distribution of our taxable income in accordance with tax rules. We did not incur a U.S. federal excise tax for calendar years 20152020 and 20162021 and do not expect to incur a U.S. federal excise tax for the calendar year 2017.2022. We may incur a federal excise tax in future years.
We intend to distribute at least 90% of our annual taxable income (which includes our taxable interest and fee income) to our stockholders. The covenants contained in the ING facilityour credit facilities may prohibit us from making distributions to our stockholders, and, as a result, could hinder our ability to satisfy the distribution requirement associated with our ability to be subject to tax as a RIC. Also, until we complete the surrender of our SBIC licenses to the SBA, distributions from our SBIC subsidiaries may be limited by the Small Business Investment Act and SBA regulations governing SBICs. In addition, we may retain for investment some or all of our net capital gains (i.e., realized net long-term capital gains in excess of realized net short-term capital losses) and treat such amounts as deemed distributions to our stockholders. If we do this, our stockholders will be treated as if they received actual distributions of the capital gains we retained and then reinvested the net after-tax proceeds in our common stock. Our stockholders also may be eligible to claim tax credits (or, in certain circumstances, tax refunds) equal to their allocable share of the tax we paid on the capital gains deemed distributed to them. To the extent our taxable earnings for a fiscal and taxable year fall below the total amount of our dividend distributions for that fiscal and taxable year, a portion of those distributions may be deemed a return of capital to our stockholders.
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. In addition, we may be limited in our ability to make distributions due to the asset coverage test for borrowings applicable to us as a business development companyBusiness Development Company under the 1940Investment Company Act and due to provisions in our credit facilities and debt instruments. If we do not distribute a certain percentage of our taxable income annually, we will suffer adverse tax consequences,


including possible loss of our ability to be subject to tax as a RIC. We cannot assure stockholders that they will receive any distributions or distributions at a particular level.
A RIC may treat a distribution of its own stock as fulfilling its RIC distribution requirements if each stockholder elects to receive his or her entire distribution in either cash or stock of the RIC, subject to certain limitations regarding the aggregate amount of cash to be distributed to all stockholders. If these and certain other requirements are met, for U.S federal income tax purposes, the amount of the dividend paid in stock will be equal to the amount of cash that could have been received instead of stock. We have no current intention of paying dividends in shares of our stock in accordance with these guidelines.
We may generate qualified net interest income or qualified net short-term capital gains that may be exempt from U.S. withholding tax when distributed to foreign stockholders. A RIC is permitted to designate distributions of qualified net interest income and qualified short-term capital gains as exempt from U.S. withholding tax when paid to non-U.S. shareholders with proper documentation. The following table, which may be subject to change as we finalize our annual tax filings, lists the percentage of qualified net interest income and qualified short-term capital gains for the year ended September 30, 2017.
2022.
Year EndedQualified Net Interest IncomeQualified Short-Term Capital Gains
September 30, 2017202285.880.8 %—
We have adopted a DRIP that provides for the reinvestment of any distributions that we declare in cash on behalf of our stockholders, unless a stockholder elects to receive cash. As a result, if our Board of Directors declares a cash distribution, then our stockholders who have not “opted out” of the DRIP will have their cash distributions automatically reinvested in additional shares of our common stock, rather than receiving a cash distribution. If our shares are trading at a premium to net asset value, we typically issue new shares to implement the DRIP, with such shares issued at the greater of the most recently computed net asset value per share of our common stock or 95% of the current market value per share of our common stock on the payment date for such distribution. If our shares are trading at a discount to net asset value, we typically purchase shares in the open market in connection with our obligations under the DRIP.
Related Party Transactions
We have entered into the New Investment Advisory Agreement with our Investment AdviserOaktree and the New Administration Agreement with Oaktree Administrator, a wholly-owned subsidiaryan affiliate of the Investment Adviser.Oaktree. Mr. John B. Frank, an interested member of our Board of Directors, has an indirect pecuniary interest in our Investment Adviser. The Investment AdviserOaktree. Oaktree is a registered investment adviser under the Investment Advisers Act of 1940, as amended, that is partially and indirectly owned by OCG.Oaktree Capital Group, LLC. See “Item 1. Business-The Investment Adviser” and “-New “Note 10. Related Party Transactions –
75

Investment Advisory Agreement.Agreement”
Prior and “– Administrative Services” in the notes to October 17, 2017, we were externally managed and advised by our Former Adviser, and our administrator was our Former Administrator, a wholly-owned subsidiary of our Former Adviser. Messrs. Bernard D. Berman and Alexander C. Frank, each an interested member of our Board of Directors prior to October 17, 2017, had a direct or indirect pecuniary interest in our Former Adviser. See “Item 1. Business-Our Former Adviser and Administrator.”the accompanying Consolidated Financial Statements.
Recent Developments
On November 17, 2017, we entered into the Ninth Amendment, or the Ninth ING Amendment, that amends the documents governing the ING facility. The Ninth ING Amendment (a) decreased the minimum amount of shareholders’ equity we are required to have under the documents governing the ING facility as of the last day of any fiscal quarter, starting with the quarter ending September 30, 2017, to $700 million and (b) decreased the minimum amount of net worth that we are required to maintain at any time, starting with the quarter ending September 30, 2017, to $650 million.Distribution Declaration
On November 24, 2017, Fifth Street Funding II, LLC, as the borrower under the Sumitomo Facility, repaid all outstanding borrowings thereunder, following which the Sumitomo facility was terminated. Obligations under the Sumitomo facility would have otherwise matured10, 2022, our Board of Directors declared a quarterly distribution of $0.18 per share, payable in cash on the earlierDecember 30, 2022 to stockholders of August 6, 2018 or the daterecord on which the ING facility is repaid, refinanced or terminated.December 15, 2022. On November 10, 2022, our Board of Directors also declared a special distribution of $0.14 per share payable on December 30, 2022 to stockholders of record on December 15, 2022.
Recently Issued Accounting Standards
See “Note 2. Significant Accounting Policies” in the Consolidated Financial Statements for a description of recent accounting pronouncements, including the expected dates of adoption and the anticipated impact on our Consolidated Financial Statements.




76


Item 7A. Quantitative and Qualitative Disclosures about Market Risk


We are subject to financial market risks, including changes in the valuations of our investment portfolio and interest rates.
Valuation Risk
Our investments may not have a readily available market price, and we value these investments at fair value as determined by Oaktree, as our valuation designee. There is no single standard for determining fair value in good faith and valuation methodologies involve a significant degree of management judgment. In addition, our valuation methodology utilizes discount rates in part in valuing our investments, and changes in those discount rates may have an impact on the valuation of our investments. Accordingly, valuations by Oaktree do not necessarily represent the amounts which may eventually be realized from sales or other dispositions of investments. Estimated fair values may differ from the values that would have been used had a ready market for the investment existed, and the differences could be material to the financial statements.
Interest Rate Risk
We are subject to financial market risks, including changes in interest rates. Changes in interest rates may affect both our cost of funding and our interest income from portfolio investments, cash and cash equivalents and idle fundsfund investments. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks and limits by means of reliable administrative and information systems and other policies and programs.risks. Our investment income will be affected by changes in various interest rates, including LIBOR, SOFR, SONIA and prime rates, to the extent our debt investments include floating interest rates. In addition, our investments are carried at fair value as determined in good faith by our Board of Directors in accordance with the 1940 Act. Our valuation methodology utilizes discount rates in part in valuing our investments, and changes in those discount rates may have an impact on the valuation of our investments.


As of September 30, 2017, 83.6%2022, 86.5% of our debt investment portfolio (at fair value) and 81.9%86.3% of our debt investment portfolio (at cost) bore interest at floating rates. As of September 30, 2021, 91.5% of our debt investment portfolio (at fair value) and 91.8% of our debt investment portfolio (at cost) bore interest at floating rates. The composition of our floating rate debt investments by cash interest rate floor (excluding PIK) as of September 30, 20172022 and September 30, 20162021, was as follows:
 September 30, 2022September 30, 2021
($ in thousands)Fair Value% of Floating Rate PortfolioFair Value% of Floating Rate Portfolio
0%$228,186 11.1 %$322,222 14.6 %
>0% and <1%388,458 19.0 %283,065 12.8 %
1%1,364,668 66.6 %1,507,977 68.4 %
>1%68,332 3.3 %92,384 4.2 %
Total Floating Rate Investments$2,049,644 100.0 %$2,205,648 100.0 %
  September 30, 2017 September 30, 2016
($ in thousands) Fair Value 
% of Floating
Rate Portfolio
 Fair Value 
% of Floating
Rate Portfolio
Under 1% $201,365
 16.91% $271,484
 16.98%
1% to under 2% 989,575
 83.09
 1,324,121
 82.83
2% to under 3% —
 —
 —
 —
3% and over —
 —
 3,000
 0.19
Total $1,190,940
 100.00% $1,598,605
 100.00%

Based on our Consolidated Statement of Assets and Liabilities as of September 30, 2017,2022, the following table shows the approximate annualized net increase (decrease) in components of net assets resulting from operations (excluding the impact of any potential incentive fees) of hypothetical base rate changes in interest rates, assuming no changes in our investment and capital structure:structure. However, there can be no assurances our portfolio companies will be able to meet their contractual obligations at any or all levels on increases in interest rates.
($ in thousands) Basis point increaseIncrease in Interest Income(Increase) in Interest ExpenseNet increase in net assets resulting from operations
250$53,484 $(26,250)$27,234 
20042,767 (21,000)21,767 
15032,051 (15,750)16,301 
10021,334 (10,500)10,834 
5010,622 (5,250)5,372 


77

($ in thousands)      
Basis point increase(1) 
Interest
income
 
Interest
expense
 
Net increase
(decrease)
500 $61,700
 $(13,100) $48,600
400 50,300
 (10,400) 39,900
300 39,000
 (7,700) 31,300
200 27,600
 (5,000) 22,600
100 16,200
 (2,300) 13,900
($ in thousands) Basis point decrease(Decrease) in Interest IncomeDecrease in Interest ExpenseNet (decrease) in net assets resulting from operations
50$(10,611)$5,250 $(5,361)
100(21,062)10,500 (10,562)
150(31,456)15,750 (15,706)
200(41,787)21,000 (20,787)
250(49,943)26,250 (23,693)
(1)A decline in interest rates would not have a material impact on our Consolidated Financial Statements.
We regularly measure exposure to interest rate risk. We assess interest rate risk and manage our interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on this review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates. The following table shows a comparison of the interest rate base for our interest-bearing cash and outstanding investments, at principal, and our outstanding borrowings as of September 30, 20172022 and September 30, 2016:2021:
 September 30, 2022September 30, 2021
($ in thousands)Interest Bearing
Cash and
Investments		BorrowingsInterest Bearing
Cash and
Investments		Borrowings
Money market rate$5,262 $— $23,600 $— 
Prime rate2,618 — 305 10,000 
LIBOR
30 day669,273 540,000 674,613 485,000 
90 day (a)928,978 510,000 1,037,019 485,000 
180 day199,301 — 323,869 — 
360 day— — 96,095 — 
EURIBOR
30 day€24,838 — €24,838 — 
90 day16,911 — 13,980 — 
180 day1,964 — 18,203 — 
SOFR
30 day$50,099 — — — 
90 day190,799 — — — 
180 day18,390 — — — 
SONIA£40,137 — — — 
UK LIBOR
30 day— — £21,501 — 
180 day— — 18,638 — 
Fixed rate$341,749 300,000 $200,599 300,000 
__________ 
(a)Borrowings include the 2027 Notes, which pay interest at a floating rate under the terms of the interest rate swap.
78
  September 30, 2017 September 30, 2016
($ in thousands) 
Interest Bearing
Cash and
Investments
 Borrowings Interest Bearing
Cash and
Investments		 Borrowings
Money market rate $59,913
 $—
 $130,362
 $—
Prime rate 1,061
 —
 12,344
 —
LIBOR        
30 day 42,165
 255,993
 42,087
 516,295
90 day 1,254,246
 13,491
 1,665,339
 18,929
Fixed rate 290,427
 411,250
 408,136
 624,550
Total $1,647,812
 $680,734
 $2,258,268
 $1,159,774



Item 8. Consolidated Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

8380
8483
8584
8685
8786
8887
101100
116112

79




Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors and Shareholders ofOaktree Specialty Lending Corporation


In our opinion,Opinion on the Financial Statements

We have audited the accompanying consolidatedstatement statements of assets and liabilities of Oaktree Specialty Lending Corporation (the Company), including the consolidated scheduleschedules of investments, as of September 30, 2022 and 2021, the related consolidated statements of operations, changes in net assets, and cash flows for each of the three years in the period ended September 30, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Oaktree SpecialtyLending Corporation (formerly known as Fifth Street Finance Corp.)and its subsidiariesas ofthe Company at September 30, 20172022 and 2016,2021, and the results of theirits operations,the changes in theirits net assets, and theirits cash flows for each of the three years in the period endedSeptember 30, 20172022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 30, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated November 14, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned as of September 30, 2022 and 2021 by correspondence with the custodians, syndication agents and underlying investee companies, and by other appropriate auditing procedures where confirmation was not received. Our audits also included evaluating the accounting principles generally acceptedused and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in the United States of America. In addition, inany way our opinion on the consolidated financial statement schedule listedstatements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.


80

Valuation of investments using significant unobservable inputs

Description of the MatterAs described in Note 3 to the consolidated financial statements, the Company classified $2,169,475 thousand of its investments as Level 3 within the fair value hierarchy (Level 3 investments) as of September 30, 2022. As described in Note 2 and Note 3 to the consolidated financial statements, the Company’s valuation designee, under the oversight of the Board of Directors, determined the fair value of the Company’s Level 3 investments by using valuation techniques such as broker quotations, precedent transactions, enterprise value analyses or market yield techniques. These techniques require management to make judgments about the significant unobservable inputs including, among others, comparable EBITDA, revenue or asset multiples, market yields and broker quoted prices.

Auditing the fair value of the Company’s Level 3 investments involved a high degree of auditor judgment and extensive audit effort, as changes in the valuation techniques or significant unobservable inputs could have resulted in significant changes in fair value measurements.

How We Addressed the Matter in Our AuditWe obtained an understanding, evaluated the design and tested the operating effectiveness of controls related to the Company’s investment valuation process, including controls related to the Company’s assessment of valuation techniques and significant unobservable inputs used in determining the fair value measurements of the Level 3 investments.

Our audit procedures included, among others, evaluating the Company’s valuation techniques and significant unobservable inputs used. Our audit procedures also included, for a sample of Level 3 investments, validating the mathematical accuracy of the fair value calculations and validating the accuracy of other relevant inputs used in estimating fair value measurement, such as investment terms and portfolio company financial information.

For example, we compared publicly available information in the Company’s valuation models (e.g., market yields, EBITDA, revenue, and asset multiples of comparable public companies and comparable public transactions) to information available from third-party market research providers. We also compared the significant company-specific inputs in the Company’s valuation models to source documents, such as portfolio company financial statements and covenant certificates provided by the Company. To evaluate the reasonableness of significant unobservable inputs, we assessed whether these inputs were developed in a manner consistent with the Company’s valuation policies and in some instances, we involved our valuation specialists to independently develop ranges using portfolio company and available market information to estimate the fair value of selected investments and we compared these ranges to the Company’s fair value measurements. We also evaluated subsequent events and transactions and considered whether they corroborated or contradicted the Company’s fair value measurements.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2018.

Los Angeles, CA
November 14, 2022
81

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Oaktree Specialty Lending Corporation

Opinion on Internal Control Over Financial Reporting

We have audited Oaktree Specialty Lending Corporation’s internal control over financial reporting as of September 30, 2022, based on criteria established in Internal Control–Integrated Framework issued by the accompanying indexpresents fairly, in all material respects,Committee of Sponsoring Organizations of the information set forth therein when read in conjunction with the related consolidatedfinancial statements. Also inTreadway Commission (2013 framework) (the COSO criteria). In our opinion, the Company did not maintain,Oaktree Specialty Lending Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of September 30, 2017,2022, based on criteria establishedthe COSO criteria.

We also have audited, in Internal Control - Integrated Framework (2013)issued byaccordance with the Committee of Sponsoring Organizationsstandards of the Treadway Commission (COSO) because a material weaknessin internal control over financial reporting related to not designing or maintaining effective controls to internally communicate current accounting policiesPublic Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of assets and proceduresliabilities of the Company, including the natureconsolidated schedules of supporting documentation required to validate certain portfolio company data existedinvestments, as of that date. A material weakness is a deficiency, or a combinationSeptember 30, 2022 and 2021, the related consolidated statements of deficiencies,operations, changes in internal control over financial reporting, such that there is a reasonable possibility that a material misstatementnet assets and cash flows for each of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness referred to above is describedthree years in the accompanying Management’s Report on Internal Control over Financial Reporting.We considered thismaterial weaknessin determiningperiod ended September 30, 2022, and the nature, timing, and extent of audit tests applied in our audit of the 2017 consolidatedfinancial statementsrelated notes and our report dated November 14, 2022 expressed an unqualified opinion regarding the effectiveness of thethereon.

Basis for Opinion

The Company’s internal control over financial reporting does not affect our opinion on those consolidatedfinancial statements. The Company's management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in management's report referred to above.the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on these financial statements,an opinion on the financial statement schedule, and on the Company'sCompany’s internal control over financial reporting based on our integrated audits. audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our auditsaudit in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the auditsaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also includedrisk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audits, which included confirmation of securities as of September 30, 2017 by correspondence with the custodian, transfer agent and brokers,and the application of alternative auditing procedures where confirmation had not been received, provideaudit provides a reasonable basis for our opinions.opinion.


Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i)(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii)(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii)(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ PricewaterhouseCoopersErnst & Young LLP
New York, New York
Los Angeles, California
November 29, 201714, 2022




82

Oaktree Specialty Lending Corporation
Consolidated Statements of Assets and Liabilities
(in thousands, except per share amounts)
September 30, 2022September 30, 2021
ASSETS
Investments at fair value:
Control investments (cost September 30, 2022: $260,305; cost September 30, 2021: $283,599)$214,165 $270,765 
Affiliate investments (cost September 30, 2022: $27,353; cost September 30, 2021: $18,763)26,196 18,289 
Non-control/Non-affiliate investments (cost September 30, 2022: $2,330,096; cost September 30, 2021: $2,236,759)2,253,750 2,267,575 
Total investments at fair value (cost September 30, 2022: $2,617,754; cost September 30, 2021: $2,539,121)2,494,111 2,556,629 
Cash and cash equivalents23,528 29,334 
Restricted cash2,836 2,301 
Interest, dividends and fees receivable35,598 22,125 
Due from portfolio companies22,495 1,990 
Receivables from unsettled transactions4,692 8,150 
Due from broker45,530 1,640 
Deferred financing costs7,350 9,274 
Deferred offering costs32 34 
Deferred tax asset, net1,687 714 
Derivative assets at fair value6,789 1,912 
Other assets1,665 2,284 
Total assets$2,646,313 $2,636,387 
LIABILITIES AND NET ASSETS
Liabilities:
Accounts payable, accrued expenses and other liabilities$3,701 $3,024 
Base management fee and incentive fee payable15,940 32,649 
Due to affiliate3,180 4,357 
Interest payable7,936 4,597 
Payables from unsettled transactions26,981 8,086 
Derivative liability at fair value41,969 2,108 
Credit facilities payable700,000 630,000 
Unsecured notes payable (net of $5,020 and $6,501 of unamortized financing costs as of September 30, 2022 and September 30, 2021, respectively)601,043 638,743 
Total liabilities1,400,750 1,323,564 
Commitments and contingencies (Note 13)
Net assets:
Common stock, $0.01 par value per share, 250,000 shares authorized; 183,374 and 180,361 shares issued and outstanding as of September 30, 2022 and September 30, 2021, respectively1,834 1,804 
Additional paid-in-capital1,826,498 1,804,354 
Accumulated overdistributed earnings(582,769)(493,335)
Total net assets (equivalent to $6.79 and $7.28 per common share as of September 30, 2022 and September 30, 2021, respectively) (Note 11)1,245,563 1,312,823 
Total liabilities and net assets$2,646,313 $2,636,387 
  September 30, 2017 September 30, 2016
ASSETS
Investments at fair value:    
Control investments (cost September 30, 2017: $444,826; cost September 30, 2016: $456,493) $305,271
 $388,267
Affiliate investments (cost September 30, 2017: $33,743; cost September 30, 2016: $34,955) 36,983
 39,769
Non-control/Non-affiliate investments (cost September 30, 2017: $1,279,096; cost September 30, 2016: $1,792,410) 1,199,501
 1,737,455
Total investments at fair value (cost September 30, 2017: $1,757,665; cost September 30, 2016: $2,283,858) 1,541,755
 2,165,491
Cash and cash equivalents 53,018
 117,923
Restricted cash 6,895
 12,439
Interest, dividends and fees receivable 6,892
 15,568
Due from portfolio companies 5,670
 4,077
Receivables from unsettled transactions —
 5,346
Deferred financing costs 1,304
 2,234
Insurance recoveries receivable —
 19,729
Other assets 514
 478
Total assets $1,616,048
 $2,343,285
LIABILITIES AND NET ASSETS
Liabilities: 
  
Accounts payable, accrued expenses and other liabilities $2,417
 $2,533
Base management fee and Part I incentive fee payable 6,750
 15,958
Due to FSC CT 1,815
 2,204
Interest payable 3,167
 3,912
Amounts payable to syndication partners 1
 754
Director fees payable 184
 566
Payables from unsettled transactions 58,691
 6,234
Legal settlements payable —
 19,500
Credit facilities payable 255,995
 516,295
SBA debentures payable (net of $3,289 of unamortized financing costs as of September 30, 2016) —
 210,011
Unsecured notes payable (net of $4,737 and $5,956 of unamortized financing costs as of September 30, 2017 and September 30, 2016, respectively) 406,115
 404,630
Secured borrowings at fair value (proceeds September 30, 2017: $13,489; proceeds September 30, 2016: $18,929) 13,256
 18,400
Total liabilities 748,391
 1,200,997
Commitments and contingencies (Note 16) 
  
Net assets:    
Common stock, $0.01 par value, 250,000 shares authorized; 140,961 shares issued and outstanding at September 30, 2017; 143,259 shares issued and outstanding at September 30, 2016 1,409
 1,433
Additional paid-in-capital 1,579,278
 1,591,467
Net unrealized depreciation on investments and secured borrowings (215,677) (117,838)
Net realized loss on investments and secured borrowings (478,010) (306,228)
Accumulated overdistributed net investment income (19,343) (26,546)
Total net assets (equivalent to $6.16 and $7.97 per common share at September 30, 2017 and September 30, 2016, respectively) (Note 12) 867,657
 1,142,288
Total liabilities and net assets $1,616,048
 $2,343,285

See notes to Consolidated Financial Statements.

83

Oaktree Specialty Lending Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts)

 Year ended
September 30, 2017		 Year ended
September 30, 2016		 Year ended
September 30, 2015		Year ended
September 30,
2022		Year ended
September 30,
2021		Year ended
September 30,
2020
Interest income:      Interest income:
Control investments $14,230
 $17,122
 $15,541
Control investments$14,043 $11,792 $9,832 
Affiliate investments 3,939
 4,110
 4,338
Affiliate investments1,744 716 467 
Non-control/Non-affiliate investments 133,344
 175,584
 195,988
Non-control/Non-affiliate investments212,677 161,864 114,947 
Interest on cash and cash equivalents 810
 380
 55
Interest on cash and cash equivalents452 9 322 
Total interest income 152,323
 197,196
 215,922
Total interest income228,916 174,381 125,568 
PIK interest income:      PIK interest income:
Control investments 6,631
 4,987
 5,029
Affiliate investments 788
 822
 860
Non-control/Non-affiliate investments 3,674
 8,219
 7,500
Non-control/Non-affiliate investments20,526 16,447 7,863 
Total PIK interest income 11,093
 14,028
 13,389
Total PIK interest income20,526 16,447 7,863 
Fee income:      Fee income:
Control investments 1,244
 2,715
 1,841
Control investments50 59 42 
Affiliate investments 753
 320
 52
Affiliate investments20 20 20 
Non-control/Non-affiliate investments 8,510
 19,643
 20,371
Non-control/Non-affiliate investments6,561 14,019 8,457 
Total fee income 10,507
 22,678
 22,264
Total fee income6,631 14,098 8,519 
Dividend and other income:      
Dividend income:Dividend income:
Control investments 3,954
 9,175
 12,574
Control investments6,366 4,459 1,180 
Non-control/Non-affiliate investments 87
 4,795
 1,326
Non-control/Non-affiliate investments81 — 3 
Total dividend and other income 4,041
 13,970
 13,900
Total dividend incomeTotal dividend income6,447 4,459 1,183 
Total investment income 177,964
 247,872
 265,475
Total investment income262,520 209,385 143,133 
Expenses:      Expenses:
Base management fee 31,369
 41,483
 51,615
Base management fee39,556 32,288 22,895 
Part I incentive fee 10,713
 22,091
 28,575
Part I incentive fee26,644 21,598 15,194 
Part II incentive feePart II incentive fee(8,791)17,615 (5,557)
Professional fees 5,703
 15,232
 4,079
Professional fees4,418 4,231 2,532 
Board of Directors fees 872
 966
 722
Directors feesDirectors fees603 607 570 
Interest expense 49,935
 54,621
 56,654
Interest expense46,929 30,518 26,289 
Administrator expense 2,217
 1,891
 3,090
Administrator expense1,246 1,510 1,524 
General and administrative expenses 5,999
 5,128
 6,346
General and administrative expenses2,986 2,725 2,494 
Loss on legal settlements 3
 19,500
 —
Total expenses 106,811
 160,912
 151,081
Total expenses113,591 111,092 65,941 
Base management fee waived (240) (338) (546)
Insurance recoveries (1,259) (19,429) —
Reversal of fees waived (fees waived)Reversal of fees waived (fees waived)(3,000)(1,608)5,200 
Net expenses 105,312
 141,145
 150,535
Net expenses110,591 109,484 71,141 
Net investment income before taxesNet investment income before taxes151,929 99,901 71,992 
(Provision) benefit for taxes on net investment income(Provision) benefit for taxes on net investment income(3,308)(2,795)— 
Net investment income 72,652
 106,727
 114,940
Net investment income148,621 97,106 71,992 
Unrealized appreciation (depreciation) on investments:      
Unrealized appreciation (depreciation):Unrealized appreciation (depreciation):
Control investments (71,329) (53,599) (21,874)Control investments(33,306)31,731 (29,488)
Affiliate investments (1,574) 845
 962
Affiliate investments(683)568 (1,763)
Non-control/Non-affiliate investments (24,640) 4,830
 (50,762)Non-control/Non-affiliate investments(107,136)80,531 10,904 
Net unrealized depreciation on investments (97,543) (47,924) (71,674)
Net unrealized (appreciation) depreciation on secured borrowings (296) (76) 658
Realized gain (loss) on investments and secured borrowings:      
Foreign currency forward contractsForeign currency forward contracts4,877 1,689 (267)
Net unrealized appreciation (depreciation)Net unrealized appreciation (depreciation)(136,248)114,519 (20,614)
Realized gains (losses):Realized gains (losses):
Control investments (59,722) (9,318) (4,516)Control investments1,868 — (4,155)
Affiliate investments —
 3
 72
Non-control/Non-affiliate investments (112,060) (115,968) (24,085)Non-control/Non-affiliate investments1,585 27,094 (4,615)
Net realized loss on investments and secured borrowings (171,782) (125,283) (28,529)
Extinguishment of unsecured notes payableExtinguishment of unsecured notes payable— — (2,541)
Foreign currency forward contractsForeign currency forward contracts13,726 (674)(2,613)
Net realized gains (losses)Net realized gains (losses)17,179 26,420 (13,924)
(Provision) benefit for taxes on realized and unrealized gains (losses)(Provision) benefit for taxes on realized and unrealized gains (losses)(329)(785)1,770 
Net realized and unrealized gains (losses), net of taxesNet realized and unrealized gains (losses), net of taxes(119,398)140,154 (32,768)
Net increase (decrease) in net assets resulting from operations $(196,969) $(66,556) $15,395
Net increase (decrease) in net assets resulting from operations$29,223 $237,260 $39,224 
Net investment income per common share — basic $0.51
 $0.72
 $0.75
Earnings (loss) per common share — basic $(1.39) $(0.45) $0.10
Weighted average common shares outstanding — basic 141,438
 147,422
 153,164
Net investment income per common share — diluted $0.51
 $0.71
 $0.75
Earnings (loss) per common share — diluted (Note 5) $(1.39) $(0.45) $0.10
Weighted average common shares outstanding — diluted 141,438
 151,339
 160,954
Distributions per common share $0.465
 $0.72
 $0.79
Net investment income per common share — basic and dilutedNet investment income per common share — basic and diluted$0.82 $0.60 $0.51 
Earnings (loss) per common share — basic and diluted (Note 5)Earnings (loss) per common share — basic and diluted (Note 5)$0.16 $1.46 $0.28 
Weighted average common shares outstanding — basic and dilutedWeighted average common shares outstanding — basic and diluted182,181 162,118 140,961 


See notes to Consolidated Financial Statements.

84


Oaktree Specialty Lending Corporation
Consolidated Statements of Changes in Net Assets
(in thousands, except per share amounts)




Year ended
September 30,
2022		Year ended
September 30,
2021		Year ended
September 30,
2020
Operations:
Net investment income$148,621 $97,106 $71,992 
Net unrealized appreciation (depreciation)(136,248)114,519 (20,614)
Net realized gains (losses)17,179 26,420 (13,924)
(Provision) benefit for taxes on realized and unrealized gains (losses)(329)(785)1,770 
Net increase (decrease) in net assets resulting from operations29,223 237,260 39,224 
Stockholder transactions:
Distributions to stockholders(118,657)(82,020)(54,975)
Net increase (decrease) in net assets from stockholder transactions(118,657)(82,020)(54,975)
Capital share transactions:
Issuance of common stock in connection with the OCSI Merger— 242,704 — 
Issuance of common stock under dividend reinvestment plan3,409 2,170 1,878 
Repurchases of common stock under dividend reinvestment plan(1,857)(2,170)(1,878)
Issuance of common stock in connection with the "at the market" offering20,622 — — 
Net increase (decrease) in net assets from capital share transactions22,174 242,704 — 
Total increase (decrease) in net assets(67,260)397,944 (15,751)
Net assets at beginning of period1,312,823 914,879 930,630 
Net assets at end of period$1,245,563 $1,312,823 $914,879 
Net asset value per common share$6.79 $7.28 $6.49 
Common shares outstanding at end of period183,374 180,361 140,961 
  Year ended
September 30,
2017		 Year ended
September 30,
2016		 Year ended
September 30,
2015
Operations:      
Net investment income $72,652
 $106,727
 $114,940
Net unrealized depreciation on investments (97,543) (47,924) (71,674)
Net unrealized (appreciation) depreciation on secured borrowings (296) (76) 658
Net realized loss on investments and secured borrowings (171,782) (125,283) (28,529)
Net increase (decrease) in net assets resulting from operations (196,969) (66,556) 15,395
Stockholder transactions:      
Contributions from stockholders (Note 11) 287
 —
 —
Distributions to stockholders (65,449) (99,419) (120,647)
Tax return of capital —
 (7,239) —
Net decrease in net assets from stockholder transactions (65,162) (106,658) (120,647)
Capital share transactions:      
Issuance of common stock, net —
 —
 (94)
Issuance of common stock under dividend reinvestment plan 2,924
 6,398
 5,953
Repurchases of treasury stock —
 —
 (2,538)
Repurchases of common stock under stock repurchase program (12,500) (37,592) (17,497)
Repurchases of common stock under dividend reinvestment program (2,924) (6,398) (5,953)
Net decrease in net assets from capital share transactions (12,500) (37,592) (20,129)
Total decrease in net assets (274,631) (210,806) (125,381)
Net assets at beginning of period 1,142,288
 1,353,094
 1,478,475
Net assets at end of period $867,657
 $1,142,288
 $1,353,094
Net asset value per common share $6.16
 $7.97
 $9.00
Common shares outstanding at end of period 140,961
 143,259
 150,263






See notes to Consolidated Financial Statements.
85
Oaktree Specialty Lending Corporation
Consolidated Statements of Cash Flows
(in thousands)








Year ended
September 30,
2022		Year ended
September 30,
2021		Year ended
September 30,
2020
Operating activities:
Net increase (decrease) in net assets resulting from operations$29,223 $237,260 $39,224 
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net unrealized (appreciation) depreciation136,248 (114,519)20,614 
Net realized (gains) losses(17,179)(26,420)13,924 
PIK interest income(20,526)(16,447)(7,863)
Accretion of original issue discount on investments(29,091)(29,391)(12,305)
Accretion of original issue discount on unsecured notes payable679 572 302 
Amortization of deferred financing costs3,740 4,151 2,187 
Deferred taxes(973)133 (1,551)
Purchases of investments(702,063)(1,120,168)(727,161)
Proceeds from the sales and repayments of investments693,745 792,161 579,550 
Cash acquired in the OCSI Merger— 20,945 — 
Changes in operating assets and liabilities:
(Increase) decrease in interest, dividends and fees receivable(16,115)(8,495)4,232 
(Increase) decrease in due from portfolio companies(20,505)1,360 (109)
(Increase) decrease in receivables from unsettled transactions3,458 2,514 (4,537)
(Increase) decrease in due from broker(43,890)(1,640)— 
(Increase) decrease in other assets619 (1,427)437 
Increase (decrease) in accounts payable, accrued expenses and other liabilities677 (426)(517)
Increase (decrease) in base management fee and incentive fee payable(16,709)19,516 1,045 
Increase (decrease) in due to affiliate(1,177)1,119 (559)
Increase (decrease) in interest payable3,339 1,163 (670)
Increase (decrease) in payables from unsettled transactions18,895 7,608 (59,118)
Increase (decrease) in director fees payable— (90)— 
Net cash provided by (used in) operating activities22,395 (230,521)(152,875)
Financing activities:
Distributions paid in cash(115,248)(79,850)(53,097)
Borrowings under credit facilities300,000 505,000 286,000 
Repayments of borrowings under credit facilities(230,000)(529,582)(186,000)
Repayments of unsecured notes— — (161,250)
Issuance of unsecured notes— 349,020 297,459 
Repayments of secured borrowings— (9,341)— 
Repurchases of common stock under dividend reinvestment plan(1,857)(2,170)(1,878)
Shares issued under the "at the market" offering20,839 — — 
Deferred financing costs paid(334)(8,890)(4,835)
Offering costs paid(215)— (67)
Net cash provided by (used in) financing activities(26,815)224,187 176,332 
Effect of exchange rate changes on foreign currency(851)(1,127)233 
Net increase (decrease) in cash and cash equivalents and restricted cash(5,271)(7,461)23,690 
Cash and cash equivalents and restricted cash, beginning of period31,635 39,096 15,406 
Cash and cash equivalents and restricted cash, end of period$26,364 $31,635 $39,096 
Supplemental information:
Cash paid for interest$39,171 $24,006 $24,470 
Non-cash financing activities:
Issuance of shares of common stock under dividend reinvestment plan$3,409 $2,170 $1,878 
Deferred financing costs— (162)— 
Issuance of shares in connection with the OCSI Merger— 242,704 — 
Reconciliation to the Consolidated Statements of Assets and LiabilitiesSeptember 30,
2022		September 30,
2021		September 30,
2020
Cash and cash equivalents$23,528 $29,334 $39,096 
Restricted cash2,836 2,301 — 
Total cash and cash equivalents and restricted cash$26,364 $31,635 $39,096 

  Year ended
September 30,
2017		 Year ended
September 30,
2016		 Year ended
September 30,
2015
Operating activities:      
Net increase (decrease) in net assets resulting from operations $(196,969) $(66,556) $15,395
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities:      
Net unrealized depreciation on investments 97,543
 47,924
 71,674
Net unrealized appreciation (depreciation) on secured borrowings 296
 76
 (658)
Net realized loss on investments and secured borrowings 171,782
 125,283
 28,529
PIK interest income (11,093) (14,028) (13,389)
Recognition of fee income (10,507) (22,678) (22,264)
Accretion of original issue discount on investments (11,474) (4,248) (7,328)
Accretion of original issue discount on unsecured notes payable 266
 266
 443
Amortization of deferred financing costs 6,082
 4,975
 5,117
Changes in operating assets and liabilities:      
Fee income received 10,321
 20,885
 21,588
(Increase) decrease in restricted cash 5,544
 (7,332) 17,208
(Increase) decrease in interest, dividends and fees receivable 8,676
 1,280
 (1,104)
(Increase) decrease in due from portfolio companies (1,593) (1,436) 20,309
(Increase) decrease in receivables from unsettled transactions 5,346
 (178) (418)
(Increase) decrease in insurance recoveries receivable 19,729
 (19,729) —
Increase in other assets (36) (347) (131)
Increase (decrease) in accounts payable, accrued expenses and other liabilities (116) (2,413) 1,038
Decrease in base management fee and Part I incentive fee payable (9,208) (573) (5,150)
Increase (decrease) in due to FSC CT (389) (761) 501
Decrease in interest payable (745) (388) (1,497)
Increase in payables from unsettled transactions 52,457
 2,586
 3,648
Increase (decrease) in director fees payable (382) 506
 60
Increase (decrease) in legal settlements payable (19,500) 19,500
 —
Decrease in amounts payable to syndication partners (753) (562) (2,501)
Purchases of investments and net revolver activity (568,270) (735,544) (1,419,801)
Principal payments received on investments (scheduled payments) 29,447
 30,321
 29,169
Principal payments received on investments (payoffs) 818,959
 543,950
 653,522
PIK interest income received in cash 4,307
 2,076
 2,397
Proceeds from the sale of investments 92,721
 241,902
 749,835
Net cash provided by operating activities 492,441
 164,757
 146,192
Financing activities:      
Contributions received in cash 287
 —
 —
Distributions paid in cash (62,525) (100,260) (114,694)
Repayments under SBA debentures (213,300) (11,700) —
Borrowings under credit facilities 219,082
 695,000
 818,400
Repayments of borrowings under credit facilities (479,382) (606,000) (708,500)
Repurchases of treasury stock —
 —
 (2,538)
Repayments of secured borrowings (5,440) (2,858) (62,836)
Repayments of unsecured convertible notes —
 (115,000) —
Repurchases of common stock under stock repurchase program (12,500) (37,592) (17,497)
Repurchases of common stock under dividend reinvestment plan (2,924) (6,398) (5,953)
Deferred financing costs paid (644) (403) (834)
Offering costs paid —
 —
 (94)
Net cash used by financing activities (557,346) (185,211) (94,546)
Net increase (decrease) in cash and cash equivalents (64,905) (20,454) 51,646
Cash and cash equivalents, beginning of period 117,923
 138,377
 86,731
Cash and cash equivalents, end of period $53,018
 $117,923
 $138,377
Supplemental information:      
Cash paid for interest $44,332
 $49,768
 $52,706
Non-cash operating activities:      
Purchases of investments from restructurings $(165,759) $(78,834) $—
Proceeds from investment restructurings $165,759
 $78,834
 $—
Non-cash financing activities:      
Issuance of shares of common stock under dividend reinvestment plan $2,924
 $6,398
 $5,953
See notes to Consolidated Financial Statements.
86
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 20172022
(dollar amounts in thousands)






Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Control Investments(8)(9)
C5 Technology Holdings, LLCData Processing & Outsourced Services
829 Common Units$— $— (15)
34,984,460.37 Preferred Units34,984 27,638 (15)
34,984 27,638 
Dominion Diagnostics, LLCHealth Care Services
First Lien Term Loan, LIBOR+5.00% cash due 2/28/20248.68 %$14,333 14,333 14,333 (6)(15)
First Lien Revolver, LIBOR+5.00% cash due 2/28/2024— — — (6)(15)(19)
30,030.8 Common Units in DD Healthcare Services Holdings, LLC15,222 4,946 (15)
29,555 19,279 
OCSI Glick JV LLCMulti-Sector Holdings(14)
Subordinated Debt, LIBOR+4.50% cash due 10/20/20286.30 %59,662 50,194 50,283  (6)(11)(15)(19)
87.5% equity interest— —  (11)(16)(19)
50,194 50,283 
Senior Loan Fund JV I, LLCMulti-Sector Holdings(14)
Subordinated Debt, LIBOR+7.00% cash due 12/29/20288.80 %96,250 96,250 96,250 (6)(11)(15)(19)
87.5% LLC equity interest49,322 20,715 (11)(12)(16)(19)
145,572 116,965 
 Total Control Investments (17.2% of net assets)$260,305 $214,165 
Affiliate Investments(17)
Assembled Brands Capital LLCSpecialized Finance
First Lien Revolver, LIBOR+6.75% cash due 10/17/202310.42 %$24,490 $24,490 $24,225 (6)(15)(19)
1,609,201 Class A Units764 370 (15)
1,019,168.80 Preferred Units, 6%1,019 1,223 (15)
70,424.5641 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029— — (15)
26,273 25,818 
Caregiver Services, Inc.Health Care Services
1,080,399 shares of Series A Preferred Stock, 10%1,080 378 (15)
1,080 378 
 Total Affiliate Investments (2.1% of net assets)$27,353 $26,196 
Non-Control/Non-Affiliate Investments(18)
109 Montgomery Owner LLCReal Estate Operating Companies
First Lien Term Loan, LIBOR+7.00% cash due 2/2/20239.80 %$389 $387 $727 (6)(15)
First Lien Delayed Draw Term Loan, LIBOR+7.00% cash due 2/2/2023— (31)— (6)(15)(19)
356 727 
A.T. Holdings II SÀRLBiotechnology
First Lien Term Loan, 10.50% PIK due 12/22/202233,997 33,960 34,891 (11)(15)
33,960 34,891 
Access CIG, LLCDiversified Support Services
Second Lien Term Loan, LIBOR+7.75% cash due 2/27/202610.82 %20,000 19,927 19,075 (6)
19,927 19,075 
Accupac, Inc.Personal Products
First Lien Term Loan, SOFR+5.50% cash due 1/16/20269.12 %15,976 15,686 15,944 (6)(15)
First Lien Delayed Draw Term Loan, SOFR+5.50% cash due 1/16/2026— — (6)(6)(15)(19)
First Lien Revolver, SOFR+5.50% cash due 1/16/20269.14 %500 462 495 (6)(15)(19)
16,148 16,433 
87
Portfolio Company/Type of Investment (1)(2)(5)(9)(14)  Cash Interest Rate (13) Industry Principal (8)
 Cost Fair Value
Control Investments (3)(15)          
Traffic Solutions Holdings, Inc.   Construction and engineering      
 First Lien Term Loan, LIBOR+7% (1% floor) cash 2% PIK due 4/1/2021 (13) 8.34%   $36,567
 $36,539
 $36,568
 First Lien Revolver, LIBOR+6% (1% floor) cash due 4/1/2021 (13) 7.34%   1,250
 1,247
 1,250
 LC Facility, 6% cash due 4/1/2021 

   4,752
 4,748
 4,752
 746,114 Series A Preferred Units, 10%       20,029
 7,700
 746,114 Shares of Common Stock       5,316
 —
        67,879
 50,270
 TransTrade Operators, Inc.   Air freight & logistics      
 First Lien Term Loan, 5% cash due 12/31/2017 

   15,973
 15,574
 1,810
 First Lien Revolver, 8% cash due 12/31/2017 

   7,757
 7,757
 —
 596.67 Series A Common Units       —
 —
 4,000 Series A Preferred Units in TransTrade Holdings LLC       4,000
 —
 5,200,000 Series B Preferred Units in TransTrade Holdings LLC       5,200
 —
        32,531
 1,810
 First Star Speir Aviation Limited (11)(16)   Airlines      
 First Lien Term Loan, 9% cash due 12/15/2020 

   41,395
 34,542
 41,395
 100% equity interest (6)       8,500
 3,926
        43,042
 45,321
 First Star Bermuda Aviation Limited (11)(16)   Airlines      
 First Lien Term Loan, 9% cash 3% PIK due 8/19/2018 

   11,868
 11,868
 11,868
 100% equity interest (6)       2,693
 2,323
        14,561
 14,191
 Eagle Hospital Physicians, LLC   Healthcare services      
 Earn-out (19)       7,851
 4,986
        7,851
 4,986
 Senior Loan Fund JV I, LLC (11)(17)(18)   Multi-sector holdings      
 Class A Mezzanine Secured Deferrable Floating Rate Notes due 2036 in SLF Repack Issuer 2016 LLC (13) 6.88%   101,030
 101,030
 101,030
 Class B Mezzanine Secured Deferrable Fixed Rate Notes, 15% PIK due 2036 in SLF Repack Issuer 2016 LLC     27,641
 27,641
 27,641
 87.5% LLC equity interest (6)       16,172
 5,525
        144,843
 134,196
 Ameritox Ltd.   Healthcare services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash 3% PIK due 4/11/2021 (13) 6.33%   38,338
 37,539
 4,445
 14,090,126.4 Class A Preferred Units in Ameritox Holdings II, LLC       14,090
 —
 1,602,260.83 Class B Preferred Units in Ameritox Holdings II, LLC       1,602
 —
 4,930.03 Class A Units in Ameritox Holdings II, LLC       29,049
 —
        82,280
 4,445
 New IPT, Inc.    Oil & gas equipment services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 3/17/2021 (13) 6.33%   4,107
 4,107
 4,107
 Second Lien Term Loan, LIBOR+5.1% (1% floor) cash due 9/17/2021 (13) 6.43%   2,504
 2,504
 2,504
 First Lien Revolver, LIBOR+5% (1% floor) cash due 3/17/2021 (13) 6.33%   1,009
 1,009
 1,009
 50.087 Class A Common Units in New IPT Holdings, LLC       —
 736
        7,620
 8,356
 AdVenture Interactive, Corp.   Advertising      
 9,073 shares of common stock       13,611
 13,818
        13,611
 13,818
 Keypath Education, Inc. (20)   Advertising      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 4/3/2022 (13) 8.33%   19,960
 19,960
 19,960
 First Lien Revolver, LIBOR+7% (1% floor) cash due 4/3/2022 (13) 8.33%   —
 —
 —
 9,073 Class A Units in FS AVI Holdco, LLC       10,648
 7,918
        30,608
 27,878
 Total Control Investments (35.2% of net assets)       $444,826
 $305,271
See notes to Consolidated Financial Statements.

Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 20172022
(dollar amounts in thousands)






Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Acquia Inc.Application Software
First Lien Term Loan, LIBOR+7.00% cash due 10/31/20259.63 %$27,349 $27,038 $27,158 (6)(15)
First Lien Revolver, LIBOR+7.00% cash due 10/31/202510.64 %914 890 898 (6)(15)(19)
27,928 28,056 
ADB Companies, LLCConstruction & Engineering
First Lien Term Loan, SOFR+6.25% cash due 12/18/20259.80 %14,685 14,217 14,431 (6)(15)
14,217 14,431 
ADC Therapeutics SABiotechnology
First Lien Term Loan, SOFR+7.50% cash due 8/15/202911.20 %6,589 6,256 6,262 (6)(11)(15)
First Lien Delayed Draw Term Loan, SOFR+7.50% cash due 8/15/2029— (38)(37)(6)(11)(15)(19)
28,948 Common Stock Warrants (exercise price $8.297) expiration 8/15/2032174 73 (11)(15)
6,392 6,298 
Aden & Anais Merger Sub, Inc.Apparel, Accessories & Luxury Goods
51,645 Common Units in Aden & Anais Holdings, Inc.5,165 — (15)
5,165 — 
AI Sirona (Luxembourg) Acquisition S.a.r.l.Pharmaceuticals
Second Lien Term Loan, EURIBOR+7.25% cash due 9/28/20267.94 %€24,838 27,752 22,143 (6)(11)(15)
27,752 22,143 
AIP RD Buyer Corp.Distributors
Second Lien Term Loan, SOFR+7.75% cash due 12/23/202910.88 %$14,414 14,154 13,910 (6)(15)
14,410 Common Units in RD Holding LP1,352 1,291 (15)
15,506 15,201 
AirStrip Technologies, Inc.Application Software
5,715 Common Stock Warrants (exercise price $139.99) expiration date 5/11/202590 — (15)
90 — 
All Web Leads, Inc.Advertising
First Lien Term Loan, LIBOR+8.50% PIK due 12/29/202323,338 22,057 22,141 (6)(15)
22,057 22,141 
Altice France S.A.Integrated Telecommunication Services
Fixed Rate Bond, 5.50% cash due 10/15/20294,050 3,518 3,057 (11)
3,518 3,057 
Alvogen Pharma US, Inc.Pharmaceuticals
First Lien Term Loan, SOFR+7.50% cash due 6/30/202511.20 %13,134 12,847 13,068 (6)(15)
12,847 13,068 
Alvotech Holdings S.A.Biotechnology(13)
Tranche A Fixed Rate Bond 10.00% cash due 6/24/202524,043 23,747 23,923 (11)(15)
Tranche B Fixed Rate Bond 10.00% cash due 6/24/202523,522 23,264 23,404 (11)(15)
587,930 Common Shares in Alvotech SA5,308 3,974 (11)
124,780 Seller Earn Out Shares in Alvotech SA485 212 (11)(15)
52,804 51,513 
American Auto Auction Group, LLCConsumer Finance
Second Lien Term Loan, SOFR+8.75% cash due 1/2/202912.30 %14,760 14,492 13,284 (6)(15)
14,492 13,284 
American Tire Distributors, Inc.Distributors
First Lien Term Loan, LIBOR+6.25% cash due 10/20/20289.03 %9,895 9,772 9,293 (6)
9,772 9,293 
Amplify Finco Pty Ltd.Movies & Entertainment
First Lien Term Loan, LIBOR+4.25% cash due 11/26/20267.92 %15,220 13,973 14,687 (6)(11)(15)
Second Lien Term Loan, LIBOR+8.00% cash due 11/26/202711.67 %12,500 12,188 11,958 (6)(11)(15)
26,161 26,645 
88
Portfolio Company/Type of Investment (1)(2)(5)(9)(14)  Cash Interest Rate (13) Industry Principal (8)
 Cost Fair Value
 Affiliate Investments (4)          
 Caregiver Services, Inc.   Healthcare services      
 Second Lien Term Loan, 10% cash 2% PIK due 6/30/2019 

   $9,719
 $9,719
 $9,665
 1,080,399 Shares of Series A Preferred Stock, 10%       1,080
 2,534
        10,799
 12,199
 AmBath/ReBath Holdings, Inc.   Home improvement retail      
 First Lien Term Loan B, 12.5% cash 2.5% PIK due 8/31/2018 

   22,955
 22,944
 22,957
 4,668,788 Shares of Preferred Stock       —
 1,827
        22,944
 24,784
 Total Affiliate Investments (4.3% of net assets)       $33,743
 $36,983
           
 Non-Control/Non-Affiliate Investments (7)          
 Cenegenics, LLC   Healthcare services      
 First Lien Term Loan, 9.75% cash 2% PIK due 9/30/2019 

   28,600
 $27,737
 $15,811
 First Lien Revolver, 15% cash due 9/30/2019 

   2,203
 2,203
 1,218
 452,914.87 Common Units in Cenegenics, LLC       598
 —
 345,380.141 Preferred Units in Cenegenics, LLC       300
 —
        30,838
 17,029
 Riverlake Equity Partners II, LP   Multi-sector holdings      
 1.92% limited partnership interest (11)       870
 625
        870
 625
 Riverside Fund IV, LP   Multi-sector holdings      
 0.34% limited partnership interest (11)       219
 397
        219
 397
 Bunker Hill Capital II (QP), L.P.   Multi-sector holdings      
 0.51% limited partnership interest (11)       826
 1,056
        826
 1,056
 Maverick Healthcare Group, LLC (21)   Healthcare equipment      
 First Lien Term Loan A, LIBOR+7.5% cash (1.75% floor) cash due 4/30/2017 (13) 9.25%   16,309
 16,204
 14,209
 First Lien Term Loan B, LIBOR+11% cash (1.75% floor) cash due 4/30/2017 (13) 12.75%   41,739
 39,110
 14,531
 CapEx Line, LIBOR+7.75% (1.75% floor) cash due 4/30/2017 (13) 9.50%   1,272
 1,261
 1,124
 First Lien Revolver, PRIME+6.5% cash due 4/30/2017 (13) 10.75%   55
 40
 55
        56,615
 29,919
 Refac Optical Group   Specialty stores      
 First Lien Term Loan A, LIBOR+8% cash due 9/30/2018 (13) 9.23%   4,027
 3,997
 4,027
 First Lien Term Loan B, LIBOR+9% cash, 1.75% PIK due 9/30/2018 (13) 10.23%   34,621
 34,533
 34,275
 First Lien Term Loan C, 12.5% cash due 9/30/2018 

   3,416
 3,416
 3,314
 First Lien Revolver, LIBOR+8% cash due 9/30/2018 (13) 9.23%   3,520
 3,516
 3,520
 1,550.9435 Shares of Common Stock in Refac Holdings, Inc.       1
 —
 550.9435 Shares of Series A-2 Preferred Stock in Refac Holdings, Inc., 10%       305
 —
 1,000 Shares of Series A Preferred Stock Units in Refac Holdings, Inc., 10%       999
 397
        46,767
 45,533
 Baird Capital Partners V, LP   Multi-sector holdings      
 0.4% limited partnership interest (11)       994
 601
        994
 601
 Milestone Partners IV, L.P.   Multi-sector holdings      
 0.82% limited partnership interest (11)       948
 1,527
        948
 1,527

See notes to Consolidated Financial Statements.
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 20172022
(dollar amounts in thousands)






Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Anastasia Parent, LLCPersonal Products
First Lien Term Loan, LIBOR+3.75% cash due 8/11/20257.42 %$2,736 $2,260 $2,189 (6)
2,260 2,189 
Ankura Consulting Group LLCResearch & Consulting Services
Second Lien Term Loan, LIBOR+8.00% cash due 3/19/202910.78 %4,346 4,281 3,813 (6)(15)
4,281 3,813 
Apptio, Inc.Application Software
First Lien Term Loan, LIBOR+6.00% cash due 1/10/20258.46 %34,458 33,737 33,738 (6)(15)
First Lien Revolver, LIBOR+6.00% cash due 1/10/20258.46 %892 863 846 (6)(15)(19)
34,600 34,584 
APX Group Inc.Electrical Components & Equipment
Fixed Rate Bond, 5.75% cash due 7/15/20292,075 1,733 1,645 (11)
1,733 1,645 
Ardonagh Midco 3 PLCInsurance Brokers
First Lien Term Loan, EURIBOR+7.00% cash due 7/14/20268.00 %€1,964 2,176 1,927 (6)(11)(15)
First Lien Term Loan, SONIA+7.00% cash due 7/14/20269.19 %£18,636 23,139 20,826 (6)(11)(15)
First Lien Term Loan, LIBOR+5.75% cash due 7/14/20268.81 %$10,519 10,357 10,328 (6)(11)(15)
First Lien Delayed Draw Term Loan, SONIA+5.75% cash due 7/14/2026£— (44)— (6)(11)(15)(19)
35,628 33,081 
ASP Unifrax Holdings, Inc.Trading Companies & Distributors
Fixed Rate Bond, 7.50% cash due 9/30/2029$5,500 5,408 3,641 
Fixed Rate Bond, 5.25% cash due 9/30/20282,500 2,220 1,926 
7,628 5,567 
Associated Asphalt Partners, LLCConstruction Materials
First Lien Term Loan, LIBOR+5.25% cash due 4/5/20248.06 %2,501 2,331 1,934 (6)
2,331 1,934 
Astra Acquisition Corp.Application Software
First Lien Term Loan, LIBOR+5.25% cash due 10/25/20288.37 %5,640 5,482 4,822 (6)
5,482 4,822 
athenahealth Group Inc.Health Care Technology
18,635 Shares of Series A Preferred Stock in Minerva Holdco, Inc., 10.75%18,264 16,575 (15)
18,264 16,575 
Athenex, Inc.Pharmaceuticals
First Lien Term Loan, 11.00% cash due 6/19/202613,346 12,929 12,812 (11)(15)
First Lien Revenue Interest Financing Term Loan due 5/31/20318,309 8,264 8,309 (11)(15)
328,149 Common Stock Warrants (exercise price $0.4955) expiration date 6/19/2027973 16 (11)(15)
22,166 21,137 
Aurora Lux Finco S.À.R.L.Airport Services
First Lien Term Loan, LIBOR+6.00% cash due 12/24/20268.78 %22,425 22,086 21,326 (6)(11)(15)
22,086 21,326 
The AveryReal Estate Operating Companies
First Lien Term Loan in T8 Urban Condo Owner, LLC, LIBOR+7.30% cash due 2/17/202310.44 %15,674 15,605 15,682 (6)(15)
Subordinated Debt in T8 Senior Mezz LLC, LIBOR+12.50% cash due 2/17/202316.17 %3,789 3,774 3,800 (6)(15)
19,379 19,482 
BAART Programs, Inc.Health Care Services
First Lien Delayed Draw Term Loan, LIBOR+5.00% cash due 6/11/20278.12 %2,546 2,503 2,395 (6)(15)(19)
Second Lien Term Loan, LIBOR+8.50% cash due 6/11/202811.62 %7,166 7,059 6,915 (6)(15)
Second Lien Delayed Draw Term Loan, LIBOR+8.50% cash due 6/11/202811.62 %4,227 4,070 3,839 (6)(15)(19)
13,632 13,149 
89
Portfolio Company/Type of Investment (1)(2)(5)(9)(14)  Cash Interest Rate (13) Industry Principal (8)
 Cost Fair Value
 RCPDirect, L.P.   Multi-sector holdings      
 0.9% limited partnership interest (11)       $354
 $559
        354
 559
 Riverside Fund V, L.P.   Multi-sector holdings      
 0.48% limited partnership interest (11)       1,452
 1,405
        1,452
 1,405
 ACON Equity Partners III, LP   Multi-sector holdings      
 0.13% limited partnership interest (11)       785
 962
        785
 962
 BMC Acquisition, Inc.   Other diversified financial services      
 500 Series A Preferred Shares       500
 763
 50,000 Common Shares (6)       1
 67
        501
 830
 Edmentum, Inc.   Education services      
 Unsecured Senior PIK Note, 8.5% PIK due 6/9/2020     $2,434
 2,434
 1,922
 Unsecured Junior PIK Note, 10% PIK due 6/9/2020    11,304
 10,227
 379
 Unsecured Revolver, 5% cash due 6/9/2020 

     —
 —
 126,127.80 Class A Common Units       126
 —
        12,787
 2,301
 I Drive Safely, LLC   Education services      
125,079 Class A Common Units of IDS Investments, LLC       1,000
 —
        1,000
 —
 Yeti Acquisition, LLC   Leisure products      
 3,000,000 Common Stock Units of Yeti Holdings, Inc.       —
 5,900
        —
 5,900
 Vitalyst Holdings, Inc.   IT consulting & other services      
 675 Series A Preferred Units of PCH Support Holdings, Inc., 10%       675
 511
 7,500 Class A Common Stock Units of PCH Support Holdings, Inc.       75
 —
        750
 511
 Beecken Petty O'Keefe Fund IV, L.P.   Multi-sector holdings      
 0.5% limited partnership interest (11)       1,014
 1,310
        1,014
 1,310
 Comprehensive Pharmacy Services LLC   Pharmaceuticals      
 20,000 Common Shares in MCP CPS Group Holdings, Inc.       2,000
 2,776
        2,000
 2,776
 Garretson Firm Resolution Group, Inc.   Diversified support services      
 First Lien Revolver, PRIME+5.5% cash due 5/22/2020 (13) 9.75%   25
 25
 25
 4,950,000 Preferred Units in GRG Holdings, LP, 8%       495
 198
 50,000 Common Units in GRG Holdings, LP       5
 —
        525
 223
 Teaching Strategies, LLC   Education services      
 Second Lien Term Loan, LIBOR+9.5% (1% floor) cash due 8/27/2023 (13) 10.83%   33,500
 33,500
 33,964
        33,500
 33,964
See notes to Consolidated Financial Statements.

Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 20172022
(dollar amounts in thousands)






Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Berner Food & Beverage, LLCSoft Drinks
First Lien Term Loan, LIBOR+5.50% cash due 7/30/20278.31 %$33,078 $32,612 $32,053 (6)(15)
First Lien Revolver, PRIME+4.50% cash due 7/30/202610.75 %1,702 1,660 1,617 (6)(15)(19)
34,272 33,670 
BioXcel Therapeutics, Inc.Pharmaceuticals
First Lien Term Loan, 10.25% cash due 4/19/20275,322 5,111 5,114 (11)(15)
First Lien Delayed Draw Term Loan, 10.25% cash due 4/19/2027— — — (11)(15)(19)
First Lien Revenue Interest Financing Term Loan due 9/30/20322,353 2,353 2,353 (11)(15)
First Lien Revenue Interest Financing Delayed Draw Term Loan due 9/30/2032— — — (11)(15)(19)
21,177 Common Stock Warrants (exercise price $20.04) expiration date 4/19/2029125 98 (11)(15)
7,589 7,565 
Blackhawk Network Holdings, Inc.Data Processing & Outsourced Services
Second Lien Term Loan, LIBOR+7.00% cash due 6/15/20269.50 %30,625 30,276 29,017 (6)
30,276 29,017 
Blumenthal Temecula, LLCAutomotive Retail
First Lien Term Loan, 9.00% cash due 9/24/20233,979 3,980 3,960 (15)
1,293,324 Preferred Units in Unstoppable Automotive AMV, LLC1,293 1,280 (15)
298,460 Preferred Units in Unstoppable Automotive VMV, LLC298 295 (15)
298,460 Common Units in Unstoppable Automotive AMV, LLC298 349 (15)
5,869 5,884 
Cadence Aerospace, LLCAerospace & Defense
First Lien Term Loan, LIBOR+6.50% cash 2.00% PIK due 11/14/20239.31 %14,294 13,471 13,143 (6)(15)
13,471 13,143 
Carvana Co.Automotive Retail
Fixed Rate Bond, 5.625% cash due 10/1/20256,700 5,825 4,724 (11)
5,825 4,724 
CCO Holdings LLCCable & Satellite
Fixed Rate Bond, 4.50% cash due 5/1/20322,097 1,746 1,603 (11)
1,746 1,603 
CircusTrix Holdings, LLCLeisure Facilities
First Lien Term Loan, LIBOR+5.50% cash due 7/16/20238.62 %10,692 10,004 10,209 (6)(15)
10,004 10,209 
CITGO Holding, Inc.Oil & Gas Refining & Marketing
Fixed Rate Bond, 9.25% cash due 8/1/20247,857 7,857 7,807 
7,857 7,807 
CITGO Petroleum Corp.Oil & Gas Refining & Marketing
First Lien Term Loan, LIBOR+6.25% cash due 3/28/20249.37 %795 770 797 (6)
770 797 
Clear Channel Outdoor Holdings Inc.Advertising
Fixed Rate Bond, 7.50% cash due 6/1/20294,311 4,311 3,132 (11)
Fixed Rate Bond, 5.125% cash due 8/15/20271,374 1,229 1,163 (11)
Fixed Rate Bond, 7.75% cash due 4/15/2028676 648 512 (11)
6,188 4,807 
Condor Merger Sub Inc.Systems Software
Fixed Rate Bond, 7.375% cash due 2/15/20308,420 8,243 6,900 
8,243 6,900 
Continental Intermodal Group LPOil & Gas Storage & Transportation
First Lien Term Loan, LIBOR+8.50% cash due 1/28/202511.62 %22,537 21,642 20,396 (6)(15)
Common Stock Warrants expiration date 7/28/2025648 457 (15)
22,290 20,853 
90
Portfolio Company/Type of Investment (1)(2)(5)(9)(14)  Cash Interest Rate (13) Industry Principal (8)
 Cost Fair Value
 Dominion Diagnostics, LLC   Healthcare services      
 Subordinated Term Loan, 11% cash 1% PIK due 10/8/2019 

   $19,866
 $17,625
 $8,534
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 4/8/2019 (13) 6.30%   49,414
 37,574
 44,592
 First Lien Revolver, LIBOR+5% (1% floor) cash due 4/8/2019 (13) 6.30%     —
 —
        55,199
 53,126
 Sterling Capital Partners IV, L.P.   Multi-sector holdings      
 0.2% limited partnership interest (11)       1,770
 1,297
        1,770
 1,297
 Advanced Pain Management   Healthcare services      
 First Lien Term Loan, LIBOR+8.5% (1.25% floor) cash due 2/26/2018 (13) 9.75%   24,000
 23,409
 1,157
        23,409
 1,157
 TravelClick, Inc.   Internet software & services      
 Second Lien Term Loan, LIBOR+7.75% (1% floor) cash due 11/6/2021 (13) 8.99%   2,697
 2,475
 2,710
        2,475
 2,710
 Pingora MSR Opportunity Fund I-A, LP   Thrift & mortgage finance      
 1.86% limited partnership interest (11)       7,240
 6,129
        7,240
 6,129
 Credit Infonet, Inc.   Data processing & outsourced services      
 Subordinated Term Loan, 12.25% cash 0.75% PIK due 10/26/2020 

   13,940
 13,940
 13,941
        13,940
 13,941
 HealthEdge Software, Inc.   Application software      
 482,453 Series A-3 Preferred Stock Warrants (exercise price $1.450918) expiration date 9/30/2023       213
 768
        213
 768
 InMotion Entertainment Group, LLC   Consumer electronics      
 First Lien Term Loan A, LIBOR+7.75% (1.25% floor) cash due 10/1/2018 (13) 9.09%   12,259
 12,223
 12,259
 First Lien Term Loan B, LIBOR+7.75% (1.25% floor) cash due 10/1/2018 (13) 9.09%   5,344
 5,265
 5,344
 First Lien Revolver, LIBOR+6.25% cash due 10/1/2018 (13) 6.25%   3,904
 3,897
 3,904
 CapEx Line, LIBOR+7.75% (1.25% floor) cash due 10/1/2018 (13) 9.09%   797
 789
 797
 1,000,000 Class A Units in InMotion Entertainment Holdings, LLC       1,000
 1,761
        23,174
 24,065
 Thing5, LLC   Data processing & outsourced services      
 First Lien Term Loan, LIBOR+7.5% (1% floor) cash 2% PIK due 10/11/2020 (12)(13) 8.83%   47,530
 47,530
 40,900
 First Lien Revolver, LIBOR+7.5% (1% floor) cash due 10/11/2020 (13) 8.83%   1,000
 1,000
 1,000
 2,000,000 Units in T5 Investment Vehicle, LLC       2,000
 —
        50,530
 41,900
 Kason Corporation   Industrial machinery      
 Mezzanine Term Loan, 11.5% cash 1.75% PIK due 10/28/2019 

   6,006
 6,006
 5,850
 498.6 Class A Preferred Units in Kason Investment, LLC, 8%       499
 569
 5,540 Class A Common Units in Kason Investment, LLC       55
 —
        6,560
 6,419
 SPC Partners V, L.P.   Multi-sector holdings      
 0.571% limited partnership interest (11)       1,762
 1,857
        1,762
 1,857
See notes to Consolidated Financial Statements.
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 20172022
(dollar amounts in thousands)






Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Convergeone Holdings, Inc.IT Consulting & Other Services
First Lien Term Loan, LIBOR+5.00% cash due 1/4/20268.12 %$11,913 $11,697 $8,596 (6)
11,697 8,596 
Conviva Inc.Application Software
517,851 Shares of Series D Preferred Stock605 894 (15)
605 894 
CorEvitas, LLCHealth Care Technology
First Lien Term Loan, SOFR+5.75% cash due 12/13/20258.88 %13,712 13,554 13,583 (6)(15)
First Lien Revolver, PRIME+4.75% cash due 12/13/202511.00 %916 898 898 (6)(15)(19)
1,099 Class A2 Common Units in CorEvitas Holdings, L.P.690 2,340 (15)
15,142 16,821 
Covetrus, Inc.Health Care Distributors
First Lien Term Loan, SOFR+5.00% cash due 9/20/20297.65 %10,336 9,716 9,681 (6)
9,716 9,681 
Coyote Buyer, LLCSpecialty Chemicals
First Lien Term Loan, LIBOR+6.00% cash due 2/6/20268.81 %18,200 17,790 17,843 (6)(15)
First Lien Revolver, LIBOR+6.00% cash due 2/6/2025— (13)(26)(6)(15)(19)
17,777 17,817 
Delivery Hero FinCo LLCInternet & Direct Marketing Retail
First Lien Term Loan, SOFR+5.75% cash due 8/12/20278.49 %4,988 4,882 4,757 (6)(11)
4,882 4,757 
Delta Leasing SPV II LLCSpecialized Finance
Subordinated Delayed Draw Term Loan, 10.00% cash due 8/31/20294,183 4,183 4,183 (11)(15)(19)
419 Series C Preferred Units in Delta Financial Holdings LLC419 419 (11)(15)
2.09 Common Units in Delta Financial Holdings LLC2 2 (11)(15)
31.37 Common Warrants (exercise price $1.00)— — (11)(15)
4,604 4,604 
Delta Topco, Inc.Systems Software
Second Lien Term Loan, LIBOR+7.25% cash due 12/1/20289.34 %6,680 6,647 5,934 (6)
6,647 5,934 
Dialyze Holdings, LLCHealth Care Equipment
First Lien Term Loan, LIBOR+9.00% cash 2.00% PIK due 8/4/202612.67 %24,396 23,083 22,993 (6)(15)
First Lien Delayed Draw Term Loan, LIBOR+9.00% cash 2.00% PIK due 8/4/2026— (135)(129)(6)(15)(19)
5,403,823 Class A Warrants (exercise price $1.00) expiration date 8/4/20281,405 1,297 (15)
24,353 24,161 
Digital.AI Software Holdings, Inc.Application Software
First Lien Term Loan, LIBOR+7.00% cash due 2/10/20279.91 %9,902 9,599 9,793 (6)(15)
First Lien Revolver, LIBOR+6.50% cash due 2/10/20279.41 %251 228 239 (6)(15)(19)
9,827 10,032 
DirecTV Financing, LLCCable & Satellite
First Lien Term Loan, LIBOR+5.00% cash due 8/2/20278.12 %19,242 18,970 17,973 (6)
18,970 17,973 
DTI Holdco, Inc.Research & Consulting Services
First Lien Term Loan, SOFR+4.75% cash due 4/26/20297.33 %5,000 4,906 4,760 (6)
4,906 4,760 
Eagleview Technology CorporationApplication Software
Second Lien Term Loan, LIBOR+7.50% cash due 8/14/202611.17 %8,974 8,884 8,503 (6)(15)
8,884 8,503 
91
Portfolio Company/Type of Investment (1)(2)(5)(9)(14)  Cash Interest Rate (13) Industry Principal (8)
 Cost Fair Value
 P2 Upstream Acquisition Co.    Application software      
 First Lien Revolver, LIBOR+4% (1% floor) cash due 11/1/2018 (10)(13) 5.33%     $—
 $(238)
        —
 (238)
 OmniSYS Acquisition Corporation   Diversified support services      
 First Lien Term Loan, LIBOR+7.5% (1% floor) cash due 11/21/2018 (13) 8.83%   $5,500
 5,495
 5,468
 First Lien Revolver, LIBOR+7.5% (1% floor) cash due 11/21/2018 (10)(13) 8.83%     —
 (15)
 100,000 Common Units in OSYS Holdings, LLC       1,000
 903
        6,495
 6,356
 Moelis Capital Partners Opportunity Fund I-B, LP   Multi-sector holdings      
 1.0% limited partnership interest (11)       1,045
 1,457
        1,045
 1,457
 Aden & Anais Merger Sub, Inc.   Apparel, accessories & luxury goods      
 51,645 Common Units in Aden & Anais Holdings, Inc.       5,165
 1,241
        5,165
 1,241
 Lift Brands, Inc.   Leisure facilities      
 First Lien Term Loan, LIBOR+7.5% (1% floor) cash due 12/23/2019 (13) 8.83%   21,371
 21,358
 21,370
 First Lien Revolver, LIBOR+7.5% (1% floor) cash due 12/23/2019 (10)(13) 8.83%     (3) (1)
 2,000,000 Class A Common Units in Snap Investments, LLC       2,004
 2,922
        23,359
 24,291
 Tailwind Capital Partners II, L.P.   Multi-sector holdings      
 0.3% limited partnership interest (11)       1,583
 1,956
        1,583
 1,956
 Long's Drugs Incorporated   Pharmaceuticals      
 Second Lien Term Loan, LIBOR+11.25% cash due 2/19/2022 (13) 12.49%   26,909
 26,909
 27,447
 50 Series A Preferred Shares in Long's Drugs Incorporated       813
 1,267
        27,722
 28,714
 Conviva Inc.   Application software      
 417,851 Series D Preferred Stock Warrants (exercise price $1.1966) expiration date 2/28/2021       105
 169
        105
 169
 OnCourse Learning Corporation   Education services      
 264,312 Class A Units in CIP OCL Investments, LLC       2,726
 1,988
        2,726
 1,988
 ShareThis, Inc.   Internet software & services      
 345,452 Series C Preferred Stock Warrants (exercise price $3.0395) expiration date 3/4/2024       367
 8
        367
 8
 Aptean, Inc.   Internet software & services      
 Second Lien Term Loan, LIBOR+9.5% (1% floor) cash due 12/20/2023 (13) 10.84%   5,900
 5,821
 5,952
        5,821
 5,952
 ExamSoft Worldwide, Inc.   Internet software & services      
 180,707 Class C Units in ExamSoft Investor LLC       181
 135
        181
 135


See notes to Consolidated Financial Statements.
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 20172022
(dollar amounts in thousands)






Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
EOS Fitness Opco Holdings, LLCLeisure Facilities
487.5 Class A Preferred Units, 12%$488 $966 (15)
12,500 Class B Common Units— — (15)
488 966 
Establishment Labs Holdings Inc.Health Care Technology
First Lien Term Loan, 3.00% cash 6.00% PIK due 4/21/2027$10,418 10,275 10,231 (11)(15)
First Lien Delayed Draw Term Loan, 3.00% cash 6.00% PIK due 4/21/20273 — (11)(15)(19)
10,278 10,231 
Fairbridge Strategic Capital Funding LLCReal Estate Operating Companies(20)
First Lien Delayed Draw Term Loan, 9.00% cash due 12/24/202827,850 27,850 27,850 (15)(19)
2,500 Warrant Units (exercise price $0.01) expiration date 11/24/2031— 3 (11)(15)
27,850 27,853 
FINThrive Software Intermediate Holdings, Inc.Health Care Technology
Second Lien Term Loan, LIBOR+6.75% cash due 12/17/20299.87 %25,061 24,685 21,646 (6)
24,685 21,646 
Fortress Biotech, Inc.Biotechnology
First Lien Term Loan, 11.00% cash due 8/27/20259,466 9,071 9,008 (11)(15)
331,200 Common Stock Warrants (exercise price $3.20) expiration date 8/27/2030405 66 (11)(15)
9,476 9,074 
Frontier Communications Holdings, LLCIntegrated Telecommunication Services
Fixed Rate Bond, 6.00% cash due 1/15/20304,881 4,420 3,845 (11)
4,420 3,845 
GKD Index Partners, LLCSpecialized Finance
First Lien Term Loan, LIBOR+7.00% cash due 6/29/202310.67 %25,128 24,915 24,851 (6)(15)
First Lien Revolver, LIBOR+7.00% cash due 6/29/202310.60 %1,280 1,268 1,262 (6)(15)(19)
26,183 26,113 
Global Medical Response, Inc.Health Care Services
First Lien Term Loan, LIBOR+4.25% cash due 3/14/20257.37 %5,572 5,435 4,848 (6)
5,435 4,848 
Grove Hotel Parcel Owner, LLCHotels, Resorts & Cruise Lines
First Lien Term Loan, SOFR+8.00% cash due 6/21/202711.04 %14,311 14,041 14,060 (6)(15)
First Lien Delayed Draw Term Loan, SOFR+8.00% cash due 6/21/2027— (54)(50)(6)(15)(19)
First Lien Revolver, SOFR+8.00% cash due 6/21/2027— (27)(25)(6)(15)(19)
13,960 13,985 
Harbor Purchaser Inc.Education Services
First Lien Term Loan, SOFR+5.25% cash due 4/9/20298.38 %9,392 9,080 8,582 (6)
9,080 8,582 
iCIMs, Inc.Application Software
First Lien Term Loan, SOFR+6.75% cash due 8/18/20289.49 %19,203 18,874 18,867 (6)(15)
First Lien Delayed Draw Term Loan, SOFR+6.75% cash due 8/18/2028— — — (6)(15)(19)
First Lien Revolver, SOFR+6.75% cash due 8/18/2028— (31)(32)(6)(15)(19)
18,843 18,835 
Immucor, Inc.Health Care Supplies
First Lien Term Loan, LIBOR+5.75% cash due 7/2/20259.42 %8,569 8,401 8,407 (6)(15)
Second Lien Term Loan, LIBOR+8.00% cash 3.50% PIK due 10/2/202511.67 %22,619 22,162 22,275 (6)(15)
30,563 30,682 
92
Portfolio Company/Type of Investment (1)(2)(5)(9)(14)  Cash Interest Rate (13) Industry Principal (8)
 Cost Fair Value
 DigiCert, Inc.   Internet software & services      
 Second Lien Term Loan, LIBOR+9% (1% floor) cash due 10/21/2022 (13) 10.24%   $61,500
 $60,980
 $61,500
        60,980
 61,500
 RCPDirect II, LP   Multi-sector holdings      
 0.4% limited partnership interest (11)       617
 719
        617
 719
 Integral Development Corporation   Other diversified financial services      
 First Lien Term Loan, LIBOR+9.5% (1% floor) cash due 7/10/2019 (13) 10.80%   11,500
 11,466
 10,815
1,078,284 Common Stock Warrants (exercise price $0.9274) expiration date 7/10/2024       113
 —
        11,579
 10,815
 Loftware, Inc.   Internet software & services      
 Mezzanine Term Loan, 11% cash 1% PIK due 7/18/2020 

   6,198
 6,198
 6,198
 300,000 Class A Common Units in RPLF Holdings, LLC       300
 220
        6,498
 6,418
 Webster Capital III, L.P.   Multi-sector holdings      
0.754% limited partnership interest (11)       1,020
 1,296
        1,020
 1,296
 L Squared Capital Partners LLC   Multi-sector holdings      
 2% limited partnership interest (11)       2,660
 2,660
        2,660
 2,660
 BeyondTrust Software, Inc.   Application software      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 9/25/2019 (13) 8.33%   26,677
 26,174
 26,676
 First Lien Revolver, LIBOR+7% (1% floor) cash due 9/25/2019 (10)(13) 8.33%     (54) —
 4,500,000 Class A membership interests in BeyondTrust Holdings LLC       4,500
 5,660
        30,620
 32,336
 GOBP Holdings Inc.   Food retail      
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 10/21/2022 (13) 9.58%   4,214
 4,176
 4,251
        4,176
 4,251
 Kellermeyer Bergensons Services, LLC   Diversified support services      
 Second Lien Term Loan, LIBOR+8.50% (1% floor) cash due 4/29/2022 (13) 9.81%   6,105
 5,907
 5,983
        5,907
 5,983
 Dodge Data & Analytics LLC   Data processing & outsourced services      
 First Lien Term Loan, LIBOR+8.75% (1% floor) cash due 10/31/2019 (13) 10.13%   7,348
 7,348
 6,881
 500,000 Class A Common Units in Skyline Data, News and Analytics LLC       500
 202
        7,848
 7,083
 Metamorph US 3, LLC   Internet software & services      
 First Lien Term Loan, LIBOR+5.5% (1% floor) cash 2% PIK due 12/1/2020 (13) 6.74%   9,969
 9,550
 3,816
 First Lien Revolver, LIBOR+6.5% (1% floor) cash due 12/1/2020 (10)(13) 7.74%   2,205
 2,203
 (74)
        11,753
 3,742
See notes to Consolidated Financial Statements.
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 20172022
(dollar amounts in thousands)






Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Impel Neuropharma, Inc.Health Care Technology
First Lien Revenue Interest Financing Term Loan due 2/15/2031$13,083 $13,083 $13,083 (15)
First Lien Term Loan, SOFR+8.75% cash due 3/17/202712.45 %12,161 11,944 11,942 (6)(15)
25,027 25,025 
Innocoll Pharmaceuticals LimitedHealth Care Technology
First Lien Term Loan, 11.00% cash due 1/26/20276,817 6,553 6,408 (11)(15)
First Lien Delayed Draw Term Loan, 11.00% cash due 1/26/2027— — — (11)(15)(19)
56,999 Tranche A Warrant Shares (exercise price $4.23) expiration date 1/26/2029135 609 (11)(15)
6,688 7,017 
Integral Development CorporationOther Diversified Financial Services
1,078,284 Common Stock Warrants (exercise price $0.9274) expiration date 7/10/2024113 — (15)
113 — 
Inventus Power, Inc.Electrical Components & Equipment
First Lien Term Loan, SOFR+5.00% cash due 3/29/20248.55 %18,660 18,567 18,134 (6)(15)
Second Lien Term Loan, LIBOR+8.50% cash due 9/29/202412.17 %13,674 13,514 13,154 (6)(15)
32,081 31,288 
INW Manufacturing, LLCPersonal Products
First Lien Term Loan, LIBOR+5.75% cash due 3/25/20279.42 %35,625 34,806 31,528 (6)(15)
34,806 31,528 
IPC Corp.Application Software
First Lien Term Loan, LIBOR+6.50% cash due 10/1/20269.44 %34,357 33,612 32,639 (6)(15)
33,612 32,639 
Ivanti Software, Inc.Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 12/1/202810.33 %10,247 10,196 7,702 (6)
10,196 7,702 
Jazz Acquisition, Inc.Aerospace & Defense
First Lien Term Loan, LIBOR+7.50% cash due 1/29/202710.62 %36,234 35,170 36,392 (6)(15)
Second Lien Term Loan, LIBOR+8.00% cash due 6/18/202711.12 %528 478 481 (6)
35,648 36,873 
Kings Buyer, LLCEnvironmental & Facilities Services
First Lien Term Loan, LIBOR+6.50% cash due 10/29/202710.17 %13,623 13,487 13,351 (6)(15)
First Lien Revolver, LIBOR+6.50% cash due 10/29/202710.17 %329 311 292 (6)(15)(19)
13,798 13,643 
LaserShip, Inc.Air Freight & Logistics
Second Lien Term Loan, LIBOR+7.50% cash due 5/7/202910.38 %2,394 2,370 1,867 (6)(15)
2,370 1,867 
Lift Brands Holdings, Inc.Leisure Facilities
2,000,000 Class A Common Units in Snap Investments, LLC1,399 — (15)
1,399 — 
Lightbox Intermediate, L.P.Real Estate Services
First Lien Term Loan, LIBOR+5.00% cash due 5/9/20268.67 %41,008 40,243 39,573 (6)(15)
40,243 39,573 
Liquid Environmental Solutions CorporationEnvironmental & Facilities Services
Second Lien Term Loan, LIBOR+8.50% cash due 11/30/202611.38 %4,357 4,285 4,226 (6)(15)
Second Lien Delayed Draw Term Loan, LIBOR+8.50% cash due 11/30/202611.38 %2,370 2,323 2,265 (6)(15)(19)
450.75 Class A2 Units in LES Group Holdings, L.P.451 451 (15)
7,059 6,942 
93
Portfolio Company/Type of Investment (1)(2)(5)(9)(14)  Cash Interest Rate (13) Industry Principal (8) Cost Fair Value
 Schulman Associates Institutional Board Review, Inc.   Research & consulting services      
 Second Lien Term Loan, LIBOR+8% (1% floor) cash due 6/3/2021 (13) 9.30%   $17,000
 $17,000
 $17,000
        17,000
 17,000
 Janrain, Inc.   Internet software & services      
 218,008 Common Stock Warrants (exercise price $1.3761) expiration date 12/5/2024       45
 —
        45
 —
 TigerText, Inc.   Internet software & services      
 299,110 Series B Preferred Stock Warrants (exercise price $1.3373) expiration date 12/8/2024       60
 409
        60
 409
 Survey Sampling International, LLC   Research & consulting services      
 Second Lien Term Loan, LIBOR+9% (1% floor) cash due 12/16/2021 (13) 10.27%   18,700
 18,475
 18,513
        18,475
 18,513
 PSC Industrial Holdings Corp.   Diversified support services      
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 12/3/2021 (13) 9.49%   7,000
 6,839
 7,000
        6,839
 7,000
 EOS Fitness Opco Holdings, LLC   Leisure facilities      
 First Lien Term Loan, LIBOR+8.75% (0.75% floor) cash due 12/30/2019 (13) 9.99%   3,675
 3,675
 3,711
 First Lien Revolver, LIBOR+8.75% (0.75% floor) cash due 12/30/2019 (13) 9.99%     —
 50
 487.5 Class A Preferred Units, 12%       488
 678
 12,500 Class B Common Units       13
 463
        4,176
 4,902
 Motion Recruitment Partners LLC   Human resources & employment services      
 First Lien Revolver, LIBOR+6% (1% floor) cash due 2/13/2020 (10)(13) 7.24%     (6) —
        (6) —
 WeddingWire, Inc.   Internet software & services      
 First Lien Term Loan, LIBOR+8.5% (1% floor) cash due 2/20/2020 (13) 9.84%
   25,781
 25,781
 25,911
 First Lien Revolver, LIBOR+8.5% (1% floor) cash due 2/20/2020 (13) 9.84%     —
 15
 483,645 Common Shares of WeddingWire, Inc.       1,200
 1,607
        26,981
 27,533
 xMatters, Inc.   Internet software & services      
 600,000 Common Stock Warrants (exercise price $0.593333) expiration date 2/26/2025       709
 368
        709
 368
 Edge Fitness, LLC   Leisure facilities      
 Delayed Draw Term Loan, LIBOR+7.75% (1% floor) cash due 6/30/2020 (13) 9.05%   3,398
 3,398
 3,397
        3,398
 3,397
 Golden State Medical Supply, Inc.   Pharmaceuticals      
 Mezzanine Term Loan, 10% cash 2.5% PIK due 4/24/2021 

   15,001
 15,001
 14,835
        15,001
 14,835
 AirStrip Technologies, Inc.   Internet software & services      
 22,858.71 Series C-1 Preferred Stock Warrants (exercise price $34.99757) expiration date 5/11/2025       90
 —
        90
 —
See notes to Consolidated Financial Statements.

Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 20172022
(dollar amounts in thousands)






Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
LSL Holdco, LLCHealth Care Distributors
First Lien Term Loan, LIBOR+6.00% cash due 1/31/20289.12 %$19,236 $18,894 $18,707 (6)(15)
First Lien Revolver, LIBOR+6.00% cash due 1/31/20289.12 %1,710 1,672 1,651 (6)(15)(19)
20,566 20,358 
LTI Holdings, Inc.Electronic Components
Second Lien Term Loan, LIBOR+6.75% cash due 9/6/20269.87 %2,140 2,092 1,890 (6)
2,092 1,890 
Marinus Pharmaceuticals, Inc.Pharmaceuticals
First Lien Term Loan, 11.50% cash due 5/11/202617,203 16,954 16,644 (11)(15)
First Lien Delayed Draw Term Loan, 11.50% cash due 5/11/2026— — — (11)(15)(19)
16,954 16,644 
Mesoblast, Inc.Biotechnology
First Lien Term Loan, 8.00% cash 1.75% PIK due 11/19/20267,215 6,650 6,440 (11)(15)
First Lien Delayed Draw Term Loan, 8.00% cash 1.75% PIK due 11/19/2026— 1 — (11)(15)(19)
209,588 Warrant Shares (exercise price $7.26) expiration date 11/19/2028480 170 (11)(15)
7,131 6,610 
MHE Intermediate Holdings, LLCDiversified Support Services
First Lien Term Loan, SOFR+6.00% cash due 7/21/20279.50 %18,390 18,088 17,691 (6)(15)
First Lien Revolver, SOFR+6.00% cash due 7/21/2027— (23)(54)(6)(15)(19)
18,065 17,637 
Mindbody, Inc.Internet Services & Infrastructure
First Lien Term Loan, LIBOR+7.00% cash 1.50% PIK due 2/14/202510.64 %45,665 44,689 44,523 (6)(15)
First Lien Revolver, LIBOR+8.00% cash due 2/14/2025— (54)(100)(6)(15)(19)
44,635 44,423 
Mosaic Companies, LLCHome Improvement Retail
First Lien Term Loan, LIBOR+6.75% cash due 7/2/20269.89 %46,499 45,802 45,421 (6)(15)
45,802 45,421 
MRI Software LLCApplication Software
First Lien Term Loan, LIBOR+5.50% cash due 2/10/20269.17 %29,565 29,128 28,734 (6)(15)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026— (12)(96)(6)(15)(19)
First Lien Revolver, LIBOR+5.50% cash due 2/10/2026— (13)(51)(6)(15)(19)
29,103 28,587 
Navisite, LLCData Processing & Outsourced Services
Second Lien Term Loan, LIBOR+8.50% cash due 12/30/202612.17 %22,560 22,241 21,524 (6)(15)
22,241 21,524 
NeuAG, LLCFertilizers & Agricultural Chemicals
First Lien Term Loan, LIBOR+10.50% cash due 9/11/202414.17 %50,459 49,301 51,972 (6)(15)
49,301 51,972 
NFP Corp.Other Diversified Financial Services
Fixed Rate Bond 6.875% cash due 8/15/202810,191 9,773 7,966 
9,773 7,966 
NN, Inc.Industrial Machinery
First Lien Term Loan, LIBOR+6.88% cash due 9/19/20269.99 %58,713 57,655 56,805 (6)(11)(15)
57,655 56,805 
OEConnection LLCApplication Software
First Lien Term Loan, LIBOR+4.00% cash due 9/25/20267.12 %3,323 3,162 3,207 (6)
Second Lien Term Loan, LIBOR+7.00% cash due 9/25/202710.05 %7,519 7,389 7,237 (6)(15)
10,551 10,444 
94
Portfolio Company/Type of Investment (1)(2)(5)(9)(14)  Cash Interest Rate (13) Industry Principal (8) Cost Fair Value
 Access Medical Acquisition, Inc.   Healthcare services      
 450,000 Shares of Class A Common Stock in CMG Holding Company, LLC (6)       $151
 $970
        151
 970
 QuorumLabs, Inc.   Internet software & services      
 2,727,939 Common Stock Warrants (exercise price $0.0001) expiration date 7/8/2025       375
 —
        375
 —
 Poseidon Merger Sub, Inc.   Advertising      
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 8/15/2023 (13) 9.81%   $30,000
 29,101
 30,300
        29,101
 30,300
 Valet Merger Sub, Inc.   Environmental & facilities services      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 9/24/2021 (13) 8.24%   50,661
 50,016
 50,660
 First Lien Revolver, LIBOR+7% (1% floor) cash due 9/24/2021 (10)(13) 8.24%   —
 (115) —
        49,901
 50,660
 Argon Medical Devices, Inc.   Healthcare equipment      
 Second Lien Term Loan, LIBOR+9.5% (1% floor) cash due 6/23/2022 (13) 10.74%   43,000
 43,000
 43,002
        43,000
 43,002
 Lytx, Inc.   Research & consulting services      
3,500 Class A Units in Lytx Holdings, LLC       2,478
 2,459
3,500 Class B Units in Lytx Holdings, LLC       —
 559
        2,478
 3,018
 Onvoy, LLC    Integrated telecommunication services      
 Second Lien Term Loan, LIBOR+10.5% (1% floor) cash due 2/10/2025 (13) 11.83%   16,750
 16,750
 16,704
 19,666.67 Class A Units in GTCR Onvoy Holdings, LLC       1,967
 2,088
 13,664.73 Series 3 Class B Units in GTCR Onvoy Holdings, LLC       —
 —
        18,717
 18,792
 4 Over International, LLC    Commercial printing      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 6/7/2022 (13) 7.24%   6,045
 6,001
 6,045
 First Lien Revolver, LIBOR+6% (1% floor) cash due 6/7/2021 (10)(13) 7.24%     (17) —
        5,984
 6,045
 Ping Identity Corporation    Internet software & services      
 First Lien Term Loan, LIBOR+9.25% (1% floor) cash due 6/30/2021 (13) 10.49%   42,500
 41,557
 43,176
 First Lien Revolver, LIBOR+9.25% (1% floor) cash due 6/30/2021 (10)(13) 10.49%     (55) 40
        41,502
 43,216
 Ancile Solutions, Inc.    Internet software & services      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 6/30/2021 (13) 8.33%   10,330
 10,104
 10,248
        10,104
 10,248
See notes to Consolidated Financial Statements.





Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 20172022
(dollar amounts in thousands)






Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
OTG Management, LLCAirport Services
First Lien Term Loan, LIBOR+2.00% cash 8.00% PIK due 9/1/20255.08 %$21,557 $21,267 $21,557 (6)(15)
First Lien Delayed Draw Term Loan, LIBOR+2.00% cash 8.00% PIK due 9/1/2025— (31)— (6)(15)(19)
21,236 21,557 
P & L Development, LLCPharmaceuticals
Fixed Rate Bond, 7.75% cash due 11/15/20257,776 7,820 5,846 
7,820 5,846 
Park Place Technologies, LLCInternet Services & Infrastructure
First Lien Term Loan, SOFR+5.00% cash due 11/10/20278.13 %9,850 9,460 9,374 (6)
9,460 9,374 
Performance Health Holdings, Inc.Health Care Distributors
First Lien Term Loan, LIBOR+6.00% cash due 7/12/20278.88 %17,976 17,690 17,537 (6)(15)
17,690 17,537 
PFNY Holdings, LLCLeisure Facilities
First Lien Term Loan, LIBOR+7.00% cash due 12/31/20269.28 %26,154 25,712 25,893 (6)(15)
First Lien Delayed Draw Term Loan, LIBOR+7.00% cash due 12/31/20269.25 %2,228 2,186 2,203 (6)(15)(19)
First Lien Revolver, LIBOR+7.00% cash due 12/31/2026— (21)(13)(6)(15)(19)
27,877 28,083 
Planview Parent, Inc.Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 12/18/202810.92 %28,627 28,198 27,482 (6)(15)
28,198 27,482 
Pluralsight, LLCApplication Software
First Lien Term Loan, LIBOR+8.00% cash due 4/6/202710.68 %48,689 47,951 47,155 (6)(15)
First Lien Revolver, LIBOR+8.00% cash due 4/6/2027— (53)(111)(6)(15)(19)
47,898 47,044 
PRGX Global, Inc.Data Processing & Outsourced Services
First Lien Term Loan, LIBOR+6.75% cash due 3/3/202610.42 %33,775 32,931 33,116 (6)(15)
First Lien Revolver, LIBOR+6.75% cash due 3/3/2026— (34)(49)(6)(15)(19)
80,515 Class B Common Units79 89 (15)
32,976 33,156 
Profrac Holdings II, LLCIndustrial Machinery
First Lien Term Loan, SOFR+8.50% cash due 3/4/202510.01 %23,275 22,722 22,810 (6)(15)
22,722 22,810 
Project Boost Purchaser, LLCApplication Software
Second Lien Term Loan, LIBOR+8.00% cash due 5/31/202711.12 %5,250 5,168 5,047 (6)(15)
5,168 5,047 
Quantum Bidco LimitedFood Distributors
First Lien Term Loan, SONIA+6.00% cash due 1/29/20288.39 %£3,501 4,646 3,367 (6)(11)(15)
4,646 3,367 
QuorumLabs, Inc.Application Software
64,887,669 Junior-2 Preferred Stock375 — (15)
375 — 
Radiology Partners Inc.Health Care Distributors
First Lien Term Loan, LIBOR+4.25% cash due 7/9/20257.33 %$3,400 3,202 2,880 (6)
Fixed Rate Bond, 9.25% cash due 2/1/20284,755 4,720 3,109 
7,922 5,989 
Relativity ODA LLCApplication Software
First Lien Term Loan, LIBOR+7.50% PIK due 5/12/202724,692 24,265 24,101 (6)(15)
First Lien Revolver, LIBOR+6.50% cash due 5/12/2027— (43)(64)(6)(15)(19)
24,222 24,037 
Renaissance Holding Corp.Diversified Banks
Second Lien Term Loan, LIBOR+7.00% cash due 5/29/202610.12 %3,542 3,515 3,402 (6)
3,515 3,402 
95
Portfolio Company/Type of Investment (1)(2)(5)(9)(14)  Cash Interest Rate (13) Industry Principal (8) Cost Fair Value
 Ministry Brands, LLC    Internet software & services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 12/2/2022 (13) 6.24%   $3,891
 $3,857
 $3,891
 First Lien Delayed Draw Term Loan, LIBOR+5% (1% floor) cash due 12/2/2022 (13) 6.24%   1,352
 1,336
 1,352
 Second Lien Term Loan, LIBOR+9.25% (1% floor) cash due 6/2/2023 (13) 10.49%   7,056
 6,964
 7,056
 Second Lien Delayed Draw Term Loan, LIBOR+9.25% (1% floor) cash due 6/2/2023 (13) 10.49%   1,944
 1,918
 1,944
 First Lien Revolver LIBOR+5% (1% floor) cash due 12/2/2022 (10)(13) 6.24%   —
 (9) —
        14,066
 14,243
 Sailpoint Technologies, Inc.   Application software      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 8/16/2021 (13) 8.33%   20,870
 20,529
 20,870
 First Lien Revolver, LIBOR+7% (1% floor) cash due 8/16/2021 (10)(13) 8.33%     (22) —
        20,507
 20,870
 California Pizza Kitchen, Inc.   Restaurants      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 8/23/2022 (13) 7.24%   4,950
 4,910
 4,917
        4,910
 4,917
 Aptos, Inc.   Data processing & outsourced services      
 First Lien Term Loan B, LIBOR+6.75% (1% floor) cash due 9/1/2022 (13) 8.08%   5,445
 5,354
 5,391
        5,354
 5,391
 SPC Partners VI, L.P.    Multi-sector holdings      
 0.39% limited partnership interest (11)       —
 —
        —
 —
 Impact Sales, LLC    Advertising      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 12/30/2021 (13) 8.30%   11,166
 10,955
 11,145
 Delayed Draw Term Loan, LIBOR+7% (1% floor) cash due 12/30/2021 (13) 8.30%   513
 443
 506
        11,398
 11,651
 DFT Intermediate LLC    Specialized finance      
 First Lien Term Revolver, LIBOR+5.5% (1% floor) cash due 3/1/2022 (13) 6.74%   3,300
 3,224
 3,278
        3,224
 3,278
 Systems, Inc.    Industrial machinery      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 3/3/2022 (13) 6.57%   8,668
 8,553
 8,625
 First Lien Revolver, LIBOR+5.25% (1% floor) cash due 3/3/2022 (10)(13) 6.57%     (40) (40)
        8,513
 8,585
 TerSera Therapeutics, LLC    Pharmaceuticals      
 Second Lien Term Loan, LIBOR+9.25% (1% floor) cash due 3/30/2024 (13) 10.58%   15,000
 14,586
 14,629
 668,879 Common Units of TerSera Holdings LLC       1,500
 1,816
        16,086
 16,445
 Cablevision Systems Corp.    Integrated telecommunication services      
 Fixed Rate Bond 10.875% cash due 10/15/2025 (22) 

   5,897
 7,077
 7,298
        7,077
 7,298
See notes to Consolidated Financial Statements.
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 20172022
(dollar amounts in thousands)






Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
RP Escrow Issuer LLCHealth Care Distributors
Fixed Rate Bond, 5.25% cash due 12/15/2025$1,325 $1,218 $1,097 
1,218 1,097 
RumbleOn, Inc.Automotive Retail
First Lien Term Loan, LIBOR+8.25% cash due 8/31/202611.92 %37,656 35,775 36,187 (6)(11)(15)
First Lien Delayed Draw Term Loan, LIBOR+8.25% cash due 8/31/202611.92 %11,393 10,583 10,760 (6)(11)(15)(19)
164,660 Class B Common Stock Warrants (exercise price $33.00) expiration date 2/28/20231,202 74 (11)(15)
47,560 47,021 
Sabert CorporationMetal & Glass Containers
First Lien Term Loan, LIBOR+4.50% cash due 12/10/20267.63 %1,691 1,610 1,623 (6)
1,610 1,623 
ShareThis, Inc.Application Software
345,452 Series C Preferred Stock Warrants (exercise price $3.0395) expiration date 3/4/2024367 — (15)
367 — 
SiO2 Medical Products, Inc.Metal & Glass Containers
First Lien Term Loan, 5.50% cash 8.50% PIK due 12/21/202646,121 45,413 45,295 (15)
415.34 Common Stock Warrants (exercise price $4,920.75) expiration date 7/31/2028681 681 (15)
46,094 45,976 
SM Wellness Holdings, Inc.Health Care Services
Second Lien Term Loan, LIBOR+8.00% cash due 4/16/202910.74 %9,109 8,972 8,289 (6)(15)
8,972 8,289 
SonicWall US Holdings Inc.Technology Distributors
Second Lien Term Loan, LIBOR+7.50% cash due 5/18/202610.48 %3,195 3,163 2,997 (6)(15)
3,163 2,997 
Sorrento Therapeutics, Inc.Biotechnology
50,000 Common Stock Units197 79 (11)
197 79 
Spanx, LLCApparel Retail
First Lien Term Loan, LIBOR+5.25% cash due 11/20/20288.30 %4,534 4,455 4,427 (6)(15)
First Lien Revolver, LIBOR+5.25% cash due 11/18/20278.03 %866 813 796 (6)(15)(19)
5,268 5,223 
SPX Flow, Inc.Industrial Machinery
First Lien Term Loan, SOFR+4.50% cash due 4/5/20297.63 %1,500 1,410 1,393 (6)
1,410 1,393 
SumUp Holdings Luxembourg S.À.R.L.Other Diversified Financial Services
First Lien Term Loan, EURIBOR+8.50% cash due 3/10/202610.00 %€16,911 19,414 16,360 (6)(11)(15)
19,414 16,360 
Sunland Asphalt & Construction, LLCConstruction & Engineering
First Lien Term Loan, LIBOR+6.00% cash due 1/13/20268.88 %$42,618 41,654 41,723 (6)(15)
41,654 41,723 
Supermoose Borrower, LLCApplication Software
First Lien Term Loan, LIBOR+3.75% cash due 8/29/20257.42 %3,466 3,141 3,056 (6)
3,141 3,056 
SVP-Singer Holdings Inc.Home Furnishings
First Lien Term Loan, LIBOR+6.75% cash due 7/28/202810.42 %20,766 19,550 18,188 (6)(15)
19,550 18,188 
Swordfish Merger Sub LLCAuto Parts & Equipment
Second Lien Term Loan, LIBOR+6.75% cash due 2/2/20269.81 %12,500 12,474 11,469 (6)(15)
12,474 11,469 
96
Portfolio Company/Type of Investment (1)(2)(5)(9)(14)  Cash Interest Rate (13) Industry Principal (8) Cost Fair Value
 Terraform Power Operating    Multi-utilities      
 Fixed Rate Bond 6.375% cash due 2/1/2023 (11)(22) 

   $6,000
 $6,201
 $6,255
        6,201
 6,255
 HC2 Holdings Inc.    Multi-sector holdings      
 Fixed Rate Bond 11% cash due 12/1/2019 (11)(22) 

   10,500
 10,666
 10,631
        10,666
 10,631
 Natural Resource Partners LP    Precious metals & minerals      
 Fixed Rate Bond 10.5% cash due 3/15/2022 (11)(22) 

   7,000
 7,459
 7,464
        7,459
 7,464
 Virgin Media    Integrated telecommunication services      
 Fixed Rate Bond 5.5% cash due 8/15/2026 (11)(22) 

   2,000
 2,038
 2,108
 Fixed Rate Bond 5.25% cash due 1/15/2026 (11)(22)     3,000
 3,009
 3,161
        5,047
 5,269
 Scientific Games International, Inc.    Casinos & gaming      
 First Lien Term Loan B4, LIBOR+3.25% cash due 8/14/2024 (13)(22) 4.58%   11,368
 11,313
 11,402
        11,313
 11,402
 ASHCO, LLC    Specialty stores      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 12/15/2023 (13) 6.24%   12,000
 11,762
 11,335
        11,762
 11,335
 Salient CRGT Inc.    IT consulting & other services      
 First Lien Term Loan, LIBOR+5.75% (1% floor) cash due 2/28/2022 (13) 6.99%   3,440
 3,377
 3,416
        3,377
 3,416
 BJ's Wholesale Club, Inc.    Hypermarkets & super centers      
 First Lien Term Loan, LIBOR+3.75% (1% floor) cash due 1/26/2024 (13)(22) 4.99%   11,970
 11,979
 11,504
        11,979
 11,504
 Everi Payments Inc.    Casinos & gaming      
 First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 5/9/2024 (13)(22) 5.74%   11,970
 11,996
 12,093
        11,996
 12,093
 LSF9 Atlantis Holdings, LLC    Computer & electronics retail      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 5/1/2023 (13) 7.24%   6,459
 6,399
 6,498
        6,399
 6,498
 Allied Universal Holdco LLC    Security & alarm services      
 First Lien Term Loan, LIBOR+3.75% (1% floor) cash due 7/28/2022 (13)(22) 5.08%   11,970
 12,043
 11,958
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 7/27/2023 (13)(22) 9.81%   1,149
 1,171
 1,145
        13,214
 13,103
 Truck Hero, Inc.    Auto parts & equipment      
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 4/21/2025 (13) 9.58%   21,500
 21,191
 21,715
        21,191
 21,715
 BMC Software Finance, Inc.    Internet software & services      
 First Lien Term Loan, LIBOR+4% (1% floor) cash due 9/10/2022 (13)(22) 5.24%   16,881
 16,999
 16,993
        16,999
 16,993
See notes to Consolidated Financial Statements.
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 20172022
(dollar amounts in thousands)






Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Tacala, LLCRestaurants
Second Lien Term Loan, LIBOR+7.50% cash due 2/4/202810.62 %$9,448 $9,338 $8,692 (6)
9,338 8,692 
Tahoe Bidco B.V.Application Software
First Lien Term Loan, LIBOR+6.00% cash due 9/29/20288.68 %23,215 22,815 22,843 (6)(11)(15)
First Lien Revolver, LIBOR+6.00% cash due 10/1/2027— (29)(28)(6)(11)(15)(19)
22,786 22,815 
Tecta America Corp.Construction & Engineering
Second Lien Term Loan, LIBOR+8.50% cash due 4/9/202911.62 %5,203 5,125 5,034 (6)(15)
5,125 5,034 
Telestream Holdings CorporationApplication Software
First Lien Term Loan, SOFR+9.25% cash due 10/15/202512.11 %18,323 17,956 17,865 (6)(15)
First Lien Revolver, SOFR+9.25% cash due 10/15/202512.20 %1,231 1,210 1,187 (6)(15)(19)
19,166 19,052 
TerSera Therapeutics LLCPharmaceuticals
Second Lien Term Loan, LIBOR+9.50% cash due 3/30/202613.17 %29,663 29,352 29,031 (6)(15)
668,879 Common Units of TerSera Holdings LLC2,028 4,077 (15)
31,380 33,108 
TGNR HoldCo LLCIntegrated Oil & Gas
Subordinated Debt, 11.50% cash due 5/14/20264,984 4,866 4,872 (10)(11)(15)
4,866 4,872 
Thrasio, LLCInternet & Direct Marketing Retail
First Lien Term Loan, LIBOR+7.00% cash due 12/18/202611.17 %37,494 36,569 35,807 (6)(15)
8,434 Shares of Series C-3 Preferred Stock in Thrasio Holdings, Inc.101 69 (15)
284,650.32 Shares of Series C-2 Preferred Stock in Thrasio Holdings, Inc.2,409 2,320 (15)
48,352 Shares of Series D Preferred Stock in Thrasio Holdings, Inc.979 979 (15)
23,201 Shares of Series X Preferred Stock in Thrasio Holdings, Inc.22,986 26,487 (15)(19)
63,044 65,662 
TIBCO Software Inc.Application Software
First Lien Term Loan, SOFR+4.50% cash due 3/20/20298.15 %12,032 10,949 10,827 (6)
10,949 10,827 
Touchstone Acquisition, Inc.Health Care Supplies
First Lien Term Loan, LIBOR+6.00% cash due 12/29/20289.12 %6,016 5,908 5,895 (6)(15)
5,908 5,895 
Uniti Group LPSpecialized REITs
Fixed Rate Bond, 6.50% cash due 2/15/20294,500 4,060 3,026 (11)
Fixed Rate Bond, 4.75% cash due 4/15/2028300 258 238 (11)
4,318 3,264 
Win Brands Group LLCHousewares & Specialties
First Lien Term Loan, LIBOR+15.00% cash due 1/22/202619.64 %2,316 2,293 2,264 (6)(15)
3,621 Class F Warrants in Brand Value Growth LLC (exercise price $0.01) expiration date 1/25/2027— 192 (15)
2,293 2,456 
97
Portfolio Company/Type of Investment (1)(2)(5)(9)(14)  Cash Interest Rate (13) Industry Principal (8) Cost Fair Value
 Internet Pipeline, Inc.    Internet software & services      
 Incremental First Lien Term Loan, LIBOR+6.25% (1% floor) cash due 8/1/2022 (13) 7.48%   $5,565
 $5,513
 $5,677
        5,513
 5,677
 CCC Information Services Inc.    Internet software & services      
 Second Lien Term Loan, LIBOR+6.75% (1% floor) cash due 3/13/2025 (13) 7.99%   2,500
 2,559
 2,581
        2,559
 2,581
 Hyland Software Inc.    Internet software & services      
 Second Lien Term Loan, LIBOR+7% (1% floor) cash due 7/7/2025 (13) 8.24%   2,000
 1,991
 1,980
        1,991
 1,980
 Idera, Inc.    Internet software & services      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 6/27/2024 (13) 6.24%   6,926
 6,910
 6,978
        6,910
 6,978
 MHE Intermediate Holdings, LLC    Diversified support services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 3/11/2024 (13) 6.33%   2,993
 2,964
 2,993
        2,964
 2,993
 PowerPlan Holdings, LLC    Internet software & services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 2/23/2022 (13) 6.49%   4,988
 4,941
 4,987
        4,941
 4,987
 UOS, LLC   Trucking      
 First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 4/18/2023 (13) 6.74%   6,916
 7,081
 7,106
        7,081
 7,106
 Veritas US Inc.    Internet software & services      
 First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 1/27/2023 (13)(22) 5.83%   34,947
 35,379
 35,336
        35,379
 35,336
 Staples, Inc.    Distributors      
 First Lien Term Loan, LIBOR+4% (1% floor) cash due 8/12/2024 (13)(22) 5.31%   10,000
 9,976
 9,967
 Fixed Rate Bond 8.5% cash due 9/15/2025 (22) 

   5,000
 4,988
 4,863
        14,964
 14,830
 Zep Inc.    Housewares & Specialties      
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 8/11/2025 (13) 9.48%   30,000
 29,852
 29,775
        29,852
 29,775
 DTZ U.S. Borrower, LLC   Real estate services      
 First Lien Term Loan, LIBOR+3.25% (1% floor) cash due 11/4/2021 (13)(22) 4.57%   12,967
 13,011
 13,014
        13,011
 13,014
 Micro Holding Corp.    Internet software & services      
 First Lien Term Loan, LIBOR+3.5% (1% floor) cash due 9/15/2024 (13) 4.82%   6,000
 5,970
 5,978
        5,970
 5,978
 Accudyne Industries, LLC    Oil & gas equipment services      
 First Lien Term Loan, LIBOR+3.75% (1% floor) cash due 8/18/2024 (13)(22) 5.01%   19,915
 19,977
 19,990
        19,977
 19,990
See notes to Consolidated Financial Statements.
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 20172022
(dollar amounts in thousands)






Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Windstream Services II, LLCIntegrated Telecommunication Services
First Lien Term Loan, LIBOR+6.25% cash due 9/21/20279.37 %$25,499 $24,632 $23,204 (6)
18,032 Shares of Common Stock in Windstream Holdings II, LLC216 296 (15)
109,420 Warrants in Windstream Holdings II, LLC1,842 1,799 (15)
26,690 25,299 
WP CPP Holdings, LLCAerospace & Defense
First Lien Term Loan, LIBOR+3.75% cash due 4/30/20256.56 %7,564 6,989 6,795 (6)
Second Lien Term Loan, LIBOR+7.75% cash due 4/30/202610.56 %6,000 5,855 5,070 (6)(15)
12,844 11,865 
WPEngine, Inc.Application Software
First Lien Term Loan, LIBOR+6.00% cash due 3/27/202610.19 %40,536 39,947 40,131 (6)(15)
39,947 40,131 
WWEX Uni Topco Holdings, LLCAir Freight & Logistics
Second Lien Term Loan, LIBOR+7.00% cash due 7/26/202910.67 %5,000 4,925 4,538 (6)(15)
4,925 4,538 
Zayo Group Holdings, Inc.Alternative Carriers
Fixed Rate Bond, 4.00% cash due 3/1/2027250 212 201 
212 201 
Zep Inc.Specialty Chemicals
Second Lien Term Loan, LIBOR+8.25% cash due 8/11/202511.92 %19,578 19,542 16,152 (6)(15)
19,542 16,152 
Zephyr Bidco LimitedSpecialized Finance
Second Lien Term Loan, SONIA+7.50% cash due 7/23/20269.72 %£18,000 23,804 16,552 (6)(11)(15)
23,804 16,552 
Total Non-Control/Non-Affiliate Investments (180.9% of net assets)$2,330,096 $2,253,750 
Total Portfolio Investments (200.2% of net assets)$2,617,754 $2,494,111 
Cash and Cash Equivalents and Restricted Cash
JP Morgan Prime Money Market Fund, Institutional Shares $5,261 $5,261 
Other cash accounts21,103 21,103 
Total Cash and Cash Equivalents and Restricted Cash (2.1% of net assets)$26,364 $26,364 
Total Portfolio Investments and Cash and Cash Equivalents and Restricted Cash (202.4% of net assets)$2,644,118 $2,520,475 


Derivative InstrumentNotional Amount to be PurchasedNotional Amount to be SoldMaturity DateCounterpartyCumulative Unrealized Appreciation /(Depreciation)
Foreign currency forward contract$43,179 €41,444 11/10/2022JPMorgan Chase Bank, N.A.$2,466 
Foreign currency forward contract$45,692 £37,033 11/10/2022JPMorgan Chase Bank, N.A.4,323 
$6,789 


Derivative InstrumentCompany ReceivesCompany PaysCounterpartyMaturity DateNotional AmountFair Value
Interest rate swapFixed 2.7%Floating 3-month LIBOR +1.658%Royal Bank of Canada1/15/2027$350,000$(41,969)
98
Portfolio Company/Type of Investment (1)(2)(5)(9)(14)  Cash Interest Rate (13) Industry Principal (8) Cost Fair Value
 McAfee, LLC    Internet software & services      
 First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 9/30/2024 (13) 5.83%   $8,000
 $7,921
 $8,083
        7,921
 8,083
 Total Non-Control/Non-Affiliate Investments (138.2% of net assets)       $1,279,096
 $1,199,501
Total Portfolio Investments (177.7% of net assets)       $1,757,665
 $1,541,755
Cash and Cash Equivalents          
JP Morgan Prime Money Market Fund       $48,808
 $48,808
Other cash accounts       4,210
 4,210
Total Cash and Cash Equivalents (6.1% of net assets)       $53,018
 $53,018
Total Portfolio Investments, Cash and Cash Equivalents (183.8% of net assets)       $1,810,683
 $1,594,773
See notes to Consolidated Financial Statements.

(1)All debt investments are income producing unless otherwise noted. All equity investments are non-income producing unless otherwise noted.
(2)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.
(3)Control Investments generally are defined by the Investment Company Act of 1940, as amended ("1940 Act"), as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.
(4)Affiliate Investments generally are defined by the 1940 Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.
(5)Equity ownership may be held in shares or units of companies related to the portfolio companies.
(6)Income producing through payment of dividends or distributions.
(7)Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.
(8)Principal includes accumulated payment in kind ("PIK") interest and is net of repayments.
(9)Interest rates may be adjusted from period to period on certain term loans and revolvers. These rate adjustments may be either temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements or permanent in nature per loan amendment or waiver documents.
(10)Investment has undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.
(11)Investment is not a "qualifying asset" as defined under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of September 30, 2017, qualifying assets represented 83.6% of the Company's total assets and non-qualifying assets represented 16.4% of the Company's total assets.
(12)
The sale of a portion of this loan does not qualify for true sale accounting under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 860 - Transfers and Servicing ("ASC 860"), and therefore, the entire debt investment remains in the Consolidated Schedule of Investments. Accordingly, the fair value of the Company's debt investments includes $13.3 million related to the Company's secured borrowings. (See Note 15 in the accompanying notes to the Consolidated Financial Statements.)
(13)The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate based rate based on each respective credit agreement and the cash interest rate as of period end.
(14)With the exception of investments held by the Company’s wholly-owned subsidiaries that have each received a license from the U.S. Small Business Administration (“SBA”) to operate as a small business investment company (“SBIC”), each of the Company's investments is pledged as collateral under one or more of its credit facilities. A single investment may be divided into parts that are individually pledged as collateral to separate credit facilities.
(15)As defined in the 1940 Act, the Company is deemed to be both an "Affiliated Person" of and to "Control" this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Schedule 12-14 in the accompanying notes to the Consolidated Financial Statements for transactions during the year ended September 30, 2017 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to control.
(16)First Star Bermuda Aviation Limited and First Star Speir Aviation 1 Limited are wholly-owned holding companies formed by the Company in order to facilitate its investment strategy. In accordance with Accounting Standards Update ("ASU") 2013-08, the Company has deemed the holding companies to be investment companies under GAAP and therefore deemed it appropriate to consolidate the financial results and financial position of the holding companies and to recognize dividend income versus a combination of interest income and dividend income. Accordingly,
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 20172022
(dollar amounts in thousands)






(1)All debt investments are income producing unless otherwise noted. All equity investments are non-income producing unless otherwise noted.
(2)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.
(3)Equity ownership may be held in shares or units of companies related to the portfolio companies.
(4)Interest rates may be adjusted from period to period on certain term loans and revolvers. These rate adjustments may be either temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements or permanent in nature per loan amendment or waiver documents.
(5)Each of the Company's investments is pledged as collateral under one or more of its credit facilities. A single investment may be divided into parts that are individually pledged as collateral to separate credit facilities.
(6)The interest rate on the principal balance outstanding for most of the floating rate loans is indexed to the London Interbank Offered Rate ("LIBOR") and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. Certain loans may also be indexed to the secured overnight financing rate ("SOFR") or the sterling overnight index average ("SONIA"). The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over the reference rate based on each respective credit agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars unless otherwise noted. As of September 30, 2022, the reference rates for the Company's variable rate loans were the 30-day LIBOR at 3.12%, the 90-day LIBOR at 3.67%, the 180-day LIBOR at 4.17%, the 360-day LIBOR at 4.78%, the PRIME at 6.25%, the 30-day SOFR at 3.03%, the 90-day SOFR at 3.55%, the SONIA at 1.69%, the 30-day EURIBOR at 0.69%, the 90-day EURIBOR at 0.99% and the 180-day EURIBOR at 0.38%. Most loans include an interest floor, which generally ranges from 0% to 1%. SOFR and SONIA based contracts may include a credit spread adjustment that is charged in addition to the base rate and the stated spread.
(7)Principal includes accumulated payment in kind ("PIK") interest and is net of repayments, if any. “£” signifies the investment is denominated in British Pounds. "€" signifies the investment is denominated in Euros. All other investments are denominated in U.S. dollars.
(8)Control Investments generally are defined by the Investment Company Act of 1940, as amended (the "Investment Company Act"), as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.
(9)As defined in the Investment Company Act, the Company is deemed to be both an "Affiliated Person" of and to "Control" these portfolio companies as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Schedule 12-14 in the accompanying notes to the Consolidated Financial Statements for transactions during the year ended September 30, 2022 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to control.
(10)This investment represents a participation interest in the underlying securities shown.
(11)Investment is not a "qualifying asset" as defined under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of September 30, 2022, qualifying assets represented 75.7% of the Company's total assets and non-qualifying assets represented 24.3% of the Company's total assets.
(12)Income producing through payment of dividends or distributions.
(13)One half of the Seller Earn Out Shares will vest if, at any time through June 16, 2027, the Alvotech SA common share price is at or above a volume weighted average price ("VWAP") of $15.00 per share for any ten trading days within any twenty trading day period, and the other half will vest, if at any time during such period, the common share price is at or above a VWAP of $20.00 per share for any ten trading days within any twenty trading day period.
(14)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition.
(15)As of September 30, 2022, these investments were categorized as Level 3 within the fair value hierarchy established by Financial Accounting Standards Board ("FASB") guidance under Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("ASC 820").
(16)This investment was valued using net asset value as a practical expedient for fair value. Consistent with ASC 820, these investments are excluded from the hierarchical levels.
(17)Affiliate Investments generally are defined by the Investment Company Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.
(18)Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.
(19)Investment had undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.
(20)This investment was renamed during the three months ended March 31, 2022. For periods prior to March 31, 2022, this investment was referenced as Realfi Strategic Capital Funding LLC.

See notes to Consolidated Financial Statements.
99
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2021
(dollar amounts in thousands)

Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Control Investments(8)(9)
C5 Technology Holdings, LLCData Processing & Outsourced Services
829 Common Units$— $— (15)
34,984,460.37 Preferred Units34,984 27,638 (15)
34,984 27,638 
Dominion Diagnostics, LLCHealth Care Services
First Lien Term Loan, LIBOR+5.00% cash due 2/28/20246.00 %$27,381 27,381 27,381 (6)(15)
First Lien Revolver, LIBOR+5.00% cash due 2/28/2024— — — (6)(15)(19)
30,030.8 Common Units in DD Healthcare Services Holdings, LLC18,625 18,065 (12)(15)
46,006 45,446 
First Star Speir Aviation LimitedAirlines(10)
First Lien Term Loan, 9.00% cash due 12/15/20257,500 — 7,500 (11)(15)
100% equity interest6,332 698 (11)(12)(15)
6,332 8,198 
OCSI Glick JV LLCMulti-Sector Holdings(14)
Subordinated Debt, LIBOR+4.50% cash due 10/20/20284.60 %61,709 50,705 55,582  (6)(11)(15)(19)
87.5% equity interest— —  (11)(16)(19)
50,705 55,582 
Senior Loan Fund JV I, LLCMulti-Sector Holdings(14)
Subordinated Debt, LIBOR+7.00% cash due 12/29/20288.00 %96,250 96,250 96,250 (6)(11)(15)(19)
87.5% LLC equity interest49,322 37,651 (11)(12)(16)(19)
145,572 133,901 
 Total Control Investments (20.6% of net assets)$283,599 $270,765 
Affiliate Investments(17)
Assembled Brands Capital LLCSpecialized Finance
First Lien Revolver, LIBOR+6.00% cash due 10/17/20237.00 %$15,899 $15,900 $15,712 (6)(15)(19)
1,609,201 Class A Units764 587 (15)
1,019,168.80 Preferred Units, 6%1,019 1,152 (15)
70,424.5641 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029— — (15)
17,683 17,451 
Caregiver Services, Inc.Health Care Services
1,080,399 shares of Series A Preferred Stock, 10%1,080 838 (15)
1,080 838 
 Total Affiliate Investments (1.4% of net assets)$18,763 $18,289 
Non-Control/Non-Affiliate Investments(18)
4 Over International, LLCCommercial Printing
First Lien Term Loan, LIBOR+6.00% cash due 6/7/20227.00 %$10,927 $10,524 $10,484 (6)(15)
First Lien Revolver, LIBOR+6.00% cash due 6/7/2022— (24)(93)(6)(15)(19)
10,500 10,391 
109 Montgomery Owner LLCReal Estate Operating Companies
First Lien Delayed Draw Term Loan, LIBOR+7.00% cash due 2/2/20237.50 %3,102 2,984 3,153 (6)(15)(19)
2,984 3,153 
A.T. Holdings II SÀRLBiotechnology
First Lien Term Loan, 9.50% cash due 12/22/202237,158 36,930 36,972 (11)(15)
36,930 36,972 
Access CIG, LLCDiversified Support Services
First Lien Term Loan, LIBOR+3.75% cash due 2/27/20253.83 %5,352 5,021 5,332 (6)
Second Lien Term Loan, LIBOR+7.75% cash due 2/27/20267.83 %17,000 16,923 17,028 (6)
21,944 22,360 
100
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2021
(dollar amounts in thousands)

Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Accupac, Inc.Personal Products
First Lien Term Loan, LIBOR+6.00% cash due 1/17/20267.00 %$16,140 $15,758 $16,140 (6)(15)
First Lien Delayed Draw Term Loan, LIBOR+6.00% cash due 1/17/2026— (29)— (6)(15)(19)
First Lien Revolver, LIBOR+6.00% cash due 1/17/20267.00 %1,838 1,789 1,838 (6)(15)(19)
17,518 17,978 
Acquia Inc.Application Software
First Lien Term Loan, LIBOR+7.00% cash due 10/31/20258.00 %27,349 26,936 27,295 (6)(15)
First Lien Revolver, LIBOR+7.00% cash due 10/31/20258.00 %179 148 175 (6)(15)(19)
27,084 27,470 
ADB Companies, LLCConstruction & Engineering
First Lien Term Loan, LIBOR+6.25% cash due 12/18/20257.25 %15,463 14,817 15,287 (6)(15)
14,817 15,287 
Aden & Anais Merger Sub, Inc.Apparel, Accessories & Luxury Goods
51,645 Common Units in Aden & Anais Holdings, Inc.5,165 — (15)
5,165 — 
AI Sirona (Luxembourg) Acquisition S.a.r.l.Pharmaceuticals
Second Lien Term Loan, EURIBOR+7.25% cash due 9/28/20267.25 %€24,838 27,720 28,738 (6)(11)(15)
27,720 28,738 
AirStrip Technologies, Inc.Application Software
5,715 Common Stock Warrants (exercise price $139.99) expiration date 5/11/202590 — (15)
90 — 
All Web Leads, Inc.Advertising
First Lien Term Loan, LIBOR+6.50% cash due 12/29/20237.50 %$23,899 21,512 22,992 (6)(15)
21,512 22,992 
Alvogen Pharma US, Inc.Pharmaceuticals
First Lien Term Loan, LIBOR+5.25% cash due 12/31/20236.25 %13,825 13,329 13,383 (6)
13,329 13,383 
Alvotech Holdings S.A.Biotechnology(13)
Fixed Rate Bond 15% PIK Tranche A due 6/24/202520,967 20,576 20,967 (11)(15)
Fixed Rate Bond 15% PIK Tranche B due 6/24/202520,512 20,169 20,512 (11)(15)
27,308 Common Shares6,322 6,322 (15)
47,067 47,801 
Amplify Finco Pty Ltd.Movies & Entertainment
First Lien Term Loan, LIBOR+4.25% cash due 11/26/20265.00 %15,376 13,814 14,985 (6)(11)(15)
Second Lien Term Loan, LIBOR+8.00% cash due 11/26/20278.75 %12,500 12,188 12,063 (6)(11)(15)
26,002 27,048 
Ankura Consulting Group LLCResearch & Consulting Services
Second Lien Term Loan, LIBOR+8.00% cash due 3/19/20298.75 %7,466 7,354 7,606 (6)(15)
7,354 7,606 
Apptio, Inc.Application Software
First Lien Term Loan, LIBOR+7.25% cash due 1/10/20258.25 %34,458 33,420 33,922 (6)(15)
First Lien Revolver, LIBOR+7.25% cash due 1/10/20258.25 %892 849 858 (6)(15)(19)
34,269 34,780 
Ardonagh Midco 3 PLCInsurance Brokers
First Lien Term Loan, EURIBOR+7.25% cash due 7/14/20268.25 %€1,964 2,179 2,283 (6)(11)(15)
First Lien Term Loan, UK LIBOR+7.25% cash due 7/14/20268.00 %£18,636 23,336 25,329 (6)(11)(15)
First Lien Delayed Draw Term Loan, LIBOR+6.00% cash due 7/14/2026$— — — (6)(11)(15)(19)
First Lien Delayed Draw Term Loan, SONIA+6.00% cash due 7/14/2026£— — — (6)(11)(15)(19)
25,515 27,612 
101
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2021
(dollar amounts in thousands)

Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Associated Asphalt Partners, LLCConstruction Materials
First Lien Term Loan, LIBOR+5.25% cash due 4/5/20246.25 %$2,531 $2,245 $2,350 (6)
2,245 2,350 
Athenex, Inc.Pharmaceuticals
First Lien Term Loan, 11.00% cash due 6/19/202642,145 40,475 41,845 (11)(15)
First Lien Delayed Draw Term Loan, 11.00% cash due 6/19/2026— (274)(150)(11)(15)(19)
328,149 Common Stock Warrants (exercise price $12.63) expiration date 6/19/2027973 95 (11)(15)
41,174 41,790 
Aurora Lux Finco S.À.R.L.Airport Services
First Lien Term Loan, LIBOR+6.00% cash due 12/24/20267.00 %22,655 22,232 21,318 (6)(11)(15)
22,232 21,318 
The AveryReal Estate Operating Companies
First Lien Delayed Draw Term Loan in T8 Urban Condo Owner, LLC, LIBOR+7.30% cash due 2/17/20237.55 %20,287 19,933 20,490 (6)(15)(19)
Subordinated Delayed Draw Debt in T8 Senior Mezz LLC, LIBOR+12.50% cash due 2/17/202312.75 %4,692 4,614 4,698 (6)(15)(19)
24,547 25,188 
BAART Programs, Inc.Health Care Services
Second Lien Term Loan, LIBOR+8.50% cash due 6/11/20289.50 %7,166 7,059 7,130 (6)(15)
Second Lien Delayed Draw Term Loan, LIBOR+8.50% cash due 6/11/2028— (52)(18)(6)(15)(19)
7,007 7,112 
Berner Food & Beverage, LLCSoft Drinks
First Lien Term Loan, LIBOR+6.50% cash due 7/30/20277.50 %33,412 32,844 32,844 (6)(15)
First Lien Revolver, LIBOR+6.50% cash due 7/30/20277.50 %619 566 566 (6)(15)(19)
33,410 33,410 
Blackhawk Network Holdings, Inc.Data Processing & Outsourced Services
Second Lien Term Loan, LIBOR+7.00% cash due 6/15/20267.13 %30,625 30,181 30,523 (6)
30,181 30,523 
Blumenthal Temecula, LLCAutomotive Retail
First Lien Term Loan, 9.00% cash due 9/24/20233,979 3,980 3,979 (15)
1,293,324 Preferred Units in Unstoppable Automotive AMV, LLC1,293 1,293 (15)
298,460 Preferred Units in Unstoppable Automotive VMV, LLC298 298 (15)
298,460 Common Units in Unstoppable Automotive AMV, LLC298 298 (15)
99,486 Common Units in Unstoppable Automotive VMV, LLC100 99 (15)
5,969 5,967 
Cadence Aerospace, LLCAerospace & Defense
First Lien Term Loan, LIBOR+6.50% cash 2.00% PIK due 11/14/20237.50 %14,146 12,574 12,992 (6)(15)
12,574 12,992 
Chief Power Finance II, LLCIndependent Power Producers & Energy Traders
First Lien Term Loan, LIBOR+6.50% cash due 12/31/20227.50 %23,850 23,458 23,552 (6)(15)
23,458 23,552 
CircusTrix Holdings, LLCLeisure Facilities
First Lien Term Loan, LIBOR+5.50% cash 2.50% PIK due 7/16/20236.50 %10,686 9,793 8,816 (6)(15)(19)
9,793 8,816 
CITGO Holding, Inc.Oil & Gas Refining & Marketing
First Lien Term Loan, LIBOR+7.00% cash due 8/1/20238.00 %11,635 11,517 11,512 (6)
Fixed Rate Bond, 9.25% cash due 8/1/202410,672 10,672 10,765 
22,189 22,277 
102
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2021
(dollar amounts in thousands)

Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
CITGO Petroleum Corp.Oil & Gas Refining & Marketing
First Lien Term Loan, LIBOR+6.25% cash due 3/28/20247.25 %$14,221 $13,855 $14,269 (6)
13,855 14,269 
Clear Channel Outdoor Holdings Inc.Advertising
Fixed Rate Bond, 7.50% cash due 6/1/20297,137 7,137 7,431 (11)
7,137 7,431 
Continental Intermodal Group LPOil & Gas Storage & Transportation
First Lien Term Loan, LIBOR+9.50% PIK due 1/28/202538,876 36,668 32,628 (6)(15)
Common Stock Warrants expiration date 7/28/2025648 1,909 (15)
37,316 34,537 
Convergeone Holdings, Inc.IT Consulting & Other Services
First Lien Term Loan, LIBOR+5.00% cash due 1/4/20265.08 %7,024 6,848 7,003 (6)
6,848 7,003 
Conviva Inc.Application Software
517,851 Shares of Series D Preferred Stock605 894 (15)
605 894 
CorEvitas, LLCHealth Care Services
First Lien Term Loan, LIBOR+5.50% cash due 12/13/20256.50 %10,196 10,071 10,109 (6)(15)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 12/13/20256.50 %1,943 1,894 1,912 (6)(15)(19)
First Lien Revolver, PRIME+4.50% cash due 12/13/20257.75 %305 283 290 (6)(15)(19)
1,099 Class A2 Common Units in CorEvitas Holdings, L.P.1,038 1,177 (15)
13,286 13,488 
Coty Inc.Personal Products
First Lien Revolver, LIBOR+1.75% cash due 4/5/2023— (712)(395)(6)(11)(15)(19)
(712)(395)
Coyote Buyer, LLCSpecialty Chemicals
First Lien Term Loan, LIBOR+6.00% cash due 2/6/20267.00 %18,387 17,887 18,225 (6)(15)
First Lien Revolver, LIBOR+6.00% cash due 2/6/2025— (13)(12)(6)(15)(19)
17,874 18,213 
Curium Bidco S.à.r.l.Biotechnology
Second Lien Term Loan, LIBOR+7.75% cash due 10/27/20288.50 %16,787 16,535 17,070 (6)(11)(15)
16,535 17,070 
Delta Topco, Inc.Systems Software
Second Lien Term Loan, LIBOR+7.25% cash due 12/1/20288.00 %6,680 6,647 6,769 (6)
6,647 6,769 
Dialyze Holdings, LLCHealth Care Equipment
First Lien Term Loan, LIBOR+7.00% cash 2.00% PIK due 8/4/20268.00 %24,093 22,439 22,467 (6)(15)
First Lien Delayed Draw Term Loan, LIBOR+7.00% cash 2.00% PIK due 8/4/2026— (170)(163)(6)(15)(19)
5,403,823 Class A Warrants (exercise price $1.00) expiration date 8/4/20281,405 1,459 (15)
23,674 23,763 
Digital.AI Software Holdings, Inc.Application Software
First Lien Term Loan, LIBOR+7.00% cash due 2/10/20278.00 %10,003 9,627 9,783 (6)(15)
First Lien Revolver, LIBOR+7.00% cash due 2/10/20278.00 %180 151 156 (6)(15)(19)
9,778 9,939 
DirecTV Financing, LLCCable & Satellite
First Lien Term Loan, LIBOR+5.00% cash due 8/2/20275.75 %27,000 26,730 27,048 (6)
26,730 27,048 
Eagleview Technology CorporationApplication Software
Second Lien Term Loan, LIBOR+7.50% cash due 8/14/20268.50 %8,974 8,884 8,918 (6)(15)
8,884 8,918 
103
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2021
(dollar amounts in thousands)

Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
EHR Canada, LLCFood Retail
First Lien Term Loan, LIBOR+8.00% cash due 12/31/20219.00 %$3,750 $3,745 $3,750 (6)(15)
3,745 3,750 
EOS Fitness Opco Holdings, LLCLeisure Facilities
487.5 Class A Preferred Units, 12%488 274 (15)
12,500 Class B Common Units— — (15)
488 274 
Firstlight Holdco, Inc.Alternative Carriers
First Lien Term Loan, LIBOR+3.50% cash due 7/23/20253.58 %7,012 6,578 6,939 (6)
6,578 6,939 
Fortress Biotech, Inc.Biotechnology
First Lien Term Loan, 11.00% cash due 8/27/202511,359 10,722 11,075 (11)(15)
331,200 Common Stock Warrants (exercise price $3.20) expiration date 8/27/2030405 341 (11)(15)
11,127 11,416 
GI Chill Acquisition LLCManaged Health Care
First Lien Term Loan, LIBOR+3.75% cash due 8/6/20253.90 %12,653 12,442 12,621 (6)(15)
Second Lien Term Loan, LIBOR+7.50% cash due 8/6/20267.63 %6,250 6,212 6,219 (6)(15)
18,654 18,840 
GKD Index Partners, LLCSpecialized Finance
First Lien Term Loan, LIBOR+8.50% cash due 6/29/20239.50 %26,360 25,837 25,931 (6)(15)
First Lien Revolver, LIBOR+8.50% cash due 6/29/20239.50 %1,280 1,251 1,252 (6)(15)(19)
27,088 27,183 
Global Medical Response, Inc.Health Care Services
First Lien Term Loan, LIBOR+4.25% cash due 3/14/20255.25 %8,630 8,399 8,674 (6)
8,399 8,674 
Gulf Operating, LLCOil & Gas Storage & Transportation
First Lien Revolver, LIBOR+4.00% cash due 12/27/2021— (704)(75)(6)(15)(19)
(704)(75)
Houghton Mifflin Harcourt Publishers Inc.Education Services
First Lien Term Loan, LIBOR+6.25% cash due 11/22/20247.25 %1,007 981 1,009 (6)(11)
981 1,009 
iCIMs, Inc.Application Software
First Lien Term Loan, LIBOR+6.50% cash due 9/12/20247.50 %25,635 25,024 25,525 (6)(15)
First Lien Revolver, LIBOR+6.50% cash due 9/12/20247.50 %1,176 1,147 1,171 (6)(15)
26,171 26,696 
Immucor, Inc.Health Care Supplies
First Lien Term Loan, LIBOR+5.75% cash due 7/2/20256.75 %8,657 8,425 8,570 (6)(15)
Second Lien Term Loan, LIBOR+8.00% cash 3.50% PIK due 10/2/20259.00 %21,834 21,225 21,616 (6)(15)
29,650 30,186 
Integral Development CorporationOther Diversified Financial Services
1,078,284 Common Stock Warrants (exercise price $0.9274) expiration date 7/10/2024113 — (15)
113 — 
Inventus Power, Inc.Electrical Components & Equipment
First Lien Term Loan, LIBOR+5.00% cash due 3/29/20246.00 %18,849 18,693 18,708 (6)(15)
Second Lien Term Loan, LIBOR+8.50% cash due 9/29/20249.50 %13,674 13,434 13,434 (6)(15)
32,127 32,142 
104
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2021
(dollar amounts in thousands)

Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
INW Manufacturing, LLCPersonal Products
First Lien Term Loan, LIBOR+5.75% cash due 5/7/20276.50 %$37,031 $35,988 $36,291 (6)(15)
35,988 36,291 
Itafos Inc.Fertilizers & Agricultural Chemicals
First Lien Term Loan, LIBOR+8.25% cash due 8/25/20249.25 %22,506 21,636 21,651 (6)(15)
21,636 21,651 
Ivanti Software, Inc.Application Software
Second Lien Term Loan, LIBOR+8.50% cash due 12/1/20289.50 %17,346 16,864 17,368 (6)(15)
16,864 17,368 
Jazz Acquisition, Inc.Aerospace & Defense
First Lien Term Loan, LIBOR+7.50% cash due 1/29/20278.50 %36,603 35,292 36,531 (6)(15)
35,292 36,531 
Latam Airlines Group S.A.Airlines
First Lien Delayed Draw Term Loan, LIBOR+11.00% PIK due 3/29/202216,239 16,085 16,356 (6)(11)(15)(19)
16,085 16,356 
Lift Brands Holdings, Inc.Leisure Facilities
2,000,000 Class A Common Units in Snap Investments, LLC1,399 — (15)
1,399 — 
Lightbox Intermediate, L.P.Real Estate Services
First Lien Term Loan, LIBOR+5.00% cash due 5/9/20265.13 %41,432 40,445 41,225 (6)(15)
40,445 41,225 
LogMeIn, Inc.Application Software
First Lien Term Loan, LIBOR+4.75% cash due 8/31/20274.83 %3,970 3,720 3,973 (6)
3,720 3,973 
LTI Holdings, Inc.Electronic Components
Second Lien Term Loan, LIBOR+6.75% cash due 9/6/20266.83 %10,140 10,080 10,127 (6)
10,080 10,127 
Marinus Pharmaceuticals, Inc.Pharmaceuticals
First Lien Term Loan, 11.50% cash due 5/11/20263,441 3,377 3,389 (11)(15)
First Lien Delayed Draw Term Loan, 11.50% cash due 5/11/20266,881 6,755 6,778 (11)(15)(19)
10,132 10,167 
Mayfield Agency Borrower Inc.Property & Casualty Insurance
First Lien Term Loan, LIBOR+4.50% cash due 2/28/20254.58 %9,949 9,884 9,949 (6)
9,884 9,949 
MedAssets Software Intermediate Holdings, Inc.Health Care Technology
Second Lien Term Loan, LIBOR+7.75% cash due 1/29/20298.50 %14,137 13,877 13,960 (6)(15)
13,877 13,960 
MHE Intermediate Holdings, LLCDiversified Support Services
First Lien Term Loan, LIBOR+5.75% cash due 7/21/20276.75 %16,429 16,111 16,100 (6)(15)
First Lien Delayed Draw Term Loan, LIBOR+5.75% cash due 7/21/20276.75 %106 84 83 (6)(15)(19)
First Lien Revolver, LIBOR+5.75% cash due 7/21/2027— (27)(28)(6)(15)(19)
16,168 16,155 
Mindbody, Inc.Internet Services & Infrastructure
First Lien Term Loan, LIBOR+7.00% cash 1.50% PIK due 2/14/20258.00 %38,774 37,513 38,038 (6)(15)
First Lien Revolver, LIBOR+8.00% cash due 2/14/2025— (75)(76)(6)(15)(19)
37,438 37,962 
105
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2021
(dollar amounts in thousands)

Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Ministry Brands, LLCApplication Software
First Lien Revolver, LIBOR+5.00% cash due 12/2/2022$— $(9)$(9)(6)(15)(19)
Second Lien Term Loan, LIBOR+9.25% cash due 6/2/202310.25 %11,000 10,844 10,906 (6)(15)
10,835 10,897 
Mosaic Companies, LLCHome Improvement Retail
First Lien Term Loan, LIBOR+6.75% cash due 7/2/20267.75 %47,388 46,487 46,488 (6)(15)
46,487 46,488 
MRI Software LLCApplication Software
First Lien Term Loan, LIBOR+5.50% cash due 2/10/20266.50 %27,352 26,815 27,335 (6)(15)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026— (25)— (6)(15)(19)
First Lien Revolver, LIBOR+5.50% cash due 2/10/2026— (13)(1)(6)(15)(19)
26,777 27,334 
Navisite, LLCData Processing & Outsourced Services
Second Lien Term Loan, LIBOR+8.50% cash due 12/30/20269.50 %22,560 22,165 22,176 (6)(15)
22,165 22,176 
NeuAG, LLCFertilizers & Agricultural Chemicals
First Lien Term Loan, LIBOR+5.50% cash 7.00% PIK due 9/11/20247.00 %47,031 45,279 45,996 (6)(15)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash 7.00% PIK due 9/11/2024— (202)(120)(6)(15)(19)
45,077 45,876 
NN, Inc.Industrial Machinery
First Lien Term Loan, LIBOR+6.88% cash due 9/19/20267.88 %59,309 57,971 58,419 (6)(11)(15)
57,971 58,419 
OEConnection LLCApplication Software
First Lien Term Loan, LIBOR+4.00% cash due 9/25/20264.08 %3,355 3,152 3,351 (6)
3,152 3,351 
Olaplex, Inc.Personal Products
First Lien Term Loan, LIBOR+6.25% cash due 1/8/20267.25 %52,122 50,906 51,731 (6)(15)
First Lien Revolver, LIBOR+6.25% cash due 1/8/2025— (58)(75)(6)(15)(19)
50,848 51,656 
OmniSYS Acquisition CorporationDiversified Support Services
100,000 Common Units in OSYS Holdings, LLC1,000 729 (15)
1,000 729 
Onvoy, LLCIntegrated Telecommunication Services
First Lien Term Loan, LIBOR+4.50% cash due 2/10/20245.50 %3,601 3,410 3,603 (6)
Second Lien Term Loan, LIBOR+10.50% cash due 2/10/202511.50 %9,277 9,277 9,277 (6)(15)
19,666.67 Class A Units in GTCR Onvoy Holdings, LLC1,967 2,372 (15)
13,664.73 Series 3 Class B Units in GTCR Onvoy Holdings, LLC— — (15)
14,654 15,252 
OTG Management, LLCAirport Services
First Lien Term Loan, LIBOR+10.00% cash due 9/1/202511.00 %19,894 19,504 19,496 (6)(15)
First Lien Delayed Draw Term Loan, LIBOR+10.00% cash due 9/1/2025— (37)(38)(6)(15)(19)
19,467 19,458 
P & L Development, LLCPharmaceuticals
Fixed Rate Bond, 7.75% cash due 11/15/20257,776 7,832 8,089 
7,832 8,089 
Park Place Technologies, LLCInternet Services & Infrastructure
First Lien Term Loan, LIBOR+5.00% cash due 11/10/20276.00 %9,950 9,479 9,961 (6)
9,479 9,961 
106
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2021
(dollar amounts in thousands)

Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Performance Health Holdings, Inc.Health Care Distributors
First Lien Term Loan, LIBOR+6.00% cash due 7/12/20277.00 %$20,085 $19,698 $19,683 (6)(15)
19,698 19,683 
Pingora MSR Opportunity Fund I-A, LPThrifts & Mortgage Finance
1.86% limited partnership interest752 112 (11)(16)(19)
752 112 
Planview Parent, Inc.Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 12/18/20288.00 %28,627 28,198 28,699 (6)(15)
28,198 28,699 
PLNTF Holdings, LLCLeisure Facilities
First Lien Term Loan, LIBOR+8.00% cash due 3/22/20269.00 %13,729 13,482 13,798 (6)(15)
13,482 13,798 
Pluralsight, LLCApplication Software
First Lien Term Loan, LIBOR+8.00% cash due 4/6/20279.00 %48,689 47,788 47,763 (6)(15)
First Lien Revolver, LIBOR+8.00% cash due 4/6/2027— (65)(67)(6)(15)(19)
47,723 47,696 
PRGX Global, Inc.Data Processing & Outsourced Services
First Lien Term Loan, LIBOR+6.75% cash due 3/3/20267.75 %34,118 33,016 33,547 (6)(15)
First Lien Revolver, LIBOR+6.75% cash due 3/3/2026— (44)(42)(6)(15)(19)
80,515 Class B Common Units79 81 (15)
33,051 33,586 
ProFrac Services, LLCIndustrial Machinery
First Lien Term Loan, LIBOR+8.50% cash due 9/15/20239.75 %30,910 29,146 30,600 (6)(15)
29,146 30,600 
Project Boost Purchaser, LLCApplication Software
Second Lien Term Loan, LIBOR+8.00% cash due 5/31/20278.08 %5,250 5,151 5,224 (6)(15)
5,151 5,224 
Quantum Bidco LimitedFood Distributors
First Lien Term Loan, UK LIBOR+6.00% cash due 1/29/20286.11 %£3,501 4,625 4,673 (6)(11)
4,625 4,673 
QuorumLabs, Inc.Application Software
64,887,669 Junior-2 Preferred Stock375 — (15)
375 — 
Relativity ODA LLCApplication Software
First Lien Term Loan, LIBOR+7.50% PIK due 5/12/2027$22,856 22,337 22,376 (6)(15)
First Lien Revolver, LIBOR+6.50% cash due 5/12/2027— (52)(47)(6)(15)(19)
22,285 22,329 
Renaissance Holding Corp.Diversified Banks
Second Lien Term Loan, LIBOR+7.00% cash due 5/29/20267.08 %3,542 3,515 3,562 (6)
3,515 3,562 
RevSpring, Inc.Commercial Printing
First Lien Term Loan, LIBOR+4.25% cash due 10/11/20254.38 %9,725 9,185 9,709 (6)
9,185 9,709 
RumbleOn, Inc.Automotive Retail
First Lien Term Loan, LIBOR+8.25% cash due 8/31/20269.25 %38,036 35,651 35,640 (6)(11)(15)
First Lien Delayed Draw Term Loan, LIBOR+8.25% cash due 8/31/2026— (1,022)(1,027)(6)(11)(15)(19)
164,660 Class B Common Stock Warrants (exercise price $33.00) expiration date 2/28/20231,202 1,553 (15)
35,831 36,166 
107
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2021
(dollar amounts in thousands)

Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Sabert CorporationMetal & Glass Containers
First Lien Term Loan, LIBOR+4.50% cash due 12/10/20265.50 %$1,818 $1,711 $1,825 (6)
1,711 1,825 
Scilex Pharmaceuticals Inc.Pharmaceuticals
Fixed Rate Zero Coupon Bond due 8/15/20267,692 6,512 7,169 (15)
6,512 7,169 
ShareThis, Inc.Application Software
345,452 Series C Preferred Stock Warrants (exercise price $3.0395) expiration date 3/4/2024367 — (15)
367 — 
SIO2 Medical Products, Inc.Metal & Glass Containers
Subordinated Debt, 11.25% cash due 2/28/202215,896 15,161 15,022 (15)
Subordinated Delayed Draw Debt, 11.25% cash due 2/28/2022— (110)(119)(15)(19)
Common Stock Warrants (exercise price $0.75) expiration date 7/31/2028681 685 (15)
15,732 15,588 
Sirva Worldwide, Inc.Diversified Support Services
First Lien Term Loan, LIBOR+5.50% cash due 8/4/20255.58 %1,739 1,554 1,644 (6)
1,554 1,644 
SM Wellness Holdings, Inc.Health Care Services
Second Lien Term Loan, LIBOR+8.00% cash due 4/16/20298.75 %9,109 8,972 9,177 (6)(15)
8,972 9,177 
SonicWall US Holdings Inc.Technology Distributors
Second Lien Term Loan, LIBOR+7.50% cash due 5/18/20267.63 %3,195 3,163 3,178 (6)
3,163 3,178 
Sorrento Therapeutics, Inc.Biotechnology
50,000 Common Stock Units197 382 (11)
197 382 
Star US Bidco LLCIndustrial Machinery
First Lien Term Loan, LIBOR+4.25% cash due 3/17/20275.25 %1,194 1,114 1,199 (6)
1,114 1,199 
SumUp Holdings Luxembourg S.À.R.L.Other Diversified Financial Services
First Lien Delayed Draw Term Loan, EURIBOR+8.50% cash due 3/10/202610.00 %€13,980 15,991 15,908 (6)(11)(15)(19)
15,991 15,908 
Sunland Asphalt & Construction, LLCConstruction & Engineering
First Lien Term Loan, LIBOR+6.00% cash due 1/13/20267.00 %$43,052 41,782 42,450 (6)(15)
First Lien Revolver, LIBOR+6.00% cash due 1/13/20227.00 %203 150 169 (6)(15)(19)
41,932 42,619 
Supermoose Borrower, LLCApplication Software
First Lien Term Loan, LIBOR+3.75% cash due 8/29/20253.88 %8,576 7,581 7,996 (6)
7,581 7,996 
SVP-Singer Holdings Inc.Home Furnishings
First Lien Term Loan, LIBOR+6.75% cash due 7/28/20287.50 %20,976 19,537 19,735 (6)(15)
19,537 19,735 
Swordfish Merger Sub LLCAuto Parts & Equipment
Second Lien Term Loan, LIBOR+6.75% cash due 2/2/20267.75 %12,500 12,466 12,365 (6)(15)
12,466 12,365 
Tacala, LLCRestaurants
Second Lien Term Loan, LIBOR+7.50% cash due 2/4/20288.25 %9,448 9,317 9,451 (6)
9,317 9,451 
108
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2021
(dollar amounts in thousands)

Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Tecta America Corp.Construction & Engineering
Second Lien Term Loan, LIBOR+8.50% cash due 4/9/20299.25 %$5,203 $5,125 $5,203 (6)(15)
5,125 5,203 
Telestream Holdings CorporationApplication Software
First Lien Term Loan, LIBOR+8.75% cash due 10/15/20259.75 %18,510 18,017 18,250 (6)(15)
First Lien Revolver, LIBOR+8.75% cash due 10/15/20259.75 %492 464 468 (6)(15)(19)
18,481 18,718 
TerSera Therapeutics LLCPharmaceuticals
Second Lien Term Loan, LIBOR+9.50% cash due 3/30/202610.50 %29,663 29,359 29,371 (6)(15)
668,879 Common Units of TerSera Holdings LLC2,192 3,487 (15)
31,551 32,858 
TGNR HoldCo LLCIntegrated Oil & Gas
Subordinated Debt, 11.50% cash due 5/14/20264,984 4,842 4,884 (11)(15)(20)
4,842 4,884 
Thermacell Repellents, Inc.Leisure Products
First Lien Term Loan, LIBOR+5.75% cash due 12/4/20266.75 %6,636 6,603 6,603 (6)(15)
First Lien Revolver, LIBOR+5.75% cash due 12/4/2026— (4)(4)(6)(15)(19)
6,599 6,599 
Thrasio, LLCInternet & Direct Marketing Retail
First Lien Term Loan, LIBOR+7.00% cash due 12/18/20268.00 %37,876 36,736 37,686 (6)(15)
8,434 Shares of Series C-3 Preferred Stock in Thrasio Holdings, Inc.101 171 (15)
284,650.32 Shares of Series C-2 Preferred Stock in Thrasio Holdings, Inc.2,410 5,764 (15)
23,201 Shares of Series X Preferred Stock in Thrasio Holdings, Inc.22,986 24,803 (15)(19)
62,233 68,424 
TIBCO Software Inc.Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 3/3/20287.34 %16,788 16,681 17,002 (6)
16,681 17,002 
TigerConnect, Inc.Application Software
299,110 Series B Preferred Stock Warrants (exercise price $1.3373) expiration date 12/8/202460 525 (15)
60 525 
Transact Holdings Inc.Application Software
First Lien Term Loan, LIBOR+4.75% cash due 4/30/20264.83 %6,860 6,757 6,809 (6)(15)
6,757 6,809 
Velocity Commercial Capital, LLCThrifts & Mortgage Finance
First Lien Term Loan, LIBOR+8.00% cash due 2/5/20269.00 %15,909 15,327 15,830 (6)(15)
15,327 15,830 
Veritas US Inc.Application Software
First Lien Term Loan, LIBOR+5.00% cash due 9/1/20256.00 %5,940 5,599 5,975 (6)
5,599 5,975 
Vitalyst Holdings, Inc.IT Consulting & Other Services
675 Series A Preferred Stock Units675 440 (15)
7,500 Class A Common Stock Units75 — (15)
750 440 
Win Brands Group LLCHousewares & Specialties
First Lien Term Loan, LIBOR+9.00% cash 5.00% PIK due 1/22/202610.00 %1,894 1,875 1,884 (6)(15)
181 Class F Warrants in Brand Value Growth LLC (exercise price $0.01) expiration date 1/25/2027— 119 (15)
1,875 2,003 
109
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2021
(dollar amounts in thousands)

Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Windstream Services II, LLCIntegrated Telecommunication Services
First Lien Term Loan, LIBOR+6.25% cash due 9/21/20277.25 %$31,598 $30,347 $31,793 (6)
18,032 Shares of Common Stock in Windstream Holdings II, LLC216 363 (15)
109,420 Warrants in Windstream Holdings II, LLC1,842 2,199 (15)
32,405 34,355 
WP CPP Holdings, LLCAerospace & Defense
First Lien Term Loan, LIBOR+3.75% cash due 4/30/20254.75 %4,369 4,005 4,264 (6)
Second Lien Term Loan, LIBOR+7.75% cash due 4/30/20268.75 %16,000 15,758 15,815 (6)(15)
19,763 20,079 
WPEngine, Inc.Application Software
First Lien Term Loan, LIBOR+6.50% cash due 3/27/20267.50 %40,536 39,778 40,013 (6)(15)
39,778 40,013 
WWEX Uni Topco Holdings, LLCAir Freight & Logistics
Second Lien Term Loan, LIBOR+7.00% cash due 7/26/20297.75 %5,000 4,925 4,981 (6)
4,925 4,981 
Zep Inc.Specialty Chemicals
First Lien Term Loan, LIBOR+4.00% cash due 8/12/20245.00 %6,495 6,165 6,353 (6)
Second Lien Term Loan, LIBOR+8.25% cash due 8/11/20259.25 %22,748 22,692 21,993 (6)(15)
28,857 28,346 
Zephyr Bidco LimitedSpecialized Finance
Second Lien Term Loan, UK LIBOR+7.50% cash due 7/23/20267.55 %£18,000 23,783 24,210 (6)(11)
23,783 24,210 
Total Non-Control/Non-Affiliate Investments (172.7% of net assets)$2,236,759 $2,267,575 
Total Portfolio Investments (194.7% of net assets)$2,539,121 $2,556,629 
Cash and Cash Equivalents and Restricted Cash
JP Morgan Prime Money Market Fund, Institutional Shares $23,600 $23,600 
Other cash accounts8,035 8,035 
Total Cash and Cash Equivalents and Restricted Cash (2.4% of net assets)$31,635 $31,635 
Total Portfolio Investments and Cash and Cash Equivalents and Restricted Cash (197.2% of net assets)$2,570,756 $2,588,264 

Derivative InstrumentNotional Amount to be PurchasedNotional Amount to be SoldMaturity DateCounterpartyCumulative Unrealized Appreciation /(Depreciation)
Foreign currency forward contract$52,186 £37,709 11/12/2021JPMorgan Chase Bank, N.A.$1,339 
Foreign currency forward contract$46,663 €39,736 11/12/2021JPMorgan Chase Bank, N.A.573 
$1,912 

Derivative InstrumentCompany ReceivesCompany PaysCounterpartyMaturity DateNotional AmountFair Value
Interest rate swapFixed 2.7%Floating 3-month LIBOR +1.658%Royal Bank of Canada1/15/2027$350,000$(2,108)
110
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2021
(dollar amounts in thousands)

(1)All debt investments are income producing unless otherwise noted. All equity investments are non-income producing unless otherwise noted.
(2)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.
(3)Equity ownership may be held in shares or units of companies related to the portfolio companies.
(4)Interest rates may be adjusted from period to period on certain term loans and revolvers. These rate adjustments may be either temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements or permanent in nature per loan amendment or waiver documents.
(5)Each of the Company's investments is pledged as collateral under one or more of its credit facilities. A single investment may be divided into parts that are individually pledged as collateral to separate credit facilities.
(6)The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars unless otherwise noted. As of September 30, 2021, the reference rates for the Company's variable rate loans were the 30-day LIBOR at 0.08%, the 60-day LIBOR at 0.11%, the 90-day LIBOR at 0.13%, the 180-day LIBOR at 0.16%, the 360-day LIBOR at 0.24%, the PRIME at 3.25%, the 30-day UK LIBOR at 0.05%, the 180-day UK LIBOR at 0.09%, the 30-day EURIBOR at (0.57)%, the 90-day EURIBOR at (0.56)% and the 180-day EURIBOR at (0.53)%. Most loans include an interest floor, which generally ranges from 0% to 1%.
(7)Principal includes accumulated PIK interest and is net of repayments, if any. “£” signifies the investment is denominated in British Pounds. "€" signifies the investment is denominated in Euros. All other investments are denominated in U.S. dollars.
(8)Control Investments generally are defined by the Investment Company Act, as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.
(9)As defined in the Investment Company Act, the Company is deemed to be both an "Affiliated Person" of and to "Control" these portfolio companies as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Schedule 12-14 in the Company's annual report on Form 10-K for the year ended September 30, 2021 for transactions during the year ended September 30, 2021 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to control.
(10)First Star Speir Aviation 1 Limited is a wholly-owned holding company formed by the Company in order to facilitate its investment strategy. In accordance with ASU 2013-08, the Company has deemed the holding company to be an investment company under accounting principles generally accepted in the United States ("GAAP") and therefore deemed it appropriate to consolidate the financial results and financial position of the holding company and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding companiescompany are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entities.
(17)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition.
(18)In December 2016, the Company restructured its investment in Senior Loan Fund JV I, LLC. As part of the restructuring, the Company exchanged its subordinated notes for Class A Mezzanine Secured Deferrable Floating Rate Notes and Class B Mezzanine Secured Deferrable Fixed Rate Notes issued by a newly formed, wholly owned subsidiary, SLF Repack Issuer 2016 LLC. The Class A Mezzanine Secured Deferrable Floating Rate Notes bear interest at a rate of LIBOR plus the applicable margin as defined in the indenture The Class A Mezzanine Secured Deferrable Floating Rate Notes and Class B Mezzanine Secured Deferrable Fixed Rate Notes are collectively referred to as the "mezzanine notes".
(19)In June 2017, the Company sold all of its investments in Eagle Hospital Physicians, LLC ("Eagle Physicians") in exchange for cash and the right to receive contingent payments in the future based on the performance of Eagle Physicians, which is referred to as an "earn-out" in the consolidated schedule of investments. Prior to the sale of its investments in Eagle Physicians, the Company may have been deemed to control Eagle Physicians within the meaning of the 1940 Act due to the fact that the Company owned greater than 25% of the voting securities in Eagle Physicians. After the sale and as of September 30, 2017, the Company no longer owns any of the voting securities in Eagle Physicians and is not deemed to control Eagle Physicians within the meaning of the 1940 Act.
(20)In June 2017, AdVenture Interactive, Corp. reorganized its business to separate its marketing services business from its online program management business. In connection with the reorganization, FS AVI Holdco LLC was formed as a separate entity and is the new parent to Keypath Education, Inc., which represents AdVenture Interactive, Corp's former marketing services business, and the Company's first lien term loan and revolver with AdVenture Interactive, Corp. was assigned to Keypath Education, Inc.
(21)The Company's investment in Maverick Healthcare Group, LLC ("Maverick Healthcare") is currently past due. In May 2017, the Company entered into a forbearance agreement with Maverick Healthcare in which the Company has temporarily agreed not to take action against Maverick Healthcare.
(22)
As of September 30, 2017, these investments are categorized as level 2 within the fair value hierarchy established by FASB ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"). All other investments are categorized as level 3 as of September 30, 2017 and were valued using significant unobservable inputs.

(11)Investment is not a "qualifying asset" as defined under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of September 30, 2021, qualifying assets represented 75.7% of the Company's total assets and non-qualifying assets represented 24.3% of the Company's total assets.
(12)Income producing through payment of dividends or distributions.
(13)PIK interest income for this investment accrues at an annualized rate of 15%, however, the PIK interest is not contractually capitalized on the investment subsequent to a restructure that occurred during the year ended September 30, 2021. As a result, the principal amount of the investment does not increase over time for accumulated PIK interest. As of September 30, 2021, the accumulated PIK interest balance for the A notes and the B notes was $0.9 million and $0.8 million, respectively.
(14)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition.
(15)As of September 30, 2021, these investments were categorized as Level 3 within the fair value hierarchy established by FASB guidance under ASC 820.
(16)This investment was valued using net asset value as a practical expedient for fair value. Consistent with ASC 820, these investments are excluded from the hierarchical levels.
(17)Affiliate Investments generally are defined by the Investment Company Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.
(18)Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.
(19)Investment had undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.
(20)This investment represents a participation interest in the underlying securities shown.
See notes to Consolidated Financial Statements.

Oaktree Specialty Lending Corporation
111
Consolidated Schedule of Investments
September 30, 2016
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(5)(9)(14)(20)  Cash Interest Rate (13) Industry Principal (8)
 Cost Fair Value
Control Investments (3)(15)          
 Traffic Solutions Holdings, Inc.   Construction and engineering      
 First Lien Term Loan, LIBOR+7% (1% floor) cash 2% PIK due 4/1/2021 (13) 8.00%   $36,180
 $36,152
 $36,328
 First Lien Revolver, LIBOR+6% (1% floor) cash due 4/1/2021 (13) 7.00%   2,800
 2,797
 2,800
 LC Facility, 6.0% cash due 4/1/2021     3,518
 3,514
 3,518
 746,114 Series A Preferred Units, 10%       18,558
 20,094
 746,114 Shares of Common Stock       5,316
 —
        66,337
 62,740
 TransTrade Operators, Inc.   Air freight & logistics      
 First Lien Term Loan, 5% cash due 12/31/2017     15,973
 15,572
 7,046
 First Lien Revolver, 8% cash due 12/31/2017     6,885
 6,885
 —
 596.67 Series A Common Units       —
 —
 4,000,000 Series A Preferred Units in TransTrade Holdings LLC       4,000
 —
 5,200,000 Series B Preferred Units in TransTrade Holdings LLC       5,200
 —
        31,657
 7,046
 First Star Aviation, LLC (16)   Airlines      
 10,104,401 Common Units (6)       5,533
 2,413
        5,533
 2,413
 First Star Speir Aviation Limited (11)(16)   Airlines      
 First Lien Term Loan, 9% cash due 12/15/2020     55,395
 50,305
 54,214
 2,058,411.64 Common Units (6)       —
 2,839
        50,305
 57,053
 First Star Bermuda Aviation Limited (11)(16)   Airlines      
 First Lien Term Loan, 9% cash 3% PIK due 8/19/2018     11,868
 11,868
 11,851
 4,293,736 Common Units (6)       3,360
 5,729
        15,228
 17,580
 Eagle Hospital Physicians, LLC   Healthcare services      
 First Lien Term Loan A, 8% PIK due 4/30/2017     13,889
 13,889
 13,875
 First Lien Term Loan B, 8.1% PIK due 4/30/2017     3,889
 3,889
 3,887
 First Lien Revolver, 8% cash due 4/30/2017     1,913
 1,913
 1,913
 4,100,000 Class A Common Units       4,100
 7,421
        23,791
 27,096
 Senior Loan Fund JV I, LLC (11)(17)   Multi-sector holdings      
 Subordinated Notes, LIBOR+8% cash due 5/2/2021 (13) 8.47%   144,841
 144,841
 129,004
 87.5% LLC equity interest (6)       16,094
 13,708
        160,935
 142,712
 Express Group Holdings LLC (18)   Oil & gas equipment services      
 First Lien Term Loan, LIBOR+8% (1% floor) cash due 9/3/2019 (13) 9.00%
   12,073
 12,073
 1,193
 First Lien Revolver, LIBOR+4.5% (1% floor) cash due 3/4/2019 (13) 5.50%
   6,090
 6,090
 6,090
 Last-In Revolver, PRIME+3.5% cash due 10/7/2016 7.00%
   3,000
 3,000
 3,000
 14,033,391 Series B Preferred Units       3,982
 —
 280,668 Series A Preferred Units       1,593
 —
 1,456,344 Common Stock Units       —
 —
        26,738
 10,283
 Ameritox Ltd. (19)   Healthcare services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash 3% PIK due 4/11/2021 (13) 6.00%
   31,258
 31,228
 31,039
 14,090,126.4 Class A Preferred Units in Ameritox Holdings II, LLC       14,090
 15,437
 1,602,260.83 Class B Preferred Units in Ameritox Holdings II, LLC       1,602
 1,755
 4,930.03 Class A Units in Ameritox Holdings II, LLC       29,049
 13,113
        75,969
 61,344
 Total Control Investments (34.0% of net assets)       $456,493
 $388,267
See notes to Consolidated Financial Statements.
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2016
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(5)(9)(14)(20)  Cash Interest Rate (13) Industry Principal (8)
 Cost Fair Value
 Affiliate Investments (4)          
 Caregiver Services, Inc.   Healthcare services      
 Second Lien Term Loan, 10% cash 2% PIK due 6/30/2019     $9,524
 $9,524
 $9,549
 1,080,399 Shares of Series A Preferred Stock, 10%       1,080
 4,079
        10,604
 13,628
 AmBath/ReBath Holdings, Inc.   Home improvement retail      
 First Lien Term Loan B, 12.5% cash 2.5% PIK due 8/31/2017     24,364
 $24,351
 $24,268
 4,668,788 Shares of Preferred Stock       —
 1,873
        24,351
 26,141
 Total Affiliate Investments (3.5% of net assets)       $34,955
 $39,769
           
 Non-Control/Non-Affiliate Investments (7)          
 HealthDrive Corporation   Healthcare services      
 First Lien Term Loan A, 12% cash due 12/31/2016     3,958
 $3,958
 $3,958
 First Lien Term Loan B, 12% cash 2% PIK due 12/31/2016     11,938
 11,938
 11,938
 First Lien Revolver, 12% cash due 12/31/2016     466
 466
 466
        16,362
 16,362
 Cenegenics, LLC   Healthcare services      
 First Lien Term Loan, 9.75% cash 2% PIK due 9/30/2019     29,662
 29,629
 29,812
 First Lien Revolver, 15% cash due 9/30/2019     1,000
 1,000
 1,000
 452,914.87 Common Units in Cenegenics, LLC       598
 613
 345,380.141 Preferred Units in Cenegenics, LLC       300
 300
        31,527
 31,725
 Riverlake Equity Partners II, LP   Multi-sector holdings      
 1.78% limited partnership interest (11)       823
 755
        823
 755
 Riverside Fund IV, LP   Multi-sector holdings      
 0.34% limited partnership interest (11)       456
 302
        456
 302
 Bunker Hill Capital II (QP), L.P.   Multi-sector holdings      
 0.51% limited partnership interest (11)       810
 739
        810
 739
See notes to Consolidated Financial Statements.

Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2016
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(5)(9)(14)(20)  Cash Interest Rate (13) Industry Principal (8)
 Cost Fair Value
 Maverick Healthcare Group, LLC   Healthcare equipment      
 First Lien Term Loan A, LIBOR+5.5% cash (1.75% floor) cash 2% PIK due 4/30/2017 (13) 7.25%   $16,151
 $16,108
 $15,993
 First Lien Term Loan B, LIBOR+5.5% cash (1.75% floor) cash 5.5% PIK due 4/30/2017 (13) 7.25%
   39,159
 39,110
 38,900
 CapEx Line, LIBOR+5.75% (1.75% floor) cash 2% PIK due 4/30/2017 (13) 7.50%   1,259
 1,252
 1,242
 First Lien Revolver, PRIME+6.5% cash due 4/30/2017 (13) 10.00%
   4,401
 4,401
 4,401
        60,871
 60,536
 Refac Optical Group   Specialty stores      
 First Lien Term Loan A, LIBOR+7.5% cash due 9/30/2018 (13) 8.02%
   6,198
 6,150
 6,190
 First Lien Term Loan B, LIBOR+8.5% cash, 1.75% PIK due 9/30/2018 (13) 9.02%
   34,290
 34,149
 33,967
 First Lien Term Loan C, 12% cash due 9/30/2018 12.00%
   3,416
 3,416
 3,339
 First Lien Revolver, LIBOR+7.5% cash due 9/30/2018 (13) 8.02%
   1,600
 1,596
 1,600
 1,550.9435 Shares of Common Stock in Refac Holdings, Inc.       1
 —
 550.9435 Shares of Series A-2 Preferred Stock in Refac Holdings, Inc., 10%       305
 —
 1,000 Shares of Series A Preferred Stock Units in Refac Holdings, Inc., 10%       999
 136
        46,616
 45,232
 Baird Capital Partners V, LP   Multi-sector holdings      
 0.4% limited partnership interest (11)       1,000
 558
        1,000
 558
 Discovery Practice Management, Inc.   Healthcare services      
 Senior Term Loan, LIBOR+9.25% cash due 11/4/2018 (13) 9.90%
   30,698
 30,651
 30,698
 Senior Revolver, LIBOR+7% cash due 11/4/2018 (10) (13) 7.65%
   —
 (4) —
 Capex Line A, LIBOR+7% cash due 11/4/2018 (13) 7.65%
   938
 938
 938
 Capex Line B, LIBOR+7% cash due 11/4/2018 (13) 7.65%
   2,000
 2,000
 2,000
        33,585
 33,636
 Milestone Partners IV, L.P.   Multi-sector holdings      
 0.85% limited partnership interest (11)       1,739
 2,005
        1,739
 2,005
 National Spine and Pain Centers, LLC   Healthcare services      
 Mezzanine Term Loan, 11% cash 1.6% PIK due 9/27/2020     30,720
 30,679
 30,750
 317,282.97 Class A Units       317
 608
        30,996
 31,358
 RCPDirect, L.P.   Multi-sector holdings      
 0.91% limited partnership interest (11)       764
 927
        764
 927
 Riverside Fund V, L.P.   Multi-sector holdings      
 0.48% limited partnership interest (11)       1,147
 766
        1,147
 766

See notes to Consolidated Financial Statements.


Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2016
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(5)(9)(14)(20)  Cash Interest Rate (13) Industry Principal (8)
 Cost Fair Value
 ACON Equity Partners III, LP          
 0.13% limited partnership interest (11)   Multi-sector holdings   $796
 $482
        796
 482
 BMC Acquisition, Inc.   Other diversified financial services      
 500 Series A Preferred Shares       500
 698
 50,000 Common Shares (6)       1
 —
        501
 698
 Ansira Partners, Inc.   Advertising      
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 4/5/2021 (13) 9.50%   $38,000
 38,000
 37,840
 209 Preferred Units of Ansira Holdings, LLC (6)      209
 234
 250 Class A Common Units of Ansira Holdings, LLC       —
 368
        38,209
 38,442
 Edmentum, Inc.   Education services      
 Unsecured Senior PIK Note, 8.5% PIK due 6/9/2020     2,235
 2,235
 2,153
 Unsecured Junior PIK Note, 10% PIK due 6/9/2020    10,227
 10,227
 8,064
 Unsecured Revolver, 5% cash due 6/9/2020       —
 —
 126,127.80 Class A Common Units       126
 —
        12,588
 10,217
 I Drive Safely, LLC   Education services      
125,079 Class A Common Units of IDS Investments, LLC       1,000
 391
        1,000
 391
 Yeti Acquisition, LLC   Leisure products      
 3,000,000 Common Stock Units of Yeti Holdings, Inc. (6)       —
 34,981
        —
 34,981
 Vitalyst Holdings, Inc.   IT consulting & other services      
 Subordinated Term Loan, 12% cash 1.5% PIK due 9/5/2018     19,681
 19,682
 19,697
 675 Series A Preferred Units of PCH Support Holdings, Inc., 10%       675
 418
 7,500 Class A Common Stock Units of PCH Support Holdings, Inc.       75
 —
        20,432
 20,115
 Beecken Petty O'Keefe Fund IV, L.P.   Multi-sector holdings      
 0.5% limited partnership interest (11)       1,187
 1,254
        1,187
 1,254
 First American Payment Systems, LP   Diversified support services      
 Second Lien Term Loan, LIBOR+9.5% (1.25% floor) cash due 4/12/2019 (13) 10.75%   23,304
 23,304
 22,546
 First Lien Revolver, PRIME+3.5% cash due 10/12/2017 (13) 7.00%   2,000
 2,000
 1,975
        25,304
 24,521
 Dexter Axle Company   Auto parts & equipment      
 1,547 Common Shares in Dexter Axle Holding Company       1,643
 3,719
        1,643
 3,719
 Comprehensive Pharmacy Services LLC   Pharmaceuticals      
 Mezzanine Term Loan, 11.25% cash 1.5% PIK due 11/30/2019     14,798
 14,798
 14,811
 20,000 Common Shares in MCP CPS Group Holdings, Inc.       2,000
 2,435
        16,798
 17,246

See notes to Consolidated Financial Statements.

Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2016
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(5)(9)(14)(20)  Cash Interest Rate (13) Industry Principal (8)
 Cost Fair Value
 Garretson Firm Resolution Group, Inc.   Diversified support services      
 First Lien Revolver, LIBOR+6.5% (1% floor) cash due 5/22/2020 (13) 9.00%     $—
 $—
 4,950,000 Preferred Units in GRG Holdings, LP, 8%       495
 611
 50,000 Common Units in GRG Holdings, LP       5
 —
        500
 611
 Teaching Strategies, LLC   Education services      
 Senior Term Loan, LIBOR+5.5% (0.5% floor) cash due 10/1/2019 (13) 6.34%   $7,253
 7,253
 7,246
 Senior Revolver, LIBOR+5.5% (0.5% floor) cash due 10/1/2019 (13)       —
 —
        7,253
 7,246
 Omniplex World Services Corporation   Security & alarm services      
 Subordinated Term Loan, 12.25% cash 2.25% PIK due 8/19/2021     11,231
 11,231
 11,469
 500 Class A Common Units in Omniplex Holdings Corp.       500
 643
 64.041 Class A-1 Common Units in Omniplex Holdings Corp.       104
 —
        11,835
 12,112
 Dominion Diagnostics, LLC   Healthcare services      
 Subordinated Term Loan, 11% cash 1% PIK due 10/8/2019     16,318
 16,195
 3,365
        16,195
 3,365
 AdVenture Interactive, Corp.   Advertising      
 First Lien Term Loan, LIBOR+7.75% (1.00% floor) cash due 3/22/2018 (13) 8.75%   89,814
 89,782
 69,151
 First Lien Revolver, LIBOR+7.75% (1.00% floor) cash due 3/22/2018 (10)(13) 8.75%     (1) —
 2,599.32 Preferred Units of AVI Holdings, L.P.       1,820
 —
        91,601
 69,151
 Sterling Capital Partners IV, L.P.   Multi-sector holdings      
 0.2% limited partnership interest (11)       1,515
 1,314
        1,515
 1,314
 RP Crown Parent, LLC   Application software      
 First Lien Revolver, LIBOR+5.5% (1.25% floor) cash due 12/21/2017 (13) 6.75%     —
 —
        —
 —
 Advanced Pain Management   Healthcare services      
 First Lien Term Loan, LIBOR+8.5% (1.25% floor) cash due 2/26/2018 (13) 9.75%   24,000
 24,000
 24,019
        24,000
 24,019

See notes to Consolidated Financial Statements.
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2016
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(5)(9)(14)(20)  Cash Interest Rate (13) Industry Principal (8)
 Cost Fair Value
 TravelClick, Inc.   Internet software & services      
 Second Lien Term Loan, LIBOR+7.75% (1% floor) cash due 11/6/2021 (13) 8.75%   $4,450
 $3,978
 $3,986
        3,978
 3,986
 Pingora MSR Opportunity Fund I-A, LP   Thrift & mortgage finance      
 1.9% limited partnership interest (11)       7,946
 5,846
        7,946
 5,846
 Credit Infonet, Inc.   Data processing & outsourced services      
 Subordinated Term Loan, 11.25% cash 1.75% PIK due 10/26/2018     13,795
 13,795
 13,260
        13,795
 13,260
 Bracket Holding Corp.   Healthcare services      
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 2/15/2020 (13) 9.25%   32,000
 32,000
 32,061
 50,000 Common Units in AB Group Holdings, LP       500
 896
        32,500
 32,957
 HealthEdge Software, Inc.   Application software      
 482,453 Series A-3 Preferred Stock Warrants (exercise price $1.450918) expiration date 9/30/2023       213
 650
        213
 650
 InMotion Entertainment Group, LLC   Consumer electronics      
 First Lien Term Loan A, LIBOR+7.75% (1.25% floor) cash due 10/1/2018 (13) 9.00%   12,950
 12,950
 12,846
 First Lien Term Loan B, LIBOR+7.75% (1.25% floor) cash due 10/1/2018 (13) 9.00%   5,645
 5,476
 5,571
 First Lien Revolver, LIBOR+6.75% (1.25% floor) cash due 10/1/2018 (13) 8.00%   4,605
 4,604
 4,605
 CapEx Line, LIBOR+7.75% (1.25% floor) cash due 10/1/2018 (13) 9.00%   839
 839
 839
 1,000,000 Class A Units in InMotion Entertainment Holdings, LLC       1,000
 1,319
        24,869
 25,180
 Thing5, LLC   Data processing & outsourced services      
 First Lien Term Loan, LIBOR+7.5% (1% floor) cash due 10/11/2018 (12)(13) 8.50%   53,680
 53,680
 52,093
 First Lien Revolver, LIBOR+7.5% (1% floor) cash due 10/11/2018 (13) 8.50%   1,000
 1,000
 1,000
 2,000,000 Units in T5 Investment Vehicle, LLC       2,000
 292
        56,680
 53,385
 Epic Health Services, Inc.          
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 8/17/2021 (13) 9.25% Healthcare services 24,667
 24,316
 24,714
        24,316
 24,714
See notes to Consolidated Financial Statements.

Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2016
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(5)(9)(14)(20)  Cash Interest Rate (13) Industry Principal (8)
 Cost Fair Value
 Kason Corporation   Industrial machinery      
 Mezzanine Term Loan, 11.5% cash 1.75% PIK due 10/28/2019 11.50%   $5,901
 $5,901
 $5,813
 498.6 Class A Preferred Units in Kason Investment, LLC, 8%       499
 566
 5,540 Class A Common Units in Kason Investment, LLC       55
 1
        6,455
 6,380
 SPC Partners V, L.P.   Multi-sector holdings      
 0.571% limited partnership interest (11)       1,398
 1,515
        1,398
 1,515
 Systems Maintenance Services Holdings, Inc.   IT consulting & other services      
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 10/18/2020 (13) 9.25%   19,000
 18,936
 18,810
        18,936
 18,810
 P2 Upstream Acquisition Co.   Application software      
 First Lien Revolver, LIBOR+4% (1% floor) cash due 10/31/2018 (13) 5.00%     —
 —
        —
 —
 Vandelay Industries Merger Sub, Inc.   Industrial machinery      
 Second Lien Term Loan, 10.75% cash 1% PIK due 11/12/2019     39,265
 39,104
 39,300
 2,500,000 Class A Common Units in Vandelay Industries, L.P.       958
 5,902
        40,062
 45,202
 Vitera Healthcare Solutions, LLC   Healthcare technology      
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 11/4/2021 (13) 9.25%   8,000
 7,904
 7,420
        7,904
 7,420
 The Active Network, Inc.   Internet software & services      
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 11/15/2021 (13) 9.50%   16,543
 16,379
 16,336
        16,379
 16,336
 OmniSYS Acquisition Corporation   Diversified support services      
 First Lien Term Loan, LIBOR+7.5% (1% floor) cash due 11/21/2018 (13) 8.50%   5,500
 5,496
 5,507
 First Lien Revolver, LIBOR+7.5% (1% floor) cash due 11/21/2018 (13) 8.50%     —
 —
 100,000 Common Units in OSYS Holdings, LLC       1,000
 1,118
        6,496
 6,625
 Moelis Capital Partners Opportunity Fund I-B, LP   Multi-sector holdings      
 1.0% limited partnership interest (11)       1,524
 1,888
        1,524
 1,888
 Aden & Anais Merger Sub, Inc.   Apparel, accessories & luxury goods      
 Mezzanine Term Loan, 10% cash 2% PIK due 6/23/2019     12,694
 12,694
 12,610
 30,000 Common Units in Aden & Anais Holdings, Inc.       3,000
 2,010
        15,694
 14,620
 Lift Brands, Inc.   Leisure facilities      
 First Lien Term Loan, LIBOR+8% (1% floor) cash due 12/23/2019 (13) 9.00%   22,268
 22,255
 22,186
 First Lien Revolver, LIBOR+8% (1% floor) cash due 12/23/2019 (13) 9.00%   2,000
 1,997
 2,000
 2,000,000 Class A Common Units in Snap Investments, LLC       2,000
 2,732
        26,252
 26,918
 Tailwind Capital Partners II, L.P.   Multi-sector holdings      
 0.3% limited partnership interest (11)       995
 1,128
        995
 1,128

See notes to Consolidated Financial Statements.
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2016
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(5)(9)(14)(20)  Cash Interest Rate (13) Industry Principal (8)
 Cost Fair Value
 Long's Drugs Incorporated   Pharmaceuticals      
 Second Lien Term Loan, LIBOR+11% cash due 2/19/2022 (13) 11.91%   $26,909
 $26,909
 $26,890
 50 Series A Preferred Shares in Long's Drugs Incorporated (6)       813
 1,037
        27,722
 27,927
 Five9, Inc.   Internet software & services      
 118,577 Common Stock Warrants (exercise price $10.12) expiration date 2/20/2024       321
 780
        321
 780
 Conviva Inc.   Application software      
 417,851 Series D Preferred Stock Warrants (exercise price $1.1966) expiration date 2/28/2021       105
 110
        105
 110
 OnCourse Learning Corporation   Education services      
 264,312 Class A Units in CIP OCL Investments, LLC       2,726
 1,891
        2,726
 1,891
 ShareThis, Inc.   Internet software & services      
 345,452 Series C Preferred Stock Warrants (exercise price $3.0395) expiration date 3/4/2024       367
 194
        367
 194
 Aptean, Inc.   Internet software & services      
 Second Lien Term Loan, LIBOR+7.5% (1% floor) cash due 2/26/2021 (13) 8.50%   3,000
 3,000
 2,957
        3,000
 2,957
 Integrated Petroleum Technologies, Inc.   Oil & gas equipment services      
 First Lien Term Loan, LIBOR+7.5% (1% floor) cash due 3/31/2019 (13) 8.50%   18,929
 18,911
 6,500
 First Lien Revolver, LIBOR+7.5% (1% floor) cash due 3/31/2019 (10)(13) 8.50%     (3) —
        18,908
 6,500
 ExamSoft Worldwide, Inc.   Internet software & services      
 First Lien Term Loan, LIBOR+8% (1% floor) cash due 5/1/2019 (13) 9.00%   14,250
 14,157
 14,061
 First Lien Revolver, LIBOR+8% (1% floor) cash due 5/1/2019 (13) 9.00%     —
 —
 180,707 Class C Units in ExamSoft Investor LLC       181
 12
        14,338
 14,073
 DigiCert, Inc.   Internet software & services      
 Second Lien Term Loan, LIBOR+9% (1% floor) cash due 6/2/2020 (13) 10.00%   61,500
 60,801
 62,500
        60,801
 62,500
 RCPDirect II, LP   Multi-sector holdings      
 0.5% limited partnership interest (11)       $346
 $353
        346
 353
 PR Wireless, Inc. (11)   Integrated telecommunication services      
 First Lien Term Loan, LIBOR+9% (1% floor) cash due 6/27/2020 (13) 10.00%   $12,715
 12,424
 8,788
 118.4211 Common Stock Warrants (exercise price $0.01) expiration date 6/27/2024       —
 430
        12,424
 9,218
See notes to Consolidated Financial Statements.





Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2016
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(5)(9)(14)(20)  Cash Interest Rate (13) Industry Principal (8) Cost Fair Value
 Integral Development Corporation   Other diversified financial services      
 First Lien Term Loan, LIBOR+9.5% (1% floor) cash due 7/10/2019 (13) 10.50%   $14,250
 $14,182
 $14,079
1,078,284 Common Stock Warrants (exercise price $0.9274) expiration date 7/10/2024       113
 —
        14,295
 14,079
 Loftware, Inc.   Internet software & services      
 Mezzanine Term Loan, 11% cash 1% PIK due 7/18/2020     6,135
 6,136
 6,208
 300,000 Class A Common Units in RPLF Holdings, LLC       300
 311
        6,436
 6,519
 Tectum Holdings, Inc.   Auto parts & equipment      
 Second Lien Term Loan, LIBOR+8.75% (1% floor) cash due 1/28/2021 (13) 9.75%   15,000
 15,000
 14,969
        15,000
 14,969
 TV Borrower US, LLC   Integrated telecommunication services      
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 7/8/2021 (11) (13) 9.50%   30,000
 29,386
 29,100
        29,386
 29,100
 Webster Capital III, L.P.   Multi-sector holdings      
0.754% limited partnership interest (11)       987
 1,157
        987
 1,157
 L Squared Capital Partners LLC   Multi-sector holdings      
 2% limited partnership interest (11)       1,692
 1,692
        1,692
 1,692
 ERS Acquisition Corp.   Diversified support services      
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash 2% PIK due 9/10/2018 (13) 9.25%   40,940
 40,187
 31,548
        40,187
 31,548
 BeyondTrust Software, Inc.   Application software      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 9/25/2019 (13) 8.00%   29,929
 29,152
 29,814
 First Lien Revolver, LIBOR+7% (1% floor) cash due 9/25/2019 (10)(13) 8.00%     (79) —
 4,500,000 Class A membership interests in BeyondTrust Holdings LLC       4,500
 5,525
        33,573
 35,339
 Answers Corporation   Internet software & services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 10/3/2021 (13) 6.25%   4,925
 4,906
 2,659
 Second Lien Term Loan, LIBOR+9% (1% floor) cash due 10/3/2022 (13) 10.00%   37,000
 35,190
 3,577
        40,096
 6,236
 Idera, Inc.   Internet software & services      
 First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 4/9/2021 (13) 6.50%   26,035
 24,962
 25,319
        24,962
 25,319
 GOBP Holdings Inc.   Food retail      
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 10/21/2022 (13) 9.25%   4,214
 4,169
 4,214
        4,169
 4,214
 Kellermeyer Bergensons Services, LLC   Diversified support services      
 Second Lien Term Loan, LIBOR+8.50% (1% floor) cash due 4/29/2022 (13) 9.50%   6,105
 5,864
 5,800
        5,864
 5,800
See notes to Consolidated Financial Statements.
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2016
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(5)(9)(14)(20)  Cash Interest Rate (13) Industry Principal (8) Cost Fair Value
 Dodge Data & Analytics LLC   Data processing & outsourced services      
 First Lien Term Loan, LIBOR+8.75% (1% floor) cash due 10/31/2019 (13) 9.75%   $7,623
 $7,623
 $7,719
 500,000 Class A Common Units in Skyline Data, News and Analytics LLC       500
 627
        8,123
 8,346
 NAVEX Global, Inc.   Internet software & services      
 Second Lien Term Loan, LIBOR+8.75% (1% floor) cash due 11/18/2022 (13) 9.75%   44,837
 44,587
 43,492
        44,587
 43,492
 GTCR Valor Companies, Inc.   Advertising      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 6/16/2023 (13) 7.00%   12,219
 11,751
 11,689
        11,751
 11,689
 Tecomet Inc.   Healthcare equipment      
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 12/5/2022 (13) 9.50%   17,000
 15,835
 16,150
        15,835
 16,150
 Metamorph US 3, LLC   Internet software & services      
 First Lien Term Loan, LIBOR+6.5% (1% floor) cash due 12/1/2020 (13) 7.50%   10,078
 10,074
 8,391
 First Lien Revolver, LIBOR+6.5% (1% floor) cash due 12/1/2020 (13) 7.50%   1,225
 1,224
 1,225
        11,298
 9,616
 Schulman Associates Institutional Board Review, Inc.   Research & consulting services      
 Second Lien Term Loan, LIBOR+8% (1% floor) cash due 6/3/2021 (13) 9.00%   17,000
 17,000
 17,333
        17,000
 17,333
 Janrain, Inc.   Internet software & services      
 218,008 Common Stock Warrants (exercise price $1.3761) expiration date 12/5/2024       45
 —
        45
 —
 TigerText, Inc.   Internet software & services      
 Second Lien Term Loan, LIBOR+9.75% (1% floor) cash due 12/8/2017 (13) 10.75%   5,000
 4,977
 4,854
 299,110 Series B Preferred Stock Warrants (exercise price $1.3373) expiration date 12/8/2024       60
 268
        5,037
 5,122
 Survey Sampling International, LLC   Research & consulting services      
 Second Lien Term Loan, LIBOR+9% (1% floor) cash due 12/16/2021 (13) 10.00%   18,700
 18,422
 18,326
        18,422
 18,326

See notes to Consolidated Financial Statements.


Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2016
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(5)(9)(14)(20)  Cash Interest Rate (13) Industry Principal (8) Cost Fair Value
 PSC Industrial Holdings Corp.   Diversified support services      
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 12/3/2021 (13) 9.25%   $7,000
 $6,800
 $6,615
        6,800
 6,615
 TIBCO Software, Inc.   Internet software & services      
 First Lien Revolver, LIBOR+4% cash due 11/25/2020 (13) 4.00%   —
 —
 —
        —
 —
 EOS Fitness Opco Holdings, LLC   Leisure facilities      
 First Lien Term Loan, LIBOR+8.75% (0.75% floor) cash due 12/30/2019 (13) 9.50%   3,832
 3,832
 3,734
 First Lien Revolver, LIBOR+8.75% (0.75% floor) cash due 12/30/2019 (13) 9.50%     —
 —
 487.5 Class A Preferred Units, 12%       488
 446
 12,500 Class B Common Units       13
 —
        4,333
 4,180
 TrialCard Incorporated   Healthcare services      
 First Lien Revolver, LIBOR+5.25% (1% floor) cash due 12/31/2019 (10)(13) 6.25%     (32) —
        (32) —
 Motion Recruitment Partners LLC   Human resources & employment services      
 First Lien Revolver, LIBOR+6% (1% floor) cash due 2/13/2020 (10)(13) 7.00%   —
 (6) —
        (6) —
 WeddingWire, Inc.   Internet software & services      
 First Lien Term Loan, LIBOR+8.5% (1% floor) cash due 2/20/2020 (13) 9.50%   26,984
 26,984
 27,247
 First Lien Revolver, LIBOR+8.5% (1% floor) cash due 2/20/2020 (13) 9.50%     —
 —
 483,645 Common Shares of WeddingWire, Inc.       1,200
 1,044
        28,184
 28,291
 xMatters, Inc.   Internet software & services      
 200,000 Common Stock Warrants (exercise price $1.78) expiration date 2/26/2025       709
 347
        709
 347
 Edge Fitness, LLC   Leisure facilities      
 Delayed Draw Term Loan, LIBOR+8.75% (1% floor) cash due 12/31/2019 (13) 9.75%   3,398
 3,398
 3,388
        3,398
 3,388
 Golden State Medical Supply, Inc.   Pharmaceuticals      
 Mezzanine Term Loan, 10% cash 2.5% PIK due 4/24/2021     15,001
 15,001
 15,345
        15,001
 15,345
 My Alarm Center, LLC   Security & alarm services      
 First Lien Term Loan D, LIBOR+8% (1% floor) cash due 1/9/2019 (13) 9.00%   1,505
 1,505
 1,484
 First Lien Term Revolver, PRIME+7.5% (1% floor) cash due 1/9/2019 (13) 11.00%   180
 180
 180
        1,685
 1,664
 AirStrip Technologies, Inc.   Internet software & services      
 First Lien Term Loan, LIBOR+10% (1% floor) cash due 5/12/2018 (13) 11.00%   16,000
 15,950
 15,982
22,858.71 Series C-1 Preferred Stock Warrants (exercise price $34.99757) expiration date 5/11/2025       90
 66
        16,040
 16,048

See notes to Consolidated Financial Statements.



Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2016
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(5)(9)(14)(20)  Cash Interest Rate (13) Industry Principal (8) Cost Fair Value
 Legalzoom.com, Inc.   Specialized consumer services      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 5/13/2020 (13) 8.00%   $6,400
 $6,376
 $6,459
 First Lien Revolver, LIBOR+7% (1% floor) cash due 5/13/2020 (10)(13) 8.00%     (7) —
 Delayed Draw Term Loan, LIBOR+7% (1% floor) cash due 5/13/2020 (13)       2,645
 2,623
        9,014
 9,082
 Access Medical Acquisition, Inc.   Healthcare services      
 Mezzanine Term Loan, 10% cash 2% PIK due 1/2/2022     12,476
 12,476
 12,728
 450,000 Shares of Class A Common Stock in CMG Holding Company, LLC       450
 1,132
        12,926
 13,860
 QuorumLabs, Inc.   Internet software & services   ��  
 2,045,954 Common Stock Warrants (exercise price $0.0001) expiration date 7/8/2025       375
 —
        375
 —
 Worley Claims Services, LLC   Internet software & services      
 First Lien Term Loan, LIBOR+8% (1% floor) cash due 10/31/2020 (13) 9.00%   7,664
 7,566
 7,625
        7,566
 7,625
 Poseidon Merger Sub, Inc.   Advertising      
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 8/15/2023 (13) 9.50%   30,000
 28,956
 30,055
        28,956
 30,055
 American Seafoods Group LLC   Food distributors      
 Second Lien Term Loan, LIBOR+9% (1% floor) cash due 2/19/2022 (13) 10.00%   12,000
 11,903
 11,400
        11,903
 11,400
 Valet Merger Sub, Inc.   Environmental & facilities services      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 9/24/2021 (13) 8.00%   49,422
 48,600
 50,256
 First Lien Revolver, LIBOR+7% (1% floor) cash due 9/24/2021 (13) 8.00%   5,596
 5,454
 5,596
        54,054
 55,852
 Swipely, Inc.   IT consulting & other services      
 First Lien Term Loan, LIBOR+8.5% (1% floor) cash due 9/30/2019 (13) 9.50%   12,500
 12,500
 12,389
 252,119 Common Stock Warrants (exercise price $1.77) expiration date 9/30/2025       —
 146
        12,500
 12,535
 Baart Programs, Inc.   Healthcare services      
 First Lien Term Loan, LIBOR+7.75% cash due 10/9/2021 (13) 8.42%   32,175
 31,714
 32,055
 First Lien Revolver, LIBOR+7.75% cash due 10/9/2021 (10)(13) 8.42%     (60) —
        31,654
 32,055
 Argon Medical Devices, Inc.   Healthcare equipment      
 Second Lien Term Loan, LIBOR+9.5% (1% floor) cash due 6/23/2022 (13) 10.50%   43,000
 43,000
 44,140
        43,000
 44,140
 Lytx, Inc.   Research & consulting services      
 First Lien Term Loan, LIBOR+8.5% (1% floor) cash due 3/15/2023 (13) 9.50%   24,215
 24,215
 24,215
3,500 Class A Units in Lytx Holdings, LLC       3,500
 3,529
        27,715
 27,744
See notes to Consolidated Financial Statements.
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2016
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(5)(9)(14)(20)  Cash Interest Rate (13) Industry Principal (8) Cost Fair Value
 Onvoy, LLC    Integrated telecommunication services      
 First Lien Term Loan, LIBOR+6.25% (1% floor) cash due 4/29/2021 (13) 7.25%   $14,813
 $14,533
 $14,773
        14,533
 14,773
 Accruent, LLC    Internet software & services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 5/16/2022 (13) 6.25%   4,988
 4,941
 4,997
 First Lien Revolver, LIBOR+5.25% (1% floor) cash due 5/16/2022 (10)(13) 6.25%   —
 (18) —
        4,923
 4,997
 4 Over International, LLC    Commercial printing      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 6/7/2022 (13) 7.00%   6,169
 6,111
 6,127
 First Lien Revolver, LIBOR+6% (1% floor) cash due 6/7/2021 (10)(13) 7.00%   —
 (21) —
        6,090
 6,127
 OBHG Management Services, LLC    Healthcare services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 6/28/2022 (13) 6.25%   14,863
 14,858
 14,820
 First Lien Revolver, LIBOR+5.25% (1% floor) cash due 6/28/2021 (10)(13) 6.25%   —
 (2) —
        14,856
 14,820
 Ping Identity Corporation    Internet software & services      
 First Lien Term Loan, LIBOR+9.25% (1% floor) cash due 6/30/2021 (13) 10.25%   42,500
 41,305
 41,225
 First Lien Revolver, LIBOR+9.25% (1% floor) cash due 6/30/2021 (10)(13) 10.25%   —
 (70) —
        41,235
 41,225
 Ancile Solutions, Inc.    Internet software & services      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 6/30/2021 (13) 8.00%   11,500
 11,178
 11,328
        11,178
 11,328
 Ministry Brands, LLC    Internet software & services      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 11/20/2021 (13) 8.00%   19,874
 19,683
 19,675
 Delayed Draw Term Loan, LIBOR+7% (1% floor) cash due 11/20/2021 (10)(13) 8.00%     (143) —
        19,540
 19,675
 HSW RR, Inc.   Environmental & facilities services      
 First Lien Term Loan B, LIBOR+9% (1% floor) cash due 7/13/2020 (13) 10.00%   45,000
 45,000
 45,000
        45,000
 45,000
 Sailpoint Technologies, Inc.          
 First Lien Term Loan, LIBOR+8% (1% floor) cash due 8/16/2021 (13) 9.00% Application software 15,000
 14,710
 14,700
 First Lien Revolver, LIBOR+8% (1% floor) cash due 8/16/2021 (10)(13) 9.00%     (19) —
        14,691
 14,700
 California Pizza Kitchen, Inc.   Restaurants      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 8/23/2022 (13) 7.00%   5,000
 4,951
 4,985
        4,951
 4,985
See notes to Consolidated Financial Statements.

Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2016
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(5)(9)(14)(20)  Cash Interest Rate (13) Industry Principal (8) Cost Fair Value
 Aptos, Inc.   Data processing & outsourced services      
 First Lien Term Loan B, LIBOR+6.75% (1% floor) cash due 9/1/2022 (13) 7.75%   $5,500
 $5,390
 $5,445
        5,390
 5,445
 SPC Partners V, L.P.   Multi-sector holdings      
 0.39% limited partnership interest (11)       —
 —
        —
 —
 Total Non-Control/Non-Affiliate Investments (152.1% of net assets)       $1,792,410
 $1,737,455
Total Portfolio Investments (189.6% of net assets)       $2,283,858
 $2,165,491
           
Cash and Cash Equivalents          
JP Morgan Prime Money Market Fund       $111,447
 $111,447
Other cash accounts       6,476
 6,476
 Total Cash and Cash Equivalents (10.3% of net assets)       117,923
 117,923
Total Portfolio Investments, Cash and Cash Equivalents (199.9% of net assets)       $2,401,781
 $2,283,414
See notes to Consolidated Financial Statements.

(1)All debt investments are income producing unless otherwise noted. All equity investments are non-income producing unless otherwise noted.
(2)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.
(3)Control Investments generally are defined by the 1940 Act, as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.
(4)Affiliate Investments generally are defined by the 1940 Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.
(5)Equity ownership may be held in shares or units of companies related to the portfolio companies.
(6)Income producing through payment of dividends or distributions.
(7)Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.
(8)Principal includes accumulated PIK interest and is net of repayments.
(9)Interest rates may be adjusted from period to period on certain term loans and revolvers. These rate adjustments may be either temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements or permanent in nature per loan amendment or waiver documents.
(10)Investment has undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis.
(11)Investment is not a "qualifying asset" as defined under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of September 30, 2016, qualifying assets represented 85.8% of the Company's total assets and non-qualifying assets represented 14.2% of the Company's total assets.
(12)The sale of a portion of this loan does not qualify for true sale accounting under ASC 860, and therefore, the entire debt investment remains in the Consolidated Schedule of Investments. Accordingly, the fair value of the Company's debt investments includes $13.3 million related to the Company's secured borrowings. (See Note 15 in the accompanying notes to the Consolidated Financial Statements.)
(13)The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end.
(14)With the exception of investments held by the Company’s wholly-owned subsidiaries that have each received a license from the SBA to operate as an SBIC, each of the Company's investments is pledged as collateral under one or more of its credit facilities. A single investment may be divided into parts that are individually pledged as collateral to separate credit facilities.
(15)As defined in the 1940 Act, the Company is deemed to be both an "Affiliated Person" of and to "Control" this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement).
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2016
(dollar amounts in thousands)


(16)First Star Aviation, LLC, First Star Bermuda Aviation Limited and First Star Speir Aviation 1 Limited are wholly-owned holding companies formed by the Company in order to facilitate its investment strategy. In accordance with ASU 2013-08, the Company has deemed the holding companies to be investment companies under GAAP and therefore deemed it appropriate to consolidate the financial results and financial position of the holding companies and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding companies are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entities.
(17)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition.
(18)In March 2016, the Company restructured its investment in CCCG, LLC. As part of the restructuring, the Company exchanged cash and its debt securities for debt and equity securities in a newly restructured entity, Express Group Holdings LLC.
(19)
In April 2016, the Companyrestructured its debt investment in Ameritox Ltd. As a part of the restructuring, the Company exchanged cash and its debt securities for debt and equity securities in the newly restructured entity.
(20)As of September 30, 2016, all investments are categorized as level 3 within the fair value hierarchy established by ASC 820 and were valued using significant unobservable inputs.


See notes to Consolidated Financial Statements.

OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









Note 1. Organization
Oaktree Specialty Lending Corporation (formerly known as Fifth Street Finance Corp. through October 17, 2017), (together with its consolidated subsidiaries, the "Company") is a specialty finance company that islooks to provide customized, one-stop credit solutions to companies with limited access to public or syndicated capital markets. The Company was formed in late 2007 and operates as a closed-end, externally managed, non-diversified management investment company that has elected to be regulated as a business development companyBusiness Development Company under the 1940Investment Company Act. The Company has qualified and elected to be treated as a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended (the "Code"), for U.S. federal income tax purposes.
As of October 17, 2017, the CompanyThe Company's investment objective is externally managed by Oaktree Capital Management, L.P., (“Oaktree” or the “Investment Adviser”), a subsidiary of Oaktree Capital Group, LLC (“OCG”), a global investment manager specializing in alternative investments, pursuant to an investment advisory agreement between the Company and the Investment Adviser (the “New Investment Advisory Agreement”). Oaktree Fund Administration, LLC (“Oaktree Administrator” or “OFA”), a subsidiary of the Investment Adviser, provides certain administrative and other services necessary for the Company to operate pursuant to an administration agreement between the Company and OFA (the “New Administration Agreement”). See Note 11 for additional information regarding the New Investment Advisory Agreement and the New Administration Agreement.
Prior to October 17, 2017, the Company was externally managed by Fifth Street Management LLC (“FSM”), an indirect, partially-owned subsidiary of Fifth Street Asset Management Inc. (“FSAM”), and FSC CT LLC ("FSC CT"), a subsidiary of the FSM, also provided certain administrative and other services necessary for the Company to operate pursuant to an administration agreement (the “Prior Administration Agreement”).
The Company seeks to generate current income and capital appreciation by providing companies with flexible and innovative financing solutions, including first and second lien loans, unsecured and mezzanine loans, bonds, preferred equity and preferred equity.certain equity co-investments. The Company may also seek to generate capital appreciation and income through secondary investments at discounts to par in either private or syndicated transactions.
On July 13, 2017,The Company is externally managed by Oaktree entered intoFund Advisors, LLC ("Oaktree"), a subsidiary of Oaktree Capital Group, LLC (“OCG”), pursuant to an Asset Purchase Agreement (the “Purchase Agreement”), with FSM,investment advisory agreement between the Company and for certain limited purposes, FSAM,Oaktree (as amended and Fifth Street Holdingsrestated, the "Investment Advisory Agreement"). Oaktree is an affiliate of Oaktree Capital Management, L.P. ("OCM"), the direct, partial owner of FSM.
On September 7, 2017, the Company held a special meeting of stockholders (the "Special Meeting"). At the Special Meeting, stockholders of the Company approved the New Investment Advisory Agreement to take effect upon the closing of the transactions contemplated by the Purchase Agreement (the “Transaction”). Upon the closing of the Transaction onCompany's external investment adviser from October 17, 2017 through May 3, 2020 and also a subsidiary of OCG. Oaktree becameFund Administration, LLC ("Oaktree Administrator"), a subsidiary of OCM, provides certain administrative and other services necessary for the Company to operate pursuant to an administration agreement between the Company and Oaktree Administrator (the "Administration Agreement"). See Note 10. In 2019, Brookfield Asset Management Inc. ("Brookfield") acquired a majority economic interest in OCG. OCG operates as an independent business within Brookfield, with its own product offerings and investment, adviser to each ofmarketing and support teams.
On March 19, 2021, the Company acquired Oaktree Strategic Income Corporation (formerly known as Fifth Street Senior Floating Rate Corp.), (“OCSI”), pursuant to that certain Agreement and Plan of Merger (the “OCSI Merger Agreement”), dated as of October 28, 2020, by and among OCSI, the Company. The closingCompany, Lion Merger Sub, Inc., a wholly-owned subsidiary of the Transaction resulted in an assignment for purposes of the 1940 Act of the investment advisory agreement between FSM and the Company, and, solely for the limited purposes set forth therein, Oaktree. Pursuant to the OCSI Merger Agreement, OCSI was merged with and into the Company in a two-step transaction, with the Company as the surviving company (the "OCSI Merger”). As a result of the OCSI Merger, the Company issued an aggregate of 39,400,011 shares of its immediate termination.common stock to former OCSI stockholders.


Note 2. Significant Accounting Policies
Basis of Presentation:
The Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP")GAAP and pursuant to the requirements for reporting on Form 10-K and Regulation S-X. All intercompany balances and transactions have been eliminated. The Company is an investment company following the accounting and reporting guidance in FASB ASC Topic 946, Financial Services - Investment Companies ("ASC 946").
Use of Estimates:
The preparation of the financial statements in conformity with GAAP requires management to make certain estimates and assumptions affecting amounts reported in the financial statements and accompanying notes. These estimates are based on the information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Changes in the economic and political environments, financial markets and any other parameters used in determining these estimates could cause actual results to differ and such differences could be material. Significant estimates include the valuation of investments and revenue recognition.
Consolidation:
The accompanying Consolidated Financial Statements include the accounts of Oaktree Specialty Lending Corporation and its consolidated subsidiaries. Each consolidated subsidiary is wholly-owned and, as such, consolidated into the Consolidated Financial Statements. Certain subsidiaries that hold investments are treated as pass through entities for U.S. federal income tax purposes. The assets of certain of the Company's consolidated subsidiaries are not directly available to satisfy the claims of the creditors of the CompanyOaktree Specialty Lending Corporation or any of its other subsidiaries.
As an investment company, portfolio investments held by the Company are not consolidated into the Consolidated Financial Statements but rather are included on the Statements of September 30, 2017, the Company's consolidated subsidiaries were Fifth Street Fund of Funds LLC ("Fund of Funds"), Fifth Street Funding II, LLC ("Funding II"), Fifth Street Mezzanine Partners IV, L.P. ("FSMP IV"), Fifth Street MezzanineAssets and Liabilities as investments at fair value.

112
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









Partners V, L.P. ("FSMP V" and together with FSMP IV, the "SBIC Subsidiaries"), and FSFC Holdings, Inc. ("Holdings"). In addition, the Company consolidates various holding companies held in connection with its equity investments in certain portfolio investments.
Since the Company is an investment company, portfolio investments held by the Company are not consolidated into the Consolidated Financial Statements. The portfolio investments held by the Company are included on the Statements of Assets and Liabilities as investments at fair value.

Fair Value Measurements:
The Company is required to report its investments for which current market values are not readily available at fair value. The Company values its investments in accordance with ASC 820, which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A liability's fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. ASC 820 prioritizes the use of observable market prices derived from such prices over entity-specific inputs. Where observable prices or inputs are not available or reliable, valuation techniques are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments' complexity.
Hierarchical levels, defined by ASC 820 and directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:
 
•Level 1 — Unadjusted, quoted prices in active markets for identical assets or liabilities atas of the measurement date.
•Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data at the measurement date for substantially the full term of the assets or liabilities.
•Level 3 — Unobservable inputs that reflect management'sOaktree's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
If inputs used to measure fair value fall into different levels of the fair value hierarchy, an investment's level is based on the lowest level of input that is significant to the fair value measurement. The Company'sOaktree's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. This includes investment securities that are valued using "bid" and "ask" prices obtained from independent third party pricing services or directly from brokers. These investments may be classified as Level 3 because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities or may require adjustments for investment-specific factors or restrictions.
Financial instruments with readily available quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. As such, the Investment AdviserOaktree obtains and analyzes readily available market quotations provided by independent pricing servicesvendors and brokers for all of the Company's first lien and second lien ("senior secured") debt investments for which quotations are available. In determining the fair value of a particular investment, pricing servicesvendors and brokers use observable market information, including both binding and non-binding indicative quotations.
The Investment Adviser evaluatesOaktree seeks to obtain at least two quotations for the subject or similar securities, typically from pricing vendors. If Oaktree is unable to obtain two quotes from pricing vendors, or if the prices obtained from independent pricing servicesvendors are not within the Oaktree's set threshold, Oaktree seeks to obtain a quote directly from a broker making a market for the asset. Oaktree evaluates the quotations provided by pricing vendors and company specific data that could affect the credit quality and/or fair valuebrokers based on available market information, including trading activity of the investment. Investments for which market quotationssubject or similar securities, or by performing a comparable security analysis to ensure that fair values are readily available may be valued at such market quotations.reasonably estimated. Oaktree also performs back-testing of valuation information obtained from pricing vendors and brokers against actual prices received in transactions. In orderaddition to validate market quotations,ongoing monitoring and back-testing, Oaktree performs due diligence procedures over pricing vendors to understand their methodology and controls to support their use in the Investment Adviser looks at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. The Investment Adviservaluation process. Generally, Oaktree does not adjust any of the prices unless it has a reason to believe marketreceived from these sources.
If the quotations obtained from pricing vendors or brokers are not reflective of the fair value of an investment. Examples of events that would cause market quotationsdetermined to not reflect fair value could include cases when a security trades infrequently causing a quoted purchasebe reliable or sale price to become stale or in the event of a "fire sale" by a distressed seller. In these instances, the Company values such investments by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available, (as discussed below).
If the quotation provided by the pricing service is based on only one or two market sources, the Company performs additional procedures to corroborateOaktree values such information, which may include the market yield technique discussed below and a quantitative and qualitative assessmentinvestments using any of the credit quality and market trends affecting the portfolio company.
The Company performs detailed valuations of its debt and equity investments for which market quotations are not readily available or are deemed not to represent fair value of the investments. The Company typically uses three different valuation techniques. The first valuation technique is the transaction precedent technique, which utilizes recent or expected future transactions of the investment to determine fair value, to the extent applicable. The second valuation technique is an analysis of the enterprise value
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





("EV") of the portfolio company. EV means the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time. The EV analysis is typically performed to determine (i) the value of equity investments, to determine if(ii) whether there is credit impairment for debt investments and to determine(iii) the value for debt investments that the Company is deemed to control under the 1940Investment Company Act. To estimate the EV of a portfolio company, the Investment AdviserOaktree analyzes various factors, including the portfolio company’s historical and projected financial results, macroeconomic impacts on the company and competitive dynamics in the company’s industry. The Investment AdviserOaktree also utilizes some or all of the following information based on the individual circumstances of the portfolio company, including:company: (i) valuations of comparable public companies, (ii) recent sales of private and public comparable companies in similar industries or having similar business or earnings characteristics, (iii) purchase price multiplesprices as a multiple of their earnings or cash flow, (iv) the portfolio company’s ability to meet its forecasts and its business prospects, (v) a discounted cash flow analysis, (vi) estimated liquidation or collateral value of the portfolio company's assets and (vii) offers from third parties to buy the portfolio company. The CompanyOaktree may probability weight potential sale outcomes with respect to a portfolio company due to thewhen uncertainty that exists as of the valuation date. The third valuation
113
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




technique is a market yield technique, which is typically performed for non-credit impaired debt investments. To determine fair value using aIn the market yield technique, a current price is imputed for the investment based upon an assessment of the expected market yield for a similarly structured investment with a similar level of risk. In the market yield technique, the Companyrisk, and Oaktree considers the current contractual interest rate, the capital structure and other terms of the investment relative to risk of the company and the specific investment. A key determinant of risk, among other things, is the leverage through the investment relative to the EV of the portfolio company. As debt investments held by the Company are substantially illiquid with no active transaction market, the CompanyOaktree depends on primary market data, including newly funded transactions and industry specific market movements, as well as secondary market data with respect to high yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable.
In accordance with ASC 820-10, certain investments that qualify as investment companies in accordance with ASC 946 may be valued using net asset value as a practical expedient for fair value. Consistent with FASB guidance under ASC 820, these investments are excluded from the hierarchical levels. These investments are generally not redeemable.
The CompanyOaktree estimates the fair value of certain privately held warrants using a Black Scholes pricing model, which includes an analysis of various factors and subjective assumptions, including the current stock price (by using an EV analysis as described above), the expected period until exercise, expected volatility of the underlying stock price, expected dividends and the risk free rate. Changes in the subjective input assumptions can materially affect the fair value estimates.
In December 2020, the SEC adopted new Rule 2a-5 under the Investment Company Act. Rule 2a-5 permits boards of directors of registered investment companies and Business Development Companies to either (i) choose to continue to determine fair value in good faith, or (ii) designate a valuation designee tasked with determining fair value in good faith, subject to the board’s oversight. The Company's Board of Directors has designated Oaktree to serve as its valuation designee effective September 8, 2022.
Oaktree undertakes a multi-step valuation process each quarter in connection with determining the fair value of the Company's investments:
•The quarterly valuation process begins with each portfolio company or investment being initially valued by the Investment Adviser'sOaktree's valuation team in conjunction with the Investment Adviser's portfolio management team and investment professionals responsible for each portfolio investment;team;
•Preliminary valuations are then reviewed and discussed with management of the Investment Adviser;Oaktree;
•Separately, independent valuation firms engaged by the Board of Directors prepare valuations of the Company's investments, on a selected basis, for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment, and submit the reports to the Company and provide such reports to the Investment Adviser and the Audit Committee of the Board of Directors;Oaktree;
The Investment Adviser•Oaktree compares and contrasts its preliminary valuations to the valuations of the independent valuation firms and prepares a valuation report for the Audit Committee of the Board of Directors;Committee;
•The Audit Committee of the Board of Directors reviews the preliminary valuationsvaluation report with the Investment Adviser,Oaktree, and the Investment AdviserOaktree responds and supplements the preliminary valuationsvaluation report to reflect any discussions between the Investment AdviserOaktree and the Audit Committee; and
The Audit Committee of the Board of Directors makes a recommendation to the Board of Directors regarding the fair value of the investments in the Company's portfolio; and
The Board of Directors discusses valuations and•Oaktree, as valuation designee, determines the fair value of each investment in the Company's portfolio.
The fair value of the Company's investments atas of September 30, 20172022 was determined by Oaktree, as the Company's valuation designee, and the fair value of the Company's investments as of September 30, 20162021 was determined in good faith by the Board of Directors. The Board of DirectorsCompany has authorized the engagement of independent valuation firms to provide valuation assistance. The Companyand will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of a portion of the Company'sits portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter, andquarter.
Due to the Boardinherent uncertainty of Directors may reasonably rely ondetermining the fair value of investments that assistance. As of September 30, 2017, 93.8%do not have a readily available market value, the fair value of the Company's portfolioCompany’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.
With the exception of the line items entitled "deferred financing costs," "deferred offering costs," "other assets," "deferred tax asset, net," "credit facilities payable" and "unsecured notes payable," which are reported at amortized cost, all assets and liabilities approximate fair value was valued either using market quotations or by independent valuation firms.on the Consolidated Statements of Assets and Liabilities. The percentagecarrying value of the Company'sline items titled "interest, dividends and fees receivable," "due from portfolio valued by independent valuation firms may varycompanies," "receivables from unsettled transactions," "due from broker," "accounts payable, accrued expenses and other liabilities," "base management fee and incentive fee payable," "due to affiliate," "interest payable" and "payables from unsettled transactions" approximate fair value due to their short maturities.
114
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









Foreign Currency Translation:
period to periodThe accounting records of the Company are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the availability of market quotations forprevailing foreign exchange rate on the portfolio investments during the respective periods. However, the Board of Directors is responsible for the ultimate valuationreporting date. The Company does not isolate that portion of the portfolioresults of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. The Company’s investments in foreign securities may involve certain risks, including foreign exchange restrictions, expropriation, taxation or other political, social or economic risks, all of which could affect the market and/or credit risk of the investment. In addition, changes in the relationship of foreign currencies to the U.S. dollar can significantly affect the value of these investments and therefore the earnings of the Company.
Derivative Instruments:
Foreign Currency Forward Contracts
The Company uses foreign currency forward contracts to reduce the Company's exposure to fluctuations in the value of foreign currencies. In a foreign currency forward contract, the Company agrees to receive or deliver a fixed quantity of one currency for another at a pre-determined price at a future date. Foreign currency forward contracts are marked-to-market at the applicable forward rate. Unrealized appreciation (depreciation) on foreign currency forward contracts are recorded within derivative assets or derivative liabilities on the Consolidated Statements of Assets and Liabilities by counterparty on a net basis, not taking into account collateral posted which is recorded separately, if applicable. Purchases and settlements of foreign currency forward contracts having the same settlement date and counterparty are generally settled net and any realized gains or losses are recognized on the settlement date. The Company does not utilize hedge accounting with respect to foreign currency forward contracts and as such, the Company recognizes its foreign currency forward contracts at fair value with changes included in the net unrealized appreciation (depreciation) on the Consolidated Statements of Operations.
Interest Rate Swaps
The Company uses an interest rate swap to hedge some of the Company's fixed rate debt. The Company designated the interest rate swap as determinedthe hedging instrument in good faith pursuantan effective hedge accounting relationship, and therefore the periodic payments are recognized as components of interest expense in the Consolidated Statements of Operations. Depending on the nature of the balance at period end, the fair value of the interest rate swap is either included as a derivative asset or derivative liability on the Company's Consolidated Statements of Assets and Liabilities. The change in fair value of the interest rate swap is offset by a change in the carrying value of the fixed rate debt. Any amounts paid to the counterparty to cover collateral obligations under the terms of the interest rate swap agreement are included in due from broker on the Company's valuation policyConsolidated Statements of Assets and a consistently applied valuation process.Liabilities.
Investment Income:
Interest Income
Interest income, adjusted for accretion of original issue discount ("OID"), is recorded on an accrual basis to the extent that such amounts are expected to be collected. The Company stops accruing interest on investments when it is determined that interest is no longer collectible. Investments that are expected to pay regularly scheduled interest in cash are generally placed on non-accrual status when there is reasonable doubt that principal or interest cash payments will be collected. Cash interest payments received on investments may be recognized as income or a return of capital depending upon management’s judgment. SuchA non-accrual investments areinvestment is restored to accrual status if past due principal and interest are paid in cash and the portfolio companies,company, in management’s judgment, areis likely to continue timely payment of theirits remaining interest.obligations. As of each of September 30, 2022 and September 30, 2021, there were no investments on non-accrual status.
In connection with its investment in a portfolio company, the Company sometimes receives nominal cost equity that is valued as part of the negotiation process with the portfolio company. When the Company receives nominal cost equity, the Company allocates its cost basis in the investment between debt securities and the nominal cost equity at the time of origination. Any resulting discount from recording the loan, or otherwise purchasing a security at a discount, is accreted into interest income over the life of the loan.
For the Company's secured borrowings, the interest earned on the entire loan balance is recorded within interest income and the interest earned by the buyer from the partial loan sales is recorded within interest expense in the Consolidated Statements of Operations.
PIK Interest Income
The Company's investments in debt securities may contain PIK interest provisions. PIK interest, which generally represents contractually deferred interest added to the loan balance that is generally due at the end of the loan term, is generally
115
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




recorded on the accrual basis to the extent such amounts are expected to be collected. The Company generally ceases accruing PIK interest if there is insufficient value to support the accrual or if the Company does not expect the portfolio company to be able to pay all principal and interest due. The Company's decision to cease accruing PIK interest on a loan or debt security involves subjective judgments and determinations based on available information about a particular portfolio company, including whether the portfolio company is current with respect to its payment of principal and interest on its loans and debt securities; financial statements and financial projections for the portfolio company; the Company's assessment of the portfolio company's business development success; information obtained by the Company in connection with periodic formal update interviews with the portfolio company's management and, if appropriate, the private equity sponsor; and information about the general economic and market conditions in which the portfolio company operates. Based on this and other information, the Company determines whether to cease accruing PIK interest on a loan or debt security. The Company's determination to cease accruing PIK interest on a loan or debt security is generally made well before the Company's full write-down of sucha loan or debt security. In addition, if it is subsequently determined that the Company will not be able to collect any previously accrued PIK interest, the fair value of the loans or debt securities would be reduced by the amount of such previously accrued, but uncollectible, PIK interest. The accrual of PIK interest on the Company’s debt investments increases the recorded cost bases of these investments in the consolidated financial statements and, as a result, increases the cost bases of these investmentsConsolidated Financial Statements including for purposes of computing the capital gaingains incentive fee payable by the Company to the Investment Adviser.Oaktree. To maintain its status as a RIC, certain income from PIK interest mustmay be paid outrequired to be distributed to the Company’s stockholders, as distributions, even though the Company has not yet collected the cash and may never collect the cash relating to the PIK interest.do so.
Fee Income
Oaktree or its affiliates may provide financial advisory services to portfolio companies and, in return, the Company may receive fees for capital structuring services. These fees are generally non-recurring and are recognized by the Company upon the investment closing date. The Company receives a variety ofmay also receive additional fees in the ordinary course of business, including servicing, advisory, amendment structuring and prepayment fees, which are classified as fee income and recognized as they are earned.earned or the services are rendered.
The Company has also structured exit fees across certain of its portfolio investments to be received upon the future exit of those investments. These fees are to betypically paid to the Company upon the soonerearliest to occur of (i) a sale of the borrower or substantially all of the assets of the borrower, (ii) the maturity date of the loan or (iii) the date when full prepayment of the loan occurs. Exit fees are payable upon the exit of a debt security. The receipt of such fees is contingent upon the occurrence of one of the events listed above for each of the investments. A percentage of theseThese fees isare included in net investment income over the life of the loan.
Dividend Income
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





The Company generally recognizes dividend income on the ex-dividend date.date for public securities and the record date for private equity investments. Distributions received from private equity investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from suchprivate equity investments as dividend income unless there are sufficient earnings at the portfolio company prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.
Cash and Cash Equivalents and Restricted Cash:
Cash and cash equivalents and restricted cash consist of demand deposits and highly liquid investments with maturities of three months or less when acquired. The Company places its cash and cash equivalents and restricted cash with financial institutions and, at times, cash held in bank accounts may exceed the Federal Deposit Insurance Corporation ("FDIC") insurance limit. Cash and cash equivalents are classified as Level 1 assets and are included on the Company's Consolidated Schedule of Investments.Investments and cash equivalents are classified as Level 1 assets.
As of September 30, 20172022 and September 30, 2016, included in cash and cash equivalents was $25.2 million and $107.4 million, respectively, held in bank accounts of the SBIC Subsidiaries. These cash and cash equivalents are permitted only for certain uses, including funding portfolio company investments to be held at the SBIC Subsidiaries and funding operating expenses of the SBIC Subsidiaries. This cash is not permitted to be used to fund the Company's investments that are held outside the SBIC Subsidiaries or for other corporate purposes of the Company.
As of September 30, 2017,2021, included in restricted cash was $6.8$2.8 million and $2.3 million, respectively, that was held at U.S.Wells Fargo Bank, National AssociationN.A. in connection with the Company's SumitomoCitibank Facility (as defined in Note 6)6. Borrowings). As of September 30, 2016, included in restricted cash was $12.4 million that was held at U.S. Bank, National Association in connection with the Company's Sumitomo Facility. Pursuant to the terms of the SumitomoCitibank Facility, the cash isCompany was restricted in terms of access to $2.8 million and $2.3 million as of September 30, 2022 and September 30, 2021, respectively, until the occurrence of the Company submitsperiodic distribution dates and, in connection therewith, the Company’s submission of its required monthlyperiodic reporting schedules.schedules and verifications of the Company’s compliance with the terms of the Citibank Facility.
Due from Portfolio Companies:
Due from portfolio companies consists of amounts payable to the Company from its portfolio companies, including any escrow receivableproceeds from the sale of portfolio companies not yet received or being held in escrow and excluding those amounts
116
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




attributable to interest, dividends or fees receivable. These amounts are recognized as they become payable to the Company (e.g., principal payments on the scheduled amortization payment date).
Receivables/Payables Fromfrom Unsettled Transactions:
Receivables/payables from unsettled transactions consistsconsist of amounts receivable to or payable by the Company for transactions that have not settled at the reporting date.
Insurance Recoveries Receivable:
Insurance recoveries receivable consists of amounts receivable to the Company from insurance recoveries in connection with settlement costs and professional fees. Claims for loss recoveries are generally recognized when a loss event has occurred and recovery is considered probable.
Deferred Financing Costs:
In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs which requires debt financing costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the related debt liability, similar to the presentation of debt discounts. Additionally, the FASB issued ASU 2015-15, Interest - Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which provides further clarification on the same topic and states that the Security and Exchange Commission ("SEC") would not object to the deferral and presentation of debt issuance costs as an asset and subsequent amortization of the deferred costs over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company adopted the guidance for debt arrangements that are not line-of-credit arrangements for the three months ended December 31, 2016 and applied a retrospective approach. As a result of the adoption, the Company reclassified $9.2 million of deferred financing costs assets to a direct deduction from the related debt liability on the Statement of Assets and Liabilities as of September 30, 2016. The adoption of this guidance had no impact on net assets or the Consolidated Statement of Operations.
Deferred financing costs consist of fees and expenses paid in connection with the closing or amending of credit facilities and debt offerings. Deferred financing costs in connection with credit facilities are capitalized as an asset at the time of payment.when incurred. Deferred financing costs in connection with all other debt arrangements are a direct deduction from the related debt liability at the time of payment.when incurred. Deferred financing costs are amortized using the straight lineeffective interest method over the termsterm of the respective credit facilities and the effective interest method for debt securities.arrangement. This amortization expense is included in interest expense in the Company's Consolidated Statements of Operations. Upon early termination or modification of a credit facility, all or a portion of unamortized fees related to such facility may be accelerated into interest expense. For extinguishments of the Company’s unsecured notes payable, any unamortized deferred financing costs are deducted from the carrying amount of the debt in determining the gain or loss from the extinguishment.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)






Deferred Offering Costs:
Offering costs consist ofLegal fees and expensesother costs incurred in connection with the offerCompany’s shelf registration statement are capitalized as deferred offering costs in the Consolidated Statements of Assets and saleLiabilities. To the extent any such costs relate to equity offerings, these costs are charged as a reduction of capital upon utilization. To the extent any such costs relate to debt offerings, these costs are treated as deferred financing costs and are amortized over the term of the Company's securities, including legal, accounting and printing fees. The Company chargesrespective debt arrangement. Any deferred offering costs to capitalthat remain at the timeexpiration of the shelf registration statement or when it becomes probable that an offering. There were no offering costs charged to capital during the years ended September 30, 2017 and September 30, 2016.will not be completed are expensed.
Income Taxes:
The Company has elected to be treatedsubject to tax as a RIC under Subchapter M of the Code and operates in a manner so as to qualify for the tax treatment applicable to RICs. In order to be subject to tax as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute dividends to its stockholders of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code and determined without regard to any deduction for dividends paid, for each taxable year. As a RIC, the Company is not subject to U.S. federal income tax on the portion of its taxable income and gains distributed currently to stockholders as a dividend. Depending on the level of taxable income earned during a taxable year, the Company may choose to retain taxable income in excess of current year dividend distributions and would distribute such taxable income in the next taxable year. The Company would then incur a 4% excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated current calendar year dividend distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. The Company anticipates timely distribution of its taxable income within the tax rules under Subchapter M of the Code. The Company did not incur a U.S. federal excise tax for calendar years 20152020 and 20162021 and does not expect to incur a U.S. federal excise tax for calendar year 2017. The Company may incur a U.S. federal excise tax in future years.2022.
The Company holds certain portfolio investments through taxable subsidiaries, including Funds of Funds and Holdings.subsidiaries. The purpose of the Company's taxable subsidiaries is to permit the Company to hold equity investments in portfolio companies which are "pass through" entities for U.S. federal income tax purposes in order to comply with the RIC tax requirements. The taxable subsidiaries are consolidated for financial reporting purposes, and portfolio investments held by them are included in the Company’s Consolidated Financial Statements as portfolio investments and recorded at fair value. The taxable subsidiaries are not consolidated with the Company for U.S. federal income tax purposes and may generate income tax expense, or benefit, and the related tax assets and liabilities, as a result of their ownership of certain portfolio investments. This income tax expense, if any, would be reflected in the Company's Consolidated Statements of Operations. The Company uses the asset and liability method to account for its taxable subsidiaries' income taxes. Using this method, the Company recognizes deferred tax assets and liabilities for the estimated future tax effects attributable to temporary differences between financial reporting and tax bases of assets and liabilities. In addition, the Company recognizes deferred tax benefits associated with net operating loss carry forwards that it may use to offset future tax obligations. The Company measures deferred tax assets and liabilities using the enacted tax rates expected to apply to taxable income in the years in which it expects to recover or settle those temporary differences.
117
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




FASB ASC Topic 740, Accounting for Uncertainty in Income Taxes ("ASC 740"), provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the Company's Consolidated Financial Statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Management's determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including but not limited to, an ongoing analysis of tax laws, regulations and interpretations thereof. The Company recognizes the tax benefits of uncertain tax positions only where the position is "more-likely-than-not" to be sustained assuming examination by tax authorities. Management has analyzed the Company's tax positions and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years 2014, 2015 or 2016.2019, 2020 and 2021. The Company identifies its major tax jurisdictions as U.S. Federal and Connecticut,California, and the Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
Secured Borrowings:Recently Adopted Accounting Pronouncements
The Company follows the guidance in ASC 860 when accounting for loan participations and other partial loan sales. Such guidance provides accounting and reporting standards for transfers and servicing of financial assets and requires a participation or other partial loan sales to meet the definition of a "participating interest," as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest or which are not eligible for sale accounting remain on the Company's Consolidated Statements of Assets and Liabilities and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value. See Note 15 for additional information.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Amounts Payable to Syndication Partners:
The Company acts as administrative agent for certain loans it originates and then syndicates. As administrative agent, the Company receives interest, principal and/or other payments from borrowers that is redistributed to syndication partners. If not redistributed by the reporting date, such amounts are classified in restricted cash and a payable is recorded to syndication partners on the Consolidated Statements of Assets and Liabilities.
Fair Value Option:
The Company adopted certain principles under FASB ASC Topic 825 Financial Instruments – Fair Value Option ("ASC 825") and elected the fair value option for its secured borrowings, which had a cost basis of $13.5 million and $18.9 million in the aggregate as of September 30, 2017 and September 30, 2016, respectively. The Company believes that by electing the fair value option for these financial instruments, it provides consistent measurement of the assets and liabilities which relate to the partial loan sales mentioned above.
However, the Company has not elected the fair value option to report other selected financial assets and liabilities at fair value. With the exception of the line items entitled "deferred financing costs", "credit facilities payable", "SBA debentures payable", and "unsecured notes payable," which are reported at amortized cost, all assets and liabilities approximate fair value on the Consolidated Statement of Assets and Liabilities. The carrying value of the line items titled "interest, dividends, and fees receivable," "due from portfolio companies," "receivables from unsettled transactions," "insurance recoveries receivable," "accounts payable, accrued expenses and other liabilities," "base management fee and part I incentive fee payable," "due to FSC CT," "interest payable," "amounts payable to syndication partners," "director fees payable," "payables from unsettled transactions" and "legal settlements payable" approximate fair value due to their short maturities.
Recent Accounting Pronouncements:
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606) - Principal versus Agent Considerations. This ASU is intended to clarify revenue recognition accounting when a third party is involved in providing goods or services to a customer. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing. This ASU is intended to clarify two aspects of Topic 606: identifying performance obligations and licensing implementation guidance. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients. This ASU amends certain aspects of ASU 2014-09, addresses certain implementation issues identified and clarifies the new revenue standards’ core revenue recognition principles. The new standards will be effective for the Company on October 1, 2018 and early adoption is permitted on the original effective date of January 1, 2017. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has not yet selected a transition method nor has it determined the effect of this standard on its Consolidated Financial Statements and related disclosures and its ongoing financial reporting.
In August 2014,2020, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern, which requires management to evaluate, at each annual and interim reporting period, a company's ability to continue as a going concern within one year2020-04, Reference Rate Reform (Topic 848) Facilitation of the dateEffects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial statementsreporting if certain criteria are issued and provide related disclosures.met. The Company adopted ASU 2014-16 on a prospective basis during the year endedguidance is effective from March 12, 2020 through December 31, 2022. As of September 30, 2017 and determined that2022, the adoption of this guidance did not have a materialan impact on its Consolidated Financial Statements.
In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). The update eliminates the requirement to categorize investments in the fair value hierarchy if their fair value is measured at net asset value (NAV) per share (or its equivalent) using the practical expedient in the FASB’s fair value measurement guidance. Public companies are required to apply ASU 2015-07 retrospectively for interim and annual reporting periods beginning after December 15, 2015. Accordingly, the Company adopted ASU 2015-07 during the three months ended December 31, 2016 and determined that the adoption did not have a material impact on its Consolidated Financial Statements.
In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall ("ASU 2016-01"), which makes limited amendments to the guidance in GAAP on the classification and measurement of financial instruments. The new standard significantly revises an entity's accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods therein.  Early adoption is permitted specifically for the amendments pertaining to the presentation of certain fair value changes for financial liabilities measured at fair value.  Early adoption of all other amendments is not permitted. Upon adoption, the Company will be required to make a cumulative-effect adjustment to the Consolidated Statement of Assets and Liabilities as of the beginning of the first reporting period in which the guidance is effective.  The Company did not early adopt the new guidance
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





during the year ended September 30, 2017. The Company is evaluating the effect that ASU 2016-01 will have on its Consolidated Financial Statements and related disclosures.
In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included within cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for interim and annual periods beginning after December 15, 2017 and early adoption is permitted. The amendment should be adopted retrospectively. The Company did not early adopt the new guidance during the year ended September 30, 2017. The new guidance is not expected to have a material effect on the Company's Consolidated Financial Statements.

Note 3. Portfolio Investments
AtAs of September 30, 2017, 177.7%2022, 200.2%of net assets at fair value, or $1.5$2.5 billion, was invested in 125149 portfolio companies, including the Company's investment(i) $117.0 million in Class A mezzanine secured deferrable floating rate notes and Class B mezzanine secured deferrable fixed ratesubordinated notes and limited liability company ("LLC") equity interests inof Senior Loan Fund JV I, LLC (together with its consolidated subsidiaries, "SLF("SLF JV I"), a joint venture through which hadthe Company and Trinity Universal Insurance Company, a fair valuesubsidiary of $101.0Kemper Corporation ("Kemper"), co-invest in senior secured loans of middle-market companies and other corporate debt securities and (ii) $50.3 million $27.6 millionin subordinated notes and $5.5 million, respectively. AtLLC equity interests of OCSI Glick JV LLC ("Glick JV" and, together with SLF JV I, the "JVs"), a joint venture through which the Company and GF Equity Funding 2014 LLC ("GF Equity Funding") co-invest primarily in senior secured loans of middle-market companies. As of September 30, 2017, 6.9%2022, 2.1% of net assets at fair value, or $59.9$26.4 million, was invested in cash and cash equivalents (including $2.8 million of restricted cash). In comparison, atas of September 30, 2016, 189.6%2021, 194.7% of net assets at fair value, or $2.2$2.6 billion, was invested in 129138 portfolio investments, including the Company's investment(i) $133.9 million in subordinated notes and LLC equity interests inof SLF JV I which had a fair valueand (ii) $55.6 million in subordinated notes and LLC equity interests of $129.0 million and $13.7 million, respectively, and 11.4%Glick JV. As of September 30, 2021, 2.4% of net assets at fair value, or $130.4$31.6 million, was invested in cash and cash equivalents (including $2.3 million of restricted cash). As of September 30, 2017, 78.0%2022, 86.9% of the Company's portfolio at fair value consisted of senior secured debt investments that were secured by priority liens on the assets of the portfolio companies and 14.4%8.1% consisted of subordinated notes,debt investments, including the debt investments in SLF JV I.the JVs. As of September 30, 2016, 78.0%2021, 86.7% of the Company's portfolio at fair value consisted of senior secured debt investments that were secured by priority liens on the assets of the portfolio companies and 13.2%7.6% consisted of subordinated notes,debt investments, including the debt investments in SLF JV I.the JVs.
The Company also held equity investments in certain of its portfolio companies consisting of common stock, preferred stock, warrants, limited partnership interests or LLC equity interests. These instruments generally do not produce a current return but are held for potential investment appreciation and capital gain.
During the years ended September 30, 2017, September 30, 20162022, 2021 and September 30, 2015,2020, the Company recorded net realized losses on investments and secured borrowingsgains (losses) of $171.8$17.2 million, $125.3$26.4 million and $28.5$(13.9) million, respectively. During the years ended September 30, 2017, September 30, 20162022, 2021 and September 30, 2015,2020, the Company recorded net unrealized depreciation on investments and secured borrowingsappreciation (depreciation) of $97.8$(136.2) million, $48.0$114.5 million and $71.0$(20.6) million, respectively.
The composition of the Company's investments as of September 30, 2017 and September 30, 2016 at cost and fair value was as follows:
118
  September 30, 2017 September 30, 2016
  Cost Fair Value Cost Fair Value
Investments in debt securities $1,426,301
 $1,296,138
 $1,960,581
 $1,845,808
Investments in equity securities 186,521
 111,421
 162,343
 176,970
Debt investments in SLF JV I 128,671
 128,671
 144,841
 129,004
Equity investment in SLF JV I 16,172
 5,525
 16,093
 13,709
Total $1,757,665
 $1,541,755
 $2,283,858
 $2,165,491
The composition of the Company's debt investments as of September 30, 2017 and September 30, 2016 at fixed rates and floating rates was as follows:
  September 30, 2017 September 30, 2016
  Fair Value 
% of Debt
Portfolio
 Fair Value 
% of Debt
Portfolio
Fixed rate debt securities $233,869
 16.41% $376,207
 19.05%
Floating rate debt securities, including debt investments in SLF JV I 1,190,940
 83.59
 1,598,605
 80.95
Total $1,424,809
 100.00% $1,974,812
 100.00%
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









The composition of the Company's investments as of September 30, 2022 and September 30, 2021 at cost and fair value was as follows:
 September 30, 2022September 30, 2021
 CostFair ValueCostFair Value
Investments in debt securities$2,294,392 $2,223,329 $2,222,223 $2,259,924 
Investments in equity securities127,596 103,534 120,621 107,222 
Debt investments in the JVs146,444 146,533 146,955 151,832 
Equity investments in the JVs49,322 20,715 49,322 37,651 
Total$2,617,754 $2,494,111 $2,539,121 $2,556,629 

The following table presents the composition of the Company's debt investments as of September 30, 2022 and September 30, 2021 at fixed rates and floating rates:
 September 30, 2022September 30, 2021
 Fair Value% of Debt
Portfolio		Fair Value% of Debt
Portfolio
Floating rate debt securities, including the debt investments in the JVs$2,049,644 86.49 %$2,205,648 91.45 %
Fixed rate debt securities320,218 13.51 206,108 8.55 
Total$2,369,862 100.00 %$2,411,756 100.00 %

The following table presents the financial instruments carried at fair value as of September 30, 20172022 on the Company's Consolidated Statement of Assets and Liabilities for each of the three levels of hierarchy established by ASC 820:
 Level 1 Level 2 Level 3 Measured at Net Asset Value (a) TotalLevel 1Level 2Level 3Measured at Net Asset Value (a)Total
Investments in debt securities (senior secured) $—
 $142,257
 $1,060,442
 $—
 $1,202,699
Investments in debt securities (senior secured)$— $255,803 $1,910,606 $— $2,166,409 
Investments in debt securities (subordinated, including debt investments in SLF JV I) —
 41,778
 180,331
 —
 222,109
Investments in debt securities (subordinated, including the debt investments in the JVs)Investments in debt securities (subordinated, including the debt investments in the JVs)— 44,065 159,388 — 203,453 
Investments in equity securities (preferred) —
 —
 16,445
 —
 16,445
Investments in equity securities (preferred)— — 79,523 — 79,523 
Investments in equity securities (common, including LLC equity interests of SLF JV I) —
 —
 69,164
 31,338
 100,502
Investments in equity securities (common and warrants, including LLC equity interests of the JVs)Investments in equity securities (common and warrants, including LLC equity interests of the JVs)4,053 — 19,958 20,715 44,726 
Total investments at fair value —
 184,035
 1,326,382
 31,338
 1,541,755
Total investments at fair value4,053 299,868 2,169,475 20,715 2,494,111 
Cash and cash equivalents 53,018
 —
 —
 —
 53,018
Cash equivalentsCash equivalents5,261 — — — 5,261 
Derivative assetsDerivative assets— 6,789 — — 6,789 
Total assets at fair value $53,018
 $184,035
 $1,326,382
 $31,338
 $1,594,773
Total assets at fair value$9,314 $306,657 $2,169,475 $20,715 $2,506,161 
Secured borrowings relating to senior secured debt investments —
 —
 13,256
 —
 13,256
Derivative liabilityDerivative liability$— $41,969 $— $— $41,969 
Total liabilities at fair value $—
 $—
 $13,256
 $—
 $13,256
Total liabilities at fair value$— $41,969 $— $— $41,969 
__________ 
(a)In accordance with ASC 820-10, certain investments that are measured using the net asset value per share (or its equivalent) as a practical expedient for fair value have not been classified in the fair value hierarchy. These investments are generally not redeemable. 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.
(a)In accordance with ASC 820-10, certain investments that are measured using the net asset value per share (or its equivalent) as a practical expedient for fair value have not been classified in the fair value hierarchy. These investments are generally not redeemable. 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.
119
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




The following table presents the financial instruments carried at fair value as of September 30, 20162021 on the Company's Consolidated Statement of Assets and Liabilities for each of the three levels of hierarchy established by ASC 820:
Level 1Level 2Level 3Measured at Net Asset Value (a)Total
Investments in debt securities (senior secured)$— $338,707 $1,878,536 $— $2,217,243 
Investments in debt securities (subordinated, including the debt investments in the JVs)— 18,196 176,317 — 194,513 
Investments in equity securities (preferred)— — 63,565 — 63,565 
Investments in equity securities (common and warrants, including LLC equity interests of the JVs)382 — 43,163 37,763 81,308 
Total investments at fair value382 356,903 2,161,581 37,763 2,556,629 
Cash equivalents23,600 — — — 23,600 
Derivative assets— 1,912 — — 1,912 
Total assets at fair value$23,982 $358,815 $2,161,581 $37,763 $2,582,141 
Derivative liability$— $2,108 $— $— $2,108 
Total liabilities at fair value$— $2,108 $— $— $2,108 
__________ 
  Level 1 Level 2 Level 3 Measured at Net Asset Value (a) Total
Investments in debt securities (senior secured) $—
 $—
 $1,689,535
 $—
 $1,689,535
Investments in debt securities (subordinated, including debt investments in SLF JV I) —
 —
 285,277
 —
 285,277
Investments in equity securities (preferred) —
 —
 47,749
 —
 47,749
Investments in equity securities (common, including LLC equity interests of SLF JV I) —
 —
 106,540
 36,390
 142,930
Total investments at fair value —
 —
 2,129,101
 36,390
 2,165,491
Cash and cash equivalents 117,923
 —
 —
 —
 117,923
Total assets at fair value $117,923
 $—
 $2,129,101
��$36,390
 $2,283,414
Secured borrowings relating to senior secured debt investments —
 —
 18,400
 —
 18,400
Total liabilities at fair value $—
 $—
 $18,400
 $—
 $18,400
(a)In accordance with ASC 820-10, certain investments that are measured using the net asset value per share (or its equivalent) as a practical expedient for fair value have not been classified in the fair value hierarchy. These investments are generally not redeemable. 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.
__________ 
(a)In accordance with ASC 820-10, certain investments that are measured using the net asset value per share (or its equivalent) as a practical expedient for fair value have not been classified in the fair value hierarchy. These investments are generally not redeemable. 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.
When a determination is made to classify a financial instrument within Level 3 of the valuation hierarchy, the determination is based upon the fact that the unobservable factors are significant to the overall fair value measurement. However, Level 3 financial instruments typically include, in addition to thehave both unobservable or Level 3 components and observable components (i.e. components that are actively quoted and can be validated by external sources). Accordingly, the appreciation (depreciation) in the tables below includes changes in fair value due in part to observable factors that are part of the valuation methodology. Transfers between levels are recognized at the beginning of the reporting period.
The following table provides a roll-forward in the changes in fair value from September 30, 2021 to September 30, 2022 for all investments for which the Company determined fair value using unobservable (Level 3) factors:
Investments
Senior Secured DebtSubordinated
Debt (including debt investments in the JVs)		Preferred
Equity		Common
Equity and Warrants		Total
Fair value as of September 30, 2021$1,878,536 $176,317 $63,565 $43,163 $2,161,581 
Purchases 490,081 7,960 19,662 2,807 520,510 
Sales and repayments(476,813)(22,525)(163)(13,034)(512,535)
Transfers in (a)(c)49,843 — — — 49,843 
Transfers out (a)(b)(17,070)— — (5,838)(22,908)
Capitalized PIK interest income22,855 313 — — 23,168 
Accretion of OID24,422 2,060 — — 26,482 
Net unrealized appreciation (depreciation)(67,455)(4,737)(3,029)(6,642)(81,863)
Net realized gains (losses)6,207 — (512)(498)5,197 
Fair value as of September 30, 2022$1,910,606 $159,388 $79,523 $19,958 $2,169,475 
Net unrealized appreciation (depreciation) relating to Level 3 investments still held as of September 30, 2022 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the year ended September 30, 2022$(53,013)$(4,885)$(3,264)$(11,751)$(72,913)
__________
(a) There were transfers into/out of Level 3 from/to Level 2 for certain investments during the year ended September 30, 2022 as a result of a change in the number of market quotes available and/or a change in market liquidity.
120
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









(b) There was one transfer out of Level 3 in connection with a transaction in which Level 3 common equity was exchanged for Level 1 common equity.
(c) There was one transfer into Level 3 from Level 2 as a result of an investment restructuring in which Level 2 senior secured debt was exchanged for Level 3 senior secured debt.

The following table provides a roll-forward in the changes in fair value from September 30, 20162020 to September 30, 2017 for all investments and secured borrowings for which the Company determined fair value using unobservable (Level 3) factors:
  Investments Liabilities
  Senior Secured Debt 
Subordinated
Debt (including debt investments in SLF JV I)
 
Preferred
Equity
 
Common
Equity
 Total Secured Borrowings
Fair value as of September 30, 2016 $1,689,535
 $285,277
 $47,749
 $106,540
 $2,129,101
 $18,400
New investments & net revolver activity 329,904
 127,844
 —
 58,272
 516,020
 —
Redemptions/repayments/sales (807,528) (227,711) (652) (37,264) (1,073,155) (5,440)
Net accrual of PIK interest income 1,640
 3,675
 1,470
 —
 6,785
 —
Accretion of OID 12,178
 —
 —
 —
 12,178
 —
Net change in unearned income 150
 36
 —
 —
 186
 —
Net unrealized appreciation (depreciation) on investments (10,533) 11,052
 (25,170) (67,653) (92,304) —
Net unrealized appreciation on secured borrowings —
 —
 —
 —
 —
 296
Realized loss on investments (154,904) (19,842) (6,952) 9,269
 (172,429) —
Fair value as of September 30, 2017 $1,060,442
 $180,331
 $16,445
 $69,164
 $1,326,382
 $13,256
Net unrealized appreciation (depreciation) relating to Level 3 assets & liabilities still held as of September 30, 2017 and reported within net unrealized appreciation (depreciation) on investments and net unrealized (appreciation) depreciation on secured borrowings in the Consolidated Statement of Operations for the year ended September 30, 2017 $(101,985) $(4,491) $(15,049) $(47,501) $(169,026) $296

The following table provides a roll-forward in the changes in fair value from September 30, 2015 to September 30, 20162021 for all investments for which the Company determined fair value using unobservable (Level 3) factors:
Investments
Senior Secured DebtSubordinated
Debt (including debt investments in the JVs)		Preferred
Equity		Common
Equity and Warrants		Total
Fair value as of September 30, 2020$904,237 $126,152 $29,959 $35,080 $1,095,428 
Purchases (a)1,237,783 66,537 27,692 5,665 1,337,677 
Sales and repayments(352,237)(45,353)(31)(28,629)(426,250)
Transfers in (b)(c)(d)18,458 — — 6,759 25,217 
Transfers out (b)(d)(6,228)— — — (6,228)
Capitalized PIK interest income14,700 — — — 14,700 
Accretion of OID19,642 2,069 — — 21,711 
Net unrealized appreciation (depreciation)43,736 18,177 7,218 13,953 83,084 
Net realized gains (losses)(1,555)8,735 (1,273)10,335 16,242 
Fair value as of September 30, 2021$1,878,536 $176,317 $63,565 $43,163 $2,161,581 
Net unrealized appreciation (depreciation) relating to Level 3 investments still held as of September 30, 2021 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the year ended September 30, 2021$46,340 $4,857 $5,913 $13,763 $70,873 
__________
  Investments Liabilities
  Senior Secured Debt 
Subordinated
Debt (including subordinated notes of SLF JV I)
 
Preferred
Equity
 
Common
Equity (including LLC equity interests of SLF JV I)
 Total Secured Borrowings
Fair value as of September 30, 2015 $1,893,135
 $359,028
 $30,806
 $85,179
 $2,368,148
 $21,182
New investments & net revolver activity 737,729
 14,962
 22,073
 35,367
 810,131
 —
Redemptions/repayments/sales (822,881) (59,025) (761) (11,413) (894,080) (2,858)
Net accrual of PIK interest income 6,254
 3,449
 2,249
 —
 11,952
 —
Accretion of original issue discount 4,248
 —
 —
 —
 4,248
 —
Net change in unearned income 554
 78
 —
 —
 632
 —
Net unrealized appreciation (depreciation) on investments (51,112) 9,946
 (6,305) 1,751
 (45,720) —
Net unrealized appreciation on secured borrowings —
 —
 —
 —
 —
 76
Realized loss on investments (78,392) (43,161) (313) (4,344) (126,210) —
Fair value as of September 30, 2016 $1,689,535
 $285,277
 $47,749
 $106,540
 $2,129,101
 $18,400
Net unrealized appreciation (depreciation) relating to Level 3 assets & liabilities still held as of September 30, 2016 and reported within net unrealized depreciation on investments and net unrealized (appreciation) depreciation on secured borrowings in the Consolidated Statement of Operations for the year ended September 30, 2016 $(111,957) $(35,015) $(1,492) $829
 $(147,635) $76
(a) Includes the Level 3 investments acquired in connection with the OCSI Merger during the year ended September 30, 2021.

(b) There were transfers into/out of Level 3 from/to Level 2 for certain investments during the year ended September 30, 2021 as a result of a change in the number of market quotes available and/or a change in market liquidity.

(c) There was a transfer into Level 3 from Level 2 as a result of an investment restructuring in which Level 2 senior secured debt was exchanged for Level 3 senior secured debt and common equity.

(d) There was one transfer from senior secured debt to common equity and warrants during the year ended September 30, 2021 as a result of an investment restructuring, in which $6.3 million of senior secured debt was exchanged for $6.3 million of common equity.



OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Significant Unobservable Inputs for Level 3 Investments
The following table provides quantitative information related to the significant unobservable inputs for Level 3 investments, and secured borrowings, which are carried at fair value, as of September 30, 2017:2022:
AssetFair ValueValuation TechniqueUnobservable InputRangeWeighted
Average (a)
Senior Secured Debt$1,599,148 Market YieldMarket Yield(b)9.0%-30.0%13.7%
14,333 Enterprise ValueEBITDA Multiple(c)5.0x-7.0x6.0x
297,125 Broker QuotationsBroker Quoted Price(e)N/A-N/AN/A
Subordinated Debt12,855 Market YieldMarket Yield(b)10.0%-19.0%13.8%
Debt Investments in the JVs146,533 Enterprise ValueN/A(f)N/A-N/AN/A
Preferred & Common Equity61,693 Enterprise ValueRevenue Multiple(c)0.4x-10.1x4.3x
36,913 Enterprise ValueEBITDA Multiple(c)3.0x-20.0x11.4x
3 Enterprise ValueAsset Multiple(c)0.9x-1.1x1.0x
872 Transaction PrecedentTransaction Price(d)N/A-N/AN/A
Total$2,169,475 
__________
(a)Weighted averages are calculated based on fair value of investments.
(b)Used when market participants would take into account market yield when pricing the investment.
(c)Used when market participants would use such multiples when pricing the investment.
(d)Used when there is an observable transaction or pending event for the investment.
Asset Fair Value Valuation Technique Unobservable Input Range 
Weighted
Average (c)
Senior secured debt $632,835
 Market yield technique Capital structure premium (a)0.0%-2.0% 0.7%
      Tranche specific risk premium/(discount) (a)(2.5)%-10.5% 2.9%
      Size premium (a)0.5%-2.0% 1.0%
      Industry premium/(discount) (a)(1.2)%-2.6% 0.4%
  58,815
 Enterprise value technique Revenue multiple (b)0.2x-0.6x 0.5x
  107,313
 Enterprise value technique EBITDA multiple (b)0.1x-7.2x 4.6x
  98,800
 Transactions precedent technique Transaction price (d)N/A-N/A N/A
  162,679
 Market quotations Broker quoted price (e)N/A-N/A N/A
Subordinated debt 40,825
 Market yield technique Capital structure premium (a)2.0%-2.0% 2.0%
      Tranche specific risk premium (a)1.8%-5.9% 3.4%
      Size premium (a)2.0%-2.0% 2.0%
      Industry premium/(discount) (a)(0.5)%-2.6% 0.6%
  10,835
 Enterprise value technique EBITDA multiple (b)6.3x-7.0x 6.4x
SLF JV I debt investments 128,671
 Enterprise value technique N/A (f)N/A-N/A N/A
Preferred & common equity 85,609
 Enterprise value technique EBITDA multiple (b)0.1x-15.6x 6.8x
      Revenue multiple (b)0.9x 10.9x 2.7x
Total $1,326,382
           
Secured borrowings 13,256
 Market yield technique Tranche specific risk premium (discount) (a)(2.0)%-6.5% 5.7%
      Size premium (a)2.0%-2.0% 2.0%
      Industry premium (a)0.2%-0.2% 0.2%
              
Total $13,256
           
121
__________
(a)Used when market participant would take into account this premium or discount when pricing the investment or secured borrowings.
(b)Used when market participant would use such multiples when pricing the investment.
(c)Weighted averages are calculated based on fair value of investments or secured borrowings.
(d)Used when there is an observable transaction or pending event for the investment.
(e)The Company generally uses prices provided by an independent pricing service which are non-binding indicative prices on or near the valuation date as the primary basis for the fair value determinations for quoted senior secured debt investments. Since these prices are non-binding, they may not be indicative of fair value. Each quoted price is evaluated by the Audit Committee of the Company's Board of Directors in conjunction with additional information compiled by the Investment Adviser, including financial performance, recent business developments and various other factors.
(f)The Company determined the value based on the total assets less the total liabilities senior to the mezzanine notes held at SLF JV I under the enterprise value technique.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









(e)The Company generally uses prices provided by an independent pricing service which are non-binding indicative prices on or near the valuation date as the primary basis for the fair value determinations for quoted senior secured debt investments. Since these prices are non-binding, they may not be indicative of fair value. The Company evaluates the quotations provided by pricing vendors and brokers based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated.
(f)The Company determined the value of its subordinated notes of each JV based on the total assets less the total liabilities senior to the subordinated notes held at such JV in an amount not exceeding par under the EV technique.
The following table provides quantitative information related to the significant unobservable inputs for Level 3 investments, and secured borrowings, which are carried at fair value, as of September 30, 2016:2021:
AssetFair ValueValuation TechniqueUnobservable InputRangeWeighted
Average (a)
Senior Secured Debt$1,413,373 Market YieldMarket Yield(b)4.0%-30.0%10.4%
36,197 Enterprise ValueEBITDA Multiple(c)3.0x-9.0x4.5x
7,500 Enterprise ValueAsset Multiple(c)0.9x-1.1x1.0x
421,466 Broker QuotationsBroker Quoted Price(e)N/A-N/AN/A
Subordinated Debt24,485 Market YieldMarket Yield(b)12.0%-14.0%12.6%
Debt Investments in the JVs151,832 Enterprise ValueN/A(f)N/A-N/AN/A
Preferred & Common Equity6,188 Enterprise ValueRevenue Multiple(c)0.9x-11.2x2.5x
93,520 Enterprise ValueEBITDA Multiple(c)3.0x-35.0x15.9x
698 Enterprise ValueAsset Multiple(c)0.9x-1.1x1.0x
6,322 Transactions PrecedentTransaction Price(d)N/A-N/AN/A
Total$2,161,581 
Asset Fair Value Valuation Technique Unobservable Input Range 
Weighted
Average (c)
Senior secured debt $1,096,434
 Market yield technique Capital structure premium (a)0.0%-2.0% 0.8%
      Tranche specific risk premium/(discount) (a)(4.5)%-8.0% 1.2%
      Size premium (a)0.5%-2.0% 1.1%
      Industry premium/(discount) (a)(1.9)%-5.4% (0.1)%
  107,745
 Enterprise value technique Weighted average cost of capital  16.0%-35.0% 20.5%
      Company specific risk premium (a)1.0%-20.0% 2.5%
      Revenue growth rate  (19.6)%-32.0% (10.2)%
      EBITDA multiple (b)6.7x-6.7x 6.7x
      Revenue multiple (b)0.7x 0.7x 0.7x
  206,141
 Transactions precedent technique Transaction price (d)N/A-N/A N/A
  279,215
 Market quotations Broker quoted price (e)N/A-N/A N/A
Subordinated debt 142,691
 Market yield technique Capital structure premium (a)2.0%-2.0% 2.0%
      Tranche specific risk premium/(discount) (a)1.0%-4.0% 2.8%
      Size premium (a)0.5%-2.0% 1.0%
      Industry premium/(discount) (a)(1.3)%-1.1% 0.1%
  13,582
 Enterprise value technique Weighted average cost of capital  19.0%-23.0% 20.0%
      Company specific risk premium (a)2.0%-15.0% 5.2%
      Revenue growth rate  (2.9)%-(2.9)% (2.9)%
      Revenue multiple (b)1.4x-1.4x 1.4x
SLF JV I debt investments 129,004
 Market yield technique Capital structure premium (a)2.0%-2.0% 2.0%
      Tranche specific risk discount (a)(1.2)%-(1.2)% (1.2)%
      Size premium (a)2.0%-2.0% 2.0%
      Industry premium (a)1.9%-1.9% 1.9%
Preferred & common equity 154,289
 Enterprise value technique Weighted average cost of capital  9.0%-35.0% 15.6%
      Company specific risk premium (a)1.0%-20.0% 2.2%
      Revenue growth rate  0.9%-156.0% 32.5%
      EBITDA multiple (b)1.0x-18.0x 8.5x
      Revenue multiple (b)0.7x 15.9x 8.1x
Total $2,129,101
           
Secured borrowings $18,400
 Market yield technique Capital structure premium (a)0.0%-1.0% 0.8%
      Tranche specific risk discount (a)(4.5)%-(0.5)% (1.2)%
      Size premium (a)2.0%-2.0% 2.0%
      Industry premium (a)1.0%-1.0% 1.0%
Total $18,400
      ��    
__________
__________
(a)Used when market participant would take into account this premium or discount when pricing the investment or secured borrowings.
(b)Used when market participant would use such multiples when pricing the investment.
(c)Weighted averages are calculated based on fair value of investments or secured borrowings.
(d)Used when there is an observable transaction or pending event for the investment.
(e)The Company generally uses prices provided by an independent pricing service which are non-binding indicative prices on or near the valuation date as the primary basis for the fair value determinations for quoted senior secured debt investments. Since these prices are non-binding, they may not be indicative of fair value. Each quoted price is evaluated by the Audit Committee of the Company's Board of Directors in conjunction with additional information compiled by the Company, including financial performance, recent business developments and various other factors.
OAKTREE SPECIALTY LENDING CORPORATION(a)Weighted averages are calculated based on fair value of investments.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(b)Used when market participants would take into account market yield when pricing the investment.
((c)Used when market participants would use such multiples when pricing the investment.
(d)Used when there is an observable transaction or pending event for the investment.
(e)The Company generally uses prices provided by an independent pricing service which are non-binding indicative prices on or near the valuation date as the primary basis for the fair value determinations for quoted senior secured debt investments. Since these prices are non-binding, they may not be indicative of fair value. The Company evaluates the quotations provided by pricing vendors and brokers based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated.
(f)The Company determined the value of its subordinated notes of each JV based on the total assets less the total liabilities senior to the subordinated notes held at such JV in thousands, except share and per share amounts, percentages and as otherwise indicated)





an amount not exceeding par under the EV technique.
Under the market yield technique, the significant unobservable inputsinput used in the fair value measurement of the Company's investments in debt securities and secured borrowings are capital structure premium, tranche specific risk premium (discount), size premium and industry premium (discount).is the market yield. Increases or decreases in any of those inputs in isolationthe market yield may result in a lower or higher fair value measurement, respectively.
Under the enterprise valueEV technique, the significant unobservable input used in the fair value measurement of the Company's investments in debt or equity securities is the EBITDA/Revenue multiple.earnings before interest, taxes, depreciation and amortization ("EBITDA"), revenue or asset multiple, as applicable. Increases or decreases in the valuation multiples in isolation may result in a higher or lower fair value measurement, respectively.
 
Financial Instruments Disclosed, But Not Carried, At Fair Value
The following table presents the carrying value and fair value of the Company's financial liabilities disclosed, but not carried, at fair value as of September 30, 20172022 and the level of each financial liability within the fair value hierarchy:
 
Carrying
Value		Fair ValueLevel 1Level 2Level 3
Syndicated Facility payable$540,000 $540,000 $— $— $540,000 
Citibank Facility payable160,000 160,000 — — 160,000 
2025 Notes payable (carrying value is net of unamortized financing costs and unaccreted discount)296,991 283,077 — 283,077 — 
2027 Notes payable (carrying value is net of unamortized financing costs, unaccreted discount and interest rate swap fair value adjustment)304,052 294,028 — 294,028 — 
Total$1,301,043 $1,277,105 $— $577,105 $700,000 
122
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




  
Carrying
Value
 Fair Value Level 1 Level 2 Level 3
Credit facilities payable $255,995
 $255,995
 $—
 $—
 $255,995
Unsecured notes payable (net of unamortized financing costs) 406,115
 414,067
 —
 163,517
 250,550
Total $662,110
 $670,062
 $—
 $163,517
 $506,545

The following table presents the carrying value and fair value of the Company's financial liabilities disclosed, but not carried, at fair value as of September 30, 20162021 and the level of each financial liability within the fair value hierarchy:
Carrying
Value		Fair ValueLevel 1Level 2Level 3
Syndicated Facility payable$495,000 $495,000 $— $— $495,000 
Citibank Facility payable135,000 135,000 — — 135,000 
2025 Notes payable (carrying value is net of unamortized financing costs and unaccreted discount)295,740 314,541 — 314,541 — 
2027 Notes payable (carrying value is net of unamortized financing costs, unaccreted discount and interest rate swap fair value adjustment)343,003 351,134 — 351,134 — 
Total$1,268,743 $1,295,675 $— $665,675 $630,000 
  
Carrying
Value
 Fair Value Level 1 Level 2 Level 3
Credit facilities payable $516,295
 $516,295
 $—
 $—
 $516,295
SBA debentures payable (net of unamortized financing costs) 210,011
 198,536
 —
 —
 198,536
Unsecured notes payable (net of unamortized financing costs) 404,630
 422,307
 —
 165,444
 256,863
Total $1,130,936
 $1,137,138
 $—
 $165,444
 $971,694

The carryingprincipal values of the credit facilities payable approximate their fair valuesvalue due to their variable interest rates and are included in Level 3 of the hierarchy.
The Company uses the non-binding indicative quoted priceused market quotes as of the valuation date to estimate the fair value of its 4.875% unsecured3.500% notes due 2019, which are included in Level 3 of the hierarchy.
The Company uses the unadjusted quoted price as of the valuation date to calculate the fair value of its 5.875% unsecured2025 (the "2025 Notes") and 2.700% notes due 2024 and its 6.125% unsecured notes due 2028,2027 (the "2027 Notes"), which as of September 30, 2017, traded under the symbol "FSCE" on the New York Stock Exchange and the symbol "FSCFL" on the NASDAQ Global Select Market, respectively. Although these securities are publicly traded, the market is relatively inactive, and accordingly, these securities are included in Level 2 of the hierarchy. As of October 17, 2017, the company’s 5.875% unsecured notes due 2024 and its 6.125% unsecured notes due 2028, trade under the symbol “OSLE” on the New York Stock Exchange and the symbol “OCSLL” on the NASDAQ Global Select Market, respectively.
The Company utilizes the market yield technique to estimate the fair values of its SBA debentures payable, which are included in Level 3
Portfolio Composition
Summaries of the hierarchy as of September 30, 2016. Under the market yield technique, the Company uses market yield models to determine the present valuecomposition of the future cash flow streams for the debentures. The Company reviews various sourcesCompany's portfolio at cost as a percentage of data involvingtotal investments with similar characteristics and assesses the informationat fair value as a percentage of total investments and net assets are shown in the valuation process.following tables:
 September 30, 2022September 30, 2021
Cost: % of Total Investments% of Total Investments
Senior secured debt$2,227,245 85.08 %$2,179,907 85.85 %
Debt investments in the JVs146,444 5.59 %146,955 5.79 %
Preferred equity85,300 3.26 %65,939 2.60 %
Subordinated debt67,147 2.57 %42,316 1.67 %
LLC equity interests of the JVs49,322 1.88 %49,322 1.94 %
Common equity and warrants42,296 1.62 %54,682 2.15 %
Total$2,617,754 100.00 %$2,539,121 100.00 %

 September 30, 2022September 30, 2021
Fair Value: % of Total Investments% of Net Assets% of Total Investments% of Net Assets
Senior secured debt$2,166,409 86.86 %173.93 %$2,217,243 86.72 %168.89 %
Debt investments in the JVs146,533 5.88 %11.77 %151,832 5.94 %11.56 %
Preferred equity79,523 3.19 %6.38 %63,565 2.49 %4.84 %
Subordinated debt56,920 2.28 %4.57 %42,681 1.67 %3.25 %
Common equity and warrants24,011 0.96 %1.93 %43,657 1.71 %3.33 %
LLC equity interests of the JVs20,715 0.83 %1.66 %37,651 1.47 %2.87 %
Total$2,494,111 100.00 %200.24 %$2,556,629 100.00 %194.74 %

123
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









Portfolio Composition
Summaries of the composition of the Company's investment portfolio at cost as a percentage of total investments and at fair value as a percentage of total investments and total net assets are shown in the following tables:
  September 30, 2017 September 30, 2016
Cost:    % of Total Investments    % of Total Investments
Senior secured debt $1,313,432
 74.73% $1,789,532
 78.36%
Subordinated debt 112,869
 6.42
 171,049
 7.49
Debt investments in SLF JV I 128,671
 7.32
 144,841
 6.34
LLC equity interests of SLF JV I 16,172
 0.92
 16,093
 0.70
Purchased equity 112,558
 6.40
 82,516
 3.61
Equity grants 48,805
 2.78
 54,702
 2.40
Limited partnership interests 25,158
 1.43
 25,125
 1.10
Total $1,757,665
 100.00% $2,283,858
 100.00%
  September 30, 2017 September 30, 2016
Fair Value:    % of Total Investments % of Total Net Assets    % of Total Investments % of Total Net Assets
Senior secured debt $1,202,699
 78.01% 138.61% $1,689,535
 78.02% 147.91%
Subordinated debt 93,438
 6.06
 10.77
 156,273
 7.22
 13.68
Debt investments in SLF JV I 128,671
 8.35
 14.83
 129,004
 5.96
 11.29
LLC equity interests of SLF JV I 5,525
 0.36
 0.64
 13,709
 0.63
 1.20
Purchased equity 78,655
 5.10
 9.07
 114,047
 5.27
 9.98
Equity grants 6,954
 0.45
 0.80
 40,241
 1.86
 3.52
Limited partnership interests 25,813
 1.67
 2.97
 22,682
 1.04
 1.99
Total $1,541,755
 100.00% 177.69% $2,165,491
 100.00% 189.57%
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





The Company primarily invests in portfolio companies located in North America. The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company's business. The following tables show the composition of the Company's portfolio composition by geographic region at cost as a percentage of total investments and at fair value as a percentage of total investments and total net assets:
 September 30, 2022September 30, 2021
Cost: % of Total Investments % of Total Investments
Northeast$747,420 28.55 %$720,781 28.39 %
Midwest373,236 14.26 %385,846 15.20 %
West358,306 13.69 %365,471 14.39 %
Southeast356,041 13.60 %294,339 11.59 %
International301,242 11.51 %268,817 10.59 %
Southwest221,308 8.45 %256,227 10.09 %
South168,819 6.45 %156,764 6.17 %
Northwest91,382 3.49 %90,876 3.58 %
Total$2,617,754 100.00 %$2,539,121 100.00 %
  September 30, 2017 September 30, 2016
Cost:    % of Total Investments    % of Total Investments
Northeast U.S. $648,105
 36.87% $660,616
 28.92%
West U.S. 328,673
 18.70
 470,700
 20.61
Southwest U.S. 271,484
 15.45
 416,060
 18.22
Midwest U.S. 258,895
 14.73
 320,368
 14.03
Southeast U.S. 176,460
 10.04
 308,770
 13.52
International 62,649
 3.56
 107,344
 4.70
Northwest U.S. 11,399
 0.65
 —
 —
Total $1,757,665
 100.00% $2,283,858
 100.00%

 September 30, 2022September 30, 2021
Fair Value: % of Total Investments% of Net Assets % of Total Investments% of Net Assets
Northeast$696,368 27.93 %55.90 %$721,647 28.24 %54.97 %
Midwest356,934 14.31 %28.66 %382,475 14.96 %29.13 %
West345,251 13.84 %27.72 %371,257 14.52 %28.28 %
Southeast344,567 13.82 %27.66 %299,486 11.71 %22.81 %
International279,646 11.21 %22.45 %275,904 10.79 %21.02 %
Southwest214,984 8.62 %17.26 %258,940 10.13 %19.72 %
South166,230 6.66 %13.35 %155,526 6.08 %11.85 %
Northwest90,131 3.61 %7.24 %91,394 3.57 %6.96 %
Total$2,494,111 100.00 %200.24 %$2,556,629 100.00 %194.74 %
124
  September 30, 2017 September 30, 2016
Fair Value:    % of Total Investments % of Total Net Assets    % of Total Investments % of Total Net Assets
Northeast U.S. $539,803
 35.01% 62.22% $607,240
 28.03% 53.15%
West U.S. 297,716
 19.31
 34.31% 452,078
 20.88
 39.58%
Southwest U.S. 224,233
 14.54
 25.84% 406,307
 18.76
 28.32%
Midwest U.S. 224,111
 14.54
 25.83% 263,434
 12.17
 23.06%
Southeast U.S. 179,460
 11.64
 20.68% 323,481
 14.94
 35.57%
International 64,780
 4.20
 7.47% 112,951
 5.22
 9.89%
Northwest U.S. 11,652
 0.76
 1.34% —
 —
 —
Total $1,541,755
 100.00% 177.69% $2,165,491
 100.00% 189.57%
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









The following tables show the composition of the Company's portfolio by industry at cost as a percentage of total investments and at fair value as a percentage of total investments and total net assets as of September 30, 20172022 and September 30, 2016 was as follows:2021:
September 30, 2022September 30, 2021
Cost: % of Total Investments % of Total Investments
Application Software$391,938 14.98 %$367,265 14.49 %
Multi-Sector Holdings (1)195,766 7.48 196,277 7.73 
Pharmaceuticals126,508 4.83 138,250 5.44 
Data Processing & Outsourced Services120,477 4.60 120,381 4.74 
Biotechnology109,960 4.20 111,856 4.41 
Health Care Technology100,084 3.82 13,877 0.55 
Industrial Machinery81,787 3.12 88,231 3.47 
Specialized Finance80,864 3.09 68,554 2.70 
Internet & Direct Marketing Retail67,926 2.59 62,233 2.45 
Aerospace & Defense61,963 2.37 67,629 2.66 
Construction & Engineering60,996 2.33 61,874 2.44 
Automotive Retail59,254 2.26 41,800 1.65 
Health Care Services58,674 2.24 84,750 3.34 
Health Care Distributors57,112 2.18 19,698 0.78 
Internet Services & Infrastructure54,095 2.07 46,917 1.85 
Personal Products53,214 2.03 103,642 4.08 
Fertilizers & Agricultural Chemicals49,301 1.88 66,713 2.63 
Metal & Glass Containers47,704 1.82 17,443 0.69 
Real Estate Operating Companies47,585 1.82 27,531 1.08 
Home Improvement Retail45,802 1.75 46,487 1.83 
Airport Services43,322 1.65 41,699 1.64 
Real Estate Services40,243 1.54 40,445 1.59 
Leisure Facilities39,768 1.52 25,162 0.99 
Diversified Support Services37,992 1.45 40,666 1.60 
Specialty Chemicals37,319 1.43 46,731 1.84 
Health Care Supplies36,471 1.39 29,650 1.17 
Insurance Brokers35,628 1.36 25,515 1.00 
Integrated Telecommunication Services34,628 1.32 47,059 1.85 
Soft Drinks34,272 1.31 33,410 1.32 
Electrical Components & Equipment33,814 1.29 32,127 1.27 
Other Diversified Financial Services29,300 1.12 16,104 0.63 
Advertising28,245 1.08 28,649 1.13 
Movies & Entertainment26,161 1.00 26,002 1.02 
Distributors25,278 0.97 — — 
Health Care Equipment24,353 0.93 23,674 0.93 
Oil & Gas Storage & Transportation22,290 0.85 36,612 1.44 
Environmental & Facilities Services20,857 0.80 — — 
Cable & Satellite20,716 0.79 26,730 1.05 
Home Furnishings19,550 0.75 19,537 0.77 
Systems Software14,890 0.57 6,647 0.26 
Consumer Finance14,492 0.55 — — 
Hotels, Resorts & Cruise Lines13,960 0.53 — — 
Auto Parts & Equipment12,474 0.48 12,466 0.49 
IT Consulting & Other Services11,697 0.45 7,598 0.30 
Restaurants9,338 0.36 9,317 0.37 
Research & Consulting Services9,187 0.35 7,354 0.29 
Education Services9,080 0.35 981 0.04 
Oil & Gas Refining & Marketing8,627 0.33 36,044 1.42 
Trading Companies & Distributors7,628 0.29 — — 
Air Freight & Logistics7,295 0.28 4,925 0.19 
Apparel Retail5,268 0.20 — — 
Apparel, Accessories & Luxury Goods5,165 0.20 5,165 0.20 
Integrated Oil & Gas4,866 0.19 4,842 0.19 
Food Distributors4,646 0.18 4,625 0.18 
Specialized REITs4,318 0.16 — — 
Diversified Banks3,515 0.13 3,515 0.14 
Technology Distributors3,163 0.12 3,163 0.12 
Construction Materials2,331 0.09 2,245 0.09 
Housewares & Specialties2,293 0.09 1,875 0.07 
Electronic Components2,092 0.08 10,080 0.40 
Alternative Carriers212 0.01 6,578 0.26 
Independent Power Producers & Energy Traders— — 23,458 0.92 
Airlines— — 22,417 0.88 
Commercial Printing— — 19,685 0.78 
Managed Health Care— — 18,654 0.73 
Thrifts & Mortgage Finance— — 16,079 0.63 
Property & Casualty Insurance— — 9,884 0.39 
Leisure Products— — 6,599 0.26 
Food Retail— — 3,745 0.15 
$2,617,754 100.00 %$2,539,121 100.00 %
125
  September 30, 2017 September 30, 2016
Cost:    % of Total Investments    % of Total Investments
 Internet software & services $270,192
 15.37% $361,396
 15.80%
 Healthcare services 210,527
 11.98
 379,250
 16.60
 Multi-sector holdings (1) 173,427
 9.87
 178,113
 7.80
 Healthcare equipment 99,614
 5.67
 119,705
 5.24
 Advertising 84,720
 4.82
 170,517
 7.47
 Data processing & outsourced services 77,673
 4.42
 83,988
 3.68
 Construction & engineering 67,879
 3.86
 66,337
 2.90
 Pharmaceuticals 60,810
 3.46
 59,521
 2.61
 Specialty stores 58,530
 3.33
 46,618
 2.04
 Airlines 57,602
 3.28
 71,067
 3.11
 Application software 51,444
 2.93
 48,581
 2.13
 Education services 50,013
 2.85
 23,568
 1.03
 Environmental & facilities services 49,902
 2.84
 99,054
 4.34
 Research & consulting services 37,952
 2.16
 63,137
 2.76
 Air freight and logistics 32,530
 1.85
 31,657
 1.39
 Leisure facilities 30,931
 1.76
 33,981
 1.49
 Integrated telecommunication services 30,840
 1.75
 56,343
 2.47
 Housewares & specialties 29,852
 1.70
 —
 —
 Oil & gas equipment services 27,598
 1.57
 45,646
 2.00
 Casinos & gaming 23,309
 1.33
 —
 —
 Consumer electronics 23,176
 1.32
 24,870
 1.09
 Home improvement retail 22,944
 1.31
 24,352
 1.07
 Diversified support services 22,724
 1.29
 85,144
 3.73
 Auto parts & equipment 21,191
 1.21
 16,643
 0.73
 Industrial machinery 15,074
 0.86
 46,517
 2.04
 Distributors 14,963
 0.85
 —
 —
 Security & alarm services 13,214
 0.75
 13,520
 0.59
 Real Estate Services 13,011
 0.74
 —
 —
 Other diversified financial services 12,079
 0.69
 14,794
 0.65
 Hypermarkets & super centers 11,979
 0.68
 —
 —
 Precious metals & minerals 7,459
 0.42
 —
 —
 Thrift & mortgage finance 7,240
 0.41
 7,946
 0.35
 Trucking 7,081
 0.40
 —
 —
 Computer & electronics retail 6,399
 0.36
 —
 —
 Multi-utilities 6,201
 0.35
 —
 —
 Commercial printing 5,983
 0.34
 6,090
 0.27
 Apparel, accessories & luxury goods 5,165
 0.29
 15,694
 0.69
 Restaurants 4,910
 0.28
 4,951
 0.22
 Food retail 4,176
 0.24
 4,169
 0.18
 IT consulting & other services 4,127
 0.23
 51,868
 2.27
 Specialized finance 3,224
 0.18
 —
 —
 Food distributors —
 —
 11,903
 0.52
 Specialized consumer services —
 —
 9,014
 0.39
 Healthcare technology —
 —
 7,904
 0.35
Total $1,757,665
 100.00% $2,283,858
 100.00%


OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









September 30, 2022September 30, 2021
Fair Value: % of Total Investments% of Net Assets % of Total Investments% of Net Assets
Application Software$384,589 15.43 %30.87 %$372,606 14.58 %28.39 %
Multi-Sector Holdings (1)167,248 6.71 13.43 189,483 7.41 14.43 
Pharmaceuticals119,511 4.79 9.59 142,194 5.56 10.83 
Data Processing & Outsourced Services111,335 4.46 8.94 113,923 4.46 8.68 
Biotechnology108,465 4.35 8.71 113,641 4.44 8.66 
Health Care Technology97,315 3.90 7.81 13,960 0.55 1.06 
Industrial Machinery81,008 3.25 6.50 90,218 3.53 6.87 
Specialized Finance73,087 2.93 5.87 68,844 2.69 5.24 
Internet & Direct Marketing Retail70,419 2.82 5.65 68,424 2.68 5.21 
Aerospace & Defense61,881 2.48 4.97 69,602 2.72 5.30 
Construction & Engineering61,188 2.45 4.91 63,109 2.47 4.81 
Automotive Retail57,629 2.31 4.63 42,133 1.65 3.21 
Health Care Distributors54,662 2.19 4.39 19,683 0.77 1.50 
Internet Services & Infrastructure53,797 2.16 4.32 47,923 1.87 3.65 
Fertilizers & Agricultural Chemicals51,972 2.08 4.17 67,527 2.64 5.14 
Personal Products50,150 2.01 4.03 105,530 4.13 8.04 
Real Estate Operating Companies48,062 1.93 3.86 28,341 1.11 2.16 
Metal & Glass Containers47,599 1.91 3.82 17,413 0.68 1.33 
Health Care Services45,943 1.84 3.69 84,735 3.31 6.45 
Home Improvement Retail45,421 1.82 3.65 46,488 1.82 3.54 
Airport Services42,883 1.72 3.44 40,776 1.59 3.11 
Real Estate Services39,573 1.59 3.18 41,225 1.61 3.14 
Leisure Facilities39,258 1.57 3.15 22,888 0.90 1.74 
Diversified Support Services36,712 1.47 2.95 40,888 1.60 3.11 
Health Care Supplies36,577 1.47 2.94 30,186 1.18 2.30 
Specialty Chemicals33,969 1.36 2.73 46,559 1.82 3.55 
Soft Drinks33,670 1.35 2.70 33,410 1.31 2.54 
Insurance Brokers33,081 1.33 2.66 27,612 1.08 2.10 
Electrical Components & Equipment32,933 1.32 2.64 32,142 1.26 2.45 
Integrated Telecommunication Services32,201 1.29 2.59 49,607 1.94 3.78 
Advertising26,948 1.08 2.16 30,423 1.19 2.32 
Movies & Entertainment26,645 1.07 2.14 27,048 1.06 2.06 
Distributors24,494 0.98 1.97 — — — 
Other Diversified Financial Services24,326 0.98 1.95 15,908 0.62 1.21 
Health Care Equipment24,161 0.97 1.94 23,763 0.93 1.81 
Oil & Gas Storage & Transportation20,853 0.84 1.67 34,462 1.35 2.63 
Environmental & Facilities Services20,585 0.83 1.65 — — — 
Cable & Satellite19,576 0.78 1.57 27,048 1.06 2.06 
Home Furnishings18,188 0.73 1.46 19,735 0.77 1.50 
Hotels, Resorts & Cruise Lines13,985 0.56 1.12 — — — 
Consumer Finance13,284 0.53 1.07 — — — 
Systems Software12,834 0.51 1.03 6,769 0.26 0.52 
Auto Parts & Equipment11,469 0.46 0.92 12,365 0.48 0.94 
Restaurants8,692 0.35 0.70 9,451 0.37 0.72 
Oil & Gas Refining & Marketing8,604 0.34 0.69 36,546 1.43 2.78 
IT Consulting & Other Services8,596 0.34 0.69 7,443 0.29 0.57 
Education Services8,582 0.34 0.69 1,009 0.04 0.08 
Research & Consulting Services8,573 0.34 0.69 7,606 0.30 0.58 
Air Freight & Logistics6,405 0.26 0.51 4,981 0.19 0.38 
Trading Companies & Distributors5,567 0.22 0.45 — — — 
Apparel Retail5,223 0.21 0.42 — — — 
Integrated Oil & Gas4,872 0.20 0.39 4,884 0.19 0.37 
Diversified Banks3,402 0.14 0.27 3,562 0.14 0.27 
Food Distributors3,367 0.13 0.27 4,673 0.18 0.36 
Specialized REITs3,264 0.13 0.26 — — — 
Technology Distributors2,997 0.12 0.24 3,178 0.12 0.24 
Housewares & Specialties2,456 0.10 0.20 2,003 0.08 0.15 
Construction Materials1,934 0.08 0.16 2,350 0.09 0.18 
Electronic Components1,890 0.08 0.15 10,127 0.40 0.77 
Alternative Carriers201 0.01 0.02 6,939 0.27 0.53 
Airlines— — — 24,554 0.96 1.87 
Independent Power Producers & Energy Traders— — — 23,552 0.92 1.79 
Commercial Printing— — — 20,100 0.79 1.53 
Managed Health Care— — — 18,840 0.74 1.44 
Thrifts & Mortgage Finance— — — 15,942 0.62 1.21 
Property & Casualty Insurance— — — 9,949 0.39 0.76 
Leisure Products— — — 6,599 0.26 0.50 
Food Retail— — — 3,750 0.15 0.29 
Total$2,494,111 100.00 %200.24 %$2,556,629 100.00 %194.74 %
___________________
(1)This industry includes the Company's investments in the JVs and certain limited partnership interests.

126
  September 30, 2017 September 30, 2016
Fair Value:    % of Total Investments % of Total Net Assets    % of Total Investments % of Total Net Assets
 Internet software & services $265,076
 17.20% 30.56% $326,665
 15.09% 28.56%
 Multi-sector holdings (1) 164,511
 10.67
 18.96
 159,549
 7.37
 13.97
 Healthcare services 93,912
 6.09
 10.82
 360,937
 16.64
 31.60
 Advertising 83,648
 5.43
 9.64
 149,337
 6.90
 13.07
 Healthcare equipment 72,922
 4.73
 8.40
 120,827
 5.58
 10.58
 Data processing & outsourced services 68,314
 4.43
 7.87
 80,435
 3.71
 7.04
 Pharmaceuticals 62,770
 4.07
 7.23
 60,517
 2.79
 5.30
 Airlines 59,511
 3.86
 6.86
 77,046
 3.56
 6.74
 Specialty stores 56,867
 3.69
 6.55
 45,233
 2.09
 3.96
 Application software 53,905
 3.50
 6.21
 50,799
 2.35
 4.45
 Environmental & facilities services 50,659
 3.29
 5.84
 100,852
 4.66
 8.83
 Construction & engineering 50,269
 3.26
 5.79
 62,740
 2.90
 5.49
 Research & consulting services 38,531
 2.50
 4.44
 63,404
 2.93
 5.55
 Education services 38,254
 2.48
 4.41
 19,745
 0.91
 1.73
 Leisure facilities 32,591
 2.11
 3.76
 34,486
 1.59
 3.02
 Integrated telecommunication services 31,358
 2.03
 3.61
 53,092
 2.45
 4.65
 Housewares & specialties 29,775
 1.93
 3.43
 —
 0.00
 —
 Oil & gas equipment services 28,347
 1.84
 3.27
 16,783
 0.78
 1.47
 Home improvement retail 24,784
 1.61
 2.86
 26,141
 1.21
 2.29
 Consumer electronics 24,066
 1.56
 2.77
 25,180
 1.16
 2.20
 Casinos & gaming 23,495
 1.52
 2.71
 —
 0.00
 —
 Diversified support services 22,554
 1.46
 2.60
 75,720
 3.50
 6.63
 Auto parts & equipment 21,715
 1.41
 2.50
 18,688
 0.86
 1.64
 Industrial machinery 15,004
 0.97
 1.73
 51,581
 2.38
 4.52
 Distributors 14,829
 0.96
 1.71
 —
 0.00
 —
 Security & alarm services 13,103
 0.85
 1.51
 13,776
 0.64
 1.21
 Real Estate Services 13,014
 0.84
 1.50
 —
 0.00
 —
 Other diversified financial services 11,646
 0.76
 1.34
 14,777
 0.68
 1.29
 Hypermarkets & super centers 11,504
 0.75
 1.33
 —
 —
 —
 Precious metals & minerals 7,464
 0.48
 0.86
 —
 —
 —
 Trucking 7,106
 0.46
 0.82
 —
 —
 —
 Computer & electronics retail 6,498
 0.42
 0.75
 —
 —
 —
 Multi-utilities 6,255
 0.41
 0.72
 —
 —
 —
 Thrift & mortgage finance 6,129
 0.40
 0.71
 5,846
 0.27
 0.51
 Commercial printing 6,045
 0.39
 0.70
 6,127
 0.28
 0.54
 Leisure products 5,900
 0.38
 0.68
 34,981
 1.62
 3.06
 Restaurants 4,917
 0.32
 0.57
 4,985
 0.23
 0.44
 Food retail 4,251
 0.28
 0.49
 4,214
 0.19
 0.37
 IT consulting & other services 3,927
 0.25
 0.45
 51,460
 2.38
 4.51
 Specialized finance 3,278
 0.21
 0.38
 —
 —
 —
 Air freight and logistics 1,810
 0.12
 0.21
 7,046
 0.33
 0.62
 Apparel, accessories & luxury goods 1,241
 0.08
 0.14
 14,620
 0.68
 1.28
 Food distributors —
 —
 —
 11,400
 0.53
 1.00
 Specialized consumer services —
 —
 —
 9,082
 0.42
 0.80
 Healthcare technology —
 —
 —
 7,420
 0.34
 0.65
Total $1,541,755
 100.00% 177.69% $2,165,491
 100.00% 189.57%
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









___________________
(1)This industry includes the Company's investment in SLF JV I.
The Company's investments are generally in small and mid-sized companies in a variety of industries. As of September 30, 20172022 and September 30, 2016,2021, the Company had no single investment that represented greater than 10%of the total investment portfolio at fair value. Income, consisting of interest, dividends, fees, other investment income and realization of gains or losses, canmay fluctuate upon repayment or sale of an investment and in any given yearperiod can be highly concentrated among several investments. For the years ended September 30, 2017, September 30, 2016 and September 30, 2015, no individual investment produced investment income that exceeded 10% of total investment income.

Senior Loan Fund JV I, LLC
In May 2014, the Company entered into an LLC agreement with Trinity Universal Insurance Company, a subsidiary of Kemper Corporation ("Kemper"), to form SLF JV I. On July 1, 2014, SLF JV I began investingThe Company co-invests in senior secured loans of middle-market companies and other corporate debt securities. The Company co-invests in these securities with Kemper through its investment in SLF JV I. SLF JV I is managed by a four person Board of Directors, two of whom are selected by the Company and two of whom are selected by Kemper. All portfolio decisions and investment decisions in respect of SLF JV I must be approved by the SLF JV I investment committee, which consists of one representative selected by the Company and one representative selected by Kemper (with approval from a representative of each required). As of September 30, 2017, Since the Company does not have a controlling financial interest in SLF JV I, the Company does not consolidate SLF JV I.
SLF JV I is capitalized pro rata with LLC equity interests as transactions are completed and may be capitalized with additional mezzaninesubordinated notes issued to the Company and Kemper by SLF Repack Issuer 2016JV I. The subordinated notes issued by SLF JV I (the "SLF JV I Notes") are senior in right of payment to SLF JV I LLC which mature on October 12, 2036.equity interests and subordinated in right of payment to SLF JV I’s secured debt. As of September 30, 20172022 and September 30, 2016,2021, the Company and Kemper owned, in the aggregate, 87.5% and 12.5%, respectively, of the LLC equity interests of SLF JV I. As of September 30, 2017I and September 30, 2016, the Company owned 87.5% of the outstanding mezzanine notes and subordinated notes, respectively, and Kemper owned 12.5% of the outstanding mezzanine notes and subordinated notes, respectively.
The Company has determined thatSLF JV I Notes. SLF JV I is not an investment company under ASC 946, however,"eligible portfolio company" as defined in accordance with such guidance,section 2(a)(46) of the Investment Company generally will not consolidate its investment in a company other than a wholly-owned investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company does not consolidate its non-controlling interest in SLF JV I.Act.
SLF JV I has a senior revolving credit facility with Deutsche Bank AG, New York Branch ("(as amended, the "SLF JV I Deutsche Bank I facility"Facility") with a stated maturity date of July 1, 2019,, which permitted up to $200.0$260.0 million of borrowings (subject to borrowing base and other limitations) as of each of September 30, 20172022 and September 30, 2016.2021. Borrowings under the Deutsche Bank I facility bear interest at a rate equal to the 3-month LIBOR plus 2.50% per annum with no LIBOR floor. Under the Deutsche Bank I facility, $71.5 million and $100.0 million was outstanding as of September 30, 2017 and September 30, 2016, respectively.
SLF JV I also has an additional $200.0 million senior credit facility with Deutsche Bank AG, New York Branch (the "Deutsche Bank II facility"). On June 29, 2017, the Deutsche Bank II facility was assigned by Credit Suisse AG, Cayman Islands Branch to Deutsche Bank AG, New York Branch. Prior to June 29, 2017, this credit facility was administered by Credit Suisse AG, Cayman Islands Branch. Accordingly, SLF JV I’s total senior debt capacity was $400.0 million as of September 30, 2017. The Deutsche Bank II facility has a maturity date of July 7, 2023 and borrowings under the facility bear interest at a rate equal to LIBOR plus 2.50% per annum with no LIBOR floor. As of September 30, 2017 and September 30, 2016, there were $41.6 million and $67.0 million of borrowings outstanding under the Deutsche Bank II facility, respectively.
As of September 30, 2017, borrowings under the Deutsche Bank I facility and the Deutsche Bank II facility wereFacility are secured by all of the assets of the respectiveSLF JV I Funding LLC, a special purpose financing vehiclessubsidiary of SLF JV I.
As of September 30, 20172022, the reinvestment period of the SLF JV I Deutsche Bank Facility was scheduled to expire May 3, 2023 and the maturity date was May 3, 2028. As of September 30, 2022, borrowings under the SLF JV I Deutsche Bank Facility accrued interest at a rate equal to 3-month LIBOR plus 2.00% per annum during the reinvestment period, 3-month LIBOR plus 2.15% per annum for the first year after the reinvestment period, 3-month LIBOR plus 2.25% for the following year and 3-month LIBOR plus 2.50% thereafter, in each case with a 0.125% LIBOR floor. $230.0 million and $215.6 million of borrowings were outstanding under the SLF JV I Deutsche Bank Facility as of September 30, 2022 and September 30, 2016,2021, respectively.
As of September 30, 2022 and September 30, 2021, SLF JV I had total assets of $276.8$385.2 million and $338.5 million.$379.2 million, respectively. SLF JV I's portfolio primarily consisted of senior secured loans to 60 and 55 portfolio companies as of September 30, 2022 and September 30, 2021, respectively. The portfolio companies in SLF JV I are in industries similar to those in which the Company may invest directly. As of September 30, 2017,2022, the Company's investment in SLF JV I consisted of LLC equity interests and SLF JV I Notes of $5.5$117.0 million in aggregate, at fair value, and Class A mezzanine secured deferrable floating rate notes and Class B mezzanine secured deferrable fixed rate notes of $101.0 million and $27.6 million, at fair value, respectively.value. As of September 30, 2016,2021, the Company's investment in SLF JV I consisted of LLC equity interests and SLF JV I Notes of $13.7$133.9 million and subordinated notes of $129.0 million,in aggregate, at fair value. In connection with the restructuring in December 2016
As of the Company’seach of September 30, 2022 and Kemper’s investment in SLF JV I,September 30, 2021, the Company and Kemper exchanged their holdings of subordinated notes ofhad funded approximately $165.5 million to SLF JV I, forof which $144.8 million was from the mezzanine notes issued by SLF Repack Issuer 2016 LLC, a newly formed, wholly owned special purpose issuer subsidiaryCompany. As of each of September 30, 2022 and September 30, 2021, the Company had aggregate commitments to fund SLF JV I of $35.0 million, of which are secured byapproximately $26.2 million was to fund additional SLF JV I’sI Notes and approximately $8.8 million was to fund LLC equity interests in the special purpose entities serving as borrowers under the Deutsche Bank I facility and Deutsche Bank II facility described above. The mezzanine notes are senior in right of payment to the SLF JV I LLC equity interests and any contributions made by the Company to fund investments of SLF JV I through SLF Repack Issuer 2016 LLC. SLF JV I's portfolio consisted of middle-market and other corporate debt securities of 32 and 37 "eligible portfolio companies" (as defined in SectionI.
127
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









2(a)(46) of the 1940 Act) as of September 30, 2017 and September 30, 2016, respectively. The portfolio companies in SLF JV I are in industries similar to those in which the Company may invest directly.
As of September 30, 2017 and September 30, 2016, the Company and Kemper had funded approximately $165.5 million and $183.9 million, respectively, to SLF JV I, of which $144.8 million and $160.9 million, respectively, was from the Company. As of September 30, 2017, the Company and Kemper had the option to fund additional mezzanine notes, subject to additional equity funding to SLF JV I. As of September 30, 2016, the Company had commitments to fund subordinated notes to SLF JV I of $157.5 million, of which $12.7 million was unfunded. As of September 30, 2017 and September 30, 2016, the Company had commitments to fund LLC equity interests in SLF JV I of $17.5 million, of which $1.3 million and $1.4 million was unfunded, respectively.
Below is a summary of SLF JV I's portfolio, followed by a listing of the individual loans in SLF JV I's portfolio as of September 30, 20172022 and September 30, 2016:2021:
September 30, 2022September 30, 2021
Senior secured loans (1)$383,194$344,196
Weighted average interest rate on senior secured loans (2)8.33%5.60%
Number of borrowers in SLF JV I6055
Largest exposure to a single borrower (1)$10,093$9,875
Total of five largest loan exposures to borrowers (1)$48,139$46,984
  September 30, 2017 September 30, 2016
Senior secured loans (1) $245,063 $324,406
Weighted average interest rate on senior secured loans (2) 7.70% 7.84%
Number of borrowers in SLF JV I 32 37
Largest exposure to a single borrower (1) $18,374 $19,775
Total of five largest loan exposures to borrowers (1) $82,728 $93,926
__________
(1) At principal amount.
(2) Computed using the weighted average annual interest rate on accruing senior secured loans.loans at fair value.


SLF JV I Portfolio as of September 30, 2017
128
Portfolio Company Industry Investment Type Maturity Date Current Interest Rate(1)(4)  Cash Interest Rate Principal Cost Fair Value (2)
AdVenture Interactive, Corp. (3) Advertising 927 Common Stock Shares 
 
   
 $1,088
 $1,412
Allied Universal Holdco LLC (3) Security & alarm services First Lien 7/28/2022 LIBOR+3.75% (1% floor) 5.08% $6,982
 7,040
 6,976
Ameritox Ltd. (3)(5) Healthcare services First Lien 4/11/2021 LIBOR+5% (1% floor) 3% PIK 6.33% 5,759
 5,638
 668
    301,913.06 Class B Preferred Units         302
 —
    928.96 Class A Common Units         5,474
 —
Total Ameritox, Ltd.           5,759
 11,414
 668
BeyondTrust Software, Inc. (3) Application software First Lien 9/25/2019 LIBOR+7% (1% floor) 8.33% 15,330
 15,231
 15,329
BJ's Wholesale Club, Inc. (3) Hypermarkets & super centers First Lien 1/26/2024 LIBOR+3.75% (1% floor) 4.99% 4,988
 4,993
 4,793
Compuware Corporation Internet software & services First Lien B3 12/15/2021 LIBOR+4.25% (1% floor) 5.49% 11,154
 11,041
 11,293
DFT Intermediate LLC (3) Specialized finance First Lien 3/1/2023 LIBOR+5.5% (1% floor) 6.74% 10,723
 10,474
 10,652
Digital River, Inc. Internet software & services First Lien 2/12/2021 LIBOR+6.5% (1% floor) 7.82% 4,524
 4,541
 4,546
Dodge Data & Analytics LLC (3) Data processing & outsourced services First Lien 10/31/2019 LIBOR+8.75% (1% floor) 10.13% 9,339
 9,372
 8,744
DTZ U.S. Borrower, LLC (3) Real estate services First Lien 11/4/2021 LIBOR+3.25% (1% floor) 4.57% 6,964
 6,998
 6,990
Edge Fitness, LLC Leisure facilities First Lien 12/31/2019 LIBOR+7.75% (1% floor) 9.05% 10,600
 10,602
 10,600
EOS Fitness Opco Holdings, LLC (3) Leisure facilities First Lien 12/30/2019 LIBOR+8.75% (0.75% floor) 9.99% 18,374
 18,182
 18,557
Everi Payments Inc.(3) Casinos & gaming First Lien 5/9/2024 LIBOR+4.5% (1% floor) 5.74% 4,988
 4,964
 5,039
Falmouth Group Holdings Corp. Specialty chemicals First Lien 12/13/2021 LIBOR+6.75% (1% floor) 8.08% 4,610
 4,578
 4,610
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









SLF JV I Portfolio as of September 30, 2022
Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Access CIG, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 2/27/20256.82 %Diversified Support Services$10,093 $10,028 $9,692 
ADB Companies, LLCFirst Lien Term Loan, SOFR+6.25% cash due 12/18/20259.80 %Construction & Engineering8,518 8,389 8,371 (4)
Altice France S.A.First Lien Term Loan, LIBOR+4.00% cash due 8/14/20266.91 %Integrated Telecommunication Services3,000 2,841 2,730 
Alvogen Pharma US, Inc.First Lien Term Loan, SOFR+7.50% cash due 6/30/202511.20 %Pharmaceuticals9,267 9,166 9,221 (4)
American Tire Distributors, Inc.First Lien Term Loan, LIBOR+6.25% cash due 10/20/20289.03 %Distributors4,873 4,812 4,576 (4)
Amplify Finco Pty Ltd.First Lien Term Loan, LIBOR+4.25% cash due 11/26/20267.92 %Movies & Entertainment7,800 7,722 7,527 (4)
Anastasia Parent, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/11/20257.42 %Personal Products1,539 1,203 1,232 (4)
Apptio, Inc.First Lien Term Loan, LIBOR+6.00% cash due 1/10/20258.46 %Application Software4,615 4,580 4,519 (4)
Apptio, Inc.First Lien Revolver, LIBOR+6.00% cash due 1/10/20258.46 %Application Software154 151 146 (4)(5)
Total Apptio, Inc.4,769 4,731 4,665 
ASP-R-PAC Acquisition Co LLCFirst Lien Term Loan, LIBOR+6.00% cash due 12/29/20279.67 %Paper Packaging4,176 4,103 4,080 
ASP-R-PAC Acquisition Co LLCFirst Lien Revolver, LIBOR+6.00% cash due 12/29/2027Paper Packaging— (9)(11)(5)
Total ASP-R-PAC Acquisition Co LLC4,176 4,094 4,069 
Astra Acquisition Corp.First Lien Term Loan, LIBOR+5.25% cash due 10/25/20288.37 %Application Software5,052 4,858 4,319 (4)
Asurion, LLCFirst Lien Term Loan, SOFR+4.00% cash due 8/19/20287.70 %Property & Casualty Insurance5,000 4,753 4,276 
Asurion, LLCSecond Lien Term Loan, LIBOR+5.25% cash due 1/20/20298.37 %Property & Casualty Insurance4,346 3,981 3,347 
Total Asurion, LLC9,346 8,734 7,623 
Aurora Lux Finco S.À.R.L.First Lien Term Loan, LIBOR+6.00% cash due 12/24/20268.78 %Airport Services6,338 6,242 6,027 (4)
BAART Programs, Inc.First Lien Term Loan, LIBOR+5.00% cash due 6/11/20278.12 %Health Care Services6,371 6,311 6,148 
BAART Programs, Inc.First Lien Delayed Draw Term Loan, LIBOR+5.00% cash due 6/11/20278.12 %Health Care Services1,771 1,751 1,664 (4)(5)
Total BAART Programs, Inc.8,142 8,062 7,812 
Blackhawk Network Holdings, Inc.First Lien Term Loan, LIBOR+3.00% cash due 6/15/20256.03 %Data Processing & Outsourced Services9,575 9,566 8,977 
BYJU's Alpha, Inc.First Lien Term Loan, LIBOR+6.00% cash due 11/24/20268.98 %Application Software7,444 7,347 5,455 
C5 Technology Holdings, LLC171 Common UnitsData Processing & Outsourced Services— — (4)
C5 Technology Holdings, LLC7,193,539.63 Preferred UnitsData Processing & Outsourced Services7,194 5,683 (4)
Total C5 Technology Holdings, LLC7,194 5,683 
Centerline Communications, LLCFirst Lien Term Loan, SOFR+5.50% cash due 8/10/20279.12 %Wireless Telecommunication Services4,358 4,286 4,280 
Centerline Communications, LLCFirst Lien Delayed Draw Term Loan, SOFR+5.50% cash due 8/10/20279.12 %Wireless Telecommunication Services449 432 413 (5)
Centerline Communications, LLCFirst Lien Revolver, SOFR+5.50% cash due 8/10/2027Wireless Telecommunication Services— (10)(11)(5)
Total Centerline Communications, LLC4,807 4,708 4,682 
129
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




Portfolio Company Industry Investment Type Maturity Date Current Interest Rate(1)(4)  Cash Interest Rate Principal Cost Fair Value (2)
Garretson Resolution Group, Inc. Diversified support services First Lien 5/22/2021 LIBOR+6.5% (1% floor) 7.83% 5,836
 5,818
 5,766
InMotion Entertainment Group, LLC (3) Consumer electronics First Lien 10/1/2018 LIBOR+7.75% (1.25% floor) 9.09% 8,875
 8,884
 8,875
    First Lien B 10/1/2018 LIBOR+7.75% (1.25% floor) 9.09% 8,875
 8,828
 8,871
Total InMotion Entertainment Group, LLC           17,750
 17,712
 17,746
 Keypath Education, Inc. (3)  Advertising First Lien 4/3/2022 LIBOR+7% (1.00% floor) 8.33% 2,040
 2,040
 2,039
    927 shares Common Stock         1,391
 809
            2,040
 3,431
 2,848
Lift Brands, Inc. (3) Leisure facilities First Lien 12/23/2019 LIBOR+7.5% (1% floor) 8.83% 18,276
 18,257
 18,275
Metamorph US 3, LLC (3)(5) Internet software & services First Lien 12/1/2020 LIBOR+5.5% (1% floor) 2% PIK 6.74% 9,969
 9,481
 3,786
Motion Recruitment Partners LLC Human resources & employment services First Lien 2/13/2020 LIBOR+6% (1% floor) 7.24% 4,330
 4,281
 4,330
NAVEX Global, Inc. Internet software & services First Lien 11/19/2021 LIBOR+4.75% (1% floor) 5.49% 5,959
 5,925
 5,982
New IPT, Inc. (3)  Oil & gas equipment & services First Lien 3/17/2021 LIBOR+5% (1% floor) 6.33% 1,794
 1,794
 1,794
    Second Lien 9/17/2021 LIBOR+5.1% (1% floor) 6.43% 1,094
 1,094
 1,094
    21.876 Class A Common Units       
 —
 321
Total New IPT, Inc.           2,888
 2,888
 3,209
Novetta Solutions, LLC Internet software & services First Lien 9/30/2022 LIBOR+5% (1% floor) 6.34% 6,118
 6,066
 5,950
OmniSYS Acquisition Corporation (3) Diversified support services First Lien 11/21/2018 LIBOR+7.5% (1% floor) 8.83% 10,896
 10,900
 10,833
Refac Optical Group (3) Specialty stores First Lien A 9/30/2018 LIBOR+8% 9.23% 4,623
 4,605
 4,623
Salient CRGT, Inc. (3)  IT consulting & other services First Lien 2/28/2022 LIBOR+5.75% (1% floor) 6.99% 2,457
 2,412
 2,440
Scientific Games International, Inc. (3) Casinos & gaming First Lien 8/14/2024 LIBOR+3.25% (1% floor) 4.58% 6,632
 6,598
 6,651
SHO Holding I Corporation Footwear First Lien 10/27/2022 LIBOR+5% (1% floor) 6.24% 8,594
 8,566
 8,487
TravelClick, Inc. (3) Internet software & services Second Lien 11/6/2021 LIBOR+7.75% (1% floor) 8.99% 5,127
 5,127
 5,153
TV Borrower US, LLC Integrated telecommunications services First Lien 2/22/2024 LIBOR+4.75% (1% floor) 6.08% 3,582
 3,565
 3,607
Valet Merger Sub, Inc. (3) Environmental & facilities services First Lien 9/24/2021 LIBOR+7% (1% floor) 8.24% 12,998
 12,862
 12,998
Vubiquity, Inc. Application software First Lien 8/12/2021 LIBOR+5.5% (1% floor) 6.83% 2,653
 2,636
 2,633
            $245,063
 $251,648
 $235,526
Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
CITGO Petroleum Corp.First Lien Term Loan, LIBOR+6.25% cash due 3/28/20249.37 %Oil & Gas Refining & Marketing$7,038 $6,967 $7,057 (4)
City Football Group LimitedFirst Lien Term Loan, LIBOR+3.50% cash due 7/21/20286.48 %Movies & Entertainment6,451 6,419 6,166 
Convergeone Holdings, Inc.First Lien Term Loan, LIBOR+5.00% cash due 1/4/20268.12 %IT Consulting & Other Services7,373 7,206 5,320 (4)
Covetrus, Inc.First Lien Term Loan, SOFR+5.00% cash due 9/20/20297.65 %Health Care Distributors5,375 5,053 5,035 (4)
Curium Bidco S.à.r.l.First Lien Term Loan, LIBOR+4.00% cash due 7/9/20267.67 %Biotechnology5,820 5,776 5,587 
Dealer Tire, LLCFirst Lien Term Loan, LIBOR+4.25% cash due 12/12/20257.37 %Distributors2,992 2,935 2,924 
Delivery Hero FinCo LLCFirst Lien Term Loan, SOFR+5.75% cash due 8/12/20278.49 %Internet & Direct Marketing Retail6,035 5,876 5,756 (4)
DirecTV Financing, LLCFirst Lien Term Loan, LIBOR+5.00% cash due 8/2/20278.12 %Cable & Satellite6,436 6,332 6,012 (4)
Domtar CorporationFirst Lien Term Loan, LIBOR+5.50% cash due 11/30/20288.26 %Paper Products4,100 4,065 3,921 
DTI Holdco, Inc.First Lien Term Loan, SOFR+4.75% cash due 4/26/20297.33 %Research & Consulting Services8,000 7,849 7,616 (4)
Eagle Parent Corp.First Lien Term Loan, SOFR+4.25% cash due 4/1/20297.80 %Industrial Machinery4,478 4,373 4,367 
eResearch Technology, Inc.First Lien Term Loan, LIBOR+4.50% cash due 2/4/20277.62 %Application Software7,331 7,258 6,859 
Gibson Brands, Inc.First Lien Term Loan, LIBOR+5.00% cash due 8/11/20287.94 %Leisure Products7,444 7,369 6,029 
Global Medical Response, Inc.First Lien Term Loan, LIBOR+4.25% cash due 3/14/20257.37 %Health Care Services1,979 1,979 1,722 (4)
Global Medical Response, Inc.First Lien Term Loan, LIBOR+4.25% cash due 10/2/20256.81 %Health Care Services2,192 2,165 1,912 
Total Global Medical Response, Inc.4,171 4,144 3,634 
Harbor Purchaser Inc.First Lien Term Loan, SOFR+5.25% cash due 4/9/20298.38 %Education Services8,000 7,774 7,310 (4)
Indivior Finance S.À.R.L.First Lien Term Loan, SOFR+5.25% cash due 6/30/20268.80 %Pharmaceuticals7,406 7,293 7,286 
INW Manufacturing, LLCFirst Lien Term Loan, LIBOR+5.75% cash due 3/25/20279.42 %Personal Products9,500 9,282 8,408 (4)
Iris Holding, Inc.First Lien Term Loan, SOFR+4.75% cash due 6/28/20287.89 %Metal & Glass Containers5,000 4,624 4,610 
LaserAway Intermediate Holdings II, LLCFirst Lien Term Loan, LIBOR+5.75% cash due 10/14/20278.23 %Health Care Services7,444 7,318 7,323 
Lightbox Intermediate, L.P.First Lien Term Loan, LIBOR+5.00% cash due 5/9/20268.67 %Real Estate Services7,367 7,315 7,109 (4)
LogMeIn, Inc.First Lien Term Loan, LIBOR+4.75% cash due 8/31/20277.80 %Application Software7,860 7,751 5,494 
LTI Holdings, Inc.First Lien Term Loan, LIBOR+3.25% cash due 9/6/20256.37 %Electronic Components7,366 7,282 6,835 
Mindbody, Inc.First Lien Term Loan, LIBOR+7.00% cash 1.50% PIK due 2/14/202510.64 %Internet Services & Infrastructure4,687 4,651 4,570 (4)
Mindbody, Inc.First Lien Revolver, LIBOR+8.00% cash due 2/14/2025Internet Services & Infrastructure— (4)(12)(4)(5)
Total Mindbody, Inc.4,687 4,647 4,558 
MRI Software LLCFirst Lien Term Loan, LIBOR+5.50% cash due 2/10/20269.17 %Application Software6,139 6,104 5,966 (4)
MRI Software LLCFirst Lien Revolver, LIBOR+5.50% cash due 2/10/2026Application Software— (3)(10)(4)(5)
Total MRI Software LLC6,139 6,101 5,956 
Northern Star Industries Inc.First Lien Term Loan, LIBOR+4.75% cash due 3/31/20257.87 %Electrical Components & Equipment6,685 6,673 6,484 
OEConnection LLCFirst Lien Term Loan, LIBOR+4.00% cash due 9/25/20267.12 %Application Software7,777 7,741 7,505 (4)
Park Place Technologies, LLCFirst Lien Term Loan, SOFR+5.00% cash due 11/10/20278.13 %Internet Services & Infrastructure4,925 4,781 4,687 (4)
Peloton Interactive, Inc.First Lien Term Loan, SOFR+6.50% cash due 5/25/20278.35 %Leisure Products5,486 5,251 5,371 
__________
130
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Planview Parent, Inc.Second Lien Term Loan, LIBOR+7.25% cash due 12/18/202810.92 %Application Software$4,503 $4,435 $4,323 (4)
Pluralsight, LLCFirst Lien Term Loan, LIBOR+8.00% cash due 4/6/202710.68 %Application Software6,796 6,694 6,582 (4)
Pluralsight, LLCFirst Lien Revolver, LIBOR+8.00% cash due 4/6/2027Application Software— (6)(13)(4)(5)
Total Pluralsight, LLC6,796 6,688 6,569 
RevSpring, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/11/20257.67 %Commercial Printing9,625 9,607 9,304 
Sabert CorporationFirst Lien Term Loan, LIBOR+4.50% cash due 12/10/20267.63 %Metal & Glass Containers2,536 2,511 2,435 (4)
SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.25% cash due 4/27/20248.06 %Footwear8,201 8,194 7,176 
SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.23% cash due 4/27/20248.04 %Footwear138 138 121 
Total SHO Holding I Corporation8,339 8,332 7,297 
Sorenson Communications, LLCFirst Lien Term Loan, LIBOR+5.50% cash due 3/17/20269.17 %Communications Equipment2,553 2,528 2,454 
Spanx, LLCFirst Lien Term Loan, LIBOR+5.25% cash due 11/20/20288.30 %Apparel Retail8,933 8,776 8,721 (4)
SPX Flow, Inc.First Lien Term Loan, SOFR+4.50% cash due 4/5/20297.63 %Industrial Machinery7,500 7,184 6,966 (4)
Supermoose Borrower, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/29/20257.42 %Application Software7,743 7,479 6,827 (4)
Surgery Center Holdings, Inc.First Lien Term Loan, LIBOR+3.75% cash due 8/31/20266.51 %Health Care Facilities3,377 3,365 3,213 
TIBCO Software Inc.First Lien Term Loan, SOFR+4.50% cash due 3/20/20298.15 %Application Software6,256 5,693 5,629 (4)
Touchstone Acquisition, Inc.First Lien Term Loan, LIBOR+6.00% cash due 12/29/20289.12 %Health Care Supplies7,285 7,155 7,140 (4)
Veritas US Inc.First Lien Term Loan, LIBOR+5.00% cash due 9/1/20258.67 %Application Software6,365 6,290 5,087 
Windstream Services II, LLCFirst Lien Term Loan, LIBOR+6.25% cash due 9/21/20279.37 %Integrated Telecommunication Services7,818 7,596 7,115 (4)
WP CPP Holdings, LLCSecond Lien Term Loan, LIBOR+7.75% cash due 4/30/202610.56 %Aerospace & Defense6,000 5,972 5,070 (4)
WP CPP Holdings, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 4/30/20256.56 %Aerospace & Defense1,985 1,910 1,783 (4)
Total WP CPP Holdings, LLC7,985 7,882 6,853 
Zayo Group Holdings, Inc.First Lien Term Loan, LIBOR+3.00% cash due 3/9/20276.12 %Alternative Carriers2,155 2,000 1,812 
Total Portfolio Investments$383,194 $382,673 $359,625 
_________
(1) Represents the interest rate as of September 30, 2017.2022. All interest rates are payable in cash, unless otherwise noted.
(2) The interest rate on the principal balance outstanding for most of the floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. Certain loans may also be indexed to SOFR. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over the reference rates based on each respective credit agreement and the cash interest rate as of period end. All the LIBOR shown above is in U.S. dollars. As of September 30, 2022, the reference rates for SLF JV I's variable rate loans were the 30-day LIBOR at 3.12%, the 90-day LIBOR at 3.67%, the 30-day SOFR at 3.03%, the 90-day SOFR at 3.55% and the 180-day SOFR at 3.98%. Most loans include an interest floor, which generally ranges from 0% to 1%. SOFR based contracts may include a credit spread adjustment that is charged in addition to the base rate and the stated spread.
(3) Represents the current determination of fair value as of September 30, 20172022 utilizing a similar technique as the Company in accordance with ASC 820. However, the determination of such fair value is not included in the Company's Board of Directors' valuation process described elsewhere herein.
(3)(4) This investment iswas held by both the Company and SLF JV I as of September 30, 2017.2022.
(4)(5) Investment had undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.
131
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




SLF JV I Portfolio as of September 30, 2021

Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Access CIG, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 2/27/20253.83 %Diversified Support Services$9,111 $9,084 $9,078 (4)
ADB Companies, LLCFirst Lien Term Loan, LIBOR+6.25% cash due 12/18/20257.25 %Construction & Engineering7,732 7,566 7,644 (4)
Altice France S.A.First Lien Term Loan, LIBOR+4.00% cash due 8/14/20264.12 %Integrated Telecommunication Services2,596 2,468 2,591 
Alvogen Pharma US, Inc.First Lien Term Loan, LIBOR+5.25% cash due 12/31/20236.25 %Pharmaceuticals9,755 9,580 9,443 (4)
Amplify Finco Pty Ltd.First Lien Term Loan, LIBOR+4.25% cash due 11/26/20265.00 %Movies & Entertainment7,880 7,801 7,680 (4)
Anastasia Parent, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/11/20253.88 %Personal Products2,799 2,211 2,378 
Apptio, Inc.First Lien Term Loan, LIBOR+7.25% cash due 1/10/20258.25 %Application Software4,615 4,565 4,544 (4)
Apptio, Inc.First Lien Revolver, LIBOR+7.25% cash due 1/10/20258.25 %Application Software154 150 148 (4)(5)
Total Apptio, Inc.4,769 4,715 4,692 
Asurion, LLCSecond Lien Term Loan, LIBOR+5.25% cash due 1/20/20295.33 %Property & Casualty Insurance6,000 5,940 5,980 
Aurora Lux Finco S.À.R.L.First Lien Term Loan, LIBOR+6.00% cash due 12/24/20267.00 %Airport Services6,403 6,283 6,025 (4)
BAART Programs, Inc.First Lien Term Loan, LIBOR+5.00% cash due 6/11/20276.00 %Health Care Services5,985 5,925 5,970 
BAART Programs, Inc.First Lien Delayed Draw Term Loan, LIBOR+5.00% cash due 6/11/20276.00 %Health Care Services450 436 446 (5)
Total BAART Programs, Inc.6,435 6,361 6,416 
Blackhawk Network Holdings, Inc.First Lien Term Loan, LIBOR+3.00% cash due 6/15/20253.08 %Data Processing & Outsourced Services9,675 9,662 9,615 
Boxer Parent Company Inc.First Lien Term Loan, LIBOR+3.75% cash due 10/2/20253.88 %Systems Software6,643 6,570 6,615 
Brazos Delaware II, LLCFirst Lien Term Loan, LIBOR+4.00% cash due 5/21/20254.08 %Oil & Gas Equipment & Services7,253 7,234 7,158 
C5 Technology Holdings, LLC171 Common UnitsData Processing & Outsourced Services— — (4)
C5 Technology Holdings, LLC7,193,539.63 Preferred UnitsData Processing & Outsourced Services7,194 5,683 (4)
Total C5 Technology Holdings, LLC7,194 5,683 
Centerline Communications, LLCFirst Lien Term Loan, LIBOR+5.50% cash due 8/10/20276.50 %Wireless Telecommunication Services2,000 1,961 1,960 
Centerline Communications, LLCFirst Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 8/10/20236.50 %Wireless Telecommunication Services1,920 1,890 1,889 (5)
Centerline Communications, LLCFirst Lien Revolver, LIBOR+5.50% cash due 8/10/2027Wireless Telecommunication Services— (12)(12)(5)
Total Centerline Communications, LLC3,920 3,839 3,837 
CITGO Petroleum Corp.First Lien Term Loan, LIBOR+6.25% cash due 3/28/20247.25 %Oil & Gas Refining & Marketing7,111 7,040 7,134 (4)
City Football Group LimitedFirst Lien Term Loan, LIBOR+3.50% cash due 7/21/20284.00 %Movies & Entertainment6,500 6,468 6,492 
Connect U.S. Finco LLCFirst Lien Term Loan, LIBOR+3.50% cash due 12/11/20264.50 %Alternative Carriers7,362 7,204 7,376 
Convergeone Holdings, Inc.First Lien Term Loan, LIBOR+5.00% cash due 1/4/20265.08 %IT Consulting & Other Services7,449 7,229 7,427 (4)
Curium Bidco S.à.r.l.First Lien Term Loan, LIBOR+4.00% cash due 7/9/20264.13 %Biotechnology5,880 5,836 5,884 
Dcert Buyer, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/16/20264.08 %Internet Services & Infrastructure5,885 5,870 5,893 
DirecTV Financing, LLCFirst Lien Term Loan, LIBOR+5.00% cash due 8/2/20275.75 %Cable & Satellite6,000 5,940 6,011 (4)
Enviva Holdings, LPFirst Lien Term Loan, LIBOR+5.50% cash due 2/17/20266.50 %Forest Products5,878 5,819 5,893 
132
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
eResearch Technology, Inc.First Lien Term Loan, LIBOR+4.50% cash due 2/4/20275.50 %Application Software$7,406 $7,332 $7,451 
GI Chill Acquisition LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/6/20253.90 %Managed Health Care3,721 3,737 3,712 (4)
GI Chill Acquisition LLCSecond Lien Term Loan, LIBOR+7.50% cash due 8/6/20267.63 %Managed Health Care3,750 3,674 3,731 (4)
Total GI Chill Acquisition LLC7,471 7,411 7,443 
Gibson Brands, Inc.First Lien Term Loan, LIBOR+5.00% cash due 8/11/20285.75 %Leisure Products7,500 7,425 7,463 
Global Medical Response, Inc.First Lien Term Loan, LIBOR+4.75% cash due 10/2/20255.75 %Health Care Services2,214 2,178 2,226 
Global Medical Response, Inc.First Lien Term Loan, LIBOR+4.25% cash due 3/14/20255.25 %Health Care Services1,995 1,995 2,004 (4)
Total Global Medical Response, Inc.4,209 4,173 4,230 
Grab Holdings Inc.First Lien Term Loan, LIBOR+4.50% cash due 1/29/20265.50 %Interactive Media & Services2,985 2,907 3,025 
Indivior Finance S.À.R.L.First Lien Term Loan, LIBOR+5.25% cash due 6/30/20266.00 %Pharmaceuticals7,481 7,336 7,456 
Intelsat Jackson Holdings S.A.First Lien Term Loan, PRIME+4.75% cash due 11/27/20238.00 %Alternative Carriers3,568 3,550 3,622 
Intelsat Jackson Holdings S.A.First Lien Term Loan, LIBOR+4.75% cash due 7/13/20225.75 %Alternative Carriers5,000 4,935 5,044 
Intelsat Jackson Holdings S.A.First Lien Delayed Draw Term Loan, LIBOR+4.75% cash due 7/13/2022Alternative Carriers— (13)9 (5)
Total Intelsat Jackson Holdings S.A.8,568 8,472 8,675 
INW Manufacturing, LLCFirst Lien Term Loan, LIBOR+5.75% cash due 5/7/20276.50 %Personal Products9,875 9,597 9,678 (4)
Lightbox Intermediate, L.P.First Lien Term Loan, LIBOR+5.00% cash due 5/9/20265.13 %Real Estate Services7,443 7,377 7,405 (4)
LogMeIn, Inc.First Lien Term Loan, LIBOR+4.75% cash due 8/31/20274.83 %Application Software7,940 7,812 7,946 (4)
LTI Holdings, Inc.First Lien Term Loan, LIBOR+3.50% cash due 9/6/20253.58 %Electronic Components7,442 7,329 7,354 
Maravai Intermediate Holdings, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 10/19/20274.75 %Biotechnology6,819 6,751 6,846 
Mindbody, Inc.First Lien Term Loan, LIBOR+7.00% cash 1.50% PIK due 2/14/20258.00 %Internet Services & Infrastructure4,616 4,565 4,528 (4)
Mindbody, Inc.First Lien Revolver, LIBOR+8.00% cash due 2/14/2025Internet Services & Infrastructure— (6)(9)(4)(5)
Total Mindbody, Inc.4,616 4,559 4,519 
MRI Software LLCFirst Lien Term Loan, LIBOR+5.50% cash due 2/10/20266.50 %Application Software3,877 3,843 3,875 (4)
MRI Software LLCFirst Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026Application Software— (6)(1)(4)(5)
MRI Software LLCFirst Lien Revolver, LIBOR+5.50% cash due 2/10/2026Application Software— (3)— (4)(5)
Total MRI Software LLC3,877 3,834 3,874 
Northern Star Industries Inc.First Lien Term Loan, LIBOR+4.50% cash due 3/31/20255.50 %Electrical Components & Equipment6,755 6,738 6,738 
OEConnection LLCFirst Lien Term Loan, LIBOR+4.00% cash due 9/25/20264.08 %Application Software7,852 7,816 7,842 (4)
Olaplex, Inc.First Lien Term Loan, LIBOR+6.25% cash due 1/8/20267.25 %Personal Products6,273 6,189 6,226 (4)
Olaplex, Inc.First Lien Revolver, LIBOR+6.25% cash due 1/8/2025Personal Products— (7)(8)(4)(5)
Total Olaplex, Inc.6,273 6,182 6,218 
Park Place Technologies, LLCFirst Lien Term Loan, LIBOR+5.00% cash due 11/10/20276.00 %Internet Services & Infrastructure4,975 4,801 4,981 (4)
Planview Parent, Inc.Second Lien Term Loan, LIBOR+7.25% cash due 12/18/20288.00 %Application Software4,503 4,435 4,514 (4)
133
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Pluralsight, LLCFirst Lien Term Loan, LIBOR+8.00% cash due 4/6/20279.00 %Application Software$6,796 $6,669 $6,667 (4)
Pluralsight, LLCFirst Lien Revolver, LIBOR+8.00% cash due 4/6/2027Application Software— (8)(8)(4)(5)
Total Pluralsight, LLC6,796 6,661 6,659 
Sabert CorporationFirst Lien Term Loan, LIBOR+4.50% cash due 12/10/20265.50 %Metal & Glass Containers2,728 2,700 2,738 (4)
SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.25% cash due 4/27/20246.25 %Footwear8,288 8,277 7,874 
SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.23% cash due 4/27/20246.23 %Footwear138 138 131 
Total SHO Holding I Corporation8,426 8,415 8,005 
Sirva Worldwide, Inc.First Lien Term Loan, LIBOR+5.50% cash due 8/4/20255.58 %Diversified Support Services1,087 1,071 1,027 (4)
Sorenson Communications, LLCFirst Lien Term Loan, LIBOR+5.50% cash due 3/17/20266.25 %Communications Equipment2,854 2,825 2,877 
Star US Bidco LLCFirst Lien Term Loan, LIBOR+4.25% cash due 3/17/20275.25 %Industrial Machinery8,255 8,075 8,289 (4)
Supermoose Borrower, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/29/20253.88 %Application Software7,823 7,465 7,294 (4)
Surgery Center Holdings, Inc.First Lien Term Loan, LIBOR+3.75% cash due 8/31/20264.50 %Health Care Facilities4,911 4,895 4,925 
Trench Plate Rental, Co.First Lien Term Loan, LIBOR+4.75% cash due 12/3/20265.75 %Construction Materials3,942 3,882 3,881 
Trench Plate Rental, Co.First Lien Delayed Draw Term Loan, LIBOR+4.75% cash due 12/3/2026Construction Materials— (11)(12)(5)
Trench Plate Rental, Co.First Lien Revolver, LIBOR+4.75% cash due 12/3/20265.75 %Construction Materials24 15 15 (5)
Total Trench Plate Rental, Co.3,966 3,886 3,884 
Veritas US Inc.First Lien Term Loan, LIBOR+5.00% cash due 9/1/20256.00 %Application Software6,435 6,333 6,473 (4)
Verscend Holding Corp.First Lien Term Loan, LIBOR+4.00% cash due 8/27/20254.08 %Health Care Technology4,080 4,052 4,091 
Waystar Technologies, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/22/20264.08 %Health Care Technology5,910 5,880 5,921 
Windstream Services II, LLCFirst Lien Term Loan, LIBOR+6.25% cash due 9/21/20277.25 %Integrated Telecommunication Services7,899 7,629 7,948 (4)
WP CPP Holdings, LLCSecond Lien Term Loan, LIBOR+7.75% cash due 4/30/20268.75 %Aerospace & Defense6,000 5,964 5,931 (4)
Total Portfolio Investments$344,196 $346,052 $346,665 
__________
(1) Represents the interest rate as of September 30, 2021. All interest rates are payable in cash, unless otherwise noted.
(2) The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement.agreement and the cash interest rate as of period end. All the LIBOR shown above is in U.S. dollars. As of September 30, 2021, the reference rates for SLF JV I's variable rate loans were the 30-day LIBOR at 0.08%, the 60-day LIBOR at 0.11%, the 90-day LIBOR at 0.13%, the 180-day LIBOR at 0.16%, the 360-day LIBOR at 0.24% and the PRIME at 3.25%. Most loans include an interest floor, which generally ranges from 0% to 1%.
(5) This investment was on cash non-accrual status(3) Represents the current determination of fair value as of September 30, 2017.2021 utilizing a similar technique as the Company in accordance with ASC 820. However, the determination of such fair value is not included in the valuation process described elsewhere herein.

(4) This investment was held by both the Company and SLF JV I as of September 30, 2021.

(5) Investment had undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.

134
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









Both the cost and fair value of the Company's SLF JV I PortfolioNotes were $96.3 million as of each of September 30, 2022 and September 30, 2021. The Company earned interest income of $8.0 million, $7.4 million and $8.1 million on the SLF JV I Notes for the years ended September 30, 2022, 2021 and 2020, respectively. As of September 30, 2022, the SLF JV I Notes bore interest at a rate of one-month LIBOR plus 7.00% per annum with a LIBOR floor of 1.00% and will mature on December 29, 2028.
The cost and fair value of the LLC equity interests in SLF JV I held by the Company were $49.3 million and $20.7 million, respectively, as of September 30, 20162022, and $49.3 million and $37.7 million, respectively, as of September 30, 2021. The Company earned $2.9 million and $0.9 million in dividend income for the years ended September 30, 2022 and September 30, 2021, respectively, with respect to its investment in the LLC equity interests of SLF JV I. The Company did not earn dividend income for the year ended September 30, 2020 with respect to its investment in the LLC equity interests of SLF JV I. The LLC equity interests of SLF JV I are generally dividend producing to the extent SLF JV I has residual cash to be distributed on a quarterly basis.
Below is certain summarized financial information for SLF JV I as of September 30, 2022 and September 30, 2021 and for the years ended September 30, 2022, 2021 and 2020:
September 30, 2022September 30, 2021
Selected Balance Sheet Information:
Investments at fair value (cost September 30, 2022: $382,673; cost September 30, 2021: $346,052)$359,625 $346,665 
Cash and cash equivalents14,274 23,446 
Restricted cash5,642 4,517 
Other assets5,686 4,529 
Total assets$385,227 $379,157 
Senior credit facility payable$230,000 $215,620 
SLF JV I Notes payable at fair value (proceeds September 30, 2022: $110,000; proceeds September 30, 2021: $110,000)110,000 110,000 
Other liabilities21,539 10,507 
Total liabilities$361,539 $336,127 
Members' equity23,688 43,030 
Total liabilities and members' equity$385,227 $379,157 
Year ended September 30, 2022Year ended September 30, 2021Year ended September 30, 2020
Selected Statements of Operations Information:
Interest income$24,014 $20,018 $19,808 
Other income198 565 338 
Total investment income24,212 20,583 20,146 
Senior credit facility interest expense7,713 5,706 7,432 
SLF JV I Notes interest expense9,146 8,444 9,205 
Other expenses253 260 244 
Total expenses (1)17,112 14,410 16,881 
Net investment income7,100 6,173 3,265 
Net unrealized appreciation (depreciation)(23,661)13,270 (9,704)
Net realized gains (losses)534 399 (3,691)
Net income (loss)$(16,027)$19,842 $(10,130)
 __________
(1) There are no management fees or incentive fees charged at SLF JV I.

SLF JV I has elected to fair value the SLF JV I Notes issued to the Company and Kemper under FASB ASC Topic 825, Financial Instruments - Fair Value Option. The SLF JV I Notes are valued based on the total assets less the total liabilities senior to the SLF JV I Notes in an amount not exceeding par under the EV technique.
During the year ended September 30, 2022, the Company sold $9.7 million of senior secured debt investments to SLF JV I for $9.7 million cash consideration, which represented the fair value at the time of sale. A gain of $0.5 million was recognized by the Company on these transactions. During the year ended September 30, 2021, the Company sold $48.0 million of senior secured debt investments to SLF JV I for $47.2 million cash consideration, which represented the fair value at the time of sale. A gain of $2.5 million was recognized by the Company on these transactions. During the year ended September 30, 2020, the Company did not sell any debt investments to SLF JV I.
135
Portfolio Company Industry Investment Type Maturity Date Current Interest Rate (1)(4)  Cash Interest Rate Principal Cost Fair Value (2)
AccentCare, Inc. Healthcare services First Lien 9/3/2021 LIBOR+5.75% (1% floor) 6.75% $4,906
 $4,837
 $4,830
AdVenture Interactive, Corp. (3) (5) Advertising First Lien 3/22/2018 LIBOR+7.75% (1% floor) 8.75% 9,178
 9,150
 7,066
AF Borrower, LLC IT consulting & other services First Lien 1/28/2022 LIBOR+5.25% (1% floor) 6.25% 8,083
 8,105
 8,121
Ameritox Ltd. (3) Healthcare services First Lien 4/11/2021 LIBOR+5% (1% floor) 3% PIK 6.00% 5,890
 5,884
 5,848
    301,913.06 Class B Preferred Units         302
 331
    928.96 Class A Common Units         5,474
 2,471
Total Ameritox, Ltd.           5,890
 11,660
 8,650
BeyondTrust Software, Inc. (3) Application software First Lien 9/25/2019 LIBOR+7% (1% floor) 8.00% 17,198
 17,038
 17,059
Compuware Corporation Internet software & services First Lien B1 12/15/2019 LIBOR+5.25% (1% floor) 6.25% 3,194
 3,164
 3,206
    First Lien B2 12/15/2021 LIBOR+5.25% (1% floor) 6.25% 9,825
 9,689
 9,806
Total Compuware Corporation           13,019
 12,853
 13,012
CRGT, Inc. IT consulting & other services First Lien 12/21/2020 LIBOR+6.5% (1% floor) 7.50% 2,294
 2,289
 2,300
Digital River, Inc. Internet software & services First Lien 2/12/2021 LIBOR+6.5% (1% floor) 7.50% 4,524
 4,563
 4,515
Dodge Data & Analytics LLC (3) Data processing & outsourced services First Lien 10/31/2019 LIBOR+8.75% (1% floor) 9.75% 9,688
 9,740
 9,810
Edge Fitness, LLC Leisure facilities First Lien 12/31/2019 LIBOR+8.75% (1% floor) 9.75% 10,600
 10,602
 10,565
EOS Fitness Opco Holdings, LLC (3) Leisure facilities First Lien 12/30/2019 LIBOR+8.75% (0.75% floor) 9.50% 19,160
 18,869
 18,672
Falmouth Group Holdings Corp. Specialty chemicals First Lien 12/13/2021 LIBOR+6.75% (1% floor) 7.75% 4,963
 4,920
 4,968
Garretson Resolution Group, Inc. Diversified support services First Lien 5/22/2021 LIBOR+6.5% (1% floor) 7.50% 5,991
 5,966
 5,946
InMotion Entertainment Group, LLC (3) Consumer electronics First Lien 10/1/2018 LIBOR+7.75% (1.25% floor) 9.00% 9,375
 9,394
 9,252
    First Lien B 10/1/2018 LIBOR+7.75% (1.25% floor) 9.00% 9,375
 9,270
 9,252
Total InMotion Entertainment Group, LLC           18,750
 18,664
 18,504
Integrated Petroleum Technologies, Inc. (3) Oil & gas equipment services First Lien 3/31/2019 LIBOR+7.5% (1% floor) 8.50% 8,267
 8,267
 2,839
Legalzoom.com, Inc. (3) Specialized consumer services First Lien 5/13/2020 LIBOR+7% (1% floor) 8.00% 19,775
 19,410
 19,660
Lift Brands, Inc. (3) Leisure facilities First Lien 12/23/2019 LIBOR+8% (1% floor) 9.00% 19,043
 19,015
 18,858
Lytx, Inc. (3) Research & consulting services First Lien 3/15/2023 LIBOR+8.5% (1% floor) 9.50% 7,981
 7,981
 7,981
MedTech Group, Inc. Healthcare equipment First Lien 1/1/2019 LIBOR+5.25% (1% floor) 6.25% 11,910
 11,910
 11,696
Metamorph US 3, LLC (3) Internet software & services First Lien 12/1/2020 LIBOR+6.5% (1% floor) 7.50% 10,078
 9,945
 8,390
Motion Recruitment Partners LLC Human resources & employment services First Lien 2/13/2020 LIBOR+6% (1% floor) 7.00% 4,563
 4,487
 4,550
My Alarm Center, LLC Security & alarm services First Lien A 1/9/2019 LIBOR+8% (1% floor) 9.00% 3,000
 2,993
 3,005
    First Lien B 1/9/2019 LIBOR+8% (1% floor) 9.00% 4,506
 4,493
 4,514
    First Lien C 1/9/2019 LIBOR+8% (1% floor) 9.00% 1,136
 1,128
 1,133
Total My Alarm Center, LLC           8,642
 8,614
 8,652
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









OCSI Glick JV LLC
On March 19, 2021, the Company became party to the LLC agreement of Glick JV. The Company co-invests primarily in senior secured loans of middle-market companies with GF Equity Funding through the Glick JV. The Glick JV is managed by a four person Board of Directors, two of whom are selected by the Company and two of whom are selected by GF Equity Funding. The Glick JV is capitalized as transactions are completed, and portfolio decisions and investment decisions in respect of the Glick JV must be approved by the Glick JV investment committee, which consists of one representative selected by the Company and one representative selected by GF Equity Funding (with approval from a representative of each required). Since the Company does not have a controlling financial interest in the Glick JV, the Company does not consolidate the Glick JV.
The members provide capital to the Glick JV in exchange for LLC equity interests, and the Company and GF Debt Funding 2014 LLC ("GF Debt Funding"), an entity advised by affiliates of GF Equity Funding, provide capital to the Glick JV in exchange for subordinated notes issued by the Glick JV (the "Glick JV Notes"). As of September 30, 2022 and September 30, 2021, the Company and GF Equity Funding owned 87.5% and 12.5%, respectively, of the outstanding LLC equity interests, and the Company and GF Debt Funding owned 87.5% and 12.5%, respectively, of the Glick JV Notes. The Glick JV is not an "eligible portfolio company" as defined in section 2(a)(46) of the Investment Company Act.
The Glick JV has a senior revolving credit facility with Deutsche Bank AG, New York Branch (the "Glick JV Deutsche Bank Facility"), which, as of September 30, 2022, had a reinvestment period end date and maturity date of May 3, 2023 and May 3, 2028, respectively, and permitted borrowings of up to $90.0 million (subject to borrowing base and other limitations). Borrowings under the Glick JV Deutsche Bank Facility are secured by all of the assets of the Glick JV and all of the equity interests in the Glick JV and, as of September 30, 2022, bore interest at a rate equal to 3-month LIBOR plus 2.25% per annum during the reinvestment period, 3-month LIBOR plus 2.40% for the first year after the end of the reinvestment period, 3-month LIBOR plus 2.50% for the following year and 3-month LIBOR plus 2.75% thereafter, in each case with a 0.125% LIBOR floor. $82.1 million and $71.9 million of borrowings were outstanding under the Glick JV Deutsche Bank Facility as of September 30, 2022 and September 30, 2021, respectively.
As of September 30, 2022 and September 30, 2021, the Glick JV had total assets of $146.8 million and $141.0 million, respectively. The Glick JV's portfolio consisted of middle-market and other corporate debt securities of 43 and 37 portfolio companies as of September 30, 2022 and September 30, 2021, respectively. The portfolio companies in the Glick JV are in industries similar to those in which the Company may invest directly.The Company's investment in the Glick JV consisted of LLC equity interests and Glick JV Notes of $50.3 million and $55.6 million in the aggregate at fair value as of September 30, 2022 and September 30, 2021, respectively. The Glick JV Notes are junior in right of payment to the repayment of temporary contributions made by the Company to fund investments of the Glick JV that are repaid when GF Equity Funding and GF Debt Funding make their capital contributions and fund their Glick JV Notes, respectively.
As of each of September 30, 2022 and September 30, 2021, the Glick JV had total capital commitments of $100.0 million, $87.5 million of which was from the Company and the remaining $12.5 million of which was from GF Equity Funding and GF Debt Funding. Approximately $84.0 million in aggregate commitments were funded as of each of September 30, 2022 and September 30, 2021, of which $73.5 million was from the Company. As of each of September 30, 2022 and September 30, 2021, the Company had commitments to fund Glick JV Notes of $78.8 million, of which $12.4 million were unfunded. As of each of September 30, 2022 and September 30, 2021, the Company had commitments to fund LLC equity interests in the Glick JV of $8.7 million, of which $1.6 million were unfunded.

136
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




Portfolio Company Industry Investment Type Maturity Date Current Interest Rate (1)(4)  Cash Interest Rate Principal Cost Fair Value (2)
NAVEX Global, Inc. Internet software & services First Lien 11/19/2021 LIBOR+4.75% (1% floor) 5.75% 995
 943
 990
Novetta Solutions, LLC Internet software & services First Lien 9/30/2022 LIBOR+5% (1% floor) 6.00% 6,614
 6,528
 6,357
OmniSYS Acquisition Corporation (3) Diversified support services First Lien 11/21/2018 LIBOR+7.5% (1% floor) 8.50% 10,896
 10,903
 10,743
Refac Optical Group (3) Specialty stores First Lien A 9/30/2018 LIBOR+7.5% 8.02% 7,116
 7,049
 7,107
SHO Holding I Corporation Footwear First Lien 10/27/2022 LIBOR+5% (1% floor) 6.00% 4,466
 4,426
 4,461
TIBCO Software, Inc. Internet software & services First Lien 12/4/2020 LIBOR+5.5% (1% floor) 6.50% 4,748
 4,548
 4,691
Too Faced Cosmetics, LLC Personal products First Lien 7/7/2021 LIBOR+5% (1% floor) 6.00% 1,135
 1,028
 1,140
TravelClick, Inc. (3) Internet software & services Second Lien 11/8/2021 LIBOR+7.75% (1% floor) 8.75% 8,460
 8,460
 7,576
TrialCard Incorporated Healthcare services First Lien 12/31/2019 LIBOR+4.5% (1% floor) 5.50% 13,319
 13,222
 13,255
TV Borrower US, LLC Integrated telecommunications services First Lien 1/8/2021 LIBOR+5% (1% floor) 6.00% 9,800
 9,633
 9,763
Valet Merger Sub, Inc. (3) Environmental & facilities services First Lien 9/24/2021 LIBOR+7% (1% floor) 8.00% 14,887
 14,692
 15,138
Vitera Healthcare Solutions, LLC Healthcare technology First Lien 11/4/2020 LIBOR+5% (1% floor) 6.00% 4,863
 4,863
 4,747
Vubiquity, Inc. Application software First Lien 8/12/2021 LIBOR+5.5% (1% floor) 6.50% 2,680
 2,658
 2,666
Worley Claims Services, LLC (3) Internet software & services First Lien 10/31/2020 LIBOR+8% (1% floor) 9.00% 9,924
 9,882
 9,875
            $324,406
 $327,720
 $315,153
Below is a summary of the Glick JV's portfolio, followed by a listing of the individual loans in the Glick JV's portfolio as of September 30, 2022 and September 30, 2021:
September 30, 2022September 30, 2021
Senior secured loans (1)$143,225$126,512
Weighted average current interest rate on senior secured loans (2)8.52%5.86%
Number of borrowers in the Glick JV4337
Largest loan exposure to a single borrower (1)$6,562$6,907
Total of five largest loan exposures to borrowers (1)$28,973$28,324
__________
(1) At principal amount.
(2) Computed using the weighted average annual interest rate on accruing senior secured loans at fair value.

Glick JV Portfolio as of September 30, 2022
Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
ADB Companies, LLCFirst Lien Term Loan, SOFR+6.25% cash due 12/18/20259.80%Construction & Engineering$4,647 $4,579 $4,567 (4)
Alvogen Pharma IncFirst Lien Term Loan, SOFR+7.50% cash due 6/30/202511.20%Pharmaceuticals6,562 6,489 6,529 (4)
American Tire Distributors, Inc.First Lien Term Loan, LIBOR+6.25% cash due 10/20/20289.03%Distributors2,889 2,853 2,714 (4)
Amplify Finco Pty Ltd.First Lien Term Loan, LIBOR+4.25% cash due 11/26/20267.92%Movies & Entertainment2,925 2,896 2,823 (4)
Anastasia Parent, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/11/20257.42%Personal Products917 712 734 (4)
ASP-R-PAC Acquisition Co LLCFirst Lien Term Loan, LIBOR+6.00% cash due 12/29/20279.67%Paper Packaging1,734 1,704 1,694 
ASP-R-PAC Acquisition Co LLCFirst Lien Revolver, LIBOR+6.00% cash due 12/29/2027Paper Packaging— (4)(5)(5)
Total ASP-R-PAC Acquisition Co LLC1,734 1,700 1,689 
Astra Acquisition Corp.First Lien Term Loan, LIBOR+5.25% cash due 10/25/20288.37%Application Software2,078 2,033 1,777 (4)
Asurion, LLCFirst Lien Term Loan, SOFR+4.00% cash due 8/19/20287.70%Property & Casualty Insurance2,000 1,901 1,711 
Asurion, LLCSecond Lien Term Loan, LIBOR+5.25% cash due 1/20/20298.37%Property & Casualty Insurance2,423 2,212 1,866 
Total Asurion, LLC4,423 4,113 3,577 
Aurora Lux Finco S.À.R.L.First Lien Term Loan, LIBOR+6.00% cash due 12/24/20268.78%Airport Services3,656 3,601 3,476 (4)
BAART Programs, Inc.First Lien Term Loan, LIBOR+5.00% cash due 6/11/20278.12%Health Care Services3,398 3,366 3,279 
BAART Programs, Inc.First Lien Delayed Draw Term Loan, LIBOR+5.00% cash due 6/11/20278.12%Health Care Services808 800 760 (4)(5)
Total BAART Programs, Inc.4,206 4,166 4,039 
BYJU's Alpha, Inc.First Lien Term Loan, LIBOR+6.00% cash due 11/24/20268.98%Application Software3,970 3,919 2,909 
CITGO Petroleum Corp.First Lien Term Loan, LIBOR+6.25% cash due 3/28/20249.37%Oil & Gas Refining & Marketing3,519 3,484 3,529 (4)
City Football Group LimitedFirst Lien Term Loan, LIBOR+3.50% cash due 7/21/20286.48%Movies & Entertainment2,481 2,469 2,372 
Covetrus, Inc.First Lien Term Loan, SOFR+5.00% cash due 9/20/20297.65%Health Care Distributors2,280 2,143 2,136 (4)
Curium Bidco S.à.r.l.First Lien Term Loan, LIBOR+4.00% cash due 7/9/20267.67%Biotechnology2,870 2,849 2,756 
DirecTV Financing, LLCFirst Lien Term Loan, LIBOR+5.00% cash due 8/2/20278.12%Cable & Satellite2,730 2,703 2,549 (4)
Domtar CorporationFirst Lien Term Loan, LIBOR+5.50% cash due 11/30/20288.26%Paper Products2,503 2,478 2,394 
DTI Holdco, Inc.First Lien Term Loan, SOFR+4.75% cash due 4/26/20297.33%Research & Consulting Services3,000 2,943 2,856 (4)
137
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Eagle Parent Corp.First Lien Term Loan, SOFR+4.25% cash due 4/1/20297.80%Industrial Machinery$2,488 $2,429 $2,426 
eResearch Technology, Inc.First Lien Term Loan, LIBOR+4.50% cash due 2/4/20277.62%Application Software2,444 2,419 2,286 
Gibson Brands, Inc.First Lien Term Loan, LIBOR+5.00% cash due 8/11/20287.94%Leisure Products3,970 3,930 3,216 
Harbor Purchaser Inc.First Lien Term Loan, SOFR+5.25% cash due 4/9/20298.38%Education Services4,000 3,887 3,655 (4)
Indivior Finance S.À.R.L.First Lien Term Loan, LIBOR+5.25% cash due 6/30/20268.80%Pharmaceuticals3,950 3,890 3,886 
INW Manufacturing, LLCFirst Lien Term Loan, LIBOR+5.75% cash due 3/25/20279.42%Personal Products2,375 2,320 2,102 (4)
Iris Holding, Inc.First Lien Term Loan, SOFR+4.75% cash due 6/28/20287.89%Metal & Glass Containers2,000 1,846 1,844 
LaserAway Intermediate Holdings II, LLCFirst Lien Term Loan, LIBOR+5.75% cash due 10/14/20278.23%Health Care Services3,970 3,903 3,905 
LTI Holdings, Inc.First Lien Term Loan, LIBOR+3.25% cash due 9/6/20256.37%Electronic Components1,358 1,192 1,260 
MRI Software LLCFirst Lien Term Loan, LIBOR+5.50% cash due 2/10/20269.17%Application Software1,647 1,632 1,600 (4)
MRI Software LLCFirst Lien Revolver, LIBOR+5.50% cash due 2/10/2026Application Software— (1)(4)(4)(5)
   Total MRI Software LLC1,647 1,631 1,596 
Northern Star Industries Inc.First Lien Term Loan, LIBOR+4.75% cash due 3/31/20257.87%Electrical Components & Equipment5,252 5,243 5,095 
OEConnection LLCFirst Lien Term Loan, LIBOR+4.00% cash due 9/25/20267.12%Application Software3,888 3,871 3,752 (4)
Planview Parent, Inc.Second Lien Term Loan, LIBOR+7.25% cash due 12/18/202810.92%Application Software2,842 2,799 2,728 (4)
Pluralsight, LLCFirst Lien Term Loan, LIBOR+8.00% cash due 4/6/202710.68%Application Software4,465 4,398 4,325 (4)
Pluralsight, LLCFirst Lien Revolver, LIBOR+8.00% cash due 4/6/2027Application Software— (5)(10)(4)(5)
Total Pluralsight, LLC4,465 4,393 4,315 
Sabert CorporationFirst Lien Term Loan, LIBOR+4.50% cash due 12/10/20267.63%Metal & Glass Containers1,691 1,674 1,623 (4)
SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.25% cash due 4/27/20248.06%Footwear6,094 6,082 5,332 
SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.23% cash due 4/27/20248.04%Footwear102 102 90 
Total SHO Holding I Corporation6,196 6,184 5,422 
Spanx, LLCFirst Lien Term Loan, LIBOR+5.25% cash due 11/20/20288.30%Apparel Retail4,962 4,876 4,845 (4)
SPX Flow, Inc.First Lien Term Loan, SOFR+4.50% cash due 4/5/20297.63%Industrial Machinery6,000 5,734 5,572 (4)
Supermoose Borrower, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/29/20257.42%Application Software2,820 2,712 2,487 (4)
Surgery Center Holdings, Inc.First Lien Term Loan, LIBOR+3.75% cash due 8/31/20266.51%Health Care Facilities3,377 3,365 3,213 
TIBCO Software Inc.First Lien Term Loan, SOFR+4.50% cash due 3/20/20298.15%Application Software2,654 2,415 2,388 (4)
Touchstone Acquisition, Inc.First Lien Term Loan, LIBOR+6.00% cash due 12/29/20289.12%Health Care Supplies3,024 2,970 2,963 (4)
Tribe Buyer LLCFirst Lien Term Loan, LIBOR+4.50% cash due 2/16/20247.62%Human Resource & Employment Services1,583 1,582 1,266 
Windstream Services II, LLCFirst Lien Term Loan, LIBOR+6.25% cash due 9/21/20279.37%Integrated Telecommunication Services4,886 4,747 4,447 (4)
WP CPP Holdings, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 4/30/20256.56%Aerospace & Defense993 955 892 (4)
WP CPP Holdings, LLCSecond Lien Term Loan, LIBOR+7.75% cash due 4/30/202610.56%Aerospace & Defense3,000 2,986 2,534 (4)
Total WP CPP Holdings, LLC3,993 3,941 3,426 
Total Portfolio Investments$143,225 $140,083 $133,144 


138
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




__________
(1) Represents the interest rate as of September 30, 2016.2022. All interest rates are payable in cash, unless otherwise noted.
(2) The interest rate on the principal balance outstanding for most of the floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. Certain loans may also be indexed to SOFR. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over the reference rates based on each respective credit agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars. As of September 30, 2022, the reference rates for the Glick JV's variable rate loans were the 30-day LIBOR at 3.12%, the 90-day LIBOR at 3.67%, the 30-day SOFR at 3.03% and the 90-day SOFR at 3.55%. Most loans include an interest floor, which generally ranges from 0% to 1%. SOFR based contracts may include a credit spread adjustment that is charged in addition to the base rate and the stated spread.
(3) Represents the current determination of fair value as of September 30, 20162022 utilizing a similar technique as the Company in accordance with ASC 820. However, the determination of such fair value is not included in the Company's Board of Directors' valuation process described elsewhere herein.
(3)(4) This investment iswas held by both the Company and SLFthe Glick JV I as of September 30, 2016.2022.
(4)(5) Investment had undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.

Glick JV Portfolio as of September 30, 2021
Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
ADB Companies, LLCFirst Lien Term Loan, LIBOR+6.25% cash due 12/18/20257.25%Construction & Engineering$3,866 $3,783 $3,822 (4)
Alvogen Pharma US, Inc.First Lien Term Loan, LIBOR+5.25% cash due 12/31/20236.25%Pharmaceuticals6,907 6,780 6,687 (4)
Amplify Finco Pty Ltd.First Lien Term Loan, LIBOR+4.25% cash due 11/26/20265.00%Movies & Entertainment2,955 2,925 2,880 (4)
Anastasia Parent, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/11/20253.88%Personal Products1,667 1,310 1,416 
Asurion, LLCSecond Lien Term Loan, LIBOR+5.25% cash due 1/20/20295.33%Property & Casualty Insurance3,000 2,970 2,990 
Aurora Lux Finco S.À.R.L.First Lien Term Loan, LIBOR+6.00% cash due 12/24/20267.00%Airport Services3,694 3,625 3,476 (4)
BAART Programs, Inc.First Lien Term Loan, LIBOR+5.00% cash due 6/11/20276.00%Health Care Services3,192 3,160 3,184 
BAART Programs, Inc.First Lien Delayed Draw Term Loan, LIBOR+5.00% cash due 6/11/20276.00%Health Care Services240 232 238 (5)
Total BAART Programs, Inc.3,432 3,392 3,422 
Brazos Delaware II, LLCFirst Lien Term Loan, LIBOR+4.00% cash due 5/21/20254.08%Oil & Gas Equipment & Services4,835 4,823 4,772 
CITGO Petroleum Corp.First Lien Term Loan, LIBOR+6.25% cash due 3/28/20247.25%Oil & Gas Refining & Marketing3,555 3,520 3,567 (4)
City Football Group LimitedFirst Lien Term Loan, LIBOR+3.50% cash due 7/21/20284.00%Movies & Entertainment2,500 2,488 2,497 
Curium Bidco S.à.r.l.First Lien Term Loan, LIBOR+4.00% cash due 7/9/20264.13%Biotechnology4,900 4,863 4,903 
DirecTV Financing, LLCFirst Lien Term Loan, LIBOR+5.00% cash due 8/2/20275.75%Cable & Satellite3,000 2,970 3,005 (4)
Enviva Holdings, LPFirst Lien Term Loan, LIBOR+5.50% cash due 2/17/20266.50%Forest Products3,919 3,879 3,928 
eResearch Technology, Inc.First Lien Term Loan, LIBOR+4.50% cash due 2/4/20275.50%Application Software2,469 2,444 2,484 
Gibson Brands, Inc.First Lien Term Loan, LIBOR+5.00% cash due 8/11/20285.75%Leisure Products4,000 3,960 3,981 
Houghton Mifflin Harcourt Publishers Inc.First Lien Term Loan, LIBOR+6.25% cash due 11/22/20247.25%Education Services431 420 433 (4)
Indivior Finance S.À.R.L.First Lien Term Loan, LIBOR+5.25% cash due 6/30/20266.00%Pharmaceuticals3,990 3,913 3,977 
Integro Parent, Inc.First Lien Term Loan, LIBOR+5.75% cash due 10/31/20226.75%Insurance Brokers3,229 3,221 3,173 
Intelsat Jackson Holdings S.A.First Lien Term Loan, LIBOR+4.75% cash due 7/13/20225.75%Alternative Carriers4,167 4,112 4,203 
Intelsat Jackson Holdings S.A.First Lien Delayed Draw Term Loan, LIBOR+4.75% cash due 7/13/2022Alternative Carriers— (11)7 (5)
Total Intelsat Jackson Holdings S.A.4,167 4,101 4,210 
INW Manufacturing, LLCFirst Lien Term Loan, LIBOR+5.75% cash due 5/7/20276.50%Personal Products2,469 2,399 2,419 (4)
139
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Lightstone Holdco LLCFirst Lien Term Loan, LIBOR+3.75% cash due 1/30/20244.75%Electric Utilities$3,439 $3,115 $2,855 
LTI Holdings, Inc.First Lien Term Loan, LIBOR+3.50% cash due 9/6/20253.58%Electronic Components1,372 1,147 1,356 
MRI Software LLCFirst Lien Term Loan, LIBOR+5.50% cash due 2/10/20266.50%Application Software1,635 1,621 1,634 (4)
MRI Software LLCFirst Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026Application Software— (1)— (4)(5)
MRI Software LLCFirst Lien Revolver, LIBOR+5.50% cash due 2/10/2026Application Software— (1)— (4)(5)
   Total MRI Software LLC1,635 1,619 1,634 
Northern Star Industries Inc.First Lien Term Loan, LIBOR+4.50% cash due 3/31/20255.50%Electrical Components & Equipment5,308 5,294 5,294 
OEConnection LLCFirst Lien Term Loan, LIBOR+4.00% cash due 9/25/20264.08%Application Software3,926 3,908 3,921 (4)
Olaplex, Inc.First Lien Term Loan, LIBOR+6.25% cash due 1/8/20267.25%Personal Products3,502 3,454 3,475 (4)
Olaplex, Inc.First Lien Revolver, LIBOR+6.25% cash due 1/8/2025Personal Products— (4)(5)(4)(5)
Total Olaplex, Inc.3,502 3,450 3,470 
Planview Parent, Inc.Second Lien Term Loan, LIBOR+7.25% cash due 12/18/20288.00%Application Software2,842 2,799 2,849 (4)
Pluralsight, LLCFirst Lien Term Loan, LIBOR+8.00% cash due 4/6/20279.00%Application Software4,465 4,383 4,380 (4)
Pluralsight, LLCFirst Lien Revolver, LIBOR+8.00% cash due 4/6/2027Application Software— (6)(6)(4)(5)
Total Pluralsight, LLC4,465 4,377 4,374 
Sabert CorporationFirst Lien Term Loan, LIBOR+4.50% cash due 12/10/20265.50%Metal & Glass Containers1,819 1,800 1,825 (4)
SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.25% cash due 4/27/20246.25%Footwear6,159 6,140 5,851 
SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.23% cash due 4/27/20246.23%Footwear102 102 97 
Total SHO Holding I Corporation6,261 6,242 5,948 
Supermoose Borrower, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/29/20253.88%Application Software2,850 2,703 2,657 (4)
Surgery Center Holdings, Inc.First Lien Term Loan, LIBOR+3.75% cash due 8/31/20264.50%Health Care Facilities4,911 4,895 4,925 
Tribe Buyer LLCFirst Lien Term Loan, LIBOR+4.50% cash due 2/16/20245.50%Human Resource & Employment Services1,599 1,598 1,354 
Verscend Holding Corp.First Lien Term Loan, LIBOR+4.00% cash due 8/27/20254.08%Health Care Technology1,721 1,709 1,725 
Waystar Technologies, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/22/20264.08%Health Care Technology3,940 3,920 3,947 
Windstream Services II, LLCFirst Lien Term Loan, LIBOR+6.25% cash due 9/21/20277.25%Integrated Telecommunication Services4,937 4,768 4,967 (4)
WP CPP Holdings, LLCSecond Lien Term Loan, LIBOR+7.75% cash due 4/30/20268.75%Aerospace & Defense3,000 2,982 2,965 (4)
Total Portfolio Investments$126,512 $124,112 $124,108 
__________
(1) Represents the interest rate as of September 30, 2021. All interest rates are payable in cash, unless otherwise noted.
(2) The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement.agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars. As of September 30, 2021, the reference rates for the Glick JV's variable rate loans were the 30-day LIBOR at 0.08%, the 60-day LIBOR at 0.11%, the 90-day LIBOR at 0.13%, the 180-day LIBOR at 0.16% and the 360-day LIBOR at 0.24%. Most loans include an interest floor, which generally ranges from 0% to 1%.
(5) This investment was on cash non-accrual status(3) Represents the current determination of fair value as of September 30, 2016.
The cost and2021 utilizing a similar technique as the Company in accordance with ASC 820. However, the determination of such fair value ofis not included in the Class A mezzanine secured deferrable floating rate notes of SLF JV Ivaluation process described elsewhere herein.
(4) This investment was held by both the Company was $101.0 millionand the Glick JV as of September 30, 2017. The Company earned interest of $5.2 million on its investments2021.
(5) Investment had undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in these notes for the year ended September 30, 2017. Thea negative cost andbasis. A negative fair value ofmay result from the Class B mezzanine secured deferrable fixed rate notes of SLF JV I held by the Company was $27.6 million as of September 30, 2017. The Company earned PIK interest of $3.0 million on its investments in these notes for the year ended September 30, 2017. The cost and fair value of the subordinated notes of SLF JV I held by the Company was $144.8 million and $129.0 million as of September 30, 2016, respectively. Prior to their repayment, the subordinated notes bore interest at a rate of LIBOR plus 8.0% per annum and the Company earned interest income of $2.9 million, $12.0 million and $6.9 million on its investments in these notes for the years ended September 30, 2017, September 30, 2016 and September 30, 2015, respectively. The cost and fair value of the LLC equity interests in SLF JV I held by the Company was $16.2 million and $5.5 million, respectively, as of September 30, 2017, and $16.1 million and $13.7 million, respectively, as of September 30, 2016. The Company earned dividend income of $1.1 million, $5.8 million and $7.9 million for the years ended September 30, 2017, September 30, 2016 and September 30, 2015, respectively, with respect to the LLC equity interests of SLF JV I. The LLC equity interests are dividend producing to the extent SLF JV I has residual cash to be distributed on a quarterly basis.unfunded commitment being valued below par.

140
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









The cost and fair value of the Company's aggregate investment in the Glick JV was $50.2 million and $50.3 million, respectively, as of September 30, 2022. The cost and fair value of the Company's aggregate investment in the Glick JV was $50.7 million and $55.6 million, respectively, as of September 30, 2021. For the year ended September 30, 2022 and for the period from March 19, 2021 to September 30, 2021, the Company's investment in the Glick JV Notes earned interest income of $4.7 million and $2.4 million, respectively. The Company did not earn dividend income for the year ended September 30, 2022 and for the period from March 19, 2021 to September 30, 2021 with respect to its investment in the LLC equity interest of the Glick JV. As of September 30, 2022, the Glick JV Notes bore interest at a rate of one-month LIBOR plus 4.50% per annum and will mature on October 20, 2028.
Below is certain summarized financial information for SLFthe Glick JV I as of September 30, 20172022 and September 30, 20162021 and for the yearsyear ended September 30, 20172022 and for the period from March 19, 2021 to September 30, 2016:2021:
September 30, 2022September 30, 2021
Selected Balance Sheet Information:
Investments at fair value (cost September 30, 2022: $140,083; September 30, 2021: $124,112)$133,144 $124,108 
Cash and cash equivalents7,021 14,087 
Restricted cash1,788 1,055 
Other assets4,855 1,750 
Total assets$146,808 $141,000 
Senior credit facility payable$82,082 $71,882 
Glick JV Notes payable at fair value (proceeds September 30, 2022: $68,185; September 30, 2021: $70,525)57,463 63,522 
Other liabilities7,263 5,596 
Total liabilities$146,808 $141,000 
Members' equity— — 
Total liabilities and members' equity$146,808 $141,000 
  September 30, 2017 September 30, 2016
Selected Balance Sheet Information:    
Investments in loans at fair value (cost September 30, 2017: $251,648; cost September 30, 2016: $327,720) $235,526
 $315,153
Receivables from secured financing arrangements at fair value (cost September 30, 2017: $9,783; cost September 30, 2016: $10,014) 8,305
 9,672
Cash and cash equivalents 24,389
 1,878
Restricted cash 5,097
 7,080
Other assets 3,485
 4,700
Total assets $276,802
 $338,483
     
Senior credit facilities payable $113,053
 $167,012
Debt securities payable at fair value (proceeds September 30, 2017: $147,052; proceeds September 30, 2016: $165,533) 147,052
 147,433
Other liabilities 10,383
 8,371
Total liabilities $270,488
 $322,816
Members' equity 6,314
 15,667
Total liabilities and members' equity $276,802
 $338,483
For the year ended September 30, 2022For the period from March 19, 2021 to September 30, 2021
Selected Statements of Operations Information:
Interest income$9,703 $4,643 
Fee income149 67 
Total investment income9,852 4,710 
Senior credit facility interest expense2,747 1,157 
Glick JV Notes interest expense3,576 1,780 
Other expenses168 95 
Total expenses (1)6,491 3,032 
Net investment income3,361 1,678 
Net unrealized appreciation (depreciation)(3,216)(1,710)
Realized gain (loss)(145)32 
Net income (loss)$— $— 

  Year ended September 30, 2017 Year ended September 30, 2016
Selected Statements of Operations Information:    
Interest income $23,222
 $30,156
Other income 869
 840
Total investment income 24,091
 30,996
Interest expense 22,195
 23,262
Other expenses 700
 501
Total expenses (1) 22,895
 23,763
Net unrealized appreciation (depreciation) (22,789) 7,438
Net realized gain (loss) 13,350
 (7,771)
Net income (loss) $(8,243) $6,900
__________
(1) There are no management fees or incentive fees charged at SLFthe Glick JV.
The Glick JV I.
SLF JV I has elected to fair value the debt securitiesGlick JV Notes issued to the Company and KemperGF Debt Funding under FASB ASC 825.Topic 825, Financial Instruments - Fair Value Option. The debt securitiesGlick JV Notes are valued based on the total assets less the total liabilities senior to the mezzanine notes of SLFGlick JV INotes in an amount not exceeding par under the enterprise valueEV technique.

During the year ended September 30, 2017,2022 and the period from March 19, 2021 to September 30, 2021, the Company sold $10.5 million of senior secureddid not sell any debt investments to SLF JV I at fair value in exchange for $10.5 million cash consideration. No gain or loss was recognized by the Company on these transactions. During the year ended September 30, 2016, the Company sold $99.4 million of senior secured debt investments at fair value to SLF JV I in exchange for $92.8 million cash consideration, $5.9 million of subordinated notes and $0.7 million of LLC equity interests in SLF JV I. The Company recognized a $0.9 million realized loss on these transactions.Glick JV.
Unconsolidated Significant Subsidiaries
The Company determined that SLF JV I is a significant subsidiary for
Note 4. Fee Income
For the years ended September 30, 20172022, 2021 and September 30, 2016 under at least one of the significance conditions of Rule 4-08(g) of SEC Regulation S-X. Accordingly, the related summary financial information is presented in the "Senior Loan Fund JV I LLC" heading above.
The Company also determined that Ameritox Holdings II, LLC was a significant subsidiary for the years ended September 30, 2017 and September 30, 2016 under at least one of the significance conditions of Rule 4-08(g) of SEC Regulation S-X. On April 11, 2016,2020, the Company restructured its debt investmentrecorded total fee income of $6.6 million, $14.1 million and $8.5 million, respectively, of which $0.9 million, $0.6 million and $0.7 million, respectively, was recurring in Ameritox Ltd. As a partnature. Recurring fee income primarily consisted of the restructuring, the Company exchanged cashservicing fees and its debtexit fees.

141
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









securities for debt and equity securities in the newly restructured entity, Ameritox Holdings II, LLC. On April 11, 2016, the Company began to recognize this investment as a control investment as it held more than 25% of the voting securities of Ameritox Holdings II, LLC. Accordingly, the following tables show summary financial information for Ameritox Holdings II, LLC and its subsidiaries for the year ended September 30, 2017 and the period from April 11, 2016 to September 30, 2016:
Selected Balance Sheet InformationSeptember 30, 2017 September 30, 2016 (1)
Current assets$19,210
 $20,226
Non-current assets36,693
 34,082
Total assets55,903
 54,308
Current liabilities16,536
 16,066
Non-current liabilities79,697
 54,329
Total liabilities96,233
 70,395
Members' deficit$(40,330) $(16,087)

Selected Statement of Operations InformationFor the year ended September 30, 2017 For the period April 11, 2016 to September 30, 2016 (1)
Total revenue$80,237
 $42,637
Cost of sales41,033
 22,627
Gross margin39,204
 20,010
Operating expenses41,823
 26,061
Other expenses23,957
 13,931
Income from continuing operations(26,576) (19,982)
Net income$(26,576) $(19,982)
(1)Ameritox has elected not to apply push-down accounting to adjust the carrying value of its assets and liabilities related to the restructuring in its financial statements.

Note 4. Fee Income
The Company receives a variety of fees in the ordinary course of business, including servicing, advisory, amendment, structuring and prepayment fees, which are classified as fee income and recognized as they are earned. The unearned fee income balance as of September 30, 2017 and September 30, 2016 was $1.1 million and $1.3 million, respectively.
As of September 30, 2017, the Company had a receivable for $1.5 million in aggregate exit fees of one portfolio investment upon the future exit of this investment. These fees are to be paid to the Company upon the sooner to occur of (i) a sale of the borrower or substantially all of the assets of the borrower, (ii) the maturity date of the loan or (iii) the date when full prepayment of the loan occurs. The receipt of such fees is contingent upon the occurrence of one of the events listed above for each of the investments. A percentage of these fees is included in net investment income over the life of the loan.
For the year ended September 30, 2017, the Company recorded total fee income of $10.5 million, $1.9 million of which was recurring in nature. For the year ended September 30, 2016, the Company recorded total fee income of $22.7 million, $6.2 million of which was recurring in nature. Recurring fee income primarily consists of servicing fees and exit fees.

OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Note 5. Share Data and DistributionsNet Assets
Earnings per Share
The following table sets forth the computation of basic and diluted earnings per share, pursuant to FASB ASC Topic 260-10,Earnings per Share, for the years ended September 30, 2017, 20162022, 2021 and 2015:2020:
(Share amounts in thousands)Year ended
September 30,
2022		Year ended
September 30,
2021		Year ended
September 30,
2020
Earnings (loss) per common share — basic and diluted:
Net increase (decrease) in net assets resulting from operations$29,223 $237,260 $39,224 
Weighted average common shares outstanding — basic and diluted182,181 162,118 140,961 
Earnings (loss) per common share — basic and diluted$0.16 $1.46 $0.28 
(Share amounts in thousands) Year ended
September 30,
2017		 Year ended
September 30,
2016 (1)		 Year ended
September 30,
2015 (1)
Earnings (loss) per common share — basic:      
Net increase (decrease) in net assets resulting from operations $(196,969) $(66,556) $15,395
Weighted average common shares outstanding — basic 141,438
 147,422
 153,164
Earnings (loss) per common share — basic $(1.39) $(0.45) $0.10
Earnings (loss) per common share — diluted:      
Net increase (decrease) in net assets resulting from operations, before adjustments $(196,969) $(66,556) $15,395
Adjustments for interest on convertible notes, base management fees and incentive fees —
 —
 5,458
Net increase (decrease) in net assets resulting from operations, as adjusted $(196,969) $(66,556) $20,853
Weighted average common shares outstanding — basic 141,438
 147,422
 153,164
Adjustments for dilutive effect of convertible notes —
 3,917
 7,791
Weighted average common shares outstanding — diluted 141,438
 151,339
 160,955
Earnings (loss) per common share — diluted $(1.39) $(0.45) $0.10

__________Changes in Net Assets
(1) Items relating to
The following table presents the Convertible Notes outstanding that were anti-dilutive to earnings per share have been excluded from the diluted earnings per share calculation. Forchanges in net assets for the years ended September 30, 20162022, 2021 and 2015, anti-dilution would have totaled approximately $0.012020:

Common Stock
(Share amounts in thousands)SharesPar ValueAdditional paid-in-capitalAccumulated Overdistributed EarningsTotal Net Assets
Balance at September 30, 2019140,961 $1,409 $1,487,774 $(558,553)$930,630 
Net investment income———71,99271,992
Net unrealized appreciation (depreciation)———(20,614)(20,614)
Net realized gains (losses)———(13,924)(13,924)
(Provision) benefit for taxes on realized and unrealized gains (losses)———1,7701,770
Distributions to stockholders———(54,975)(54,975)
Issuance of common stock under dividend reinvestment plan43541,874—1,878
Repurchases of common stock under dividend reinvestment plan(435)(4)(1,874)—(1,878)
Balance at September 30, 2020140,961 $1,409 $1,487,774 $(574,304)$914,879 
Net investment income———97,10697,106
Net unrealized appreciation (depreciation)———114,519114,519
Net realized gains (losses)———26,42026,420
(Provision) benefit for taxes on realized and unrealized gains (losses)———(785)(785)
Distributions to stockholders———(82,020)(82,020)
Reclassification of additional paid-in capital——74,271(74,271)—
Issuance of common stock in connection with the OCSI Merger39,400395242,309—242,704
Issuance of common stock under dividend reinvestment plan33832,167—2,170
Repurchases of common stock under dividend reinvestment plan(338)(3)(2,167)—(2,170)
Balance as of September 30, 2021180,361 $1,804 $1,804,354 $(493,335)$1,312,823 
Net investment income— ——148,621148,621
Net unrealized appreciation (depreciation)———(136,248)(136,248)
Net realized gains (losses)———17,17917,179
(Provision) benefit for taxes on realized and unrealized gains (losses)———(329)(329)
Distributions to stockholders———(118,657)(118,657)
Issuance of common stock in connection with the "at the market" offering2,8012820,594—20,622
Issuance of common stock under dividend reinvestment plan49753,404—3,409
Repurchases of common stock under dividend reinvestment plan(285)(3)(1,854)—(1,857)
Balance as of September 30, 2022183,374 $1,834 $1,826,498 $(582,769)$1,245,563 

142
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and $0.03, respectively.per share amounts, percentages and as otherwise indicated)






Distributions
Distributions to common stockholders are recorded on the ex-dividend date. The Company is required to distribute dividends each taxable year to its stockholders of an amount generally at least equal to 90% of its investment company taxable income, determined without regard to any deduction for dividends paid, in order to be eligible for tax benefits allowed to a RIC under Subchapter M of the Code. The Company anticipates paying out as a distribution all or substantially all of those amounts. The amount to be paid out as a dividend is determined by the Board of Directors and is based on management’s estimate of the Company’s annual taxable income. Net realized capital gains, if any, may be distributed to stockholders or retained for reinvestment.
The Company has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of any distributions the Company declares in cash on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, if the Company’s Board of Directors authorizes, and the Company declares a cash distribution, then the Company’s stockholders who have not “opted out” of the Company’s DRIP will have their cash distribution automatically reinvested in additional shares of the Company’s common stock, rather than receiving the cash distribution. If the Company’s shares are trading at a premium to net asset value, the Company typically issues new shares to implement the DRIP.DRIP with such shares issued at the greater of the most recently computed net asset value per share of common stock or 95% of the current market price per share of common stock on the payment date for such distribution. If the Company’s shares are trading at a discount to net asset value, the Company typically purchases shares in the open market in connection with the Company’s obligations under the DRIP.

For income tax purposes, the Company estimates thatestimated its distributions for the 20172022 calendar year will be composed primarily of ordinary income and will beincome. The character of such distributions was appropriately reported to the Internal Revenue Service and stockholders for the 20172021 calendar year. To the extent that the Company’s taxable earnings for a fiscal and taxable year fall below the amount of distributions paid for the fiscal and taxable year, a portion of the total amount of the Company’s dividendsdistributions for the fiscal and taxable year may beis deemed a return of capital for U.S. federal income tax purposes to the Company’s stockholders. For the year ended September 30, 2022, no portion of the distributions was deemed a return of capital for tax purposes to the Company’s stockholders.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





purposes.
The following table reflects the distributions per share that the Company has paid, including shares issued under the DRIP, on its common stock during the years ended September 30, 2017, 20162022, 2021 and 2015:2020:
Date Declared Record Date Payment Date 
Amount
per Share
 
Cash
Distribution
 
DRIP Shares
Issued
   
DRIP Shares
Value
August 3, 2016 October 14, 2016 October 31, 2016 $0.06
 $ 8.2 million 81,391
 (1) $ 0.4 million
August 3, 2016 November 15, 2016 November 30, 2016 0.06
 8.2 million 80,962
 (1) 0.4 million
October 18, 2016 December 15, 2016 December 30, 2016 0.06
 7.7 million 70,316
 (1) 0.4 million
October 18, 2016 January 13, 2017 January 31, 2017 0.06
 8.0 million 73,940
 (1) 0.4 million
October 18, 2016 February 15, 2017 February 28, 2017 0.06
 8.0 million 86,120
 (1) 0.4 million
February 6, 2017 March 15, 2017 March 31, 2017 0.02
 2.7 million 27,891
 (1) 0.1 million
February 6, 2017 June 15, 2017 June 30, 2017 0.02
 2.7 million 20,502
 (1) 0.1 million
February 6, 2017 September 15, 2017 September 29, 2017 0.125
 17.0 million 118,992
 (1) 0.7 million
Total for the year ended September 30, 2017 $0.465
 $ 62.5 million 560,114
   $ 2.9 million
               
Date Declared Record Date Payment Date 
Amount
per Share
 
Cash
Distribution
 
DRIP Shares
Issued
   
DRIP Shares
Value
August 4, 2015 October 15, 2015 October 30, 2015 $0.06
 $ 8.4 million 106,185
 (1) $ 0.6 million
August 4, 2015 November 16, 2015 November 30, 2015 0.06
 8.4 million 91,335
 (1) 0.6 million
November 30, 2015 December 15, 2015 December 30, 2015 0.06
 8.4 million 99,673
 (1) 0.6 million
November 30, 2015 January 15, 2016 January 28, 2016 0.06
 8.4 million 113,905
 (1) 0.7 million
November 30, 2015 February 12, 2016 February 26, 2016 0.06
 8.4 million 123,342
 (1) 0.6 million
February 8, 2016 March 15, 2016 March 31, 2016 0.06
 8.6 million 86,806
 (1) 0.4 million
February 8, 2016 April 15, 2016 April 29, 2016 0.06
 8.2 million 112,569
 (1) 0.6 million
February 8, 2016 May 13, 2016 May 31, 2016 0.06
 8.4 million 76,432
 (1) 0.4 million
May 5, 2016 June 15, 2016 June 30, 2016 0.06
 8.2 million 108,629
 (1) 0.5 million
May 5, 2016 July 15, 2016 July 29, 2016 0.06
 8.2 million 100,268
 (1) 0.6 million
May 5, 2016 August 15, 2016 August 31, 2016 0.06
 8.3 million 59,026
 (1) 0.4 million
August 3, 2016 September 15, 2016 September 30, 2016 0.06
 8.3 million 65,170
 (1) 0.4 million
Total for the year ended September 30, 2016 $0.72
 $ 100.3 million 1,143,340
   $ 6.4 million
               
Date Declared Record Date Payment Date 
Amount
per Share
 
Cash
Distribution
 
DRIP Shares
Issued
   
DRIP Shares
Value (2)
July 2, 2014 October 15, 2014 October 31, 2014 $0.0917
 $ 13.3 million 82,390
 (1) $ 0.7 million
July 2, 2014 November 14, 2014 November 28, 2014 0.0917
 13.4 million 80,775
 (1) 0.7 million
November 20, 2014 December 15, 2014 December 30, 2014 0.0917
    13.4 million 79,849
 (1)      0.6 million
November 20, 2014 January 15, 2015 January 30, 2015 0.0917
 13.4 million 79,138
 (1) 0.6 million
February 3, 2015 March 16, 2015 March 31, 2015 0.06
 8.8 million 56,295
 (1) 0.4 million
February 3, 2015 April 15, 2015 April 30, 2015 0.06
 8.8 million 54,818
 (1) 0.4 million
February 3, 2015 May 15, 2015 May 29, 2015 0.06
 8.8 million 60,714
 (1) 0.4 million
February 3, 2015 June 15, 2015 June 30, 2015 0.06
 8.8 million 66,707
 (1) 0.4 million
February 3, 2015 July 15, 2015 July 31, 2015 0.06
 8.8 million 71,412
 (1) 0.5 million
February 3, 2015 August 14, 2015 August 31, 2015 0.06
 8.7 million 69,370
 (1) 0.5 million
August 4, 2015 September 15, 2015 September 30, 2015 0.06
 8.5 million 113,881
 (1) 0.7 million
Total for the year ended September 30, 2015 $0.79
 $ 114.7 million 815,349
   $ 6.0 million
Date DeclaredRecord DatePayment DateAmount
per Share		Cash
Distribution		DRIP Shares
Issued		DRIP Shares
Value (3)
October 13, 2021December 15, 2021December 31, 2021$0.155 $ 27.2 million107,971 (1)$ 0.8 million
January 28, 2022March 15, 2022March 31, 20220.16 28.5 million104,411 (1)0.8 million
April 29, 2022June 15, 2022June 30, 20220.165 29.4 million131,028 (2)0.9 million
July 29, 2022September 15, 2022September 30, 20220.17 30.2 million153,544 (2)1.0 million
Total for the year ended September 30, 2022$0.65 $ 115.3 million496,954 $ 3.4 million
Date DeclaredRecord DatePayment DateAmount
per Share		Cash
Distribution		DRIP Shares
Issued		DRIP Shares
Value (3)
November 13, 2020December 15, 2020December 31, 2020$0.11 $ 15.0 million93,964 (2)$ 0.5 million
January 29, 2021March 15, 2021March 31, 20210.12 16.4 million81,702 (2)0.5 million
April 30, 2021June 15, 2021June 30, 20210.13 22.9 million76,979 (2)0.5 million
July 30, 2021September 15, 2021September 30, 20210.145 25.5 million85,075 (2)0.6 million
Total for the year ended September 30, 2021$0.505 $ 79.8 million337,720 $ 2.2 million
Date DeclaredRecord DatePayment DateAmount
per Share		Cash
Distribution		DRIP Shares
Issued		DRIP Shares
Value
November 12, 2019December 13, 2019December 31, 2019$0.095 $ 12.9 million87,747 (2)$ 0.5 million
January 31, 2020March 13, 2020March 31, 20200.095 12.9 million157,523 (2)0.5 million
April 30, 2020June 15, 2020June 30, 20200.095 13.0 million87,351 (2)0.4 million
July 31, 2020September 15, 2020September 30, 20200.105 14.3 million102,404 (2)0.5 million
Total for the year ended September 30, 2020$0.390 $ 53.1 million435,025 $ 1.9 million
 __________
(1) New shares were issued and distributed.
(2) Shares were purchased on the open market and distributed.
(2) Totals do(3) Total may not sum due to rounding.

Common Stock OfferingIssuances
There were no common stock offerings duringDuring the yearsyear ended September 30, 2017, September 30, 20162022, the Company issued an aggregate of 212,382 shares of common stock as part of the DRIP.
On February 7, 2022, the Company entered into an equity distribution agreement by and September 30, 2015.among the Company, Oaktree, Oaktree Administrator and Keefe, Bruyette & Woods, Inc., JMP Securities LLC, Raymond James & Associates, Inc. and
143
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









Stock Repurchase Program
On November 30, 2015,SMBC Nikko Securities America, Inc., as placement agents, in connection with the Company’s Boardissuance and sale by the Company of Directors approved ashares of common stock, repurchase program authorizinghaving an aggregate offering price of up to $125.0 million. Sales of the common stock may be made in negotiated transactions or transactions that are deemed to be “at the market,” as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on the Nasdaq Global Select Market or similar securities exchanges or sales made to or through a market maker other than on an exchange, at prices related to the prevailing market prices or at negotiated prices.
In connection with the "at the market" offering, the Company to repurchase up to $100 million inissued and sold the aggregatefollowing shares of its outstanding common stock through November 30, 2016. Duringduring the year ended September 30, 2016,2022:
Number of Shares IssuedGross ProceedsPlacement Agent FeesNet Proceeds (1)Average Sales Price per Share (2)
"At the market" offering2,801,206 $21,049 $210 $20,839 $7.51 
 __________
(1) Net proceeds excludes offering costs of $0.2 million.
(2) Represents the gross sales price before deducting placement agent fees and estimated offering expenses.
On March 19, 2021, in connection with the OCSI Merger, the Company repurchased 7,004,139issued an aggregate of 39,400,011 shares of its common stock for $37.6 million, including commissions.
On November 28, 2016, the Company’s Board of Directors approved a newto former OCSI stockholders. There were no other common stock repurchase program authorizing the Company to repurchase up to $12.5 million in the aggregate of its outstanding common stock through November 28, 2017. Duringissuances during the year ended September 30, 2017, the Company repurchased 2,298,247 shares of its common stock for $12.5 million, including commissions, under the new common stock repurchase plan. This authorization has been fully utilized.2021.

Note 6. Borrowings
INGSyndicated Facility

On May 27, 2010,November 30, 2017, the Company entered into a senior secured syndicated revolving credit facility (as subsequently amended and restated, the "ING facility"“Syndicated Facility”) pursuant to a Senior Secured Revolving Credit Agreement ("ING Credit Agreement") with certainthe lenders party thereto, from time to time and ING Capital LLC, as administrative agent.agent, ING Capital LLC, JPMorgan Chase Bank, N.A., BofA Securities, Inc. and MUFG Union Bank, N.A., as joint lead arrangers and joint bookrunners, and JPMorgan Chase Bank, N.A. and Bank of America, N.A., as syndication agents. The ING facilitySyndicated Facility provides that the Company may use the proceeds of the loans and issuances of letters of credit under the facilitySyndicated Facility for general corporate purposes, including acquiring and funding leveraged loans, mezzanine loans, high-yield securities, convertible securities, preferred stock, common stock and other investments. The ING facilitySyndicated Facility further allows the Company to request letters of credit from ING Capital LLC, as the issuing bank.
In connection with the Transaction, on July 13, 2017,
On December 10, 2021, the Company entered into an amendment (the “ING Amendment”)incremental commitment and assumption agreement pursuant to which a new lender provided additional commitments of $50 million under the INGSyndicated Facility. As of September 30, 2022, the size of the Syndicated Facility was $1.0 billion. In addition, pursuant to an "accordion" feature, the Company may increase the size of the facility that amends the ING Credit Agreement. Under the ING Amendment, the appointment of Oaktree as the Company’s investment adviser was approved; the covenant regarding minimum shareholders’ equity was reduced from the greater of 40% of assets or $978 millionto up to the greater of 40% of assets or $900 million;$1.25 billion and the consolidated interest coverage ratio was reduced from 2.50 to 1.0 to 2.25 to 1.0, a new minimumCompany's net worth, covenant of $750 million was added;as defined in the lenders' commitments were reduced to $525 million and the revolving period was extended to January 31, 2018. The stated maturity date of the ING facility, was not extended by the ING Amendment and remains August 6, 2018 as of September 30, 2017.under certain circumstances.

As of September 30, 2017,2022, (i) the ING facility permitted up to $525 million of borrowings,period during which the Company may make drawings will expire on May 4, 2025 and borrowings under the facility borematurity date is May 4, 2026 and (ii) the interest at a rate equal tomargin for (a) LIBOR (1-loans (which may be 1-, 2-, 3- or 6-month, at the Company'sCompany’s option) plus 2.25% per annum, with no LIBOR floor.was 2.00% and (b) alternate base rate loans was 1.00%.

The ING facilitySyndicated Facility is secured by substantially all of the Company'sCompany’s assets as well as(excluding, among other things, investments held in and by certain subsidiaries of the Company (including OCSL Senior Funding II LLC) or investments in certain portfolio companies of the Company) and guaranteed by certain subsidiaries of the Company. As of September 30, 2022, except for assets that were held by OCSL Senior Funding II LLC and certain immaterial subsidiaries, substantially all of the Company's wholly-owned subsidiary, Holdings, and its indirect wholly-owned subsidiary, Fund of Funds, subject to certain exclusions for, among other things, equity interests in the Company's SBIC subsidiaries, and equity interests in Funding II as set forth in a Guarantee, Pledge and Security Agreement ("ING Security Agreement") entered into in connection with the ING Credit Agreement, among Holdings, ING Capital LLC,assets are pledged as collateral agent, and the Company.
Pursuant to the ING Security Agreement, Holdings and Fund of Funds guaranteed the obligations under the ING Security Agreement, including the Company's obligations to the lenders and the administrative agent under the ING Credit Agreement. Additionally, the Company pledged its entire equity interest in Holdings, and Holdings pledged its entire equity interest in Fund of Funds to the collateral agent pursuant to the terms of the ING Security Agreement. None of the Company's SBIC subsidiaries, or Funding II, is party to the ING facility and their respective assets have not been pledged in connection therewith.Syndicated Facility.

The ING Credit Agreement and related agreements governing the ING facility required Holdings, Fund of Funds andSyndicated Facility requires the Company to, among other things, (i) make representations and warranties regarding the collateral as well as each of the Company'sCompany’s portfolio companies'companies’ businesses, (ii) agree to certain indemnification obligations, and (iii) agree to comply with various affirmative and negative covenants, reporting requirements and other customary requirements for similar revolving credit facilities. facilities, including covenants related to: (A) limitations on the incurrence of additional indebtedness and liens, (B) limitations on certain investments, (C) limitations on certain asset transfers and restricted payments, (D) maintaining a certain minimum stockholders’ equity, (E) maintaining a ratio of total assets (less total liabilities) to total indebtedness, of the Company and its subsidiaries (subject to certain exceptions), of not less than 1.50 to 1.00, (F) maintaining a ratio of consolidated EBITDA to consolidated interest expense, of the Company and its subsidiaries (subject to certain exceptions), of not less than 2.25 to 1.00, (G) maintaining a minimum liquidity and net worth, and (H) limitations on the creation or existence of agreements that prohibit liens on certain properties of the Company and certain of its subsidiaries.
144
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




The ING facility documentsSyndicated Facility also includeincludes usual and customary default provisions such as the failure to make timely payments under the facility, the occurrence of a change in control, and the failure by the Company to materially perform under the ING Credit Agreement and related agreements governing the facility, which, if not complied with, could accelerate repayment under the facility. Any such non-compliance could materially and adversely affect the Company's liquidity, financial condition and results of operations. As of September 30, 2017,2022, the Company was in compliance with all financial covenants under the ING facility.
Syndicated Facility. In addition to the asset coverage ratio described above, borrowings under the Syndicated Facility (and the incurrence of certain other permitted debt) are subject to compliance with a borrowing base that will apply different advance rates to different types of assets in the Company’s portfolio. Each loan or letter of credit originated or assumed under the ING facilitySyndicated Facility is subject to the satisfaction of certain conditions.

As of September 30, 2022 and September 30, 2021, the Company had $540.0 million and $495.0 million of borrowings outstanding under the Syndicated Facility, respectively, which had a fair value of $540.0 million and $495.0 million, respectively. The Company's borrowings under the Syndicated Facility bore interest at a weighted average interest rate of 2.876%, 2.197% and 3.028% for the years ended September 30, 2022, 2021 and 2020, respectively. For the years ended September 30, 2022, 2021 and 2020, the Company cannot be assuredrecorded interest expense (inclusive of fees) of $19.5 million, $13.8 million and $14.9 million, respectively, related to the Syndicated Facility.
Citibank Facility
On March 19, 2021, the Company became party to a revolving credit facility (as amended and/or restated from time to time, the “Citibank Facility”) with OCSL Senior Funding II LLC (formerly OCSI Senior Funding II LLC), the Company’s wholly-owned, special purpose financing subsidiary, as the borrower, the Company, as collateral manager and seller, each of the lenders from time to time party thereto, Citibank, N.A., as administrative agent, and Wells Fargo Bank, National Association, as collateral agent and custodian.
On November 18, 2021, the Company entered into an amendment to the Citibank Facility that, it will beamong other things, increased the size of the facility by $50 million and extended the reinvestment period and final maturity date. As of September 30, 2022, the Company was able to borrow fundsup to $200 million under the ING facilityCitibank Facility (subject to borrowing base and other limitations). As of September 30, 2022, the reinvestment period under the Citibank Facility was scheduled to expire on November 18, 2023 and the maturity date for the Citibank Facility was November 18, 2024. 
As of September 30, 2022, borrowings under the Citibank Facility are subject to certain customary advance rates and accrue interest at a rate equal to LIBOR plus between 1.25% and 2.20% per annum on broadly syndicated loans, subject to observable market depth and pricing, and LIBOR plus 2.25% per annum on all other eligible loans during the reinvestment period. In addition, as of September 30, 2022, for the duration of the reinvestment period there is a non-usage fee payable of 0.50% per annum on the undrawn amount under the Citibank Facility. The minimum asset coverage ratio applicable to the Company under the Citibank Facility is 150% as determined in accordance with the requirements of the Investment Company Act. Borrowings under the Citibank Facility are secured by all of the assets of OCSL Senior Funding II LLC and all of the Company’s equity interests in OCSL Senior Funding II LLC. The Company may use the Citibank Facility to fund a portion of its loan origination activities and for general corporate purposes. Each loan origination under the Citibank Facility is subject to the satisfaction of certain conditions.
As of September 30, 2022 and September 30, 2021, the Company had $160.0 million and $135.0 million outstanding under the Citibank Facility, respectively, which had a fair value of $160.0 million and $135.0 million, respectively. The Company's borrowings under the Citibank Facility bore interest at a weighted average interest rate of 3.179% and 2.086% for the year ended September 30, 2022 and the period from March 19, 2021 to September 30, 2021, respectively. For the year ended September 30, 2022 and the period from March 19, 2021 to September 30, 2021, the Company recorded interest expense (inclusive of fees) of $5.8 million and $1.9 million, respectively, related to the Citibank Facility.
2025 Notes
On February 25, 2020, the Company issued $300.0 million in aggregate principal amount of the 2025 Notes for net proceeds of $293.8 million after deducting OID of $2.5 million, underwriting commissions and discounts of $3.0 million and offering costs of $0.7 million. The OID on the 2025 Notes is amortized based on the effective interest method over the term of the 2025 Notes.
The 2025 Notes were issued pursuant to an indenture, dated April 30, 2012, as supplemented by the fifth supplemental indenture, dated February 25, 2020 (collectively, the "2025 Notes Indenture"), between the Company and Deutsche Bank Trust Company Americas (the "Trustee"). The 2025 Notes are the Company's general unsecured obligations that rank senior in right of payment to all of the Company's existing and future indebtedness that is expressly subordinated in right of payment to the 2025 Notes. The 2025 Notes rank equally in right of payment with all of the Company's existing and future liabilities that are not so subordinated. The 2025 Notes effectively rank junior to any particular time or at all.of the Company's secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness. The 2025
145
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









Notes rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company's subsidiaries, financing vehicles or similar facilities. 
As of September 30, 2017,Interest on the Company had $226.5 million of borrowings outstanding under the ING facility, which had a fair value of $226.5 million. The Company's borrowings under the ING facility bore interest2025 Notes is paid semi-annually on February 25 and August 25 at a weighted average interest rate of 3.191%, 2.781%3.500% per annum. The 2025 Notes mature on February 25, 2025 and 2.557% for the years ended September 30, 2017, 2016 and 2015, respectively. For the years ended September 30, 2017, 2016 and 2015, the Company recorded interest expense of $13.6 million, $15.1 million and $13.4 million, respectively, related to the ING facility.
Sumitomo Facility
On September 16, 2011, Funding II, a consolidated wholly-owned bankruptcy remote, special purpose subsidiary of the Company, entered into a Loan and Servicing Agreement (as subsequently amended, the "Sumitomo Agreement"), as amendedmay be redeemed in whole or in part at any time or from time to time at the Company's option prior to maturity at par plus a “make-whole” premium, if applicable. In addition, holders of the 2025 Notes can require the Company to repurchase the 2025 Notes at 100% of their principal amount upon the occurrence of certain change of control events as described in the 2025 Notes Indenture. The 2025 Notes were issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. During the year ended September 30, 2022, the Company did not repurchase any of the 2025 Notes in the open market.
The 2025 Notes Indenture contains certain covenants, including covenants requiring the Company's compliance with respectthe asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment Company Act or any successor provisions (but giving effect to a credit facilityany exemptive relief granted to the Company by the U.S. Securities and Exchange Commission ("Sumitomo facility"SEC") with Sumitomo Mitsui Banking Corporation ("SMBC"), an affiliate of Sumitomo Mitsui Financial Group, Inc., as administrative agent, and eachwell as covenants requiring the Company to provide financial information to the holders of the lenders2025 Notes and the Trustee if the Company ceases to be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These covenants are subject to limitations and exceptions that are described in the 2025 Notes Indenture.
2027 Notes
On May 18, 2021, the Company issued $350.0 million in aggregate principal amount of the 2027 Notes for net proceeds of $344.8 million after deducting OID of $1.0 million, underwriting commissions and discounts of $3.5 million and offering costs of $0.7 million. The OID on the 2027 Notes is amortized based on the effective interest method over the term of the 2027 Notes.
The 2027 Notes were issued pursuant to an indenture, dated April 30, 2012, as supplemented by the sixth supplemental indenture, dated May 18, 2021 (collectively, the "2027 Notes Indenture"), between the Company and the Trustee. The 2027 Notes are the Company's general unsecured obligations that rank senior in right of payment to all of the Company's existing and future indebtedness that is expressly subordinated in right of payment to the 2027 Notes. The 2027 Notes rank equally in right of payment with all of the Company's existing and future liabilities that are not so subordinated. The 2027 Notes effectively rank junior to any of the Company's secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness. The 2027 Notes rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company's subsidiaries, financing vehicles or similar facilities.
Interest on the 2027 Notes is paid semi-annually on January 15 and July 15, beginning on January 15, 2022, at a rate of 2.700% per annum. The 2027 Notes mature on January 15, 2027 and may be redeemed in whole or in part at any time or from time to time party thereto.at the Company's option prior to maturity at par plus a “make-whole” premium, if applicable. In addition, holders of the 2027 Notes can require the Company to repurchase the 2027 Notes at 100% of their principal amount upon the occurrence of certain change of control events as described in the 2027 Notes Indenture. The 2027 Notes were issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. During the year ended September 30, 2022, the Company did not repurchase any of the 2027 Notes in the open market.
The 2027 Notes Indenture contains certain covenants, including covenants requiring the Company's compliance with the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment Company Act or any successor provisions (but giving effect to any exemptive relief granted to the Company by the SEC), as well as covenants requiring the Company to provide financial information to the holders of the 2027 Notes and the Trustee if the Company ceases to be subject to the reporting requirements of the Exchange Act. These covenants are subject to limitations and exceptions that are described in the 2027 Notes Indenture.
In connection with the Transaction, on July 13, 2017,2027 Notes, the Company entered into a waiver and amendment (the “SMBC Amendment”)an interest rate swap to more closely align the Sumitomo facility, pursuant tointerest rates of its liabilities with its investment portfolio, which consists of predominately floating rate loans. Under the stated maturity date of the Sumitomo facility was changed from September 16, 2021 to the earlier of (a) August 6, 2018 and (b) the date on which the ING facility is repaid, refinanced or terminated. In addition, under the SMBC Amendment, SMBC has agreed to waive the occurrence of the change of control under the Sumitomo facility and certain possible events of default that would result from the closing of the Transaction, including the proposed appointment of Oaktree as the Company’s investment adviser, for a definite period of time, commencing on the date of the SMBC Amendment and ending on January 1, 2018.
As of September 30, 2017, the Sumitomo facility permitted up to $125 million of borrowings (subject to collateral requirements). Borrowings under the Sumitomo facility bore interest at a rate of either (i) LIBOR (1-month) plus 2.00% per annum, with no LIBOR floor, if the borrowings under the Sumitomo facility are greater than 35% of the aggregate available borrowings under the Sumitomo facility or (ii) LIBOR (1-month) plus 2.25% per annum, if the borrowings under the Sumitomo Facility are less than or equal to 35% of the aggregate available borrowings under the Sumitomo facility. The period during whichswap agreement, the Company may make and reinvest borrowings under the facility expired on September 16, 2017.
In connection with the Sumitomo facility, the Company entered intoreceives a Purchase and Sale Agreement with Funding II, pursuant to which it has sold and will continue to sell to Funding II certain loan assets the Company has originated or acquired, or will originate or acquire.
The Sumitomo Agreement and related agreements governing the Sumitomo facility required both Funding II and the Company to, among other things (i) make representations and warranties regarding the collateral as well as each of the Company's portfolio companies' businesses, (ii) agree to certain indemnification obligations, and (iii) comply with various covenants, servicing procedures, limitations on acquiring and disposing of assets, reporting requirements and other customary requirements for similar credit facilities, including a prepayment penalty in certain cases. The Sumitomo facility agreements also include usual and customary default provisions such as the failure to make timely payments under the facility, a change in control of Funding II, and the failure by Funding II or the Company to materially perform under the Sumitomo Agreement and related agreements governing the Sumitomo facility, which, if not complied with, could accelerate repayment under the facility. Any such non-compliance could materially and adversely affect the Company's liquidity, financial condition and results of operations. Funding II was formed for the sole purpose of entering into the Sumitomo facility and has no other operations. As of September 30, 2017, the Company was in compliance with all financial covenants under the Sumitomo facility.
The Sumitomo facility is secured by all of the assets of Funding II. Each loan origination under the facility is subject to the satisfaction of certain conditions. There is no assurance that Funding II will be able to borrow funds under the Sumitomo facility at any particular time or at all.
As of September 30, 2017, the Company had $29.5 million of borrowings outstanding under the Sumitomo facility, which had a fair value of $29.5 million. The Company's borrowings under the Sumitomo facility bore interest at a weighted averagefixed interest rate of 3.108%, 2.432%2.700% and 2.433%pays a floating interest rate of the three-month LIBOR plus 1.658% on a notional amount of $350 million. The Company designated the interest rate swap as the hedging instrument in an effective hedge accounting relationship. See Note 12 for more information regarding the years ended September 30, 2017, 2016 and 2015. For the years ended September 30, 2017, 2016 and 2015, the Company recorded interest expense of $2.4 million, $1.9 million and $1.9 million, respectively, related to the Sumitomo facility.rate swap.
146
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









SBIC Subsidiaries
On February 3, 2010,The below table presents the Company's consolidated, wholly-owned subsidiary, FSMP IV, received a license, effective February 1, 2010, from the SBA to operate as an SBIC under Section 301(c)components of the Small Business Investment Actcarrying value of 1958,the 2025 Notes and the 2027 Notes as amended. On May 15, 2012, the Company's consolidated, wholly-owned subsidiary, FSMP V, received a license, effective May 10, 2012, from the SBA to operate as an SBIC.
As of September 30, 2017, FSMP IV had no SBA-guaranteed debentures outstanding,2022 and September 30, 2021:
 As of September 30, 2022As of September 30, 2021
($ in millions)2025 Notes2027 Notes2025 Notes2027 Notes
Principal$300.0 $350.0 $300.0 $350.0 
  Unamortized financing costs(1.8)(3.2)(2.6)(4.0)
  Unaccreted discount(1.2)(0.7)(1.7)(0.9)
  Interest rate swap fair value adjustment— (42.0)— (2.1)
Net carrying value$297.0 $304.1 $295.7 $343.0 
Fair Value$283.1 $294.0 $314.5 $351.1 
The below table presents the components of interest and other debt expenses related to the 2025 Notes and the Company had commenced actions to surrender the license2027 Notes for FSMP IV to the SBA. During the year ended September 30, 2017, FSMP IV repaid $138.3 million2022:
($ in millions)2025 Notes2027 Notes
Coupon interest$10.5 $9.5 
Amortization of financing costs and discount1.3 0.9 
Effect of interest rate swap— (0.4)
 Total interest expense$11.8 $10.0 
Coupon interest rate (net of effect of interest rate swap for 2027 Notes)3.500 %2.585 %
The below table presents the components of SBA-guaranteed debentures. As of September 30, 2016, FSMP IV had $75.0 million in regulatory capitalinterest and $138.3 million in SBA-guaranteed debentures outstanding, which had a carrying value of $136.6 million (net of unamortized financing costs) and a fair value of $131.0 million.
As of September 30, 2017, FSMP V had no SBA-guaranteed debentures outstanding,other debt expenses related to the 2025 Notes and the Company had commenced actions to surrender the license2027 Notes for FSMP V to the SBA. During the year ended September 30, 2017, FSMP V repaid $75.0 million2021:
($ in millions)2025 Notes2027 Notes
Coupon interest$10.5 $3.5 
Amortization of financing costs and discount1.3 0.3 
Effect of interest rate swap— (1.1)
 Total interest expense$11.8 $2.7 
Coupon interest rate (net of effect of interest rate swap for 2027 Notes)3.500 %1.813 %
The below table presents the components of SBA-guaranteed debentures. As of September 30, 2016, FSMP V had $37.5 million in regulatory capitalinterest and $75.0 million in SBA-guaranteed debentures outstanding, which had a carrying value of $73.4 million (net of unamortized financing costs) and a fair value of $67.5 million.
Duringother debt expenses related to the years2025 Notes for the year ended September 30, 2017, 2016 and 2015, the SBA-guaranteed debentures held by the SBIC subsidiaries outstanding carried a weighted average interest rate of 3.781%, 3.793% and 3.781% (excluding the SBA annual charge), respectively. For the years ended September 30, 2017, 2016 and 2015, the Company recorded aggregate interest expense of $9.3 million, $9.5 million and $9.3 million, respectively, related to the SBA-guaranteed debentures of both SBIC subsidiaries.2020:
The Company has received exemptive relief from the SEC to permit it to exclude the debt of the SBIC Subsidiaries guaranteed by the SBA from the definition of senior securities in the Company's 200% asset coverage test under the 1940 Act. This allows the Company increased flexibility under the 200% asset coverage test by permitting it to borrow more than it would otherwise be able to under the 1940 Act absent the receipt of this exemptive relief.
($ in millions)2025 Notes
Coupon interest$6.3 
Amortization of financing costs and discount0.7 
 Total interest expense$7.0
Coupon interest rate3.500 %
As of September 30, 2017, except for assets that were funded through the Company's SBIC subsidiaries, substantially all of the Company's assets were pledged as collateral under the ING facility or the Sumitomo facility.
See Notes 13 through 15 for discussion of additional debt obligations of the Company.Principal Payments
Scheduled principal payments for debt obligations atas of September 30, 20172022 are as follows:
 Payments due during fiscal years ended September 30,
 Total20232024202520262027 and Thereafter
Syndicated Facility$540,000 $— $— $— $540,000 $— 
Citibank Facility160,000 — — 160,000 — — 
2025 Notes300,000 — — 300,000 — — 
2027 Notes350,000 — — — — 350,000 
Total$1,350,000 $— $— $460,000 $540,000 $350,000 

147
  Payments due during fiscal years ended September 30,
Debt Obligations Total 2018 2019 2020 2021 2022 and Thereafter
ING facility $226,495
 $226,495
 $—
 $—
 $—
 $—
Sumitomo facility 29,500
 29,500
 —
 —
 —
 —
Secured borrowings 13,489
 —
 —
 —
 13,489
 —
2019 Notes 250,000
 —
 250,000
 —
 —
 —
2024 Notes 75,000
 —
 —
 —
 —
 75,000
2028 Notes 86,250
 —
 —
 —
 —
 86,250
Total $680,734
 $255,995
 $250,000
 $—
 $13,489
 $161,250


Note 7. Interest and Dividend Income
See Note 2 "Investment Income" for a description of the Company's accounting treatment of investment income.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









Accumulated PIK interest activity for the years ended September 30, 2017, September 30, 2016 and September 30, 2015 was as follows:
  Year ended
September 30,
2017		 Year ended
September 30,
2016		 Year ended
September 30,
2015
PIK balance at beginning of period $62,631
 $50,678
 $39,686
Gross PIK interest accrued 18,894
 20,795
 21,812
PIK income reserves (1) (7,801) (6,767) (8,423)
PIK interest received in cash (4,307) (2,076) (2,397)
PIK balance at end of period $69,417
 $62,630
 $50,678
 ___________________
(1)PIK income is generally reserved for when a loan is placed on PIK non-accrual status.

As of September 30, 2017, there were eight investments on which the Company had stopped accruing cash and/or PIK interest or OID income. As of September 30, 2016, there were five investments on which the Company had stopped accruing cash and/or PIK interest or OID income. As of September 30, 2015, there were four investments on which the Company had stopped accruing cash and/or PIK interest or OID income.
The percentages of the Company's debt investments at cost and fair value by accrual status as of September 30, 2017, September 30, 2016 and September 30, 2015 were as follows:
  September 30, 2017 September 30, 2016 September 30, 2015
  Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio
Accrual $1,299,793
 83.59% $1,357,794
 95.29% $1,890,606
 89.80% $1,854,228
 93.89% $2,226,334
 95.08% $2,206,418
 97.97%
PIK non-accrual (1) 10,227
 0.66
 379
 0.03
 40,187
 1.91
 31,548
 1.60
 66,579
 2.84
 28,145
 1.25
Cash non-accrual (2) 244,952
 15.75
 66,636
 4.68
 174,629
 8.29
 89,036
 4.51
 48,694
 2.08
 17,600
 0.78
Total $1,554,972
 100.00% $1,424,809
 100.00% $2,105,422
 100.00% $1,974,812
 100.00% $2,341,607
 100.00% $2,252,163
 100.00%
 ___________________
(1)PIK non-accrual status is inclusive of other non-cash income, where applicable.
(2)Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.

OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





The non-accrual status of the Company's portfolio investments as of September 30, 2017, September 30, 2016 and September 30, 2015 was as follows:
September 30, 2017September 30, 2016September 30, 2015
Phoenix Brands Merger Sub LLC - subordinated term loan (2)——PIK non-accrual (1)
CCCG, LLC (3)——Cash non-accrual (1)
JTC Education, Inc. (2)——Cash non-accrual (1)
Answers Corporation (4)(5)—Cash non-accrual (1)PIK non-accrual (1)
 Dominion Diagnostics, LLC - subordinated term loanCash non-accrual (1)Cash non-accrual (1)—
 Express Group Holdings LLC (3)—Cash non-accrual (1)—
 AdVenture Interactive, Corp. (6)—Cash non-accrual (1)—
 ERS Acquisition Corp. (4)—PIK non-accrual (1)—
TransTrade Operators, Inc.Cash non-accrual (1)——
Ameritox Ltd.Cash non-accrual (1)——
Cenegenics, LLCCash non-accrual (1)——
Maverick Healthcare Group, LLCCash non-accrual (1)——
Edmentum, Inc. - unsecured junior PIK notePIK non-accrual (1)——
Advanced Pain ManagementCash non-accrual (1)——
Metamorph US 3, LLCCash non-accrual (1)——
 __________________
(1)PIK non-accrual status is inclusive of other non-cash income, where applicable. Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.
(2)The Company no longer held this investment as of September 30, 2017 and September 30, 2016.
(3)In March 2016, the Company restructured its investment in CCCG, LLC. As part of the restructuring, the Company exchanged cash and its debt securities for debt and equity securities in a newly restructured entity, Express Group Holdings LLC. As of September 30, 2017, the Company no longer held an investment in Express Group Holdings LLC.
(4)The Company no longer held this investment as of September 30, 2017.
(5)As of September 30, 2016, both the first lien term loan and the second lien term loan were on cash non-accrual. As of September 30, 2015, only the second lien term loan was on PIK non-accrual.
(6)In March 2017, the Company restructured its investment in AdVenture Interactive, Corp. As part of the restructuring, the Company exchanged a portion of its debt securities for equity securities in the restructured entity.


Income non-accrual amounts for the years ended September 30, 2017, September 30, 2016 and September 30, 2015, which may include amounts for investments that were no longer held at the end of the period, were as follows:
  Year ended
September 30, 2017		 Year ended
September 30, 2016		 Year ended
September 30, 2015
Cash interest income $18,327
 $13,737
 $5,179
PIK interest income 7,801
 7,225
 8,423
OID income 154
 27,886
 4,627
Total $26,282
 $48,848
 $18,229


OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Note 8.7. Taxable/Distributable Income and Dividend Distributions
Taxable income differs from net increase (decrease) in net assets resulting from operations primarily due to: (1) unrealized appreciation (depreciation) on investments and secured borrowings,foreign currency, as gains and losses are not included in taxable income until they are realized; (2) origination and exit fees received in connection with investments in portfolio companies; (3) organizational and deferred offering costs; (4) recognition of interest income on certain loans; (5) income or loss recognition on exited investments; and (6) related to investments in controlled foreign corporations.(5) recognition of interest income on certain loans.
As of September 30, 2017,2022, the Company had net capital loss carryforwards of $466.6$523.7 million to offset net capital gains that will not expire, to the extent available and permitted by U.S. federal income tax law. Of the capital loss carryforwards, $1.5 million expired on September 30, 2017, $10.3 million will expire on September 30, 2019 and $454.8 million will not expire,law, of which $71.5$64.5 million are available to offset future short-term capital gains and $384.3$459.2 million are available to offset future long-term capital gains. A portion of such net capital loss carryfowards represented a realized loss under sections 382 and 383 of the Code, which is carried forward to future years to offset future gains subject to certain limitations.
Listed below is a reconciliation of "net decreaseincrease (decrease) in net assets resulting from operations" to taxable income for the years ended September 30, 20172022, 2021 and September 30, 2016.2020.
Year ended
September 30,
2022		Year ended
September 30,
2021		Year ended
September 30,
2020
Net increase (decrease) in net assets resulting from operations$29,223 $237,260 $39,224 
Net unrealized (appreciation) depreciation136,248 (114,519)20,614 
Book/tax difference due to organizational costs(87)(87)(87)
Book/tax difference due to interest income on certain loans— — 1,214 
Book/tax difference due to capital losses utilized(16,490)(41,625)(545)
Other book/tax differences(6,506)11,863 (6,058)
Taxable/Distributable Income (1)$142,388 $92,892 $54,362 
  Year ended
September 30,
2017		 Year ended
September 30,
2016
Net decrease in net assets resulting from operations $(196,969) $(66,556)
Net unrealized depreciation on investments and secured borrowings 97,839
 48,000
Book/tax difference due to loan fees (188) (377)
Book/tax difference due to exit fees 1,081
 60
Book/tax difference due to organizational and deferred offering costs (87) (87)
Book/tax difference due to interest income on certain loans 23,748
 1,458
Book/tax difference due to capital losses not recognized 171,782
 125,283
Other book/tax differences (7,348) (8,362)
Taxable/Distributable Income(1) $89,858
 $99,419
__________
(1) The Company's taxable income for the year ended September 30, 20172022 is an estimate and will not be finally determined until the Company files its tax return for the Company's anticipated fiscal and taxable year ending September 30, 2017.2022. Therefore, the final taxable income may be different than the estimate.
As of September 30, 2017, the components of accumulated undistributed income on a tax basis were as follows:
Undistributed ordinary income, net$24,409
Net realized capital losses465,077
Unrealized losses, net97,839
The Company uses the asset and liability method to account for its taxable subsidiaries' income taxes. Using this method, the Company recognizes deferred tax assets and liabilities for the estimated future tax effects attributable to temporary differences between financial reporting and tax bases of assets and liabilities. In addition, the Company recognizes deferred tax benefits associated with net loss carry forwards that it may use to offset future tax obligations. The Company measures deferred tax assets and liabilities using the enacted tax rates expected to apply to taxable income in the years in which it expects to recover or settle those temporary differences.
When assessing the realizability of deferred tax assets, the Company considers whether it is probable that some or all of the deferred tax assets will not be realized. In determining whether the deferred tax assets are realizable, the Company considers the period of expiration of the tax asset, historical and projected taxable income and tax liabilities for the tax jurisdiction in which the tax asset is located. The deferred tax asset recognized by the Company, as it relates to the higher tax basis in the carrying value of certain assets compared to the book basis of those assets, will be recognized in future years by these taxable entities. Deferred tax assets are based on the amount of the tax benefit that the Company’s management has determined is permittedmore likely than not to carry forwardbe realized in future periods. In determining the realizability of this tax benefit, management considered numerous factors that will give rise to pre-tax income in future periods. Among these are the historical and expected future book and tax basis pre-tax income of the Company and unrealized gains in the Company’s assets at the determination date. Based on these and other factors, the Company determined that, as of September 30, 2022, $6.2 million of the $7.9 million deferred tax assets would not more likely than not be realized in future periods. As of September 30, 2022, the Company recorded a net capital losses, if any, incurred in taxable years beginning withdeferred tax asset of $1.7 million on the Company's taxableConsolidated Statements of Assets and Liabilities.
For the year ended September 30, 20112022, the Company recognized a provision for an unlimited period. However, any losses incurred during such taxable years will be requiredincome tax related to be utilized prior tonet investment income of $3.3 million, which was all current income tax expense. For the losses incurred in taxable years ended prior to the Company’s taxable year ended September 30, 2011, which are subject to an expiration date. As a result of the ordering rule, capital loss carryforwards from the Company’s taxable year ended prior to its taxable year ended September 30, 2011 may be more likely to expire unused than under previous tax law.
As a RIC,2022, the Company is also subjectrecognized a total provision for income tax related to realized and unrealized gains (losses) of $0.3 million, which was composed of (i) a U.S. federal excisecurrent income tax based on distributive requirementsexpense of itsapproximately $1.3 million, and (ii) a deferred income tax benefit of approximately $1.0 million, which resulted from unrealized depreciation of investments held by the Company's wholly-owned taxable income on a calendar year basis. The Company did not incur a U.S. federal excise tax for calendar years 2015 and 2016 and does not expect to incur a U.S. federal excise tax for calendar year 2017.subsidiaries.
148
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









For the year ended September 30, 2021, the Company recognized a total provision for income tax related to realized and unrealized gains of $0.8 million, which was composed of (i) a current income tax expense of approximately $0.7 million, and (ii) a deferred income tax expense of approximately $0.1 million, which resulted from unrealized appreciation on investments held by the Company’s wholly-owned taxable subsidiaries. For the year ended September 30, 2021, the Company recognized a provision for income tax related to net investment income of $2.8 million, which was all current income tax expense.
For the year ended September 30, 2020, the Company recognized a total provision for income tax benefit of $1.8 million, which was comprised of (i) a current income tax benefit of approximately $0.2 million, and (ii) a deferred income tax benefit of approximately $1.6 million, which resulted from unrealized depreciation on investments held by the Company’s wholly-owned taxable subsidiaries.
As of September 30, 2022, the Company's last tax year end, the components of accumulated overdistributed earnings on a tax basis were as follows:
Undistributed ordinary income, net$(43,624)
Net realized capital losses473,274 
Unrealized losses, net153,119 
Accumulated overdistributed earnings$582,769
The aggregate cost of investments for U.S. federal income tax purposes was $1.8 billion$2,654.3 million as of September 30, 2017. For the year ended2022. As of September 30, 2017,2022, the aggregate gross unrealized appreciation for all investments in which there was an excess of value over cost for U.S. federal income tax purposes was $51.7$466.9 million. For the year endedAs of September 30, 2017,2022, the aggregate gross unrealized depreciation for all investments in which there was an excess of cost for U.S. federal income tax purposes over value was $277.8$620.0 million. Net unrealized depreciation based on the aggregate cost of investments for U.S. federal income tax purposes was $226.1$153.1 million.

Note 9.8. Realized Gains or Losses and Net Unrealized Appreciation or Depreciation on Investments and Secured Borrowings
Realized Gains or Losses
Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption and the cost basis of the investment without regard to unrealized appreciation or depreciation previously recognized, and include investments written-off during the period, net of recoveries. Realized losses may also be recorded in connection with the Company's determination that certain investments are considered worthless securities and/or meet the conditions for loss recognition per the applicable tax rules.
During the year ended September 30, 2022, the Company recorded an aggregate net realized gain of $17.2 million, which consisted of the following:
($ in millions)
Portfolio CompanyNet Realized Gain (Loss)
 Foreign currency forward contracts$13.7 
 OmniSYS Acquisition Corporation2.2 
 First Star Speir Aviation Limited1.9 
TigerConnect Inc.1.8 
WP CPP Holdings, LLC(1.7)
Other, net(0.7)
Total, net$17.2
149
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




During the year ended September 30, 2021, the Company recorded an aggregate net realized gain of $26.4 million, which consisted of the following:
($ in millions)
Portfolio CompanyNet Realized Gain (Loss)
PLATO Learning Inc.$7.8 
Keypath Education Holdings, LLC6.8 
L Squared Capital Partners LLC3.4 
LTI Holdings, Inc.2.6 
BX Commercial Mortgage Trust 2020-VIVA2.6 
California Pizza Kitchen Inc.(1.8)
Refac Optical Group(1.3)
Other, net6.3 
Total, net$26.4
During the year ended September 30, 2020, the Company recorded an aggregate net realized loss of $13.9 million, which consisted of the following:
($ in millions)
Portfolio CompanyNet Realized Gain (Loss)
Cenegenics, LLC$(29.2)
Dominion Diagnostics, LLC(15.6)
Thruline Marketing Inc.(4.9)
Covia Holdings Corporation(3.3)
YETI Holdings, Inc.17.6 
Sorrento Therapeutics, Inc.11.5 
Lytx Holdings, LLC5.2 
Goodrx Holdings Inc.2.1 
HealthEdge Software, Inc.1.8 
Other, net0.9 
Total, net$(13.9)

Net Unrealized Appreciation or Depreciation
Net unrealized appreciation or depreciation reflects the net change in the valuation of the portfolio pursuant to the Company's valuation guidelines and the reclassification of any prior period unrealized appreciation or depreciation.
A summaryDuring the years ended September 30, 2022, 2021 and 2020, the Company recorded net unrealized appreciation (depreciation) of the Company's recorded investment realization events, excluding syndications of debt investments$(136.2) million, $114.5 million and sales of debt investments in the open market, for$(20.6) million, respectively. For the year ended September 30, 2017 is shown2022, this consisted of $94.1 million of net unrealized depreciation on debt investments, $35.4 million of net unrealized depreciation on equity investments and $11.7 million of net unrealized depreciation related to exited investments (a portion of which resulted in a reclassification to realized gains), partially offset by $4.9 million of net unrealized appreciation of foreign currency forward contracts. For the table below:year ended September 30, 2021, this consisted of $70.0 million of net unrealized appreciation on debt investments, $36.3 million of net unrealized appreciation on equity investments, $6.6 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses) and $1.7 million of net unrealized appreciation of foreign currency forward contracts. For the year ended September 30, 2020, this consisted of $35.3 million of net unrealized depreciation on equity investments, $12.0 million of net unrealized depreciation on debt investments and $0.3 million of net unrealized depreciation of foreign currency forward contracts, partially offset by $26.9 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses).
For the year ended September 30, 2021, there were $22.8 million of net realized and unrealized gains (losses) that resulted solely from accounting adjustments related to the OCSI Merger.
150
DatePortfolio CompanyInvestment TypeConsideration at ExitRealized Gain (Loss)Transaction
October 2016Systems Maintenance Services Holdings, Inc.Debt$ 19.0 million$—
Full payoff
November 2016First Star Aviation, LLCEquity2.5 million(3.8 million)
Sale of equity investment
November 2016HealthDrive CorporationDebt15.5 million—
Full payoff
November 2016The Active Network, Inc.Debt16.5 million—
Full payoff
November 2016Aden & Anais Merger Sub, Inc.Debt12.0 million—
Full payoff
November 2016Legalzoom.com, Inc.Debt9.0 million—
Full payoff
December 2016Discovery Practice Management, Inc.Debt33.7 million—
Full payoff
December 2016Ansira Partners, Inc.Debt and Equity38.6 million0.4 million
Full payoff /sale of equity investment
December 2016Aptean, Inc.Debt3.0 million—
Full payoff
December 2016Access Medical Acquisition, Inc.Debt and Equity12.6 million—
Full payoff /sale of equity investment
December 2016Ministry Brands, LLCDebt30.2 million—
Full payoff
December 2016Senior Loan Fund JV I, LLCDebt125.8 million(19.9 million)
Restructuring
January 2017 First American Payment Systems, LPDebt18.3 million—
Full payoff
January 2017 HSW RR, Inc.Debt45.0 million—
Full payoff
February 2017 Teaching Strategies, LLCDebt7.2 million—
Full payoff
February 2017 Vitera Healthcare Solutions, LLCDebt8.0 million—
Full payoff
February 2017 TV Borrower US, LLCDebt30.0 million—
Full payoff
February 2017 Onvoy, LLCDebt14.6 million—
Full payoff
March 2017 Bracket Holding Corp.Debt and Equity34.2 million1.7 million
Full payoff /sale of equity investment
March 2017 Epic Health Services, Inc.Debt31.9 million—
Full payoff
March 2017 Five9, Inc.Equity0.8 million0.5 million
Sale of equity investment
March 2017 Integrated Petroleum Technologies, Inc.Debt7.6 million(11.1 million)
Restructuring
March 2017 NAVEX Global, Inc.Debt16.5 million—
Full payoff
March 2017 Vention Medical, Inc.Debt2.3 million—
Full payoff
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









March 2017 Express Group Holdings LLCDebt and Equity4.4 million(22.3 million)
Partial payoff
March 2017 AdVenture Interactive, Corp.Debt and Equity24.3 million(47.4 million)
Restructuring
April 2017 Tectum Holdings, Inc.Debt15.0 million—
Full payoff
April 2017 TigerText, Inc.Debt5.0 million—
Full payoff
April 2017 AirStrip Technologies, Inc.Debt16.0 million—
Full payoff
April 2017 Cheddar's Casual Café, Inc.Debt10.0 million—
Full payoff
May 2017 Tecomet Inc.Debt17.0 million—
Full payoff
May 2017 Baart Programs, Inc.Debt35.2 million—
Full payoff
June 2017 Eagle Hospital Physicians, LLCDebt and Equity13.5 million(13.1 million)
Partial payoff
June 2017 National Spine and Pain Centers, LLCDebt and Equity32.0 million0.7 million
Full payoff /sale of equity investment
June 2017 Idera, Inc.Debt25.9 million—
Full payoff
July 2017 Dexter Axle CompanyEquity9.3 million7.7 million
Sale of equity investment
July 2017 ExamSoft Worldwide, Inc.Debt12.9 million—
Full payoff
July 2017 ERS Acquisition Corp.Debt3.7 million(34.3 million)
Partial payoff
July 2017 My Alarm Center, LLCDebt3.4 million—
Full payoff
July 2017 Swipely, Inc.Debt and Equity13.4 million0.9 million
Full payoff /sale of equity investment
August 2017 Vitalyst Holdings, Inc.Debt19.9 million—
Full payoff
August 2017 Omniplex World Services CorporationDebt and Equity12.0 million0.1 million
Full payoff /sale of investment
August 2017 NAVEX Global, Inc.Debt28.4 million—
Full payoff
August 2017 Worley Claims Services, LLCDebt7.0 million—
Full payoff
August 2017 American Seafoods Group LLCDebt12.0 million—
Full payoff
August 2017 Lytx, Inc.Debt24.0 million—
Full payoff
August 2017 OBHG Management Services, LLCDebt14.8 million—
Full payoff
August 2017 Scientific Games International, Inc.Debt12.0 million—
Full payoff
August 2017 Alpha Topco LimitedDebt3.0 million—
Full payoff
August 2017 AsurionDebt5.0 million—
Full payoff
September 2017 Comprehensive Pharmacy Services LLCDebt15.0 million—
Full payoff
September 2017 Vandelay Industries Merger Sub, Inc.Debt and Equity45.9 million5.6 million
Full payoff /sale of equity investment
September 2017 Lytx, Inc.Equity1.6 million0.4 million
Preferred equity distribution

$ (133.9 million)
During the year ended September 30, 2017, the Company received payments of $92.8 million primarily in connection with syndications of debt investments to other investors and sales of debt investments in the open market and recorded an aggregate net realized loss of $37.9 million on these transactions, including a realized loss of $37.3 million from the sale of the Company's investment in the first and second lien term loans of Answers Corporation.
A summary of the Company's recorded investment realization events, excluding syndications of debt investments and sales of debt investments in the open market, for the year ended September 30, 2016 is shown in the table below:
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





DatePortfolio CompanyInvestment TypeConsideration at ExitRealized Gain (Loss)Transaction
October 2015Affordable Care, Inc.Debt$ 23.3 million
$—
Full payoff
October 2015CoAdvantage CorporationDebt and Equity16.4 million
0.7 million
Full payoff /sale of equity investment
October 2015First Choice ER, LLCDebt119.0 million
—
Full payoff
October 2015DigiCert, Inc.Debt33.3 million
—
Full payoff
October 2015Idera, Inc.Debt7.4 million
—
Full payoff
December 2015EducationDynamics, LLCDebt13.9 million
—
Full payoff
December 2015World50, Inc.Debt14.2 million
—
Full payoff
January 2016Crealta Pharmaceuticals LLCDebt20.0 million
—
Full payoff
February 2016All Metro Health Care Services, Inc.Debt15.7 million
—
Full payoff
February 2016Long's Drugs IncorporatedDebt9.7 million
—
Full payoff
March 2016Janrain, Inc.Debt4.5 million
—
Full payoff
March 2016Miche Group, LLCDebt and Equity0.8 million
(8.1 million)
Partial payoff /sale of equity investment
March 2016CCCG, LLCDebt and Equity15.2 million
(17.2 million)
Restructuring
April 2016Traffic Solutions Holdings, Inc.Debt17.2 million
—
Full payoff
April 2016Ameritox Ltd.Debt and Equity61.1 million
(42.8 million)
Restructuring
May 2016Yeti Acquisition, LLC.Debt54.9 million
—
Full payoff
May 2016Conviva Inc.Debt4.6 million
—
Full payoff
June 2016GTCR Valor CompaniesDebt3.7 million
—
Full payoff
July 2016Cardon Healthcare Network, LLCEquity1.6 million
1.4 million
Sale of equity investment
July 2016Five9, Inc.Debt18.0 million
—
Full payoff
August 2016First Star Aviation, LLCDebt3.2 million
—
Full payoff
August 2016Penn Foster, Inc.Debt29.1 million
—
Full payoff
August 2016xMatters, Inc.Debt15.0 million
—
Full payoff
August 2016QuorumLabs, Inc.Debt3.0 million
(4.2 million)
Partial payoff
September 2016Mansell Group, Inc.Debt7.8 million
—
Full payoff
September 2016Phoenix Brands Merger Sub LLCDebt2.7 million
(28.7 million)
Partial payoff
September 2016Rocket Software, Inc.Debt10.5 million
—
Full payoff
September 2016OnCourse Learning CorporationDebt19.2 million
—
Full payoff
September 2016Language Line, LLCDebt26.0 million
—
Full payoff
September 2016JTC Education, Inc.Debt—
(22.3 million)
Write-off
($ 121.2 million)
During the year ended September 30, 2016, the Company received payments of $241.9 million primarily in connection with syndications of debt investments to other investors and sales of debt investments in the open market and recorded an aggregate net realized loss of $4.1 million on these transactions.
A summary of the Company's recorded investment realization events, excluding syndications of debt investments and sales of debt investments in the open market, for the year ended September 30, 2015 is shown in the table below:
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





DatePortfolio CompanyInvestment TypeConsideration at ExitRealized Gain (Loss)Transaction
October 2014Miche Bag, LLCDebt and Equity$ 2.7 million$ (17.9 million)
Restructuring
October 2014Teaching Strategies, LLCDebt74.4 million—
Full payoff
October 2014SugarSync, Inc.Debt6.5 million—
Full payoff
November 2014Olson + Co., Inc.Debt8.6 million—
Full payoff
November 2014American Cadastre, LLCDebt5.6 million—
Full payoff
December 2014Drugtest, Inc.Debt35.8 million—
Full payoff
December 2014Charter Brokerage, LLCDebt39.5 million—
Full payoff
December 2014CRGT, Inc.Debt27.7 million—
Full payoff
December 2014Devicor Medical Products, Inc.Debt12.5 million—
Full payoff
December 2014CT Technologies Intermediate Holdings, Inc.Debt12.0 million—
Full payoff
February 2015Enhanced Recovery Company, LLCDebt27.8 million—
Full payoff
February 2015HealthEdge Software, Inc.Debt17.5 million—
Full payoff
April 2015Digi-Star Acquisition Holdings, Inc.Debt and Equity17.5 million0.5 million
Full payoff /sale of equity investment
April 2015Total Military Management, Inc.Debt2.5 million—
Full payoff
May 2015Garretson Firm Resolution Group, Inc.Debt5.1 million—
Full payoff
June 2015HFG Holdings, LLCDebt and Equity115.8 million(4.4 million)
Full payoff /sale of equity investment
June 2015Welocalize, Inc.Equity6.0 million2.6 million
Sale of equity investment
June 2015Physicians Pharmacy Alliance, Inc.Debt10.2 million—
Full payoff
June 2015Meritas Schools Holdings, LLCDebt19.5 million—
Full payoff
June 2015Royal Adhesives and Sealants, LLCDebt10.5 million—
Full payoff
June 2015All Web Leads, Inc.Debt24.7 million—
Full payoff
June 2015Puerto Rico Cable Acquisition Company Inc.Debt27.0 million—
Full payoff
June 2015Edmentum, Inc.Debt and Equity9.1 million(7.9 million)
Restructuring
July 2015Specialized Education Services, Inc.Debt26.3 million—
Full payoff
September 20152Checkout.com, Inc.Debt2.0 million—
Full payoff
September 2015ShareThis, Inc.Debt15.0 million—
Full payoff
September 2015Salus CLO 2012-1, Ltd.Debt29.5 million—
Full payoff
($ 27.1 million)
During the year ended September 30, 2015, the Company received payments of $749.8 million in connection with syndications of debt investments to other investors, sales of debt investments in the open market, and repayment of secured borrowings and recorded an aggregate net realized loss of $0.8 million on these transactions.
Net Unrealized Appreciation or Depreciation on Investments and Secured Borrowings
During the years ended September 30, 2017, September 30, 2016 and September 30, 2015, the Company recorded net unrealized depreciation on investments and secured borrowings of $97.8 million, $48.0 million and $71.0 million, respectively. For the year ended September 30, 2017, this consisted of $163.4 million of net unrealized depreciation on debt investments, $93.1 million of net unrealized depreciation on equity investments and $0.3 million of net unrealized appreciation on secured borrowings, offset by $159.0 million of net reclassifications to realized losses (resulting in unrealized appreciation).
For the year ended September 30, 2016, the Company's net unrealized depreciation consisted of $147.0 million of net unrealized depreciation on debt investments, $0.6 million of net unrealized depreciation on equity investments and $0.1 million of net unrealized appreciation on secured borrowings, offset by $99.7 million of net reclassifications to realized losses (resulting in unrealized appreciation).
For the year ended September 30, 2015, the Company's net unrealized depreciation consisted of $91.2 million of net unrealized depreciation on debt investments and $0.2 million of net unrealized depreciation on equity investments, offset by $19.7 million of net
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





reclassifications to realized losses (resulting in unrealized appreciation) and $0.7 million of net unrealized depreciation on secured borrowings.
Note 10.9. Concentration of Credit Risks
The Company deposits its cash with financial institutions and at times such balances may be in excess of the FDIC insurance limit. The Company limits its exposure to credit loss by depositing its cash with high credit quality financial institutions and monitoring their financial stability.

Note 11.10. Related Party Transactions

As of September 30, 2017, the Company was party to a fourth amended and restated investment advisory agreement with FSM, which was the Company’s investment adviser through the closing of the Transaction. Under this investment advisory agreement, the Company paid FSM a fee for its services consisting of two components - a base management fee and an incentive fee. The fourth amended and restated investment advisory agreement changed the structure of the subordinated incentive fee on income as described below. The other commercial terms of the Company’s existing investment advisory relationship with FSM under the third amended and restated investment advisory agreement between FSM and the Company remained unchanged.
Base Management Fee
Prior to December 31, 2015, the base management fee was calculated at an annual rate of 2.0% of the Company’s gross assets, including any borrowings for investment purposes but excluding cash and cash equivalents. The base management fee is payable quarterly in arrears and the fee for any partial month or quarter was appropriately prorated.
On January 20, 2016, the Company announced that FSM agreed to an amendment to the investment advisory agreement to permanently reduce the base management fee. Beginning January 1, 2016, the base management fee on total gross assets (excluding cash and cash equivalents) was reduced from 2.0% to 1.75%. The other commercial terms of the Company’s existing investment advisory arrangement with FSM remained unchanged.
For the years ended September 30, 2017, September 30, 20162022 and September 30, 2015, base management fees (net of waivers) incurred were $31.1 million, $41.1 million and $51.1 million, respectively.
For the years ended September 30, 2017, September 30, 2016 and September 30, 2015, FSM voluntarily waived a portion of the base management fee which resulted in waivers of $0.2 million, $0.3 million and $0.5 million, respectively.
Incentive Fee

As of September 30, 2017, the incentive fee consisted of two parts. The first part (“Part I incentive fee,” “income incentive fee” or “subordinated incentive fee on income”) was calculated and payable quarterly in arrears based on the Company’s “Pre-Incentive Fee Net Investment Income” for the immediately preceding fiscal quarter. For this purpose, “Pre-Incentive Fee Net Investment Income” meant interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company received from portfolio companies) accrued during the fiscal quarter, minus the Company’s operating expenses for the quarter (including the base management fee, expenses payable under the Company’s Prior Administration Agreement, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income included, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero coupon securities), accrued income that the Company had not yet received in cash. Pre-Incentive Fee Net Investment Income did not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

Effective as of January 1, 2017, Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding fiscal quarter, was compared to a “hurdle rate” of 1.75% per quarter, subject to a “catch-up” provision measured as of the end of each fiscal quarter. The Company’s net investment income used to calculate this part of the incentive fee was also included in the amount of its gross assets used to calculate the base management fee. Effective as of January 1, 2017, the calculation of the subordinated incentive fee on income for each quarter was as follows:
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)






No subordinated incentive fee on income was payable to FSM in any fiscal quarter in which the Company’s Pre-Incentive Fee Net Investment Income did not exceed the preferred return rate of 1.75% (the “preferred return” or “hurdle”);
100% of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeded the preferred return but was less than or equal to 2.1875% in any fiscal quarter was payable to FSM. This portion of the Company’s subordinated incentive fee on income was referred to as the “catch-up” provision, and it was intended to provide FSM with an incentive fee of 20% on all of the Company’s Pre-Incentive Fee Net Investment Income when the Company’s Pre-Incentive Fee Net Investment Income reached 2.1875% on net assets in any fiscal quarter; and
For any quarter in which the Company’s Pre-Incentive Fee Net Investment Income exceeded 2.1875% on net assets, the subordinated incentive fee on income was equal to 20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, as the preferred return and catch-up would have been achieved.

Effective as of January 1, 2017, the subordinated incentive fee on income was subject to a total return hurdle. In the event the cumulative subordinated incentive fee on income accrued for the Lookback Period (after giving effect to any reduction(s) pursuant to this paragraph for any prior fiscal quarters of the Lookback Period but not the quarter of calculation) exceeded 20.0% of the cumulative net increase in net assets resulting from operations during the Lookback Period, then the subordinated incentive fee on income for the quarter would have been reduced by an amount equal to (1) 25% of the subordinated incentive fee on income calculated for such quarter (prior to giving effect to any reduction pursuant to this paragraph) less (2) any base management fees waived by FSM for such fiscal quarter. For this purpose, the “cumulative net increase in net assets resulting from operations” was an amount, if positive, equal to the sum of Pre-Incentive Fee Net Investment Income, base management fees, realized gains and losses and unrealized capital appreciation and depreciation of the Company for the Lookback Period. “Lookback Period” meant the period commencing January 1, 2017 and ending on the last day of the fiscal quarter for which the subordinated incentive fee on income was being calculated.
There was no accumulation of amounts on the hurdle rate from quarter to quarter and accordingly there was no clawback of amounts previously paid if subsequent quarters were below the quarterly hurdle and there was no delay of payment if prior quarters were below the quarterly hurdle.

Prior to effectiveness of the fourth amended and restated investment advisory agreement on January 1, 2017, the Part I incentive fee was calculated and payable as follows:
No Part I incentive fee was payable to FSM in any fiscal quarter in which the Company’s Pre-Incentive Fee Investment Income did not exceed a hurdle rate of 2.00%;
100% of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeded the 2.0% hurdle rate but was less than or equal to 2.5% was payable to FSM. This portion of the Company’s Part I incentive fee was referred to as the “catch-up” and was intended to provide the Investment Adviser with an incentive fee of 20% on all of the Company’s Pre-Incentive Fee Net Investment Income when the Company’s Pre-Incentive Fee Net Investment Income reached 2.5% in any fiscal quarter; and
20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeded 2.5% in any fiscal quarter was payable to FSM, as the preferred return and catch-up would have been achieved.

Prior to January 1, 2017, the Part I incentive fee was not subject to a total return hurdle.
As of September 30, 2017, the second part of the incentive fee (“Part II Incentive Fee” or “capital gain incentive fee”) was determined and payable in arrears as of the end of each fiscal year (or upon termination of the investment advisory agreement, as of the termination date) and equaled 20% of the Company’s realized capital gains, if any, on a cumulative basis from inception through the end of each fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees.
GAAP requires the Company to accrue for the theoretical capital gain incentive fee that would be payable after giving effect to the net unrealized capital appreciation. A fee so calculated and accrued would not be payable under the investment advisory agreement, and may never be paid based upon the computation of capital gain incentive fees in subsequent periods. Amounts ultimately paid under the investment advisory agreement will be consistent with the formula reflected in the investment advisory agreement. The Company did not currently accrue for capital gain incentive fees as of September 30, 2017 due to the accumulated realized and unrealized losses in the portfolio.
For the years ended September 30, 2017, September 30, 2016 and September 30, 2015, incentive fees were $10.7 million (net of a $1.1 million reduction due to the total return hurdle), $22.1 million and $28.6 million, respectively.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





At September 30, 2017 and September 30, 2016,2021, the Company had a liability on its Consolidated Statements of Assets and Liabilities in the amount of $6.8$15.9 million and $16.0$32.6 million, respectively, reflecting the unpaid portion of the base management feefees and Part I incentive feefees payable to FSM.Oaktree.
Prior AdministrationInvestment Advisory Agreement
As of September 30, 2017, theThe Company wasis party to the Prior Administration Agreement with FSC CT.Investment Advisory Agreement. Under the Prior Administration Agreement with FSC CT, administrative services were provided to the Company, including providing the Company with its principal executive offices and equipment, and clerical, bookkeeping and recordkeeping services at such facilities. Under the Prior Administration Agreement, FSC CT also performed or oversaw the performance of the Company's required administrative services, which included being responsible for the financial records which the Company is required to maintain and preparing reports to the Company's stockholders and reports filed with the SEC. In addition, FSC CT assisted the Company in determining and publishing the Company's net asset value, oversaw the preparation and filing of the Company's tax returns and the printing and dissemination of reports to the Company's stockholders, and generally oversaw the payment of the Company's expenses and the performance of administrative and professional services rendered to the Company by others. For providing these services, facilities and personnel, the Company reimbursed FSC CT the allocable portion of overhead and other expenses incurred by FSC CT in performing its obligations under the Prior Administration Agreement, including rent and the Company's allocable portion of the costs of compensation and related expenses of the Company's Chief Financial Officer and Chief Compliance Officer and their staffs. Such reimbursement was at cost with no profit to, or markup by, FSC CT. As of September 30, 2017, the Company utilized office space in Greenwich, CT that was leased by FSC CT from an entity controlled by the chief executive officer of FSM and FSC CT, Mr. Leonard M. Tannenbaum. As of September 30, 2017, the Company also utilized additional office space that was leased by affiliates of FSM and FSC CT in Chicago, IL. Any reimbursement for a portion of the rent at this location was at cost with no profit to, or markup by, FSC CT. As of September 30, 2017, FSC CT would also provide, on the Company's behalf, managerial assistance to the Company's portfolio companies. The Prior Administration Agreement with FSC CT was terminable by either party without penalty upon 60 days' written notice to the other party.
For the year ended September 30, 2017, the Company accrued administrative expenses of $4.3 million, including $2.1 million of general and administrative expenses, which was due to FSC CT. For the year ended September 30, 2016, the Company accrued administrative expenses of $4.0 million, including $2.1 million of general and administrative expenses, which was due to FSC CT. For the year ended September 30, 2015, the Company accrued administrative expenses of $6.9 million, including $3.8 million of general and administrative expenses, which was due to FSC CT.
As of September 30, 2017 and September 30, 2016, $1.8 million and $2.2 million was included in "Due to FSC CT" in the Consolidated Statements of Assets and Liabilities, respectively.
Common Stock held by FSAM and Principals
Based on reports filed with the SEC, as of September 30, 2017, a subsidiary of FSAM reported holdings of 8,399,520 shares of the Company's common stock, which represents approximately 6.0% of the Company's common stock outstanding.
Based on reports filed with the SEC, Mr. Leonard M. Tannenbaum, a holder of greater than 10% of the Company’s common stock, purchased shares of the Company’s common stock on March 9, 2017 and March 10, 2017 at prices less than or equal to $4.40 per share that were matchable under Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to the extent of 242,289 shares, with his sale of an aggregate of 242,289 shares of the Company’s common stock at prices ranging from $5.55 to $5.61 per share that occurred between December 13, 2016 and December 29, 2016. Upon settlement of the trades, Mr. Tannenbaum paid to the Company $0.3 million, representing the full amount of the profit realized in connection with the short-swing transaction, less transaction costs. The Company recorded this transaction as capital contributions from stockholders on the Consolidated Statements of Changes in Net Assets. Based on reports filed with the SEC, as of September 30, 2017, Mr. Tannenbaum directly and indirectly held 18,644,899 shares of the Company's common stock, which represents approximately 13.2% of the Company's common stock outstanding.

OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Note 12. Financial Highlights
  Year ended
September 30,
2017		 Year ended
September 30,
2016		 Year ended
September 30,
2015		 Year ended
September 30,
2014		 Year ended
September 30,
2013
Net asset value at beginning of period $7.97 $9.00 $9.64 $9.85 $9.92
Net investment income (4) 0.51 0.72 0.75 1.00 1.04
Net unrealized appreciation (depreciation) on investments and secured borrowings (4) (0.69) (0.33) (0.46) (0.23) 0.12
Net realized gain (loss) on investments and secured borrowings (4) (1.21) (0.84) (0.19) 0.02 (0.24)
Distributions to stockholders (4) (0.47) (0.67) (0.79) (0.94) (0.90)
Tax return of capital (4) — (0.05) — (0.06) (0.25)
Net issuance/repurchases of common stock (4) 0.05 0.14 0.05 — 0.16
Net asset value at end of period $6.16 $7.97 $9.00 $9.64 $9.85
Per share market value at beginning of period $5.81 $6.17 $9.18 $10.29 $10.98
Per share market value at end of period $5.47 $5.81 $6.17 $9.18 $10.29
Total return (1) 2.84% 7.02% (27.18)% (0.97)% 4.89%
Common shares outstanding at beginning of period 143,259 150,263 153,340 139,041 91,048
Common shares outstanding at end of period 140,961 143,259 150,263 153,340 139,041
Net assets at beginning of period $1,142,288 $1,353,094 $1,478,475 $1,368,872 $903,570
Net assets at end of period $867,657 $1,142,288 $1,353,094 $1,478,475 $1,368,872
Average net assets (2) $1,018,498 $1,229,639 $1,413,357 $1,393,635 $1,095,225
Ratio of net investment income to average net assets 7.13% 8.68% 8.13% 10.23% 10.50%
Ratio of total expenses to average net assets (excluding base management fee waiver and insurance recovery) 10.49% 13.09% 10.69% 10.91% 9.95%
Effect of base management fee waiver (0.02)% (0.03)% (0.04)% (0.05)% (0.21)%
Effect of insurance recoveries (0.12)% (1.58)% — — —
Ratio of net expenses to average net assets 10.35% 11.48% 10.65% 10.86% 9.74%
Ratio of portfolio turnover to average investments at fair value 39.06% 23.39% 23.02% 25.50% 38.22%
Weighted average outstanding debt (3) $982,372 $1,190,105 $1,228,413 $1,110,021 $597,596
Average debt per share (4) $6.95 $8.07 $8.02 $7.82 $5.42
 __________
(1)Total return equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming dividend reinvestment prices obtained under the Company's DRIP.
(2)Calculated based upon the weighted average net assets for the period.
(3)Calculated based upon the weighted average of loans payable for the period.
(4)Calculated based upon weighted average shares outstanding for the period.

Note 13. Convertible Notes
On April 12, 2011, the Company issued $152.0 million unsecured convertible notes (the "Convertible Notes"), including $2.0 million issued to Leonard M. Tannenbaum, the Company's former Chief Executive Officer. The Convertible Notes were issued pursuant to an Indenture, dated April 12, 2011 (the "Indenture"), between the Company and the Deutsche Bank Trust Company Americas (the “Trustee”).
The Convertible Notes matured on April 1, 2016 and the Company repaid in full the $115.0 million of outstanding Convertible Notes on their maturity date. The Convertible Notes bore interest at a rate of 5.375% per annum and were repaid using cash on hand and borrowings under the ING facility.
The Convertible Notes bore interest that was payable semiannually in arrears on April 1 and October 1 of each year. The Convertible Notes were the Company's unsecured obligations and ranked senior in right of payment to the Company's indebtedness that
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





was expressly subordinated in right of payment to the Convertible Notes; equal in right of payment to the Company's unsecured indebtedness that was not so subordinated; effectively junior in right of payment to any of the Company's secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness (including trade payables) incurred by the Company's subsidiaries or financing vehicles.
On or after January 1, 2016 until the close of business on March 31, 2016, holders could have converted their Convertible Notes at any time. Upon conversion, the Company would have been obligated to deliver shares of its common stock based on a conversion rate that was subject to periodic adjustment.
The Company could not redeem the Convertible Notes prior to maturity. No sinking fund was provided for the Convertible Notes. In addition, if certain corporate events occurred in respect of the Company, holders of the Convertible Notes could have required the Company to repurchase for cash all or part of their Convertible Notes at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest through, but excluding, the required repurchase date.
For the year ended September 30, 2016, the Company recorded interest expense of $3.4 million related to the Convertible Notes. For the year ended September 30, 2015, the Company recorded interest expense of $6.8 million related to the Convertible Notes.

Note 14. Unsecured Notes
2019 Notes
On February 26, 2014, the Company issued $250.0 million in aggregate principal amount of its 4.875% unsecured notes due 2019 (the "2019 Notes") for net proceeds of $244.4 million after deducting OID of $1.4 million, underwriting commissions and discounts of $3.7 million and offering costs of $0.5 million.  The OID on the 2019 Notes is amortized on a straight-line basis over the term of the notes.
The 2019 Notes were issued pursuant to an indenture, dated April 30, 2012, as supplemented by the supplemental indenture, dated February 26, 2014 (collectively, the "2019 Notes Indenture"), between the Company and the Trustee. The 2019 Notes are the Company's general unsecured obligations that rank senior in right of payment to all of the Company's existing and future indebtedness that is expressly subordinated in right of payment to the 2019 Notes. The 2019 Notes rank equally in right of payment with all of the Company's existing and future liabilities that are not so subordinated. The 2019 Notes effectively rank junior to any of the Company's secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness. The 2019 Notes rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company's subsidiaries, financing vehicles or similar facilities. 
Interest on the 2019 Notes is paid semi-annually on March 1 and September 1 at a rate of 4.875% per annum. The 2019 Notes mature on March 1, 2019 and may be redeemed in whole or in part at any time or from time to time at the Company's option prior to maturity.
The 2019 Notes Indenture contains certain covenants, including covenants requiring the Company's compliance with (regardless of whether the Company is subject to) the restrictions on dividends, distributions and purchase of capital stock set forth in Section 18(a)(1)(B) as modified by Section 61(a)(1) of the 1940 Act, as well as covenants requiring the Company to provide financial information to the holders of the 2019 Notes and the Trustee if the Company ceases to be subject to the reporting requirements of the Exchange Act. These covenants are subject to limitations and exceptions that are described in the 2019 Notes Indenture. The Company may repurchase the 2019 Notes in accordance with the 1940 Act and the rules promulgated thereunder. In addition, holders of the 2019 Notes can require the Company to repurchase the 2019 Notes at 100% of their principal amount upon the occurrence of certain change of control events as described in the 2019 Notes Indenture. The 2019 Notes were issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. During the year ended September 30, 2017, 2016 and 2015, the Company did not repurchase any of the 2019 Notes in the open market.
For the years ended September 30, 2017, 2016 and 2015, the Company recorded interest expense of $13.3 million, $13.3 million and $13.4 million, respectively, related to the 2019 Notes.
As of September 30, 2017, there were $250.0 million of 2019 Notes outstanding, which had a carrying value and fair value of $248.4 million and $250.6 million, respectively. As of September 30, 2016, there were $250.0 million of 2019 Notes outstanding, which had a carrying value and fair value of $247.3 million and $256.9 million, respectively.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





2024 Notes
On October 18, 2012, the Company issued $75.0 million in aggregate principal amount of its 5.875% unsecured notes due 2024 (the "2024 Notes") for net proceeds of $72.5 million after deducting underwriting commissions of $2.2 million and offering costs of $0.3 million.
The 2024 Notes were issued pursuant to an indenture, dated April 30, 2012, as supplemented by the first supplemental indenture, dated October 18, 2012 (collectively, the "2024 Notes Indenture"), between the Company and the Trustee. The 2024 Notes are the Company's unsecured obligations and rank senior in right of payment to the Company's existing and future indebtedness that is expressly subordinated in right of payment to the 2024 Notes; equal in right of payment to the Company's existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company's secured indebtedness (including existing unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company's subsidiaries or financing vehicles.
Interest on the 2024 Notes is paid quarterly in arrears on January 30, April 30, July 30 and October 30, at a rate of 5.875% per annum. The 2024 Notes mature on October 30, 2024 and may be redeemed in whole or in part at any time or from time to time at the Company's option on or after October 30, 2017. As of September 30, 2017, the 2024 Notes were listed on the New York Stock Exchange under the trading symbol "FSCE" with a par value of $25.00 per note. As of October 17, 2017, the 2024 Notes were listed
on the New York Stock Exchange under the trading symbol “OSLE.”
The 2024 Notes Indenture contains certain covenants, including covenants requiring the Company's compliance with (regardless of whether the Company is subject to) the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) of the 1940 Act and with the restrictions on dividends, distributions and purchase of capital stock set forth in Section 18(a)(1)(B) as modified by Section 61(a)(1) of the 1940 Act, as well as covenants requiring the Company to provide financial information to the holders of the 2024 Notes and the Trustee if the Company ceases to be subject to the reporting requirements of the Exchange Act. These covenants are subject to limitations and exceptions that are described in the 2024 Notes Indenture. The Company may repurchase the 2024 Notes in accordance with the 1940 Act and the rules promulgated thereunder. Any 2024 Notes repurchased by the Company may, at the Company's option, be surrendered to the Trustee for cancellation, but may not be reissued or resold by the Company. Any 2024 Notes surrendered for cancellation will be promptly canceled and no longer outstanding under the 2024 Notes Indenture. During the years ended September 30, 2017, 2016 and 2015, the Company did not repurchase any of the 2024 Notes in the open market.
For each of the years ended September 30, 2017, 2016 and 2015, the Company recorded interest expense of $4.6 million related to the 2024 Notes.
As of September 30, 2017, there were $75.0 million of 2024 Notes outstanding, which had a carrying value and fair value of $73.5 million and $76.0 million, respectively. As of September 30, 2016, there were $75.0 million of 2024 Notes outstanding, which had a carry value and fair value of $73.3 million and $76.7 million, respectively.
2028 Notes
In April and May 2013, the Company issued $86.3 million in aggregate principal amount of its 6.125% unsecured notes due 2028 (the "2028 Notes") for net proceeds of $83.4 million after deducting underwriting commissions of $2.6 million and offering costs of $0.3 million.
The 2028 Notes were issued pursuant to an indenture, dated April 30, 2012, as supplemented by the second supplemental indenture, dated April 4, 2013 (collectively, the "2028 Notes Indenture"), between the Company and the Trustee. The 2028 Notes are the Company's unsecured obligations and rank senior in right of payment to the Company's existing and future indebtedness that is expressly subordinated in right of payment to the 2028 Notes; equal in right of payment to the Company's existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company's secured indebtedness (including existing unsecured indebtedness that it later secures) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company's subsidiaries or financing vehicles.
Interest on the 2028 Notes is paid quarterly in arrears on January 30, April 30, July 30 and October 30, at a rate of 6.125% per annum. The 2028 Notes mature on April 30, 2028 and may be redeemed in whole or in part at any time or from time to time at the Company's option on or after April 30, 2018. As of September 30, 2017, the 2028 Notes were listed on the NASDAQ Global Select Market under the trading symbol "FSCFL." As of October 17, 2017, the 2028 Notes are listed on the NASDAQ Global Select Market under the trading symbol "OCSLL" with a par value of $25.00 per note.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





The 2028 Notes Indenture contains certain covenants, including covenants requiring the Company's compliance with (regardless of whether it is subject to) the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) of the 1940 Act, as well as covenants requiring the Company to provide financial information to the holders of the 2028 Notes and the Trustee if it ceases to be subject to the reporting requirements of the Exchange Act. These covenants are subject to limitations and exceptions that are described in the 2028 Notes Indenture. The Company may repurchase the 2028 Notes in accordance with the 1940 Act and the rules promulgated thereunder. Any 2028 Notes repurchased by the Company may, at its option, be surrendered to the Trustee for cancellation, but may not be reissued or resold by the Company. Any 2028 Notes surrendered for cancellation will be promptly canceled and no longer outstanding under the 2028 Notes Indenture. During the years ended September 30, 2017, 2016 and 2015, the Company did not repurchase any of the 2028 Notes in the open market.
For each of the years ended September 30, 2017, 2016 and 2015, the Company recorded interest expense of $5.5 million related to the 2028 Notes.
As of September 30, 2017, there were $84.2 million of 2028 Notes outstanding, which had a carrying value and fair value of $84.2 million and $87.5 million, respectively. As of September 30, 2016, there were $86.3 million of 2028 Notes outstanding, which had a carrying value and fair value of $84.0 and $88.7 million, respectively.

Note 15. Secured Borrowings
See Note 2 "Secured Borrowings" for a description of the Company's accounting treatment of secured borrowings.
As of September 30, 2017, secured borrowings at fair value totaled $13.3 million and the fair value of the investment that is associated with these secured borrowings was $40.9 million. These secured borrowings were the result of the Company's completion of partial loan sales totaling $22.8 million of a senior secured debt investment during the fiscal year ended September 30, 2014 that did not meet the definition of a participating interest. As a result, sale treatment was not allowed and these partial loan sales were treated as secured borrowings. The Company receives loan servicing fees as it continues to serve as administrative agent for this investment. As a result, the Company earns servicing fees in connection with the loans that were partially sold. During the year ended September 30, 2017, 2016 and 2015, there were $5.4 million, $2.9 million and $62.8 million of net repayments on secured borrowings, respectively.
For the years ended September 30, 2017, 2016 and 2015, the secured borrowings bore interest at a weighted average interest rate of 8.08%, 7.26% and 4.80%, respectively. For the years ended September 30, 2017, 2016 and 2015, the Company recorded interest expense of $1.2 million, $1.5 million and $1.7 million, respectively, related to the secured borrowings.
As of September 30, 2017, there were $13.5 million of secured borrowings outstanding, which had a fair value of $13.3 million. As of September 30, 2016, there were $18.9 million of secured borrowings outstanding, which had a fair value of $18.4 million.

Note 16. Commitments and Contingencies
SEC Examination and Investigation
On March 23, 2016, the Division of Enforcement of the SEC sent document subpoenas and document preservation notices to the Company, FSAM, FSCO GP LLC - General Partner of Fifth Street Opportunities Fund, L.P. ("FSOF") and OCSI. The subpoenas sought production of documents relating to a variety of issues principally related to the activities of FSM, including those raised in an ordinary-course examination of FSM by the SEC’s Office of Compliance Inspections and Examinations that began in October 2015, and in the previous disclosed securities class actions and other previously disclosed litigation. The subpoenas were issued pursuant to a formal order of private investigation captioned In the Matter of the Fifth Street Group of Companies, No. HO-12925, dated March 23, 2016, which addresses (among other things) (i) the valuation of the Company's portfolio companies and investments, (ii) the expenses allocated or charged to the Company and OCSI, (iii) FSOF’s trading in the securities of publicly traded business development companies, (iv) statements to the Board of Directors, other representatives of pooled investment vehicles, investors, or prospective investors concerning the fair value of the Company's portfolio companies or investments as well as expenses allocated or charged to the Company and OCSI, (v) various issues relating to adoption and implementation of policies and procedures under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), (vi) statements and/or potential omissions in the entities’ SEC filings, (vii) the entities’ books, records, and accounts and whether they fairly and accurately reflected the entities’ transactions and dispositions of assets, and (viii) several other issues relating to corporate books and records. The formal order cites various provisions of the Securities Act of 1933, as amended, the Exchange Act and the Advisers Act, as well as rules promulgated under those Acts, as the bases of the investigation. The Company is cooperating with the Division of Enforcement investigation, has produced requested documents, and has been communicating with Division of Enforcement personnel. The Investment Adviser is not subject to these subpoenas.


OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Legal Costs
In connection with previously disclosed litigation, the Company incurred professional fees of $0.1 million during the year ended September 30, 2017, respectively, and received insurance reimbursements related to previously incurred professional fees of $1.3 million during the year ended September 30, 2017. During the year ended September 30, 2016, the Company incurred professional fees of $9.9 million and received insurance reimbursements related to previously incurred professional fees of $0.1 million. FSAM may seek indemnification with respect to any losses and expenses it may incur in connection with these lawsuits.
Off-Balance Sheet Arrangements
The Company may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of its companies. As of September 30, 2017, the Company's only off-balance sheet arrangements consisted of $118.1 million of unfunded commitments, which was comprised of $107.3 million to provide debt financing to certain of its portfolio companies, $1.3 million to provide equity financing to SLF JV I and $9.5 million related to unfunded limited partnership interests. As of September 30, 2016, the Company's only off-balance sheet arrangements consisted of $215.7 million of unfunded commitments, which was comprised of $191.7 million to provide debt financing to certain of its portfolio companies, $14.1 million to provide debt and equity financing to SLF JV I and $9.9 million related to unfunded limited partnership interests. Such commitments are subject to its portfolio companies' satisfaction of certain financial and nonfinancial covenants and may involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Company's Consolidated Statements of Assets and Liabilities.
A list of unfunded commitments by investment (consisting of revolvers, term loans with delayed draw components, SLF JV I subordinated notes and LLC interests, and limited partnership interests) as of September 30, 2017 and September 30, 2016 is shown in the table below:
  September 30, 2017 September 30, 2016
 Lift Brands Holdings, Inc. $15,000
 $13,000
 P2 Upstream Acquisition Co. 10,000
 10,000
 Valet Merger Sub, Inc. 9,326
 5,596
 Edge Fitness, LLC 8,353
 8,353
 InMotion Entertainment Group, LLC 7,544
 6,856
 BeyondTrust Software, Inc. 5,995
 5,995
 EOS Fitness Opco Holdings, LLC 5,000
 5,000
 Dominion Diagnostics, LLC (1)(2) 4,180
 —
 Impact Sales, LLC 3,234
 —
 Systems, Inc. 3,030
 —
 Thing5, LLC 3,000
 5,000
 WeddingWire, Inc. 3,000
 3,000
 Keypath Education, Inc. 3,000
 —
 Traffic Solutions Holdings, Inc. 2,998
 2,682
 Motion Recruitment Partners LLC 2,900
 2,900
 Pingora MSR Opportunity Fund I, LP (limited partnership interest) 2,760
 2,054
 Edmentum, Inc.(1) 2,664
 2,664
 OmniSYS Acquisition Corporation 2,500
 2,500
 Ping Identity Corporation 2,500
 2,500
 4 Over International, LLC 2,232
 2,232
 New IPT, Inc. 2,229
 —
 Refac Optical Group 2,080
 6,400
 SPC Partners VI, L.P. (limited partnership interest) 2,000
 —
 Ministry Brands, LLC 1,708
 15,000
 Sailpoint Technologies, Inc. 1,500
 —
 Metamorph US 3, LLC (1) 1,470
 3,675
 Senior Loan Fund JV 1, LLC 1,328
 14,065
 TransTrade Operators, Inc. (1)(3) 1,052
 424
 Webster Capital III, L.P. (limited partnership) 736
 1,013
 Riverside Fund V, LP (limited partnership interest) 539
 853
 Garretson Firm Resolution Group, Inc. 508
 1,066
 Sterling Capital Partners IV, L.P. (limited partnership interest) 490
 485
 Beecken Petty O'Keefe Fund IV, L.P. (limited partnership interest) 472
 813
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





 Tailwind Capital Partners II, L.P. (limited partnership interest) 391
 1,005
 Moelis Capital Partners Opportunity Fund I-B, L.P. (limited partnership interest) 365
 476
 RCP Direct II, LP (limited partnership interest) 364
 654
 Cenegenics, LLC (1)(3) 297
 1,001
 Riverside Fund IV, LP (limited partnership interest) 254
 544
 ACON Equity Partners III, LP (limited partnership interest) 239
 204
 RCP Direct, LP (limited partnership interest) 184
 236
 Bunker Hill Capital II (QP), LP (limited partnership interest) 183
 190
 Milestone Partners IV, LP (limited partnership interest) 180
 261
 SPC Partners V, L.P. (limited partnership interest) 159
 602
 Riverlake Equity Partners II, LP (limited partnership interest) 129
 177
 L Squared Capital Partners (limited partnership interest) —
 308
 Legalzoom.com, Inc. —
 15,427
 TigerText, Inc. —
 10,000
 RP Crown Parent, LLC —
 9,414
 TIBCO Software, Inc. —
 5,800
 Integrated Petroleum Technologies, Inc. —
 5,397
 Trialcard Incorporated —
 4,900
 Adventure Interactive, Corp. (2) —
 4,846
 Baart Programs, Inc. —
 4,762
 Discovery Practice Management, Inc. —
 3,958
 OBHG Management Services, LLC —
 3,836
 First American Payment Systems, LP —
 3,000
 My Alarm Center, LLC —
 2,940
 Eagle Hospital Physicians, Inc. —
 2,753
 HealthDrive Corporation —
 2,534
 Teaching Strategies, LLC —
 2,400
 ExamSoft Worldwide, Inc. —
 2,000
 Accruent, LLC —
 1,900
Total $118,073
 $215,651
 ___________ 
(1) This investment was on cash or PIK non-accrual status as of September 30, 2017.
(2) This investment was on cash non-accrual status as of September 30, 2016.
(3) This portfolio company does not have the ability to draw on this unfunded commitment as of September 30, 2017.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Note 17. Selected Quarterly Financial Data (unaudited)
Selected unaudited quarterly financial data for Oaktree Specialty Lending Corporation for the years ended September 30, 2017, 2016 and 2015 are below:
 For the three months ended
(dollars in thousands,
except per share
amounts)
September  30, 2017June 30,
2017		March 31,
2017		December  31, 2016September  30, 2016June 30,
2016		March 31,
2016		December  31, 2015September  30, 2015June 30,
2015		March 31,
2015		December  31, 2014
Total investment income$35,732
$44,917
$45,555
$51,760
$59,160
$64,026
$59,563
$65,122
$63,770
$69,900
$66,467
$65,338
Net investment income11,464
19,390
18,504
23,294
25,695
29,106
25,343
26,582
28,159
32,251
28,123
26,407
Net realized and unrealized loss(136,935)(25,447)(9,703)(97,536)(29,128)(34,324)(20,363)(89,468)(30,548)(11,740)(2,380)(54,877)
Net increase (decrease) in net assets resulting from operations(125,471)(6,057)8,801
(74,242)(3,433)(5,218)4,980
(62,886)(2,389)20,511
25,743
(28,470)
Net assets867,657
1,010,750
1,019,626
1,030,272
1,142,288
1,184,376
1,225,974
1,263,113
1,353,094
1,403,213
1,410,302
1,407,822
Total investment income per common share$0.25
$0.32
$0.32
$0.36
$0.41
$0.44
$0.40
$0.43
$0.42
$0.46
$0.43
$0.43
Net investment income per common share0.08
0.14
0.13
0.16
0.18
0.20
0.17
0.18
0.18
0.21
0.18
0.17
Earnings (losses) per common share(0.89)(0.04)0.06
(0.52)(0.02)(0.04)0.03
(0.42)(0.02)0.13
0.17
(0.19)
Net asset value per common share at period end6.16
7.17
7.23
7.31
7.97
8.15
8.33
8.41
9.00
9.15
9.20
9.18

Note 18. Subsequent Events
The Company’s management evaluated subsequent events through the date of issuance of the Consolidated Financial Statements. There have been no subsequent events that occurred during such period that would require disclosure in, or would be required to be recognized in, the Consolidated Financial Statements as of and for the year ended September 30, 2017 except as discussed below:
The Transaction and the New Investment Advisory Agreement with Oaktree
On July 13, 2017, Oaktree, entered into the Purchase Agreement, with FSM, and, for certain limited purposes, FSAM, the indirect, partial owner of FSM, and Fifth Street Holdings L.P. (“FSH”), the direct, partial owner of FSM.
In order to ensure that the Transaction, complied with Section 15(f) of the 1940 Act, the Investment Adviser and FSM agreed to certain conditions. First, for a period of three years after the closing of the Transaction, at least 75% of the members of the Company’s Board of Directors must not be interested persons of Oaktree or FSM. Second, an “unfair burden” must not be imposed on the Company as a result of the closing of the Transaction or any express or implied terms, conditions or understandings applicable thereto during the two-year period after the closing of the Transaction.
On September 7, 2017, the Company held a special meeting of stockholders, or the Special Meeting. At the Special Meeting, stockholders of the Company approved the New Investment Advisory Agreement to take effect upon the closing of the Transaction. Stockholders of the Company also approved, contingent upon the closing of the Transaction, the election of John B. Frank, Marc H. Gamsin, Craig Jacobson, Richard G. Ruben and Bruce Zimmerman to serve on the Company’s Board of Directors, each of whom commenced serving on the Company’s Board of Directors on October 17, 2017. In addition, in connection with the Transaction, Edgar Lee became the Company’s Chief Executive Officer and Chief Investment Officer, Mathew Pendo became the Company’s Chief
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Operating Officer, Mel Carlisle became the Company’s Chief Financial Officer and Treasurer and Kimberly Larin became the Company’s Chief Compliance Officer.
Upon the closing of the Transaction on October 17, 2017, Oaktree became the investment adviser to each of OCSI and the Company, and Oaktree paid gross cash consideration of $320 million to FSM. The closing of the Transaction resulted in an assignment for purposes of the 1940 Act of the investment advisory agreement between FSM and the Company and, as a result, its immediate termination. The material terms of the services to be provided under the New Investment Advisory Agreement, other than the fee structure, are substantially the same as the Former Investment Advisory Agreement, except that services are provided by Oaktree.
On October 17, 2017, each of Bernard D. Berman, James Castro-Blanco, Brian S. Dunn, Alexander C. Frank, Byron J. Haney and Douglas F. Ray resigned as a member of the Company’s Board of Directors. In addition, on October 17, 2017, each of Mr. Berman, the Company’s former Chief Executive Officer, Mr. Steven Noreika, the Company’s former Chief Financial Officer, and Ms. Kerry Acocella, the Company’s former Secretary and Chief Compliance Officer, resigned from his or her role as an officer of the Company.
In connection with the Transaction, the Company and Kemper, in their respective capacities as members of SLF JV I, consented to the assignment by FSC CT of the administrative and loan services agreement between SLF JV I and FSC CT to Oaktree Administrator, effective as of October 17, 2017.
The following is a description of the New Investment Advisory Agreement, which has been in effect since October 17, 2017.
Management Services
Oaktree is registered as an investment adviser under the Advisers Act. Subject to the overall supervision of the Company’s Board of Directors since October 17, 2017, Oaktree has managed the day-to-day operations of the Company and provided the Company with investment advisory services. Under the New Investment Advisory Agreement, Oaktree:
•determines the composition of the Company’s portfolio, the nature and timing of the changes to the Company’s portfolio and the manner of implementing such changes;
•identifies, evaluates and negotiates the structure of the investments the Company makes;
•executes, closes, monitors and services the investments the Company makes;
•determines what securities and other assets the Company purchases, retains or sells; and
•performs due diligence on prospective portfolio companies.
The New Investment Advisory Agreement provides that Oaktree’s services are not exclusive to the Company and Oaktree is generally free to furnish similar services to other entities so long as its services to us are not impaired.
Management Fee
Under the New Investment Advisory Agreement, the Company pays Oaktree a fee for its services under the New Investment Advisory Agreement consisting of two components -components: a base management fee and an incentive fee. The cost of both the base management fee payable to Oaktree and any incentive fees earned by Oaktree is ultimately borne by common stockholders of the Company.
From October 17, 2017 through May 3, 2020, the Company was externally managed by OCM pursuant to an investment advisory agreement. On May 4, 2020, OCM effected the novation of such investment advisory agreement to Oaktree. Immediately following such novation, the Company and Oaktree entered into a new investment advisory agreement with the same terms, including fee structure, as the investment advisory agreement with OCM. The investment advisory agreement with Oaktree was subsequently amended and restated on March 19, 2021 in connection with the closing of the OCSI Merger. The term “Investment Advisory Agreement” refers collectively to the agreements with Oaktree and, prior to its novation, with OCM.
Unless earlier terminated as described below, the Investment Advisory Agreement will remain in effect from year-to-year if approved annually by the Board of Directors of the Company or by the affirmative vote of the holders of a majority of the Company’s outstanding voting securities, including, in either case, approval by a majority of the directors of the Company who are not interested persons. The Investment Advisory Agreement will automatically terminate in the event of its assignment. The Investment Advisory Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other. The Investment Advisory Agreement may also be terminated, without penalty, upon the vote of a majority of the outstanding voting securities of the Company.
Base Management Fee

Under the New Investment Advisory Agreement, the base management fee onis calculated at an annual rate of 1.50% of total gross assets, including any investment made with borrowings, but excluding cash and cash equivalents. The base management fee is payable quarterly in arrears and the fee for any partial month or quarter is appropriately prorated. Effective May 3, 2019, the base management fee on the Company’s gross assets, including any investments made with borrowings, but excluding any cash and cash equivalents, is 1.50%that exceed the product of (A) 200% and (B) the Company’s net asset value will be 1.00%. For the avoidance of doubt, the 200% will be calculated in accordance with the Investment Company Act and will give effect to exemptive relief the Company received from the SEC with respect to debentures issued by a small business investment company subsidiary. In connection with the OCSI Merger, the Company and Oaktree entered into an amended and restated investment advisory agreement, which among other items, waived an aggregate of $6 million of base management fees otherwise payable to Oaktree in the two years following the closing of the OCSI Merger on March 19, 2021 at a rate of $750,000 per quarter (with such amount appropriately prorated for any partial quarter).
For the years ended September 30, 2022, 2021 and 2020, the base management fee incurred under the Investment Advisory Agreement was $36.6 million (net of waiver), $30.7 million (net of waiver) and $22.9 million, respectively.
Incentive Fee
The incentive fee consists of two parts. Under the New Investment Advisory Agreement, the first part of the incentive fee (the “incentive fee on income” or "Part I incentive fee") is calculated and payable quarterly in arrears based upon the “pre-incentive fee net investment income” of the Company for the immediately preceding quarter. The payment of the incentive fee on income
151
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




is subject to payment of a preferred return to investors each quarter (i.e., a “hurdle rate”), expressed as a rate of return on the value of the Company’s net assets at the end of the most recently completed quarter, of 1.50%, subject to a “catch up” feature.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





For this purpose, “pre-incentive fee net investment income” means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies, other than fees for providing managerial assistance) accrued during the fiscal quarter, minus the Company’s operating expenses for the quarter (including the base management fee, expenses payable under the New Administration Agreement and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discountOID debt, instruments with payment-in-kindPIK interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. In addition, pre-incentive fee net investment income does not include any amortization or accretion of any purchase premium or purchase discount to interest income resulting solely from merger-related accounting adjustments in connection with the assets acquired in the OCSI Merger, including any premium or discount paid for the acquisition of such assets, solely to the extent that the inclusion of such merger-related accounting adjustments, in the aggregate, would result in an increase in pre-incentive fee net investment income.

Under the New Investment Advisory Agreement, the calculation of the incentive fee on income for each quarter is as follows:

•No incentive fee is payable to Oaktree in any quarter in which the Company’s pre-incentive fee net investment income does not exceed the preferred return rate of 1.50% (the “preferred return”) on net assets.assets;
•100% of the Company’s pre-incentive fee net investment income, if any, that exceeds the preferred return but is less than or equal to 1.8182% in any fiscal quarter is payable to Oaktree. This portion of the incentive fee on income is referred to as the “catch-up” provision, and it is intended to provide Oaktree with an incentive fee of 17.5% on all of the Company’s pre-incentive fee net investment income when the Company’s pre-incentive fee net investment income exceeds 1.8182% on net assets in any fiscal quarter.quarter; and
•For any quarter in which the Company’s pre-incentive fee net investment income exceeds 1.8182% on net assets, the subordinated incentive fee on income is equal to 17.5% of the amount of the Company’s pre-incentive fee net investment income, as the preferred return and catch-up will have been achieved.

There is no accumulation of amounts on the hurdle rate from quarter to quarter and accordingly there is no clawback of amounts previously paid if subsequent quarters are below the quarterly hurdle.

For the years ended September 30, 2022, 2021 and 2020, the first part of the incentive fee (incentive fee on income) incurred under the Investment Advisory Agreement was $26.6 million, $21.6 million and $15.2 million, respectively.
Under the New Investment Advisory Agreement, the second part of the incentive fee will be(the "capital gains incentive fee") is determined and payable in arrears as of the end of each fiscal year (or upon termination of the investment advisory agreement,Investment Advisory Agreement, as of the termination date) commencing with the fiscal year endingended September 30, 2019 and will equalequals 17.5% of the Company’s realized capital gains, if any, on a cumulative basis from the beginning of the fiscal year endingended September 30, 2019 through the end of each subsequent fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees under the New Investment Advisory Agreement. Any realized capital gains, realized capital losses, unrealized capital appreciation and unrealized capital depreciation with respect to the Company’s portfolio as of the end of the fiscal year endingended September 30, 2018 will beare excluded from the calculations of the second part of the incentive fee.
Collection In addition, the calculation of realized capital gains, realized capital losses and Disbursementunrealized capital depreciation does (1) not include any such amounts resulting solely from merger-related accounting adjustments in connection with the assets acquired in the OCSI Merger, including any premium or discount paid for the acquisition of Fees Owedsuch assets, solely to Fifth Street Management
Under the Company’s prior investment advisory agreement with FSM, bothextent that the base managementinclusion of such merger-related accounting adjustments, in the aggregate, would result in an increase in the capital gains incentive fee and incentive fee on income were calculated and paid(2) include any such amounts associated with the investments acquired in the OCSI Merger for the period from October 1, 2018 to FSM at the enddate of each quarter. In order to ensure that FSM receives any compensation earned during the quarter ending December 31, 2017, the initial paymentclosing of the base management fee andOCSI Merger, solely to the extent that the exclusion of such amounts, in the aggregate, would result in an increase in the capital gains incentive fee on incomefee. As of September 30, 2022, the Company paid $9.6 million of capital gains incentive fees cumulatively under the New Investment Advisory Agreement will cover(net of waivers). For the entire quarter in whichyear ended September 30, 2022, the NewCompany did not incur any capital gains incentive fees under the Investment Advisory Agreement became effective, and be calculated at a blended rate that will reflect fee ratesAgreement. For the year ended September 30, 2021, the Company incurred $8.8 million of capital gains incentive fees under the respective investment advisory agreements forInvestment Advisory Agreement. For the portion of the quarter in which FSM and Oaktree were serving as investment adviser. This structure will allow Oaktree to pay FSM in early 2018 the pro rata portion of the fees that were earned by, but not paid to, FSM for services rendered toyear ended September 30, 2020, the Company prior todid not incur any capital gains incentive fees under the termination of the former investment advisory agreement with FSM.
Duration and Termination
Unless earlier terminated as described below, the New Investment Advisory Agreement will remain in effect until October 17, 2019 and thereafter from year-to-year if approved annually byAgreement.

GAAP requires that the Company’s Board of Directors or bycapital gains incentive fee accrual consider the affirmative vote of the holders of a majority of the outstanding voting securities of the Company, including, in either case, approval by a majority of the directors of the Company who are not interested persons. The New Investment Advisory Agreement will automatically terminatecumulative aggregate unrealized capital appreciation in the event of its assignment. The New Investment Advisory Agreement maycalculation, as a capital gains incentive fee would be terminated by either party without penalty upon 60 days’ written notice to the other. The New Investment Advisory Agreement may alsopayable if such unrealized capital appreciation were realized on a theoretical "liquidation basis." A fee so calculated and accrued would not be terminated, without penalty, upon the vote of a majority of the outstanding voting securities of the Company.payable under applicable law and

152
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









may never be paid based upon the computation of capital gains incentive fees in subsequent periods. Amounts ultimately paid under the Investment Advisory Agreement will be consistent with the formula reflected in the Investment Advisory Agreement. This GAAP accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital depreciation included in the calculation of the capital gains incentive fee plus the aggregate cumulative unrealized capital appreciation. Any realized capital gains and losses and cumulative unrealized capital appreciation and depreciation with respect to the Company’s portfolio as of the end of the fiscal year ended September 30, 2018 are excluded from the GAAP accrual. If such amount is positive at the end of a period, then GAAP requires the Company to record a capital gains incentive fee equal to 17.5% of such cumulative amount, less the aggregate amount of actual capital gains incentive fees payable or capital gains incentive fees accrued under GAAP in all prior periods. The resulting accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. There can be no assurance that such unrealized capital appreciation will be realized in the future or any accrued capital gains incentive fee will become payable under the Investment Advisory Agreement. For the year ended September 30, 2022, $8.8 million of accrued capital gains incentive fees were reversed. For the year ended September 30, 2021, $17.6 million of accrued capital gains incentive fees were expensed. For the year ended September 30, 2020, the Company reversed $5.6 million of previously accrued capital gains incentive fees. As of September 30, 2022, the total accrued capital gains incentive fee liability was zero.
To ensure compliance with Section 15(f) of the Investment Company Act, OCM entered into a two-year contractual fee waiver with the Company, which ended on October 17, 2019, pursuant to which OCM waived any management or incentive fees payable under the Investment Advisory Agreement that exceeded what would have been paid to Fifth Street Management LLC (the "Former Adviser") in the aggregate under the investment advisory agreement by and between the Company and the Former Advisor. Prior to the end of the two-year period, amounts potentially subject to waiver under the two-year contractual fee waiver were accrued quarterly based on a theoretical “liquidation basis.” During the year ended September 30, 2020, the Company reversed $5.2 million of previously accrued fee waivers since the two-year fee waiver period ended.
Indemnification

The Investment Advisory Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of their respective duties or by reason of the reckless disregard of their respective duties and obligations, Oaktree and its officers, managers, partners, members (and their members, including the owners of their members), agents, employees, controlling persons and any other person or entity affiliated with it, are entitled to indemnification from the Company for any damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in settlement) arising from the rendering of Oaktree's services under the Investment Advisory Agreement or otherwise as investment adviser.
Administrative Services
The Company entered intois party to the New Administration Agreement with Oaktree Administrator on October 17, 2017.Administrator. Pursuant to the New Administration Agreement, Oaktree Administrator provides administrative services to the Company necessary for the operations of the Company, which include providing office facilities, equipment, clerical, bookkeeping and record keeping services at such facilities and such other services as Oaktree Administrator, subject to review by the Company’s Board of Directors, shall from time to time deem to be necessary or useful to perform its obligations under the New Administration Agreement. Oaktree Administrator may, on behalf of the Company, conduct relations and negotiate agreements with custodians, trustees, depositories, attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable. Oaktree Administrator will makemakes reports to the Company’s Board of Directors of its performance of obligations under the New Administration Agreement and furnishfurnishes advice and recommendations with respect to such other aspects of the Company’s business and affairs, of the Company, in each case, as it shall determine to be desirable or as reasonably required by the Board;Company’s Board of Directors; provided that the Oaktree Administrator shall not provide any investment advice or recommendation.
Oaktree Administrator will also provideprovides portfolio collection functions for interest income, fees and warrants and is responsible for the financial and other records that the Company is required to maintain and prepares, prints and disseminates reports to the Company’s stockholders and all other materials filed with the SEC. In addition, Oaktree Administrator will assistassists the Company in determining and publishing the Company’s net asset value, overseeing the preparation and filing of the Company’s tax returns, and generally overseeing the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others. Oaktree Administrator may also offer to provide, on the Company’s behalf, managerial assistance to the Company’s portfolio companies.
153
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




For providing these services, facilities and personnel, the Company will reimbursereimburses Oaktree Administrator the allocable portion of overhead and other expenses incurred by Oaktree Administrator in performing its obligations under the New Administration Agreement, including the Company’s allocable portion of the rent of the Company’s principal executive offices (which are located in a building owned by a Brookfield affiliate) at market rates and the Company’s allocable portion of the costs of compensation and related expenses of its Chief Financial Officer, Chief Compliance Officer, their staffs and other non-investment professionals at Oaktree that perform duties for the Company. Such reimbursement is at cost, with no profit to, or markup by, Oaktree Administrator. Oaktree Administrator may also offer to provide, on the Company’s behalf, managerial assistance to the Company’s portfolio companies. The New Administration Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of their respective duties or by reason of the reckless disregard of their respective duties and obligations, Oaktree Administrator and its officers, managers, partners, agents, employees, controlling persons, members (or their owners) and any other person or entity affiliated with it, are entitled to indemnification from the Company for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of Oaktree Administrator’s services under the New Administration Agreement or otherwise as the Company’s administrator. Unless earlier terminated as described below, the New Administration Agreement will remain in effect until October 17, 2019 and thereafter from year-to-year if approved annually by the Company’s Board of Directors or by the affirmative vote of the holders of a majority of the Company’s outstanding voting securities, including, in either case, approval by a majority of the Company’s directors who are not interested persons. The New Administration Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other. The New Administration Agreement may also be terminated, without penalty, upon the vote of a majority of the Company’s outstanding voting securities.
Pledge Agreement
On October 17, 2017, in connection withFor the Purchase Agreement,years ended September 30, 2022, 2021 and 2020, the Company entered into a pledge agreement (the “Pledge Agreement”) with FSH with respectaccrued administrative expenses of $1.5 million, $1.7 million and $1.8 million, respectively, including $0.3 million, $0.2 million and $0.3 million of general and administrative expenses, respectively.
As of September 30, 2022 and September 30, 2021, $3.2 million and $4.4 million, respectively, was included in “Due to 6,265,665 shares of the Company’s common stock owned by FSH, pursuant to which FSH pledged such shares to the Company to secure indemnification obligations of FSM and FSH under the Purchase Agreement relating to certain SEC investigation-related legal costs and expenses, if any, and certain fees, fines, monetary penalties, deductibles and disgorgements, if any, that may be ordered by the SEC to be paid by the Company, net of any disgorgements paid by FSM to the Company and any insurance recoveries received by the Company.
Supplemental Indentures
On October 17, 2017, in connection with the change of the name of the Company, the Company entered into a Fourth Supplemental Indenture (the “Fourth Supplemental Indenture”) with Deutsche Bank Trust Company Americas (the “Trustee”), amending the Indenture, dated as of April 30, 2012 (the “Base Indenture”), between the Company and the Trustee, to expressly provide for the Company authority to exchange the existing notes issued thereunder for new notes bearing the new name of the Company and new CUSIP numbers.
Pursuant to the authority providedaffiliate” in the Fourth Supplement Indenture,Consolidated Statements of Assets and Liabilities, reflecting the following occurred:unpaid portion of administrative expenses and other reimbursable expenses payable to Oaktree Administrator.
154
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)









Note 11. Financial Highlights
•the global note bearing CUSIP number 31679B AF7 (the “Old 2019 Note”), representing $250 million aggregate principal amount of the 2019 Notes, was cancelled
(Share amounts in thousands)Year ended
September 30,
2022		Year ended
September 30,
2021		Year ended
September 30,
2020		Year ended
September 30,
2019		Year ended
September 30,
2018 (1)
Net asset value per share at beginning of period$7.28$6.49$6.60$6.09$6.16
Net investment income (2)0.820.600.510.480.43
Net unrealized appreciation (depreciation) (2)(5)(0.75)0.73(0.14)0.270.73
Net realized gains (losses) (2)0.090.16(0.10)0.14(0.83)
(Provision) benefit for taxes on realized and unrealized gains (losses) (2)——0.01——
Distributions of net investment income to stockholders(0.65)(0.51)(0.39)(0.38)(0.27)
Tax return of capital————(0.13)
Issuance of common stock—(0.19)———
Net asset value per share at end of period$6.79$7.28$6.49$6.60$6.09
Per share market value at beginning of period$7.06$4.84$5.18$4.96$5.47
Per share market value at end of period$6.00$7.06$4.84$5.18$4.96
Total return (3)(6.71)%57.61%2.10%12.56%(1.49)%
Common shares outstanding at beginning of period180,361140,961140,961140,961140,961
Common shares outstanding at end of period183,374180,361140,961140,961140,961
Net assets at beginning of period$1,312,823$914,879$930,630$858,035$867,657
Net assets at end of period$1,245,563$1,312,823$914,879$930,630$858,035
Average net assets (4)$1,308,518$1,150,662$871,305$909,264$841,583
Ratio of net investment income to average net assets (4)11.36%8.44%8.26%7.47%7.13%
Ratio of total expenses to average net assets (4)8.68%9.65%7.57%9.65%9.51%
Ratio of net expenses to average net assets (4)8.45%9.51%8.16%8.78%9.35%
Ratio of portfolio turnover to average investments at fair value26.99%39.66%38.99%32.50%67.66%
Weighted average outstanding debt (6)$1,361,151$964,390$647,080$573,891$608,553
Average debt per share (2)$7.47$5.95$4.59$4.07$4.32
Asset coverage ratio at end of period (7)188.64%201.68%227.22%294.91%232.98%
 __________
(1)Beginning on October 17, 2017, the Company is externally managed by Oaktree or its affiliates. Prior to October 17, 2017, the Company was externally managed by the Former Adviser.
(2)Calculated based upon weighted average shares outstanding for the period.
(3)Total return equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming dividend reinvestment prices obtained under the Company's DRIP. Total return does not include sales load.
(4)Calculated based upon the weighted average net assets for the period.
(5)For the year ended September 30, 2021, the amount shown for net unrealized appreciation (depreciation) includes the effect of the timing of common stock issuances in connection with the OCSI Merger.
(6)Calculated based upon the weighted average of principal debt outstanding for the period.
(7)Based on outstanding senior securities of $1,350.0 million, $1,280.0 million, $714.8 million, $476.1 million and $643.4 million as of September 30, 2022, 2021, 2020, 2019 and 2018, respectively.


155
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and a global note bearing CUSIP number 67401P AA6 (the “New 2019 Note”), representing the 2019 Notes, was issued in exchange therefor;per share amounts, percentages and as otherwise indicated)
•the global note bearing CUSIP number 31679B 209 (the “Old 2024 Note”), representing $75 million aggregate principal amount of the 2024 Notes, was cancelled and a global note bearing CUSIP number 67401P 207 (the “New 2024 Note”), representing the 2024 Notes, was issued in exchange therefor; and
•the global note bearing CUSIP number 31679B 308 (collectively with the Old 2019 Note and the Old 2024 Note, the “Old Notes”), representing $86.3 million aggregate principal amount of the 2028 Notes, was cancelled and a global note bearing CUSIP number 67401P 306 (collectively with the New 2019 Note and the New 2024 Note, the “New Notes”), representing the 2028 Notes, was issued in exchange therefore.
The rights of the holders of the 2019 Notes, 2024 Notes and 2028 Notes and the rank

Senior Securities
Information about our senior securities (including debt securities and other terms of such notes were not alteredindebtedness) is shown in connection with the cancellation of the Old Notes and issuance of the New Notes.
ING Facility Amendment and Sumitomo Facility Termination
On November 17, 2017, the Company entered into the Ninth Amendment (the “Ninth ING Amendment”) to amend the ING Credit Agreement. The Ninth ING Amendment (a) decreased the minimum amount of shareholders’ equity the Company is required to have under the ING Credit Agreementfollowing table as of the last dayfiscal years ended September 30 for the years indicated below. We had no senior securities outstanding as of September 30 of any prior fiscal quarter, starting withyears prior to those indicated below.
Class and Year(1)Total Amount Outstanding Exclusive of Treasury Securities (2)Asset Coverage Per Unit(3)Involuntary Liquidating Preference Per Unit(4)Average Market Value Per Unit(5)
Syndicated Facility and Prior ING Facility
Fiscal 2013$168,000 3,949 — N/A
Fiscal 2014267,395 2,595 — N/A
Fiscal 2015383,495 2,389 — N/A
Fiscal 2016472,495 2,208 — N/A
Fiscal 2017226,495 2,274 — N/A
Fiscal 2018241,000 2,330 — N/A
Fiscal 2019314,825 2,949 — N/A
Fiscal 2020414,825 2,272 — N/A
Fiscal 2021495,000 2,017 — N/A
Fiscal 2022540,000 1,886 — N/A
Citibank Facility
Fiscal 2021$135,000 2,017 — N/A
Fiscal 2022160,000 1,886 — N/A
Wells Fargo Facility
Fiscal 2013$20,000 3,949 — N/A
Sumitomo Facility
Fiscal 2013$— 3,949 — N/A
Fiscal 201450,000 2,595 — N/A
Fiscal 201543,800 2,389 — N/A
Fiscal 201643,800 2,208 — N/A
Fiscal 201729,500 2,274 — N/A
Convertible Notes
Fiscal 2013$115,000 3,949 — N/A
Fiscal 2014115,000 2,595 — N/A
Fiscal 2015115,000 2,389 — N/A
Secured Borrowings
Fiscal 2014$84,750 2,595 — N/A
Fiscal 201521,787 2,389 — N/A
Fiscal 201618,929 2,208 — N/A
Fiscal 201713,489 2,274 — N/A
Fiscal 201812,314 2,330 — N/A
156
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




Class and Year(1)Total Amount Outstanding Exclusive of Treasury Securities (2)Asset Coverage Per Unit(3)Involuntary Liquidating Preference Per Unit(4)Average Market Value Per Unit(5)
2019 Notes
Fiscal 2014$250,000 2,595 — N/A
Fiscal 2015250,000 2,389 — N/A
Fiscal 2016250,000 2,208 — N/A
Fiscal 2017250,000 2,274 — N/A
Fiscal 2018228,825 2,330 — N/A
2024 Notes
Fiscal 2013$75,000 3,949 — 979.45 
Fiscal 201475,000 2,595 — 966.96 
Fiscal 201575,000 2,389 — 991.94 
Fiscal 201675,000 2,208 — 993.70 
Fiscal 201775,000 2,274 — 1,006.74 
Fiscal 201875,000 2,330 — 1,010.72 
Fiscal 201975,000 2,949 — 1,012.76 
2025 Notes
Fiscal 2020$300,000 2,272 — N/A
Fiscal 2021300,000 2,017 — N/A
Fiscal 2022300,000 1,886 — N/A
2027 Notes
Fiscal 2021$350,000 2,017 — N/A
Fiscal 2022350,000 1,886 — N/A
2028 Notes
Fiscal 2013$86,250 3,949 — 957.21 
Fiscal 201486,250 2,595 — 943.73 
Fiscal 201586,250 2,389 — 988.06 
Fiscal 201686,250 2,208 — 999.29 
Fiscal 201786,250 2,274 — 1,007.51 
Fiscal 201886,250 2,330 — 994.82 
Fiscal 201986,250 2,949 — 993.33 
Total Senior Securities
Fiscal 2013$464,250 3,949 — 
Fiscal 2014928,395 2,595 — 
Fiscal 2015975,332 2,389 — 
Fiscal 2016946,474 2,208 — 
Fiscal 2017680,734 2,274 — 
Fiscal 2018643,389 2,330 — 
Fiscal 2019476,075 2,949 — 
Fiscal 2020714,825 2,272 — 
Fiscal 20211,280,000 2,017 — 
Fiscal 20221,350,000 1,886 — 

157
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




______________ 
(1)This table excludes any SBA-guaranteed debentures outstanding during the quarter ending September 30, 2017,relevant periods because the SEC has granted the Company exemptive relief that permits it to $700 million and (b) decreasedexclude such debentures from the minimum amountdefinition of net worth thatsenior securities in the asset coverage ratio the Company is required to maintain under the Investment Company Act.
(2)Total amount of each class of senior securities outstanding at the end of the period, presented in thousands.
(3)The asset coverage ratio for a class of senior securities representing indebtedness is calculated as the Company's consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by total senior securities representing indebtedness. This asset coverage ratio is multiplied by $1,000 to determine the “Asset Coverage Per Unit.”
(4)The amount to which such class of senior security would be entitled upon the involuntary liquidation of the issuer in preference to any security junior to it. The “-” indicates information that the Securities and Exchange Commission expressly does not require to be disclosed for certain types of senior securities.
(5)Calculated on a daily average basis.
158
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Note 12. Derivative Instruments
The Company enters into foreign currency forward contracts from time startingto time 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. In order to better define its contractual rights and to secure rights that will help the Company mitigate its counterparty risk, the Company entered into an International Swaps and Derivatives Association, Inc. Master Agreement (the "ISDA Master Agreement") with its derivative counterparty, JPMorgan Chase Bank, N.A. The ISDA Master Agreement permits a single net payment in the event of a default or similar event. As of September 30, 2022, no cash collateral has been pledged to cover obligations and no cash collateral has been received from the counterparty with respect to the Company's forward currency contracts.
In connection with the quarter endingissuance of the 2027 Notes, the Company entered into an interest rate swap agreement with the Royal Bank of Canada pursuant to an ISDA Master Agreement. As of September 30, 2017,2022, the Company paid $45.5 million to $650the Royal Bank of Canada to cover collateral obligations under the terms of the interest swap agreement, which is included in due from broker on the Consolidated Statement of Assets and Liabilities.
Certain information related to the Company’s foreign currency forward contracts is presented below as of September 30, 2022.
DescriptionNotional Amount to be PurchasedNotional Amount to be SoldMaturity DateGross Amount of Recognized AssetsGross Amount of Recognized LiabilitiesBalance Sheet Location of Net Amounts
Foreign currency forward contract$43,179 €41,444 11/10/2022$2,466 $— Derivative asset
Foreign currency forward contract$45,692 £37,033 11/10/2022$4,323 $— Derivative asset
$6,789 $— 
Certain information related to the Company’s foreign currency forward contracts is presented below as of September 30, 2021.
DescriptionNotional Amount to be PurchasedNotional Amount to be SoldMaturity DateGross Amount of Recognized AssetsGross Amount of Recognized LiabilitiesBalance Sheet Location of Net Amounts
Foreign currency forward contract$52,186 £37,709 11/12/2021$1,339 $— Derivative asset
Foreign currency forward contract$46,663 €39,736 11/12/2021$573 $— Derivative asset
$1,912 $— 
Certain information related to the Company’s interest rate swap is presented below as of September 30, 2022.
DescriptionNotional AmountMaturity DateGross Amount of Recognized AssetsGross Amount of Recognized LiabilitiesBalance Sheet Location of Net Amounts
Interest rate swap$350,000 1/15/2027$— $41,969 Derivative liability
$— $41,969 
Certain information related to the Company’s interest rate swap is presented below as of September 30, 2021.
DescriptionNotional AmountMaturity DateGross Amount of Recognized AssetsGross Amount of Recognized LiabilitiesBalance Sheet Location of Net Amounts
Interest rate swap$350,000 1/15/2027$— $2,108 Derivative liability
$— $2,108 


Note 13. Commitments and Contingencies
Off-Balance Sheet Arrangements
The Company may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of its portfolio companies. As of September 30, 2022, the Company's only off-balance sheet arrangements
159
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




consisted of $224.2 million of unfunded commitments, which was comprised of $175.2 million to provide debt and equity financing to certain of its portfolio companies and $49.0 million to provide financing to the JVs. As of September 30, 2021, the Company's only off-balance sheet arrangements consisted of $264.9 million of unfunded commitments, which was comprised of $212.4 million to provide debt and equity financing to certain of its portfolio companies, $49.0 million to provide financing to the JVs and $3.5 million related to unfunded limited partnership interests. Such commitments are subject to the portfolio companies' satisfaction of certain financial and nonfinancial covenants and may involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Consolidated Statements of Assets and Liabilities.
A list of unfunded commitments by investment (consisting of revolvers, term loans with delayed draw components, subordinated notes and LLC equity interests in the JVs, preferred stock and limited partnership interests) as of September 30, 2022 and September 30, 2021 is shown in the table below:
160
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




September 30, 2022September 30, 2021
Senior Loan Fund JV I, LLC$35,000 $35,000 
Delta Leasing SPV II LLC27,187 — 
Fairbridge Strategic Capital Funding LLC22,150 — 
OCSI Glick JV LLC13,998 13,998 
BioXcel Therapeutics, Inc.11,785 — 
Dominion Diagnostics, LLC11,148 11,148 
BAART Programs, Inc.8,645 3,583 
iCIMs, Inc.6,930 — 
Marinus Pharmaceuticals, Inc.5,734 18,349 
MRI Software LLC5,196 2,699 
Establishment Labs Holdings Inc.5,075 — 
RumbleOn, Inc.4,822 16,301 
Accupac, Inc.4,605 3,267 
Ardonagh Midco 3 PLC4,372 14,892 
Grove Hotel Parcel Owner, LLC4,293 — 
Innocoll Pharmaceuticals Limited4,195 — 
Mindbody, Inc.4,000 4,000 
OTG Management, LLC3,789 3,789 
Mesoblast, Inc.3,553 — 
Pluralsight, LLC3,532 3,532 
Dialyze Holdings, LLC3,431 3,431 
ADC Therapeutics SA3,020 — 
Thrasio, LLC2,578 2,578 
PRGX Global, Inc.2,518 2,518 
Spanx, LLC2,226 — 
Relativity ODA LLC2,218 2,218 
Assembled Brands Capital LLC2,008 24,868 
Tahoe Bidco B.V.1,741 — 
Kings Buyer, LLC1,537 — 
PFNY Holdings, LLC1,527 — 
MHE Intermediate Holdings, LLC1,429 3,466 
Berner Food & Beverage, LLC1,392 2,475 
Apptio, Inc.1,338 1,338 
Coyote Buyer, LLC1,333 1,333 
Acquia Inc.1,326 2,061 
Liquid Environmental Solutions Corporation1,115 — 
CorEvitas, LLC915 3,235 
Digital.AI Software Holdings, Inc.826 898 
Telestream Holdings Corporation528 1,266 
109 Montgomery Owner LLC477 937 
LSL Holdco, LLC427 — 
GKD Index Partners, LLC320 320 
Athenex, Inc.— 21,072 
Gulf Operating, LLC— 10,064 
Coty Inc.— 9,886 
Latam Airlines Group S.A.— 7,267 
Sunland Asphalt & Construction, LLC— 6,492 
NeuAG, LLC— 5,441 
Olaplex, Inc.— 4,806 
Pingora MSR Opportunity Fund I-A, LP— 3,500 
SIO2 Medical Products, Inc.— 3,406 
SumUp Holdings Luxembourg S.À.R.L.— 3,350 
4 Over International, LLC— 2,300 
The Avery— 1,850 
Ministry Brands, LLC— 1,100 
Thermacell Repellents, Inc.— 833 
CircusTrix Holdings, LLC— 37 
Total$224,239 $264,904 

161
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




Note 14. Merger with OSI 2
Merger Agreement

On September 14, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Oaktree Strategic Income II, Inc., a Delaware corporation (“OSI2”), Project Superior Merger Sub, Inc., a Delaware corporation and the Company’s wholly-owned subsidiary (“Merger Sub”), and, solely for the limited purposes set forth therein, Oaktree. The Merger Agreement provides that, subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into OSI2, with OSI2 continuing as the surviving company and as the Company’s wholly-owned subsidiary (the “Merger”), and, immediately thereafter, OSI2 will merge with and into the Company, with the Company continuing as the surviving company (together with the Merger, the “Mergers”). Both the Company’s Board of Directors and the Board of Directors of OSI2, in each case, on the recommendation of a special committee comprised solely of certain independent directors of the Company or OSI2, as applicable, have approved the Merger Agreement and the transactions contemplated thereby.

At the effective time of the Merger (the “Effective Time”), each share of common stock, par value $0.001 per share, of OSI2 (the “OSI2 Common Stock”) issued and outstanding immediately prior to the Effective Time (other than shares owned by the Company or any of its consolidated subsidiaries (the “Cancelled Shares”)) will be converted into the right to receive a number of shares of the Company’s common stock equal to the Exchange Ratio (as defined below), plus any cash (without interest) in lieu of fractional shares.

As of a mutually agreed date no earlier than 48 hours (excluding Sundays and holidays) prior to the Effective Time (such date, the “Determination Date”), each of the Company and OSI2 will deliver to the other a calculation of its net asset value as of such date (such calculation with respect to OSI2, the “Closing OSI2 Net Asset Value” and such calculation with respect to the Company, the “Closing OCSL Net Asset Value”), in each case using a pre-agreed set of assumptions, methodologies and adjustments. Based on such calculations, the parties will calculate the “OSI2 Per Share NAV”, which will be equal to (i) the Closing OSI2 Net Asset Value divided by (ii) the number of shares of OSI2 Common Stock issued and outstanding as of the Determination Date (excluding any Cancelled Shares), and the “OCSL Per Share NAV”, which will be equal to (A) the Closing OCSL Net Asset Value divided by (B) the number of shares of the Company’s common stock issued and outstanding as of the Determination Date. The “Exchange Ratio” will be equal to the quotient (rounded to four decimal places) of (i) the OSI2 Per Share NAV divided by (ii) the OCSL Per Share NAV.

The Company and OSI2 will update and redeliver the Closing OCSL Net Asset Value or the Closing OSI2 Net Asset Value, respectively, in the event of a material change to such calculation between the Determination Date and the closing of the Mergers and if needed to ensure that the calculation is determined within 48 hours (excluding Sundays and holidays) prior to the Effective Time.

The Merger Agreement contains customary representations and warranties by each of the Company, OSI2 and Oaktree. The Merger Agreement also contains customary covenants, including, among others, covenants relating to the operation of each of the Company’s and OSI2’s businesses during the period prior to the closing of the Mergers.

Consummation of the Mergers, which is currently anticipated to occur during the second fiscal quarter of 2023, is subject to certain closing conditions, including requisite approvals of the Company’s and OSI2’s stockholders and certain other closing conditions.

The Merger Agreement also contains certain termination rights in favor of the Company and OSI2, including if the Mergers are not completed on or before June 30, 2023 or if the requisite approvals of the Company’s or OSI2’s stockholders are not obtained. The Merger Agreement provides that, upon the termination of the Merger Agreement under certain circumstances, a third party acquiring OSI2 may be required to pay the Company a termination fee of approximately $9.8 million. The Merger Agreement provides that, upon the termination of the Merger Agreement under certain circumstances, a third party acquiring the Company may be required to pay OSI2 a termination fee of approximately $37.9 million.

Management Fee Waiver

In connection with entry into the Merger Agreement, Oaktree has agreed to waive $9.0 million of base management fees payable to it under the Investment Advisory Agreement as follows: $6.0 million at a rate of $1.5 million per quarter (with such amount appropriately prorated for any partial quarter) in the first year following closing of the Mergers and $3.0 million at a rate of $750,000 per quarter (with such amount appropriately prorated for any partial quarter) in the second year following closing of the Mergers.
162
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Note 15. Subsequent Events
The Company’s management evaluated subsequent events through the date of issuance of the Consolidated Financial Statements. There have been no subsequent events that occurred during such period that would require disclosure in, or would be required to be recognized in the Consolidated Financial Statements as of and for the year ended September 30, 2022, except as discussed below.
Distribution Declaration
On November 24, 2017, Fifth Street Funding II, LLC, as10, 2022, the borrower underCompany’s Board of Directors declared a quarterly distribution of $0.18 per share, payable in cash on December 30, 2022 to stockholders of record on December 15, 2022. On November 10, 2022, the Sumitomo Facility, repaid all outstanding borrowings thereunder, following which the Sumitomo facility was terminated. Obligations under the Sumitomo facility would have otherwise maturedCompany’s Board of Directors also declared a special distribution of $0.14 per share payable on the earlierDecember 30, 2022 to stockholders of August 6, 2018 or the daterecord on which the ING facility is repaid, refinanced or terminated.December 15, 2022.





163









Schedule 12-14
Oaktree Specialty Lending Corporation
Schedule of Investments in and Advances to Affiliates
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
Year ended September 30, 20172022
(unaudited)
Portfolio Company/Type of Investment (1)  Cash Interest Rate Industry Principal Net Realized Gain (Loss)  Net Unrealized Appreciation (Depreciation) 
Amount of
Interest,
Fees or
Dividends
Credited in
Income (2)
 
Fair Value
at October 1,
2016
 
Gross
Additions (3)
 
Gross
Reductions (4)
 
Fair Value
at September 30, 2017
 % of Total Net Assets
Control Investments                      
Traffic Solutions Holdings, Inc.    Construction & engineering                  
 First Lien Term Loan, LIBOR+7% (1% floor) cash 2% PIK due 4/1/2021 8.34%   $36,567
 $—
 $(148) $4,243
 $36,328
 $1,303
 $(1,063) $36,568
 4.2%
 First Lien Revolver, LIBOR+6% (1% floor) cash due 4/1/2021 7.34%   1,250
 —
 —
 122
 2,800
 1,261
 (2,811) 1,250
 0.1%
 LC Facility, 6% cash due 4/1/2021     4,752
 —
 —
 236
 3,518
 1,248
 (14) 4,752
 0.5%
 746,114 Series A Preferred Units, 10%     —
 —
 (13,864) 1,471
 20,094
 3,201
 (15,595) 7,700
 0.9%
 746,114 Common Stock Units     —
 —
 —
 —
 —
 2,284
 (2,284) —
 —%
TransTrade Operators, Inc. (7)    Air freight and logistics                 

 First Lien Term Loan, 5% cash due 12/31/2017     15,973
 —
 (5,238) 8
 7,046
 644
 (5,880) 1,810
 0.2%
 First Lien Revolver, 8% cash due 12/31/2017     7,757
 —
 (872) (4) —
 2,680
 (2,680) —
 —%
 596.67 Series A Common Units       —
 —
 —
 —
 —
 —
 —
 —%
 4,000 Series A Preferred Units in TransTrade Holdings LLC       —
 —
 —
 —
 —
 —
 —
 —%
 5,200,000 Series B Preferred Units in TransTrade Holdings LLC       —
 —
 —
 —
 —
 —
 —
 —%
First Star Aviation, LLC (6)    Airlines                 

 10,104,401 Common Units     —
 (3,767) 3,119
 —
 2,413
 3,120
 (5,533) —
 —%
First Star Speir Aviation Limited (6)    Airlines                 

 First Lien Term Loan, 9% cash due 12/15/2020     41,395
 —
 2,945
 2,618
 54,214
 4,031
 (16,850) 41,395
 4.8%
 100% equity interest     —
 —
 (7,413) —
 2,839
 8,500
 (7,413) 3,926
 0.5%
First Star Bermuda Aviation Limited (6)    Airlines                 

 First Lien Term Loan, 9% cash 3% PIK due 8/19/2018     11,868
 —
 17
 915
 11,851
 179
 (162) 11,868
 1.4%
 100% equity interest     —
 —
 (2,739) —
 5,729
 58
 (3,464) 2,323
 0.3%
 Eagle Hospital Physicians, LLC    Healthcare services                 

 First Lien Term Loan A, 8% PIK due 4/30/2017     —
 (13,812) 14
 571
 13,875
 1,058
 (14,933) —
 —%
 First Lien Term Loan B, 8.1% PIK due 4/30/2017     —
 —
 2
 81
 3,887
 4,189
 (8,076) —
 —%
 First Lien Revolver, 8% cash due 4/30/2017     —
 —
 —
 156
 1,913
 2,257
 (4,170) —
 —%
 4,100,000 Class A Common Units     —
 —
 (6,185) —
 7,421
 4,100
 (11,521) —
 —%
 Earn-out     —
 —
 —
 —
 —
 7,851
 (2,865) 4,986
 0.6%
Senior Loan Fund JV I, LLC (5)    Multi-sector holdings                 

 Subordinated Notes, LIBOR+8% cash due 5/2/2021     —
 (19,857) 15,838
 2,859
 129,004
 16,546
 (145,550) —
 —%
 Class A Mezzanine Secured Deferrable Floating Rate Notes due 2036 in SLF Repack Issuer 2016 LLC 6.88%   101,030
 —
 —
 5,225
 —
 101,030
 —
 101,030
 11.6%
 Class B Mezzanine Secured Deferrable Fixed Rate Notes, 15% PIK due 2036 in SLF Repack Issuer 2016 LLC     27,641
 —
 —
 2,977
 —
 27,641
 —
 27,641
 3.2%
 87.5% LLC equity interest     —
 —
 (8,263) 1,050
 13,708
 434
 (8,617) 5,525
 0.6%
Portfolio Company/Type of Investment (1) Cash Interest RateIndustryPrincipalNet Realized Gain (Loss)Amount of
Interest,
Fees or
Dividends
Credited in
Income (2)		Fair Value
as of October 1,
2021		Gross
Additions (3)		Gross
Reductions (4)		Fair Value
as of September 30, 2022		% of Total Net Assets
Control Investments
C5 Technology Holdings, LLCData Processing & Outsourced Services
829 Common Units$— $— $— $— $— $— — %
34,984,460.37 Preferred Units— — 27,638 — — 27,638 2.2 %
Dominion Diagnostics, LLCHealth Care Services
First Lien Term Loan, LIBOR+5.00% cash due 2/28/20248.68 %$14,333 — 1,367 27,381 — (13,048)14,333 1.2 %
First Lien Revolver, LIBOR+5.00% cash due 2/28/2024— — 57 — — — — — %
30,030.8 Common Units in DD Healthcare Services Holdings, LLC— 3,308 18,065 — (13,119)4,946 0.4 %
First Star Speir Aviation Limited (5)Airlines
First Lien Term Loan, 9.00% cash due 12/15/2025— 7,500 — 7,500 — (7,500)— — %
100% equity interest(5,632)158 698 — (698)— — %
OCSI Glick JV LLC (6)Multi-Sector Holdings
Subordinated Debt, LIBOR+4.50% cash due 10/20/20286.30 %59,662 — 4,667 55,582 1,538 (6,837)50,283 4.0 %
87.5% equity interest— — — — — — — %
Senior Loan Fund JV I, LLC (7)Multi-Sector Holdings
Subordinated Debt, LIBOR+7.00% cash due 12/29/20288.80 %96,250 — 8,001 96,250 — — 96,250 7.7 %
87.5% LLC equity interest— 2,901 37,651 — (16,936)20,715 1.7 %
Total Control Investments$170,245 $1,868 $20,459 $270,765 $1,538 $(58,138)$214,165 17.2 %
Affiliate Investments
Assembled Brands Capital LLCSpecialized Finance
First Lien Revolver, LIBOR+6.75% cash due 10/17/202310.42 %$24,490 $— $1,764 $15,712 $14,996 $(6,483)$24,225 1.9 %
1,609,201 Class A Units— — 587 — (217)370 — %
1,019,168.80 Preferred Units, 6%— — 1,152 71 — 1,223 0.1 %
70,424.5641 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029— — — — — — — %
Caregiver Services, Inc.Health Care Services
1,080,399 shares of Series A Preferred Stock, 10%— — — 838 — (460)378 — %
Total Affiliate Investments$24,490 $— $1,764 $18,289 $15,067 $(7,160)$26,196 2.1 %
Total Control & Affiliate Investments$194,735 $1,868 $22,223 $289,054 $16,605 $(65,298)$240,361 19.3 %

Express Group Holdings LLC (8)    Oil & gas equipment services                 

 First Lien Term Loan, LIBOR+6% (1% floor) cash due 9/3/2019     —
 (22,312) 10,880
 (110) 1,193
 12,073
 (13,266) —
 —%
 First Lien Revolver, LIBOR+4.5% (1% floor) cash due 3/4/2019     —
 —
 —
 (2) 6,090
 5,211
 (11,301) —
 —%
 Last-In Revolver, PRIME+3.5% (3.5% floor) cash due 10/7/2016     —
 —
 —
 106
 3,000
 —
 (3,000) —
 —%
 14,033,391 Series B Preferred Units     —
 —
 3,982
 —
 —
 3,982
 (3,982) —
 —%
 280,668 Series A Preferred Units     —
 —
 1,593
 —
 —
 1,593
 (1,593) —
 —%
 1,456,344 Common Units     —
 —
 —
 —
 —
 —
 —
 —
 —%
 Ameritox Ltd. (7)    Healthcare services                 

 First Lien Term Loan, LIBOR+5% (1% floor) cash 3% PIK due 4/11/2021 6.33%   38,338
 —
 (32,905) 2,428
 31,039
 9,151
 (35,745) 4,445
 0.5%
 14,090,126.4 Class A Preferred A Units in Ameritox Holdings II, LLC     —
 —
 (15,437) —
 15,437
 1,423
 (16,860) —
 —%
 1,602,260.83 Class B Preferred A Units in Ameritox Holdings II, LLC     —
 —
 (1,755) —
 1,755
 162
 (1,917) —
 —%
 4,930.03 Common Units in Ameritox Holdings II, LLC     —
 —
 (13,113) —
 13,113
 —
 (13,113) —
 —%
 New IPT, Inc.    Oil & gas equipment services                 

 First Lien Term Loan, LIBOR+5% (1% floor) cash due 3/17/2021 6.33%   $4,107
 $—
 $—
 $140
 $—
 $4,107
 $—
 $4,107
 0.5%
 Second Lien Term Loan, LIBOR+5.1% (1% floor) cash due 9/17/2021 6.43%   2,504
 —
 —
 87
 —
 2,504
 —
 2,504
 0.3%
 First Lien Revolver, LIBOR+5% (1% floor) cash due 3/17/2021 6.33%   1,009
 26
 —
 39
 —
 1,009
 —
 1,009
 0.1%
 50.087 Class A Common Units in New IPT Holdings, LLC     —
 —
 736
 —
 —
 736
 —
 736
 0.1%
 AdVenture Interactive, Corp.    Advertising                 

 9,073 shares of common stock     —
 —
 207
 —
 —
 24,466
 (10,648) 13,818
 1.6%
 Keypath Education, Inc.    Advertising                 

 First Lien Term Loan, LIBOR+7% (1% floor) cash due 4/3/2022 8.33%   19,960
 —
 —
 835
 —
 19,960
 —
 19,960
 2.3%
 First Lien Revolver, LIBOR+7% (1% floor) cash due 4/3/2022 8.33%   —
 —
 —
 8
 —
 —
 —
 —
 —%
 9,073 Class A Units in FS AVI Holdco, LLC     —
 —
 (2,730) —
 —
 10,648
 (2,730) 7,918
 0.9%
Total Control Investments     $314,151
 $(59,722) $(71,329) $26,059
 $388,267
 $290,640
 $(373,636) $305,271
 35.2%
                       
Affiliate Investments                      
Caregiver Services, Inc.    Healthcare services                  
 Second Lien Term Loan, 10% cash 2% PIK due 6/30/2019     9,719
 —
 (81) 1,170
 9,549
 232
 (116) 9,665
 1.1%
 1,080,399 shares of Series A Preferred Stock, 10%     —
 —
 (1,544) —
 4,079
 5
 (1,550) 2,534
 0.3%
AmBath/ReBath Holdings, Inc.    Home improvement retail                 

 First Lien Term Loan B, 12.5% cash 2.5% PIK due 8/31/2018     22,956
 —
 96
 4,310
 24,268
 995
 (2,306) 22,957
 2.6%
 4,668,788 shares of Preferred Stock     —
 —
 (45) —
 1,873
 349
 (395) 1,827
 0.2%
Total Affiliate Investments     $32,675
 $—
 $(1,574) $5,480
 $39,769
 $1,581
 $(4,367) $36,983
 4.3%
Total Control & Affiliate Investments     $346,826
 $(59,722) $(72,903) $31,539
 $428,036
 $292,221
 $(378,003) $342,254
 39.4%


This schedule should be read in connection with the Company's Consolidated Financial Statements, including the Consolidated Schedules of Investments and Notes to the Consolidated Financial Statements.
______________________
(1)The principal amount and ownership detail are shown in the Company's Consolidated Schedules of Investments.

(2)Represents the total amount of interest, fees and dividends credited to income for the portion of the year an investment was included in the Control or Affiliate categories.
(3)Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest (net of non-accrual amounts), and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation as well as the movement of an existing portfolio company into this category or out of a different category.
(4)Gross reductions include decreases in the cost basis of investment resulting from principal payments or sales and exchanges of one or more existing securities for one or more new securities. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category.
(5)Together with Kemper, the Company co-invests through SLF JV I. SLF JV I is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF JV I must be approved by the SLF JV I investment committee consisting of representatives of the Company and Kemper (with approval from a representative of each required).
(6)First Star Aviation, LLC, First Star Bermuda Aviation Limited and First Star Speir Aviation 1 Limited are wholly-owned holding companies formed by the Company in order to facilitate its investment strategy. In accordance with ASU 2013-08, the Company has deemed the holding companies to be investment companies under GAAP and therefore deemed it appropriate to consolidate the financial results and financial position of the holding companies and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding companies are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entities.
(7)This investment was on cash non-accrual status as of September 30, 2017.
(8)This investment was on cash non-accrual status as of September 30, 2016.

(1)The principal amount and ownership detail are shown in the Company's Consolidated Schedules of Investments.

(2)Represents the total amount of interest (net of non-accrual amounts), fees and dividends credited to income for the portion of the period an investment was included in the Control or Affiliate categories.
(3)Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments, accrued PIK interest (net of non-accrual amounts) and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation as well as the movement of an existing portfolio company into this category or out of a different category.
164

(4)Gross reductions include decreases in the cost basis of investments resulting from principal payments or sales and exchanges of one or more existing securities for one or more new securities. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category.
(5)First Star Speir Aviation Limited is a wholly-owned holding company formed by the Company in order to facilitate its investment strategy. In accordance with ASU 2013-08, the Company has deemed the holding company to be an investment company under GAAP and therefore deemed it appropriate to consolidate the financial results and financial position of the holding company and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding company are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entities.
(6)Together with GF Equity Funding, the Company co-invests through Glick JV. Glick JV is capitalized as transactions are completed and all portfolio and investment decisions in respect to Glick JV must be approved by the Glick JV investment committee consisting of representatives of the Company and GF Equity Funding (with approval from a representative of each required).
(7)Together with Kemper, the Company co-invests through SLF JV I. SLF JV I is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF JV I must be approved by the SLF JV I investment committee consisting of representatives of the Company and Kemper (with approval from a representative of each required).



165

Schedule 12-14
Oaktree Specialty Lending Corporation
Schedule of Investments in and Advances to Affiliates
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
Year ended September 30, 20162021
(unaudited)
Portfolio Company/Type of Investment (1) Cash Interest RateIndustryPrincipalNet Realized Gain (Loss)Amount of
Interest,
Fees or
Dividends
Credited in
Income (2)		Fair Value
as of October 1,
2020		Gross
Additions (3)		Gross
Reductions (4)		Fair Value
as of September 30, 2021		% of Total Net Assets
Control Investments
C5 Technology Holdings, LLCData Processing & Outsourced Services
829 Common Units$— $— $— $— $— $— — %
34,984,460.37 Preferred Units— — 27,638 — — 27,638 2.1 %
Dominion Diagnostics, LLCHealth Care Services
First Lien Term Loan, LIBOR+5.00% cash due 2/28/20246.00 %$27,381 — 1,726 27,660 — (279)27,381 2.1 %
First Lien Revolver, LIBOR+5.00% cash due 2/28/2024— — 275 5,260 2,439 (7,699)— — %
30,030.8 Common Units in DD Healthcare Services Holdings, LLC— 2,795 7,667 10,398 — 18,065 1.4 %
First Star Speir Aviation Limited (5)Airlines
First Lien Term Loan, 9.00% cash due 12/15/20257,500 — — 11,510 — (4,010)7,500 0.6 %
100% equity interest— 763 1,622 1,244 (2,168)698 0.1 %
New IPT, Inc.Oil & Gas Equipment & Services
First Lien Term Loan, LIBOR+5.00% cash due 3/17/2021— — 42 1,800 504 (2,304)— — %
First Lien Revolver, LIBOR+5.00% cash due 3/17/2021— — 17 788 221 (1,009)— — %
50.087 Class A Common Units in New IPT Holdings, LLC— — — — — — — %
OCSI Glick JV LLC (6)Multi-Sector Holdings
Subordinated Debt, LIBOR+4.50% cash due 10/20/20284.60 %61,709 — 2,401 — 56,693 (1,111)55,582 4.2 %
87.5% equity interest— — — — — — — %
Senior Loan Fund JV I, LLC (7)Multi-Sector Holdings
Subordinated Debt, LIBOR+7.00% cash due 12/29/20288.00 %96,250 — 7,388 96,250 — — 96,250 7.3 %
87.5% LLC equity interest— 903 21,190 16,461 — 37,651 2.9 %
Total Control Investments$192,840 $— $16,310 $201,385 $87,960 $(18,580)$270,765 20.6 %
Affiliate Investments
Assembled Brands Capital LLCSpecialized Finance
First Lien Revolver, LIBOR+6.00% cash due 10/17/20237.00 %$15,899 $— $736 $4,194 $12,435 $(917)$15,712 1.2 %
1,609,201 Class A Units— — 483 104 — 587 — %
1,019,168.80 Preferred Units, 6%— — 1,091 61 — 1,152 0.1 %
70,424.5641 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029— — — — — — — %
Caregiver Services, Inc.Health Care Services
1,080,399 shares of Series A Preferred Stock, 10%— — — 741 97 — 838 0.1 %
Total Affiliate Investments$15,899 $— $736 $6,509 $12,697 $(917)$18,289 1.4 %
Total Control & Affiliate Investments$208,739 $— $17,046 $207,894 $100,657 $(19,497)$289,054 22.0 %



166
Portfolio Company/Type of Investment (1)  Cash Interest Rate Industry Principal Net Realized Gain (Loss)  Net Unrealized Appreciation (Depreciation) 
Amount of
Interest,
Fees or
Dividends
Credited in
Income (2)
 
Fair Value
at October 1,
2015
 
Gross
Additions (3)
 
Gross
Reductions (4)
 
Fair Value
at September 30, 2016
 % of Total Net Assets
Control Investments                      
Traffic Solutions Holdings, Inc.    Construction & engineering                  
 First Lien Term Loan, LIBOR+7% (1% floor) cash 2% PIK due 4/1/2021 8.00%   $36,180
 $—
 $176
 $2,370
 $—
 $37,244
 $(916) $36,328
 3.2%
 Second Lien Term Loan, 12% cash 3% PIK due 12/31/2016     —
 —
 28
 1,458
 16,878
 341
 (17,219) —
 —%
 First Lien Revolver, LIBOR+6% (1% floor) cash due 4/1/2021 7.34%   2,800
 —
 3
 145
 —
 2,891
 (91) 2,800
 0.2%
 LC Facility, 6% cash due 4/1/2021     3,518
 —
 2
 241
 1,444
 2,188
 (114) 3,518
 0.3%
 746,114 Series A Preferred Units, 10%     —
 —
 (1,569) 2,249
 19,414
 4,871
 (4,191) 20,094
 1.8%
 746,114 Common Stock Units         (5,931) —
 5,930
 —
 (5,930) —
 —%
TransTrade Operators, Inc.    Air freight and logistics                 

 First Lien Term Loan, 5% cash 3% PIK due 12/31/2017     15,973
 —
 (1,668) 836
 8,713
 1,137
 (2,804) 7,046
 0.6%
 First Lien Revolver, 8% cash due 12/31/2017     6,885
 —
 (5,590) 415
 1,555
 6,035
 (7,590) —
 —%
 596.67 Series A Common Units in TransTrade Holdings LLC           —
 —
 —
 —
 —
 —%
 4,000,000 Series A Preferred Units in TransTrade Holdings LLC           —
 —
 —
 —
 —
 —%
 5,200,000 Series B Preferred Units in TransTrade Holding LLC           —
 —
 —
 —
 —
 —%
First Star Aviation, LLC (6)    Airlines                 

 First Lien Term Loan, 9% cash 3% PIK due 1/9/2018     —
 —
 77
 1,252
 5,313
 54
 (5,367) —
 —%
 10,104,401 Common Units     —
 —
 (2,515) —
 9,500
 1,510
 (8,597) 2,413
 0.2%
First Star Speir Aviation Limited (6)    Airlines                 

 First Lien Term Loan, 9% cash due 12/15/2020     55,395
 —
 2,405
 1,655
 47,824
 15,611
 (9,221) 54,214
 4.7%
 100% equity interest     —
 —
 874
 —
 1,965
 2,506
 (1,632) 2,839
 0.2%
First Star Bermuda Aviation Limited (6)    Airlines                 

 First Lien Term Loan, 9% cash 3% PIK due 8/19/2018     11,868
 —
 17
 1,993
 24,836
 869
 (13,854) 11,851
 1.0%
 100% equity interest     —
 —
 2,490
 —
 2,773
 4,558
 (1,602) 5,729
 0.5%
 Eagle Hospital Physicians, LLC    Healthcare services                 

 First Lien Term Loan A, 8% PIK due 4/30/2017     13,889
 —
 26
 1,097
 13,066
 1,226
 (417) 13,875
 1.2%
 First Lien Term Loan B, 8.1% PIK due 4/30/2017     3,889
 —
 6
 306
 3,574
 341
 (28) 3,887
 0.3%
 First Lien Revolver, 8% cash due 4/30/2017     1,913
 —
 —
 204
 2,847
 51
 (985) 1,913
 0.2%
 4,100,000 Class A Common Units     —
 —
 1,956
 —
 5,464
 2,561
 (604) 7,421
 0.6%
Senior Loan Fund JV I, LLC (5)    Multi-sector holdings                 

 Subordinated Notes, LIBOR+8% cash due 5/2/2021 8.47%   —
 —
 (14,876) 11,959
 128,917
 14,963
 (14,876) 129,004
 11.3%
 87.5% equity interest     —
 —
 (158) 5,775
 12,205
 7,424
 (5,921) 13,708
 1.2%
 Miche Group, LLC                     

 First Lien Revolver, 8% cash due 12/18/2016     —
 (9,318) —
 67
 2,500
 —
 (2,500) —
 —%
100 units in FSFC Miche, Inc.     —
 —
 1,730
 —
 4,175
 2,513
 (6,688) —
 —%


Express Group Holdings LLC (7)    Oil & gas equipment services                 

 First Lien Term Loan, LIBOR+6% (1% floor) cash due 9/3/2019 9.00%
   12,289
 —
 (10,880) 473
 —
 12,073
 (10,880) 1,193
 0.1%
 First Lien Revolver, LIBOR+4.5% (1% floor) cash due 3/4/2019 5.50%
   6,090
 —
 —
 65
 —
 8,914
 (2,824) 6,090
 0.5%
 Last-In Revolver, PRIME+3.5% (3.5% floor) cash due 10/7/2016 7.00%
   3,000
 —
 —
 67
 —
 3,000
 —
 3,000
 0.3%
 14,033,391 Series B Preferred Units     —
 —
 (3,982) —
 —
 3,982
 (3,982) —
 —%
 280,668 Series A Preferred Units     —
 —
 (1,593) —
 —
 1,593
 (1,593) —
 —%
 1,456,344 Common Units     —
 —
 —
 —
 —
 —
 —
 —
 —%
 Ameritox Ltd.    Healthcare services                 

 First Lien Term Loan, LIBOR+5% (1% floor) cash 3% PIK due 4/11/2021 6.00%
   31,259
 —
 (189) 1,372
 —
 31,336
 (297) 31,039
 2.7%
 14,090,126.4 Class A Preferred A Units in Ameritox Holdings II, LLC     —
 —
 1,346
 —
 —
 15,437
 —
 15,437
 1.4%
 1,602,260.83 Class B Preferred A Units in Ameritox Holdings II, LLC     —
 —
 153
 —
 —
 1,755
 —
 1,755
 0.2%
 4,930.03 Common Units in Ameritox Holdings II, LLC     —
 —
 (15,937) —
 —
 29,049
 (15,936) 13,113
 1.1%
Total Control Investments     $204,948
 $(9,318) $(53,599) $33,999
 $318,893
 $216,033
 $(146,659) $388,267
 34.0%
Affiliate Investments                     

Caregiver Services, Inc.    Healthcare services                 

 Second Lien Term Loan, 10% cash 2% PIK due 6/30/2019     $9,524
 $3
 $(30) $1,175
 $9,389
 $395
 $(235) $9,549
 0.8%
 1,080,399 shares of Series A Preferred Stock, 10%     —
 —
 (134) —
 4,213
 40
 (174) 4,079
 0.4%
AmBath/ReBath Holdings, Inc.    Home improvement retail                 

 First Lien Term Loan B, 12.5% cash 2.5% PIK due 8/31/2017     —
 —
 —
 4,077
 26,240
 935
 (2,907) 24,268
 2.1%
 4,668,788 shares of Preferred Stock     —
 —
 1,009
 —
 764
 1,715
 (606) 1,873
 0.2%
Total Affiliate Investments     $9,524
 $3
 $845
 $5,252
 $40,606
 $3,085
 $(3,922) $39,769
 3.5%
Total Control & Affiliate Investments     $214,472
 $(9,315) $(52,754) $39,251
 $359,499
 $219,118
 $(150,581) $428,036
 37.5%

This schedule should be read in connection with the Company's Consolidated Financial Statements, including the Consolidated Schedules of Investments and Notes to the Consolidated Financial Statements.
______________________
(1)The principal amount and ownership detail are shown in the Company's Consolidated Schedules of Investments.
(2)Represents the total amount of interest, fees and dividends credited to income for the portion of the year an investment was included in the Control or Affiliate categories.
(3)Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest (net of non-accrual amounts), and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation as well as the movement of an existing portfolio company into this category or out of a different category.
(4)Gross reductions include decreases in the cost basis of investment resulting from principal payments or sales and exchanges of one or more existing securities for one or more new securities. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category.
(5)Together with Kemper, the Company co-invests through SLF JV I. SLF JV I is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF JV I must be approved by the SLF JV I investment committee consisting of representatives of the Company and Kemper (with approval from a representative of each required).
(6)First Star Aviation, LLC, First Star Bermuda Aviation Limited and First Star Speir Aviation 1 Limited are wholly-owned holding companies formed by the Company in order to facilitate its investment strategy. In accordance with ASU 2013-08, the Company has deemed the holding companies to be investment companies under GAAP and therefore deemed it appropriate to consolidate the financial results and financial position of the holding companies and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding companies are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entities.
(7)This investment was on cash non-accrual status as of September 30, 2016.

(1)The principal amount and ownership detail are shown in the Company's Consolidated Schedules of Investments .
(2)Represents the total amount of interest (net of non-accrual amounts), fees and dividends credited to income for the portion of the period an investment was included in the Control or Affiliate categories.
(3)Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments, accrued PIK interest (net of non-accrual amounts) and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation as well as the movement of an existing portfolio company into this category or out of a different category.
(4)Gross reductions include decreases in the cost basis of investments resulting from principal payments or sales and exchanges of one or more existing securities for one or more new securities. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category.
(5)First Star Speir Aviation Limited is a wholly-owned holding company formed by the Company in order to facilitate its investment strategy. In accordance with ASU 2013-08, the Company has deemed the holding company to be an investment company under GAAP and therefore deemed it appropriate to consolidate the financial results and financial position of the holding company and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding company are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entities.
(6)Together with GF Equity Funding, the Company co-invests through Glick JV. Glick JV is capitalized as transactions are completed and all portfolio and investment decisions in respect to Glick JV must be approved by the Glick JV investment committee consisting of representatives of the Company and GF Equity Funding (with approval from a representative of each required).
(7)Together with Kemper, the Company co-invests through SLF JV I. SLF JV I is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF JV I must be approved by the SLF JV I investment committee consisting of representatives of the Company and Kemper (with approval from a representative of each required).




167

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.



Item 9A. Controls and Procedures


(a) Evaluation of Disclosure Controls and Procedures


Management, with the participation of the Company’sour Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2017.2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”),or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’sSecurities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Based on the evaluation of our disclosure controls and procedures as of September 30, 2017,2022, our Chief Executive Officer and Chief Financial Officer concluded that as a result of the material weakness in internal control over financial reporting that is described below, our disclosure controls and procedures were not effective.effective, at the reasonable assurance level, in timely identifying, recording, processing, summarizing and reporting any material information relating to us that is required to be disclosed in the reports we file or submit under the Exchange Act.


(b) Management's Report on Internal Control Over Financial Reporting


Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). under the Exchange Act. A company’s internal control over financial reporting is a process designed by, or under the supervision of, its chief executive officer and chief financial officer, and effected by such company's boardBoard of directors,Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:


(i)    pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;


(ii)     provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and


(iii)     provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, 2017,2022, based on the framework set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). A material weakness is a deficiency, or a combination of deficiencies, inBased on our evaluation, management concluded that our internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis.

As of September 30, 2017, management has determined that the Company had a material weakness because it did not design or maintainwas effective controls to internally communicate current accounting policies and procedures including the nature of supporting documentation required to validate certain portfolio company data.

These control deficiencies, in the aggregate, could result in misstatements of accounts or disclosures that would each result in a material misstatement of the annual or interim consolidated financial statements that would not be prevented or


detected and, therefore, management has determined that these control deficiencies constitute a material weakness. This material weakness did not result in a material misstatement of the consolidated annual or interim financial statements in the year ended September 30, 2017. Because of this material weakness, management concluded that the Company did not maintain effective internal control over financial reporting as of September 30, 2017.2022.


The effectiveness of our internal control over financial reporting as of September 30, 20172022 has been audited by PricewaterhouseCoopersErnst & Young LLP, an independent registered public accounting firm, as stated in their report which appears herein.



168

(c) Remediation of Material Weaknesses in Internal Control Over Financial Reporting

During the fiscal year ending September 30, 2018, we will take a number of steps to remediate this material weakness, including the formalization of policies and procedures and the implementation of controls over the validation of portfolio company data. Management is committed to improving our internal control processes and believes that the measures described above should be sufficient to remediate the identified material weakness and strengthen our internal control over financial reporting. We cannot assure you, however, that the steps taken will remediate such weakness, nor can we be certain of whether additional actions will be required or the costs of any such actions.

(d) Changes in Internal Controls Over Financial Reporting


There were no changes in our internal control over financial reporting that occurred during the fourth fiscal quarter of 2017ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


Item 9B. Other Information
None.


PART III — OTHER INFORMATION
We will file a definitive Proxy Statement for our 2018 Annual Meeting of Stockholders with the Securities and Exchange Commission, pursuant to Regulation 14A, not later than 120 days after the end of our fiscal year. Accordingly, certain information required by Part III has been omitted under General Instruction G(3) to Form 10-K. Only those sections of our definitive Proxy Statement that specifically address the items set forth herein are incorporated by reference.


Item 10. Directors, Executive Officers and Corporate Governance
The information required by Item 10 is hereby incorporated by reference from our definitive Proxy Statement relating to our 20182023 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end of our fiscal year.


Item 11. Executive Compensation
The information required by Item 11 is hereby incorporated by reference from our definitive Proxy Statement relating to our 20182023 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end of our fiscal year.


Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by Item 12 is hereby incorporated by reference from our definitive Proxy Statement relating to our 20182023 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end of our fiscal year.


Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by Item 13 is hereby incorporated by reference from our definitive Proxy Statement relating to our 20182022 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end of our fiscal year.


Item 14. Principal Accountant Fees and Services


The information required by Item 14 is hereby incorporated by reference from our definitive Proxy Statement relating to our 20182023 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end of our fiscal year.




PART IV


Item 15. Exhibits, and Financial Statement Schedules
The following documents are filed or incorporated by reference as part of this Annual Report:



169

1. Consolidated Financial Statements
ReportReports of Independent Registered Public Accounting Firm
8380
Consolidated Statements of Assets and Liabilities as of September 30, 20172022 and 20162021
8483
Consolidated Statements of Operations for the Years Ended September 30, 2017, 20162022, 2021 and 20152020
85
Consolidated Statements of Changes in Net Assets for the Years Ended September 30, 2017, 20162022, 2021 and 20152020
8685
Consolidated Statements of Cash Flows for the Years Ended September 30, 2017, 20162022, 2021 and 20152020
8786
Consolidated Schedule of Investments as of September 30, 20172022
8887
Consolidated Schedule of Investments as of September 30, 20162021
101100
Notes to Consolidated Financial Statements
116112



2. Financial Statement Schedule
The following financial statement schedule is filed herewith:
 
Schedule 12-14 — Investments in and advances to affiliates
166164


170

3. Exhibits required to be filed by Item 601 of Regulation S-K
The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC:
 
2.1^
Agreement and Plan of Merger among Oaktree Strategic Income II, Inc., the Registrant, Merger Sub, Inc. and Oaktree Fund Advisors LLC (for the limited purposes set forth therein), dated as of October 28, 2020 (Incorporated by reference to Exhibit 2.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-00755) filed on September 15, 2022).
3.1
Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 filed with Registrant’s Form 8-A (File No. 001-33901) filed on January 2, 2008).


3.2
Certificate of Amendment to the Registrant’s Restated Certificate of Incorporation (Incorporated by reference to Exhibit (a)(2) filed with Registrant’s Registration Statement on Form N-2 (File No. 333-146743) filed on June 6, 2008).


3.3
Certificate of Correction to the Certificate of Amendment to the Registrant’s Restated Certificate of Incorporation (Incorporated by reference to Exhibit (a)(3) filed with Registrant’s Registration Statement on Form N-2 (File No. 333-146743) filed on June 6, 2008).


3.4
Certificate of Amendment to Registrant’s Restated Certificate of Incorporation (Incorporated by reference to Exhibit 3.1 filed with Registrant’s Quarterly Report on Form 10-Q (File No. 001-33901) filed on May 5, 2010).


3.5
Certificate of Amendment to Registrant’s Certificate of Incorporation (Incorporated by reference to Exhibit (a)(5) filed with the Registrant’s Registration Statement on Form N-2 (File No. 333-180267) filed on April 2, 2013).

3.6
Certificate of Amendment to the Restated Certificate of Incorporation of the Company,Registrant, dated as of October 17, 2017 (Filed with the Registrant’s Form 8-K (File No. 814-0755)814-00755) filed on October 17, 2017).


3.7
ThirdFourth Amended and Restated Bylaws of the Registrant (Incorporated by reference to Exhibit 3.1 filed with Registrant’s Form 8-K (File No. 001-33901)814-00755) filed on September 2, 2016)January 29, 2018).

4.1
Form of Common Stock Certificate (Incorporated by reference to Exhibit 4.1 filed with Registrant’s Form 8-A (File No. 001-33901) filed on January 2, 2008).

4.2*
Description of Securities


171

4.24.3
Indenture, dated April 30, 2012, between Registrant and Deutsche Bank Trust Company Americas, as trustee (Incorporated by reference to Exhibit (d)(4) filed with Registrant’s Registration Statement on Form N-2 (File No. 333-180267) filed on July 27, 2012).

4.34.4
Form of First Supplemental Indenture relating to the 5.875% Notes due 2024, between the Registrant and Deutsche Bank Trust Company Americas, as trustee (including Form of 5.875% Notes due 2024) (Incorporated by reference to Exhibit (d)(5) filed with the Registrant’s Registration Statement on Form N-2 (File No. 333-180267) filed on October 18, 2012).

4.4
Form of Second Supplemental Indenture relating to the 6.125% Notes due 2028, between the Registrant and Deutsche Bank Trust Company Americas, as trustee (including Form of 6.125% Notes due 2028) (Incorporated by reference to Exhibit (d)(7) filed with the Registrant’s Registration Statement on Form N-2 (File No. 333-180267) filed on April 2, 2013).

4.5
Form of Third Supplemental Indenture relating to the 4.875% Notes due 2019, between the Registrant and Deutsche Bank Trust Company Americas, as trustee (including Form of 4.875% Notes due 2019) (Incorporated by reference to Exhibit (d)(6) filed with the Registrant’s Registration Statement on Form N-2 (File No. 333-192770) filed on February 26, 2014).

4.6
Fourth Supplemental Indenture, dated as of October 17, 2017, between Registrant and Deutsche Bank Trust Company Americas, as trustee (Incorporated by reference to Exhibit 4.1 filed with the Registrant’s Form 8-K (File No. 814-00755) filed on October 17, 2017).

4.74.5
FormFifth Supplemental Indenture, dated as of NoteFebruary 25, 2020, relating to the 4.875%3.500% Notes due 2019,2025, between the Registrant and Deutsche Bank Trust Company Americas, as trustee (Incorporated by reference to Exhibit 4.24.1 filed with the Registrant’s Form 8-K (File No. 814-00755) filed on October 17, 2017)February 25, 2020).
4.84.6
Form of Note3.500% Notes due 2025 (included as Exhibit A to Exhibit 4.5 hereto).
4.7
Sixth Supplemental Indenture, dated as of May 18, 2021, relating to the 5.875%2.700% Notes due 2024,2027, between Registrantthe Company and Deutsche Bank Trust Company Americas, as trustee (Incorporated by reference to Exhibit 4.34.1 filed with the Registrant’sCompany’s Current Report on Form 8-K (File No. 814-00755) filed on October 17, 2017).
4.9
Form of Note relating to the 6.125% Notes due 2028, between Registrant and Deutsche Bank Trust Company Americas, as trustee (Incorporated by reference to Exhibit 4.4 filed with the Registrant’s Form 8-K (File No. 814-00755) filed on October 17, 2017).
4.10
Statement of Eligibility of Trustee on Form T-1 (Incorporated by reference to Exhibit (d)(6) filed with the Registrant’s Registration Statement on Form N-2 (File No. 333-192770) filed on February 10, 2014).
10.1
Investment Advisory Agreement, dated as of October 17, 2017, between the Registrant and Oaktree Capital Management, L.P. (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Form 8-K (File No. 814-00755) filed on October 17, 2017).
10.3
Custody Agreement (Incorporated by reference to Exhibit 10.1 filed with Registrant’s Form 10-Q (File No. 001-33901) filed on January 31, 2011).
10.4
Amended and Restated Dividend Reinvestment Plan (Incorporated by reference to Exhibit (10.1) filed with Registrant’s Form 8-K (File No. 001-33901) filed on October 28, 2010).
10.5
Purchase and Sale Agreement by and between Registrant and Fifth Street Funding, LLC, dated as of November 16, 2009 (Incorporated by reference to Exhibit 10.7 filed with Registrant’s Annual Report on Form 10-K (File No. 001-33901) filed on December 9, 2009).
10.6
Amendment No. 1 to the Purchase and Sale Agreement by and between Registrant and Fifth Street Funding, LLC, dated as of November 30, 2011 (Incorporated by reference to Exhibit 10.2 filed with Registrant’s Form 8-K (File No. 001-33901) filed on December 5, 2011).


10.7
Pledge Agreement by and between Registrant and Wells Fargo Bank, N.A., dated as of November 16, 2009 (Incorporated by reference to Exhibit 10.8 filed with Registrant’s Annual Report on Form 10-K (File No. 001-33901) filed on December 9, 2009).
10.8
Omnibus Amendment No. 1 relating to Registrant’s credit facility with Wells Fargo Bank, N.A., dated as of May 26, 2010 (Incorporated by reference to Exhibit (k)(6) filed with Registrant’s Registration Statement on Form N-2 (File No. 333-166012) filed on June 4, 2010)18, 2021).
10.9
Amended and Restated Loan and Servicing Agreement among Fifth Street Funding, LLC, Registrant, Wells Fargo Securities, LLC, and Wells Fargo Bank, N.A., dated as of November 5, 2010 (Incorporated by reference to Exhibit 10.6 filed with Registrant’s Annual Report on Form 10-K (File No. 001-33901) filed on December 2, 2010).
10.10
Amendment No. 1 to the Amended and Restated Loan and Servicing Agreement among Registrant, Fifth Street Funding, LLC, Wells Fargo Securities, LLC and Wells Fargo Bank, N.A., dated as of February 25, 2011. (Incorporated by reference to Exhibit (k)(4) filed with Registrant’s Registration Statement on Form N-2 (File No. 333-166012) filed on March 30, 2011).
10.11
Amendment No. 3 to the Amended and Restated Loan and Servicing Agreement among Registrant, Fifth Street Funding, LLC, Wells Fargo Securities, LLC and Wells Fargo Bank, N.A., dated as of November 30, 2011. (Incorporated by reference to Exhibit 10.1 filed with Registrant’s Form 8-K (File No. 001-33901) filed on December 5, 2011).
10.124.8
Amendment No. 4 toForm of 2.700% Notes due 2027 (contained in the Amended and Restated Loan and Servicing Agreement among Registrant, Fifth Street Funding, LLC, Wells Fargo Securities, LLC and Wells Fargo Bank, N.A., datedSixth Supplemental Indenture filed as of April 23, 2012 (Incorporated by reference to Exhibit 10.1 filed with Registrant’s Form 8-K (File No. 001-33901) filed on April 25, 2012)4.7 hereto).
10.13
Amendment No. 6 to the Amended and Restated Loan and Servicing Agreement among Registrant, Fifth Street Funding, LLC, Wells Fargo Securities, LLC and Wells Fargo Bank, N.A., dated as of June 20, 2013 (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Form 8-K (File No. 001-33901) filed on June 24, 2013).
10.14
Guarantee, Pledge and Security Agreement among Registrant, FSFC Holdings, Inc., and ING Capital LLC, dated as of May 27, 2010 (Incorporated by reference to Exhibit (k)(8) filed with Registrant’s Registration Statement on Form N-2 (File No. 333-166012) filed on June 4, 2010).
10.15
Amended and Restated Senior Secured Revolving Credit Agreement among Registrant, ING Capital LLC, Royal Bank of Canada, UBS Loan Finance, LLC, Morgan Stanley Bank, N.A., Key Equipment Finance Inc., Deutsche Bank Trust Company Americas and Patriot National Bank, dated as of February 22, 2011 (Incorporated by reference to Exhibit (k)(8) filed with Registrant’s Registration Statement on Form N-2 (File No. 333-166012) filed on March 30, 2011).
10.16
Amendment and Reaffirmation Agreement among Registrant, FSFC Holdings, Inc., Fifth Street Fund of Funds LLC and ING Capital LLC, dated as of February 22, 2011 (Incorporated by reference to Exhibit (k)(10) filed with Registrant’s Registration Statement on Form N-2 (File No. 333-166012) filed on March 30, 2011).
10.17
Amendment No. 1 to Amended and Restated Senior Secured Revolving Credit Agreement and Amendment No. 2 to the Guarantee, Pledge and Security Agreement, among Registrant, FSFC Holdings, Inc., Fifth Street Fund of Funds LLC, ING Capital LLC, Royal Bank of Canada, UBS Loan Finance LLC, Morgan Stanley Bank, N.A., Key Equipment Finance, Inc., Deutsche Bank Trust Company Americas and Patriot National Bank, dated as of July 8, 2011 (Incorporated by reference to Exhibit 10.1 filed with Registrant’s Form 8-K (File No. 001-33901) filed on July 14, 2011).


10.1810.1
Amendment No. 2 to Amended and Restated Senior Secured Revolving Credit Agreement among Registrant, FSFC Holdings, Inc., Fifth Street Fund of Funds LLC, ING Capital LLC, Key Equipment Finance, Inc. and UBS Loan Finance LLC, dated as of November 29, 2011 (Incorporated by reference to Exhibit 10.15 filed with Registrant’s Annual Report on Form 10-K (File No. 814-00755) filed on November 29, 2011).
10.19
Amendment No. 3 to Amended and Restated Senior Secured Revolving Credit Agreement among Registrant, FSFC Holdings, Inc., Fifth Street Fund of Funds LLC, ING Capital LLC, and the lenders party thereto, dated as of February 29, 2012 (Incorporated by reference to Exhibit 10.1 filed with Registrant’s Form 8-K (File No. 001-33901) filed on March 2, 2012).
10.20
Amendment No. 4 to Amended and Restated Senior Secured Revolving Credit Agreement among the Registrant, FSFC Holdings, Inc., Fifth Street Fund of Funds LLC, ING Capital LLC, and the lenders party thereto, dated as of November 30, 2012 (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Form 8-K (File No. 001-33901) filed on December 4, 2012).
10.21
Amendment No. 5 to Amended and Restated Senior Secured Revolving Credit Agreement among the Registrant, FSFC Holdings, Inc., Fifth Street Fund of Funds LLC, ING Capital LLC, and the lenders party thereto, dated as of August 6, 2013 (Incorporated by reference to Exhibit 10.2 filed with the Registrant’s Form 10-Q (File No. 814-00755) filed on August 7, 2013).
10.22
Amendment No. 6 to Amended and Restated Senior Secured Revolving Credit Agreement among the Registrant, FSFC Holdings, Inc., Fifth Street Fund of Funds LLC, ING Capital LLC, and the lenders party thereto, dated as of September 13, 2013 (Incorporated by reference to Exhibit (k)(20) filed with Registrant’s Registration Statement on Form N-2 (File No. 333-186101) filed on September 26, 2013).
10.23*
Amendment No. 7 to Amended and Restated Senior Secured Revolving Credit Agreement among the Registrant, FSFC Holdings, Inc., Fifth Street Fund of Funds LLC, ING Capital LLC, and the lenders party thereto, dated as of December 18, 2015.
10.24
Amendment No. 8 to Amended and Restated Senior Secured Revolving CreditInvestment Advisory Agreement, dated as of July 14, 2017, among Fifth Street Finance Corp., FSFC Holdings, Inc., Fifth StreetMarch 19, 2021, between the Registrant and Oaktree Fund of Funds LLC, the lenders party thereto and ING CapitalAdvisors, LLC (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Form 8-K (File No. 001-33901) filed on July 17, 2017).
10.25
Form of Incremental Assumption Agreement among Registrant, FSFC Holdings, Inc., Fifth Street Fund of Funds LLC, ING Capital LLC and Increasing/Assuming Lender (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Form 8-K (File No. 001-33901) filed on October 24, 2013).
10.26
Waiver Letter among Registrant, FSFC Holdings, Inc., Fifth Street Fund of Funds LLC, ING Capital LLC, Royal Bank of Canada and Key Equipment Finance, Inc., dated as of August 3, 2011 (Incorporated by reference to Exhibit 10.17 filed with Registrant’s AnnualCurrent Report on Form 10-K8-K (File No. 814-00755) filed on November 29, 2011).
10.27
Loan and Servicing Agreement among Registrant, Fifth Street Funding II, LLC and Sumitomo Mitsui Banking Corporation, dated as of September 16, 2011 (Incorporated by reference to Exhibit 10.18 filed with Registrant’s Annual Report on Form 10-K (File No. 814-00755) filed on November 29, 2011).
10.28
Amendment No. 1 and Waiver to the Loan and Servicing Agreement among Registrant, Fifth Street Funding II, LLC and Sumitomo Mitsui Banking Corporation, dated as of March 16, 2012 (Incorporated by reference to Exhibit 10.2 filed with Registrant’s Form 10-Q (File No. 001-33901) filed on May 8, 2012)19, 2021).
10.29
Amendment No. 2 to the Loan and Servicing Agreement among Registrant, Fifth Street Funding II, LLC and Sumitomo Mitsui Banking Corporation, dated as of October 30, 2013 (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Form 8-K (File No. 001-33901) filed on October 24, 2013).


10.3010.2
Amendment No. 3 to the Loan and Servicing Agreement among Registrant, Fifth Street Funding II, LLC and Sumitomo Mitsui Banking Corporation, dated as of August 17, 2015 (Incorporated by reference to Exhibit 10.1 to the Form 8-K (File No. 001-33901) filed August 21, 2015).
10.31
Waiver and Amendment No. 4 to Loan and Servicing Agreement, dated as of July 13, 2017, by and among Fifth Street Funding II, LLC, Fifth Street Finance Corp., Sumitomo Mitsui Banking Corporation, and each of the lenders from time to time party thereto (Incorporated by reference to Exhibit 10.2 to the Form 8-K (File No. 001-33901) filed July 17, 2017).
10.32
Purchase and Sale Agreement by and between Registrant and Fifth Street Funding II, LLC, dated as of September 16, 2011 (Incorporated by reference to Exhibit 10.19 filed with Registrant’s Annual Report on Form 10-K (File No. 814-00755) filed on November 29, 2011).
10.33
Senior Loan Fund JVI, LLC Limited Liability Company Agreement, dated May 2, 2014, by and between Fifth Street Finance Corp. and Trinity Universal Insurance Company (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Form 8-K (File No. 001-33901) filed on May 7, 2014).
10.34
Purchase and Settlement Agreement, dated February 18, 2016, by and among Registrant, Fifth Street Holdings L.P., Leonard M. Tannenbaum, Fifth Street Asset Management Inc., RiverNorth Capital Management, LLC, RiverNorth Capital Partners, L.P., RiverNorth Institutional Partners, L.P., RiverNorth Core Opportunity Fund, RiverNorth/DoubleLine Strategic Income Fund, Randy I. Rochman, Fred G. Steingraber and Murray R. Wise (Incorporated by reference to Exhibit 10.1 filed with Registrant’s Form 8-K (File No. 001-33901) filed on February 19, 2016).
10.35
Amendment No. 1 to the Purchase and Settlement Agreement, dated as of February 23, 2016, by and among Fifth Street Finance Corp., Fifth Street Holdings L.P., Leonard M. Tannenbaum, Fifth Street Asset Management Inc., RiverNorth Capital Management, LLC, RiverNorth Capital Partners, L.P., RiverNorth Institutional Partners, L.P., RiverNorth Core Opportunity Fund and RiverNorth/DoubleLine Strategic Income Fund, Randy I. Rochman, Fred G. Steingraber and Murray R. Wise (Incorporated by reference to Exhibit 10.2 filed with Registrant’s Form 8-K (File No. 001-33901) filed on February 24, 2016).
10.36
Administration Agreement, dated as of October 17, 2017,September 30, 2019 between the Registrant and Oaktree Administrator (Incorporated by reference to Exhibit 10.2 filed with the Registrant’s Form 8-K (File No. 814-00755) filed on October 17, 2017)2, 2019).
10.3710.3
PledgeCustody Agreement dated as of October 17, 2017, between the Registrant and Fifth Street Holdings L.P. (Incorporated by reference to Exhibit 10.310.1 filed with theRegistrant’s Form 10-Q (File No. 001-33901) filed on January 31, 2011).
10.4
Amended and Restated Dividend Reinvestment Plan (Incorporated by reference to Exhibit 10.1 filed with Registrant’s Form 8-K (File No. 814-00755)001-33901) filed on October 17, 2017)28, 2010).
10.3810.5
Amendment No. 9 to Amended and Restated Senior Secured Revolving Credit Agreement, dated as of November 17, 2017,February 25, 2019, among the Registrant, FSFC Holdings, Inc., Fifth Street Fund of Funds LLC,as Borrower, the lenders party thereto, and ING Capital LLC, as administrative agent, for the lenders party theretoING Capital LLC, JPMorgan Chase Bank, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint lead arrangers and joint bookrunners, and JPMorgan Chase Bank, N.A. and Bank of America, N.A., as syndication agents (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013)814-00755) filed on November 22, 2017)February 26, 2019).
11.1
Computation of Per Share Earnings (included in the Notes to the Financial Statements contained in this report).


172

10.6
Amendment No. 1 to Amended and Restated Senior Secured Revolving Credit Agreement, dated as of December 13, 2019, among the Registrant, as Borrower, the lenders party thereto from time to time and ING Capital LLC, as administrative agent for the lenders thereunder (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-00755) filed on December 17, 2019).
10.7
Amendment No. 2 to Amended and Restated Senior Secured Revolving Credit Agreement, dated as of May 6, 2020, among the Registrant, as Borrower, the lenders party thereto from time to time and ING Capital LLC, as administrative agent for the lenders thereunder (Incorporated by reference to Exhibit 10.2 filed with the Registrant’s Form 10-Q (File No. 814-00755) filed on May 7, 2020).
10.8
Incremental Commitment and Assumption Agreement, dated as of October 28, 2020, made by the Registrant, as Borrower, the assuming lender party hereto, as assuming lender, and ING Capital LLC, as administrative agent and issuing bank relating to the Amended and Restated Senior Secured Revolving Credit Agreement, dated as of February 25, 2019 among the Registrant, as Borrower, the lenders party thereto, ING Capital LLC, as administrative agent, ING Capital LLC, JPMorgan Chase Bank, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint lead arrangers and joint bookrunners, and JPMorgan Chase Bank, N.A. and Bank of America, N.A., as syndication agents (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-00755) filed on October 29, 2020).
10.9
Amendment No. 3 to Amended and Restated Senior Secured Revolving Credit Agreement, dated as of December 10, 2020, among the Registrant, as Borrower, the lenders party thereto from time to time and ING Capital LLC, as administrative agent for the lenders thereunder (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-00755) filed on December 14, 2020).
10.10
Incremental Commitment Agreement, dated as of December 28, 2020, made by the Registrant, as Borrower, MUFG Union Bank, N.A., as increasing lender, and ING Capital LLC, as administrative agent and issuing bank relating to the Amended and Restated Senior Secured Revolving Credit Agreement, dated as of February 25, 2019 among the Registrant, as Borrower, the lenders party thereto, ING Capital LLC, as administrative agent, ING Capital LLC, JPMorgan Chase Bank, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint lead arrangers and joint bookrunners, and JPMorgan Chase Bank, N.A. and Bank of America, N.A., as syndication agents (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-00755) filed on December 29, 2020).
10.11
Amendment No. 4 to Amended and Restated Senior Secured Revolving Credit Agreement and Amendment No. 1 to Amended and Restated Guarantee, Pledge and Security Agreement, dated May 4, 2021, among the Company, as borrower, OCSL SRNE, LLC, as subsidiary guarantor, FSFC Holdings, Inc., as subsidiary guarantor, the lenders party thereto, and ING Capital LLC, as administrative agent (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Form 10-Q (File No. 814-00755) filed on August 4, 2021).
10.12
Incremental Commitment Agreement, dated as of December 10, 2021, made by Oaktree Specialty Lending Corporation, as Borrower, BNP Paribas, as assuming lender, and ING Capital LLC, as administrative agent and issuing bank relating to the Amended and Restated Senior Secured Revolving Credit Agreement, dated as of February 25, 2019 among Oaktree Specialty Lending Corporation, as Borrower, the lenders party thereto, ING Capital LLC, as administrative agent, ING Capital LLC, JPMorgan Chase Bank, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint lead arrangers and joint bookrunners, and JPMorgan Chase Bank, N.A. and Bank of America, N.A., as syndication agents (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-00755) filed on December 13, 2021).
10.13
Loan Sale Agreement by and between Registrant and OCSL Senior Funding II LLC (formerly FS Senior Funding II LLC), dated as of January 15, 2015 (Incorporated by reference to Exhibit 10.2 filed with the Registrant’s Current Report on Form 8-K (File No. 814-00755) filed on March 19, 2021).
10.14
Amended and Restated Loan and Security Agreement, dated as of January 31, 2018, by and among Registrant, OCSL Senior Funding II LLC (formerly OCSI Senior Funding II LLC), the lenders referred to therein, Citibank, N.A., and Wells Fargo Bank, National Association (Incorporated by reference to Exhibit 10.3 filed with the Registrant’s Current Report on Form 8-K (File No. 814-00755) filed on March 19, 2021).
173

10.15
First Amendment to the Amended and Restated Loan and Security Agreement by and among the Registrant, as collateral manager, OCSL Senior Funding II LLC (formerly OCSI Senior Funding II LLC), as borrower, and Citibank, N.A., as administrative agent and sole lender, dated as of May 14, 2018 (Incorporated by reference to Exhibit 10.4 filed with the Registrant’s Current Report on Form 8-K (File No. 814-00755) filed on March 19, 2021).
10.16
Second Amendment to the Amended and Restated Loan and Security Agreement by and among Registrant, as collateral manager, OCSL Senior Funding II LLC (formerly OCSI Senior Funding II LLC), as borrower, and Citibank, N.A., as administrative agent and sole lender, dated as of July 18, 2018 (Incorporated by reference to Exhibit 10.5 filed with the Registrant’s Current Report on Form 8-K (File No. 814-00755) filed on March 19, 2021).
10.17
Third Amendment to the Amended and Restated Loan and Security Agreement by and among Registrant, as collateral manager, OCSL Senior Funding II LLC (formerly OCSI Senior Funding II LLC), as borrower, and Citibank, N.A., as administrative agent and sole lender, dated as of September 17, 2018 (Incorporated by reference to Exhibit 10.6 filed with the Registrant’s Current Report on Form 8-K (File No. 814-00755) filed on March 19, 2021).
10.18
Fourth Amendment to the Amended and Restated Loan and Security Agreement by and among Registrant, as collateral manager, OCSL Senior Funding II LLC (formerly OCSI Senior Funding II LLC), as borrower, and Citibank, N.A., as administrative agent and sole lender, dated as of September 20, 2019 (Incorporated by reference to Exhibit 10.7 filed with the Registrant’s Current Report on Form 8-K (File No. 814-00755) filed on March 19, 2021).
10.19
Fifth Amendment to the Amended and Restated Loan and Security Agreement by and among the Registrant, as collateral manager, OCSL Senior Funding II LLC (formerly OCSI Senior Funding II LLC), as borrower, and Citibank, N.A., as administrative agent and sole lender, dated as of October 27, 2020 (Incorporated by reference to Exhibit 10.8 filed with the Registrant’s Current Report on Form 8-K (File No. 814-00755) filed on March 19, 2021).
10.20
Sixth Amendment to the Amended and Restated Loan and Security Agreement by and among the Company, as collateral manager, OCSL Senior Funding II LLC, as borrower, and Citibank, N.A., as administrative agent and sole lender, dated as of July 2, 2021 (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-00755) filed on July 9, 2021).
10.21
Seventh Amendment to the Amended and Restated Loan and Security Agreement by and among the Company, as collateral manager, OCSL Senior Funding II LLC, as borrower, and Citibank, N.A., as administrative agent and sole lender, dated as of November 18, 2021 (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-00755) filed on November 22, 2021).
10.22*
Letter Agreement, dated as of September 14, 2022, by and between the Company and Oaktree
14.1*

Joint Code of Ethics of the Registrant, Oaktree Strategic Income II, Inc. and Oaktree Strategic Income Corporation.Credit Fund.
14.2*14.2

Code of Ethics of Oaktree Capital Management, L.P.Fund Advisors, LLC (Incorporated by reference to Exhibit 14.2 filed with the Registrant's Form 10-K (File No. 814-00755) filed on November 29, 2017).
21
Subsidiaries of Registrant and jurisdiction of incorporation/organizations:
Fifth Street Funding, LLC — Delaware
Fifth Street Funding II, LLC — Delaware
Fifth Street Fund of Funds LLC — Delaware
Fifth Street Mezzanine Partners IV, L.P. — Delaware
Fifth Street Mezzanine Partners V, L.P. — Delaware
FSMP IV GP, LLC — Delaware
FSMP V GP, LLC — Delaware

FSFC Holdings, Inc. — Delaware

OCSL Senior Funding II LLC— Delaware
23.1*
Consent of Registered Public Accounting Firm
24

Power of Attorney (included on the signature page hereto).
31.1*

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2*

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
174

32.1*

Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
32.2*

Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
*101.INS*Filed herewith.Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*Inline XBRL Taxonomy Extension Schema Document.
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*Filed herewith.
^Exhibits and schedules to Exhibit 2.1 have been omitted in accordance with Item 601 of Regulation S-K. The registrant agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request.









SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
OAKTREE SPECIALTY LENDING CORPORATION
By:/s/   Edgar LeeArmen Panossian
Edgar Lee



Armen Panossian
Chief Executive Officer
By:/s/   Mel CarlisleChristopher McKown
Mel Carlisle

Christopher McKown
Chief Financial Officer and Treasurer
Date: November 29, 201714, 2022
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Edgar Lee, Mel CarlisleArmen Panossian, Mathew Pendo and Mathew PendoChristopher McKown, and each of them (with full power to each of them to act alone), his true


and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, for him and on his behalf and in his name, place and stead, in any and all capacities, to sign, any amendments toexecute and file this Annual Report on Form 10-K for the fiscal year ended September 30, 2022, and any or all amendments to file the same,this Report, with all exhibits thereto and otherany and all documents in connection therewith,required to be filed with respect thereto, with the Securities and Exchange Commission or any other regulatory authority, granting unto such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each
175

and every act and thing appropriate or necessary to be done in order to effectuate the same, as fully to all intents and purposes as he himself might or could do in person, hereby ratifying and confirming all that eachsuch attorneys-in-fact and agents, or any of said attorneys-in-factthem, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Reportreport has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



SignatureTitleDate
SignatureTitleDate
/s/    EDGAR LEEARMEN PANOSSIAN
Edgar Lee

Armen Panossian
Chief Executive Officer

(principal executive officer)
November 29, 201714, 2022
/s/    MEL CARLISLECHRISTOPHER MCKOWN
Mel CarlisleChristopher McKown
Chief Financial Officer and Treasurer

(principal financial officer and

principal accounting officer)
November 29, 201714, 2022
/s/    RICHARD P. DUTKIEWICZ
Richard P. Dutkiewicz
DirectorNovember 29, 2017
/s/    JOHN B. FRANK
John B. Frank
DirectorNovember 29, 201714, 2022
/s/    MARC H. GAMSINPHYLLIS R. CALDWELL
Marc H. GamsinPhyllis R. Caldwell
DirectorNovember 29, 201714, 2022
/s/    DEBORAH A. GERO
Deborah A. Gero
DirectorNovember 14, 2022
/s/    CRAIG JACOBSON
Craig Jacobson
DirectorNovember 29, 201714, 2022
/s/    RICHARD G. RUBEN
Richard G. Ruben
DirectorNovember 29, 2017
/s/    BRUCE ZIMMERMAN
Bruce Zimmerman
DirectorNovember 29, 201714, 2022








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