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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31,June 30, 2023

OR

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

Commission file number: 814-01387

Commonwealth Credit Partners BDC I, Inc.

(Exact name of registrant as specified in its charter)

Delaware

86-3335466

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

360 S Rosemary, Suite 1700,

West Palm Beach, FL

33401

(Address of Principal Executive Office)

(Zip Code)

(561) 727-2000

(Registrant’s telephone number, including area code)

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

Title of Each Class

Trading

Symbol(s)

Name of Each Exchange

on Which Registered

None

None

None

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 past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

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

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

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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

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

There were 471,622514,901 issued and outstanding shares of the issuer’s common stock, $.001 par value per share, on May 11,August 10, 2023.

 


 

Commonwealth Credit Partners BDC I, Inc.

Quarterly Report on Form 10-Q

TABLE OF CONTENTS

 

Page

PART I—FINANCIAL INFORMATION

1

Item 1.

Financial Statements

1

Item 2.

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

2730

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

3740

Item 4.

Controls and Procedures

3841

PART II—OTHER INFORMATION

3942

Item 1.

Legal Proceedings

3942

Item 1A.

Risk Factors

3942

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

3942

Item 3.

Defaults upon Senior Securities

3943

Item 4.

Mine Safety Disclosures

4043

Item 5.

Other Information

4043

Item 6.

Exhibits

4144

SIGNATURES

4245

 

 


 

PART I—FINANCIAL INFORMATION

ITEM1. FINANCIAL STATEMENTS

COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(amounts in thousands except share and per share data)

 

March 31, 2023
(Unaudited)

 

 

December 31, 2022

 

 

June 30, 2023 (Unaudited)

 

 

December 31, 2022

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments, at fair value (amortized cost of $538,602 and $362,713 as of March 31, 2023 and December 31, 2022, respectively)

 

$

529,324

 

 

$

355,234

 

Non-controlled, non-affiliated investments, at fair value (amortized cost of $583,542 and $362,713 as of June 30, 2023 and December 31, 2022, respectively)

 

$

576,581

 

 

$

355,234

 

Cash and cash equivalents

 

 

6,919

 

 

 

8,355

 

 

 

7,738

 

 

 

8,355

 

Receivables:

 

 

 

 

 

 

 

 

 

 

Interest receivable

 

 

3,015

 

 

 

2,436

 

 

 

2,834

 

 

 

2,436

 

Prepaid expenses and other assets

 

 

155

 

 

 

193

 

 

 

178

 

 

 

193

 

Total Assets

 

$

539,413

 

 

$

366,218

 

 

$

587,331

 

 

$

366,218

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

Credit facility (net of deferred financing costs of $75 and $83 as of March 31, 2023 and December 31, 2022, respectively)

 

$

77,925

 

 

$

(83

)

Credit facility (net of deferred financing costs of $67 and $83 as of June 30, 2023 and December 31, 2022, respectively)

 

$

79,033

 

 

$

(83

)

Payables:

 

 

 

 

 

 

 

 

 

 

Management fee payable

 

 

1,126

 

 

 

851

 

 

 

1,295

 

 

 

851

 

Interest payable

 

 

333

 

 

 

366

 

 

 

525

 

 

 

366

 

Incentive fee payable, net

 

 

1,336

 

 

 

 

Directors fee payable

 

 

24

 

 

 

24

 

 

 

24

 

 

 

24

 

Accrued other general and administrative expenses

 

 

587

 

 

 

552

 

 

 

551

 

 

 

552

 

Total Liabilities

 

$

79,995

 

 

$

1,710

 

 

$

82,764

 

 

$

1,710

 

 

 

 

 

 

 

 

 

 

 

Net Assets:

 

 

 

 

 

 

 

 

 

 

Common Shares, $0.001 par value; 1,000,000 shares authorized; 471,622 and 373,705 as of

 

 

 

 

 

March 31, 2023 and December 31, 2022, respectively issued and outstanding

 

$

 

 

$

 

Common Shares, $0.001 par value; 1,000,000 shares authorized; 514,901 and 373,705 as of

 

 

 

 

 

June 30, 2023 and December 31, 2022, respectively issued and outstanding

 

$

1

 

 

$

 

Additional paid-in capital

 

 

467,874

 

 

 

372,367

 

 

 

510,032

 

 

 

372,367

 

Total distributable earnings (accumulated deficit)

 

 

(8,456

)

 

 

(7,859

)

 

 

(5,466

)

 

 

(7,859

)

Total Net Assets

 

$

459,418

 

 

$

364,508

 

 

$

504,567

 

 

$

364,508

 

Total Liabilities and Net Assets

 

$

539,413

 

 

$

366,218

 

 

$

587,331

 

 

$

366,218

 

Net Asset Value Per Common Share

 

$

974.12

 

 

$

975.39

 

 

$

979.93

 

 

$

975.39

 

 

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

1


 

COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share and per share data)

(Unaudited) $95,943

 

 

For the Three Months Ended

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

March 31, 2023

 

 

March 31, 2022

 

 

June 30, 2023

 

 

June 30, 2022

 

 

June 30, 2023

 

 

June 30, 2022

 

Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income from non-controlled, non-affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

13,657

 

 

$

2,922

 

$

 

17,130

 

$

 

4,690

 

 

$

 

30,787

 

$

 

7,612

 

Fee income

 

 

458

 

 

 

52

 

 

 

229

 

 

 

103

 

 

 

687

 

 

 

155

 

Total Investment Income

 

 

14,115

 

 

 

2,974

 

 

 

17,359

 

 

 

4,793

 

 

 

31,474

 

 

 

7,767

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Incentive fees

 

 

1,399

 

 

 

-

 

 

 

1,399

 

 

 

 

Management fees

 

 

1,126

 

 

 

461

 

 

 

1,295

 

 

 

643

 

 

 

2,421

 

 

 

1,104

 

Interest expense

 

 

825

 

 

 

143

 

 

 

1,543

 

 

 

512

 

 

 

2,369

 

 

 

655

 

Professional fees

 

 

148

 

 

 

140

 

 

 

175

 

 

 

120

 

 

 

323

 

 

 

260

 

Directors fees

 

 

26

 

 

 

26

 

 

 

25

 

 

 

26

 

 

 

50

 

 

 

51

 

Amortization of offering costs

 

 

 

 

 

42

 

 

 

-

 

 

 

38

 

 

 

 

 

 

80

 

Other general and administrative expenses

 

 

282

 

 

 

164

 

 

 

154

 

 

 

199

 

 

 

436

 

 

 

364

 

Total Expenses

 

 

2,407

 

 

 

976

 

 

 

4,591

 

 

 

1,538

 

 

 

6,998

 

 

 

2,514

 

Less: Management fee waiver (Note 4)

 

 

 

 

 

(58

)

 

 

-

 

 

 

(33

)

 

 

 

 

 

(91

)

Less: Incentive fee waiver (Note 3)

 

 

(63

)

 

 

-

 

 

 

(63

)

 

 

 

Net expenses

 

 

2,407

 

 

 

918

 

 

 

4,528

 

 

 

1,505

 

 

 

6,935

 

 

 

2,423

 

Net Investment Income (Loss)

 

 

11,708

 

 

 

2,056

 

 

 

12,831

 

 

 

3,288

 

 

 

24,539

 

 

 

5,344

 

Realized and unrealized gains (losses) on investments and foreign currency transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

 

 

 

 

 

 

-

 

 

 

32

 

 

 

 

 

 

32

 

Total net realized gains (losses)

 

 

 

 

 

 

 

 

-

 

 

 

32

 

 

 

 

 

 

32

 

Net change in unrealized gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

(1,798

)

 

 

420

 

 

 

2,317

 

 

 

(1,367

)

 

 

519

 

 

 

(947

)

Total net change in unrealized gains (losses)

 

 

(1,798

)

 

 

420

 

 

 

2,317

 

 

 

(1,367

)

 

 

519

 

 

 

(947

)

Total realized and unrealized gains (losses)

 

 

(1,798

)

 

 

420

 

 

 

2,317

 

 

 

(1,335

)

 

 

519

 

 

 

(915

)

Net Increase (Decrease) in Net Assets Resulting from Operations

 

$

9,910

 

 

$

2,476

 

$

 

15,148

 

$

 

1,953

 

 

$

 

25,058

 

$

 

4,429

 

Per Common Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net investment income/(loss) per common share

 

$

28.62

 

 

$

14.62

 

$

 

26.99

 

$

 

(18.34

)

 

$

 

55.47

 

$

 

33.38

 

Basic and diluted net increase/(decrease) in net assets resulting from operations per common share

 

$

24.23

 

 

$

17.60

 

$

 

31.86

 

$

 

10.89

 

 

$

 

56.64

 

$

 

27.67

 

Weighted Average Common Shares Outstanding - Basic and Diluted

 

 

409,042

 

 

 

140,676

 

 

 

475,418

 

 

 

179,264

 

 

 

442,413

 

 

 

160,076

 

 

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

2


 

COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED STATEMENT OF CHANGE IN NET ASSETS

(amounts in thousands except share and per share data)

(Unaudited)

 

 

For the Three Months Ended

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

March 31, 2023

 

 

March 31, 2022

 

 

June 30, 2023

 

 

June 30, 2022

 

 

June 30, 2023

 

 

June 30, 2022

 

Increase (Decrease) in Net Assets Resulting from Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income (loss)

 

$

11,708

 

 

$

2,056

 

$

 

12,831

 

$

 

3,288

 

 

$

 

24,539

 

$

 

5,344

 

Net realized gains (losses) on investments

 

 

-

 

 

 

32

 

 

 

-

 

 

 

32

 

Net change in unrealized gains (losses) on investments

 

 

(1,798

)

 

 

420

 

 

 

2,317

 

 

 

(1,367

)

 

 

519

 

 

 

(947

)

Net Increase (Decrease) in Net Assets Resulting from Operations

 

 

9,910

 

 

 

2,476

 

 

 

15,148

 

 

 

1,953

 

 

 

25,058

 

 

 

4,429

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Decrease in Net Assets Resulting from Stockholder Distributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions from net investment income

 

 

(10,507

)

 

 

(1,687

)

 

 

(12,158

)

 

 

(2,831

)

 

 

(22,665

)

 

 

(4,518

)

Net Decrease in Net Assets Resulting from Stockholder Distributions

 

 

(10,507

)

 

 

(1,687

)

 

 

(12,158

)

 

 

(2,831

)

 

 

(22,665

)

 

 

(4,518

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase in Net Assets Resulting from Capital Share Transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common shares

 

 

85,000

 

 

 

 

 

 

30,001

 

 

 

60,000

 

 

 

115,001

 

 

 

60,000

 

Reinvestment of distributions

 

 

10,507

 

 

 

1,687

 

 

 

12,158

 

 

 

2,831

 

 

 

22,665

 

 

 

4,518

 

Net Increase in Net Assets Resulting from Capital Share Transactions

 

 

95,507

 

 

 

1,687

 

 

 

42,159

 

 

 

62,831

 

 

 

137,666

 

 

 

64,518

 

Total Increase (Decrease) in Net Assets

 

 

94,910

 

 

 

2,476

 

 

 

45,149

 

 

 

61,953

 

 

 

140,059

 

 

 

64,429

 

Net Assets, Beginning of Period

 

 

364,508

 

 

 

140,094

 

 

 

459,418

 

 

 

142,570

 

 

 

364,508

 

 

 

140,094

 

Net Assets, End of Period

 

$

459,418

 

 

$

142,570

 

$

 

504,567

 

$

 

204,523

 

 

$

 

504,567

 

$

 

204,523

 

 

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

3


 

COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(Unaudited)

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

March 31, 2023

 

 

March 31, 2022

 

 

June 30, 2023

 

 

June 30, 2022

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in net assets resulting from operations

 

$

9,910

 

 

$

2,476

 

 

$

25,058

 

 

$

4,429

 

Adjustments to reconcile net increase (decrease) in net assets resulting from

 

 

 

 

 

 

 

 

 

 

 

 

operations to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net realized (gains)/losses on investments

 

 

 

 

 

(32

)

Net change in unrealized (gains)/losses on investments

 

 

1,798

 

 

 

(420

)

 

 

(519

)

 

 

947

 

Net accretion of discount on investments

 

 

(587

)

 

 

(156

)

 

 

(1,062

)

 

 

(365

)

Non-cash investment income

 

 

(244

)

 

 

 

 

 

(331

)

 

 

 

Purchases of portfolio investments

 

 

(178,055

)

 

 

(53,288

)

 

 

(227,555

)

 

 

(126,851

)

Amortization of deferred financing costs

 

 

8

 

 

 

9

 

 

 

17

 

 

 

17

 

Sales or repayments of portfolio investments

 

 

2,998

 

 

 

1,442

 

 

 

8,119

 

 

 

8,710

 

Increase/(decrease) in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

(Increase)/decrease in interest and dividends receivable

 

 

(579

)

 

 

(267

)

 

 

(398

)

 

 

(460

)

(Increase)/decrease in prepaid expenses and other assets

 

 

38

 

 

 

47

 

 

 

15

 

 

 

68

 

Increase/(decrease) in management fees payable, net

 

 

275

 

 

 

156

 

 

 

444

 

 

 

363

 

Increase/(decrease) in interest payable

 

 

(33

)

 

 

(36

)

 

 

159

 

 

 

87

 

Increase/(decrease) in incentive fee payable, net

 

 

1,336

 

 

 

 

Increase/(decrease) in directors fee payable

 

 

 

 

 

1

 

 

 

 

 

 

2

 

Increase/(decrease) in accrued other general and administrative expenses

 

 

35

 

 

 

129

 

 

 

(1

)

 

 

144

 

Net cash provided by (used in) Operating Activities

 

 

(164,436

)

 

 

(49,907

)

 

 

(194,718

)

 

 

(112,941

)

Cash Flows provided by (used in) Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings on credit facility

 

 

173,000

 

 

 

123,200

 

 

 

207,100

 

 

 

225,800

 

Payments on credit facility

 

 

(95,000

)

 

 

(114,200

)

 

 

(128,000

)

 

 

(241,700

)

Proceeds from issuance of common stock

 

 

85,000

 

 

 

 

 

 

115,001

 

 

 

60,000

 

Net cash provided by (used in) Financing Activities

 

 

163,000

 

 

 

9,000

 

 

 

194,101

 

 

 

44,100

 

Net increase (decrease) in cash and cash equivalents

 

 

(1,436

)

 

 

(40,907

)

 

 

(617

)

 

 

(68,841

)

Cash and cash equivalents, beginning of period

 

 

8,355

 

 

 

114,849

 

 

 

8,355

 

 

 

114,849

 

Cash and cash equivalents, end of period

 

$

6,919

 

 

$

73,942

 

 

$

7,738

 

 

$

46,008

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental and Non-Cash Information:

 

 

 

 

 

 

 

 

 

 

 

 

Interest paid during the period

 

$

858

 

 

$

179

 

 

$

2,210

 

 

$

568

 

Distributions declared during the period

 

$

10,507

 

 

$

1,687

 

 

$

22,665

 

 

$

4,518

 

Reinvestment of distributions during the period

 

$

10,507

 

 

$

1,687

 

 

$

22,665

 

 

$

4,518

 

 

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

4


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

AS OF MARCH 31,JUNE 30, 2023

(amounts in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portfolio Company(3)(7)

 

Industry

 

Spread Above Index

 

Interest Rate (5)

 

 

Maturity Date

 

Principal
/ Shares

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Percentage of
Net Assets
(2)

 

 

Industry

 

Spread Above Index

 

Interest Rate (5)

 

 

Maturity Date

 

Principal
/ Shares

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Percentage of
Net Assets
(2)

 

Debt Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Lien Senior Secured(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

190 Octane Financing - Delayed Draw Loan (8)

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.51

%

 

5/10/2027

 

 

4,912

 

 

$

4,839

 

 

$

4,763

 

 

 

1.0

%

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

5/10/2027

 

 

4,900

 

 

$

4,831

 

 

$

4,768

 

 

 

0.9

%

190 Octane Financing - Revolving Credit Line (4)(8)

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.51

%

 

5/10/2027

 

 

-

 

 

 

(19

)

 

 

(34

)

 

 

0.0

%

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

5/10/2027

 

 

-

 

 

 

(18

)

 

 

(31

)

 

 

0.0

%

190 Octane Financing - Term Loan (8)

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.51

%

 

5/10/2027

 

 

8,498

 

 

 

8,352

 

 

 

8,243

 

 

 

1.8

%

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

5/10/2027

 

 

8,476

 

 

 

8,338

 

 

 

8,247

 

 

 

1.6

%

Abea Acquisition, Inc. - Delayed Draw Loan

 

Consumer Services

 

L + 6.50% (1.00% floor)

 

 

11.36

%

 

11/30/2026

 

 

1,509

 

 

��

1,488

 

 

 

1,455

 

 

 

0.3

%

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.64

%

 

11/30/2026

 

 

1,506

 

 

 

1,486

 

 

 

1,478

 

 

 

0.3

%

Abea Acquisition, Inc. - Term Loan

 

Consumer Services

 

L + 6.50% (1.00% floor)

 

 

11.36

%

 

11/30/2026

 

 

12,026

 

 

 

11,865

 

 

 

11,593

 

 

 

2.5

%

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.64

%

 

11/30/2026

 

 

11,995

 

 

 

11,845

 

 

 

11,779

 

 

 

2.3

%

AccessOne Medcard, Inc. - Term Loan

 

Health Care Technology

 

L + 6.00% (0.50% floor)

 

 

10.86

%

 

8/20/2026

 

 

11,784

 

 

 

11,641

 

 

 

11,324

 

 

 

2.5

%

 

Health Care Technology

 

SOFR + 7.00% (0.50% floor)

 

 

12.14

%

 

8/20/2026

 

 

11,754

 

 

 

11,619

 

 

 

11,249

 

 

 

2.2

%

Aurora Solutions LLC - Delayed Draw Loan (4)(8)

 

Diversified Financials

 

SOFR + 6.00% (0.75% floor)

 

 

10.90

%

 

12/31/2027

 

 

3,319

 

 

 

3,255

 

 

 

2,764

 

 

 

0.6

%

 

Diversified Financials

 

SOFR + 6.00% (0.75% floor) + 0.50% PIK

 

 

11.74

%

 

12/31/2027

 

 

3,320

 

 

 

3,259

 

 

 

2,688

 

 

 

0.5

%

Aurora Solutions LLC - Revolving Credit Line (4)(8)

 

Diversified Financials

 

SOFR + 6.00% (0.75% floor)

 

 

10.90

%

 

12/31/2027

 

 

511

 

 

 

495

 

 

 

410

 

 

 

0.1

%

 

Diversified Financials

 

SOFR + 6.00% (0.75% floor) + 0.50% PIK

 

 

11.74

%

 

12/31/2027

 

 

511

 

 

 

496

 

 

 

396

 

 

 

0.1

%

Aurora Solutions LLC - Term Loan (8)

 

Diversified Financials

 

SOFR + 6.00% (0.75% floor)

 

 

10.90

%

 

12/31/2027

 

 

9,478

 

 

 

9,363

 

 

 

8,729

 

 

 

1.9

%

 

Diversified Financials

 

SOFR + 6.00% (0.75% floor) + 0.50% PIK

 

 

11.74

%

 

12/31/2027

 

 

9,457

 

 

 

9,347

 

 

 

8,606

 

 

 

1.7

%

Batteries Plus Holding Corporation - Revolving Credit Line (4)(8)

 

Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

11.99

%

 

6/27/2028

 

 

-

 

 

 

(54

)

 

 

(54

)

 

 

0.0

%

Batteries Plus Holding Corporation - Term Loan (8)

 

Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

11.99

%

 

6/27/2028

 

 

16,542

 

 

 

16,130

 

 

 

16,129

 

 

 

3.2

%

BKH - Delayed Draw Term Loan (4)(8)

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.41

%

 

2/25/2028

 

 

-

 

 

 

(21

)

 

 

(43

)

 

 

0.0

%

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.75

%

 

2/25/2028

 

 

-

 

 

 

(20

)

 

 

(43

)

 

 

0.0

%

BKH - Term Loan (4)(8)

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.41

%

 

2/25/2028

 

 

21,935

 

 

 

21,511

 

 

 

21,496

 

 

 

4.7

%

BKH - Term Loan (8)

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.75

%

 

2/25/2028

 

 

21,797

 

 

 

21,388

 

 

 

21,362

 

 

 

4.2

%

Bradford Health Services - Delayed Draw Term Loan (4)(8)

 

Health Care Providers & Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.06

%

 

10/27/2024

 

 

-

 

 

 

(59

)

 

 

(746

)

 

 

-0.2

%

 

Health Care Providers & Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.42

%

 

10/27/2028

 

 

-

 

 

 

(50

)

 

 

(121

)

 

 

0.0

%

Bradford Health Services - Term Loan (8)

 

Health Care Providers & Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.06

%

 

10/27/2028

 

 

13,162

 

 

 

12,911

 

 

 

11,859

 

 

 

2.6

%

 

Health Care Providers & Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.42

%

 

10/27/2028

 

 

13,129

 

 

 

12,888

 

 

 

12,919

 

 

 

2.6

%

Cardiovascular Logistics - Delayed Draw Term Loan A (4)(8)

 

Health Care Providers & Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.31

%

 

1/31/2029

 

 

-

 

 

 

(99

)

 

 

(121

)

 

 

0.0

%

 

Health Care Providers & Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.67

%

 

1/31/2029

 

 

1,617

 

 

 

1,521

 

 

 

1,494

 

 

 

0.3

%

Cardiovascular Logistics - Delayed Draw Term Loan B (4)(8)

 

Health Care Providers & Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.31

%

 

1/31/2029

 

 

-

 

 

 

(48

)

 

 

(116

)

 

 

0.0

%

 

Health Care Providers & Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.67

%

 

1/31/2029

 

 

-

 

 

 

(46

)

 

 

(118

)

 

 

0.0

%

Cardiovascular Logistics - Term Loan (8)

 

Health Care Providers & Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.31

%

 

1/31/2029

 

 

7,250

 

 

 

7,111

 

 

 

7,078

 

 

 

1.5

%

 

Health Care Providers & Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.67

%

 

1/31/2029

 

 

7,232

 

 

 

7,098

 

 

 

7,058

 

 

 

1.4

%

CheckedUp - Delayed Draw Term Loan (4)(8)

 

Technology Hardware & Equipment

 

SOFR + 5.50% (1.00% floor)

 

 

10.40

%

 

10/20/2027

 

 

703

 

 

 

671

 

 

 

621

 

 

 

0.1

%

 

Technology Hardware & Equipment

 

SOFR + 5.50% (1.00% floor)

 

 

10.74

%

 

10/20/2027

 

 

702

 

 

 

670

 

 

 

683

 

 

 

0.1

%

CheckedUp - Revolving Credit Line (4)(8)

 

Technology Hardware & Equipment

 

SOFR + 5.50% (1.00% floor)

 

 

10.40

%

 

10/20/2027

 

 

518

 

 

 

488

 

 

 

467

 

 

 

0.1

%

 

Technology Hardware & Equipment

 

SOFR + 5.50% (1.00% floor)

 

 

10.74

%

 

10/20/2027

 

 

189

 

 

 

160

 

 

 

177

 

 

 

0.0

%

CheckedUp - Term Loan (8)

 

Technology Hardware & Equipment

 

SOFR + 5.50% (1.00% floor)

 

 

10.40

%

 

10/20/2027

 

 

9,143

 

 

 

8,997

 

 

 

8,897

 

 

 

1.9

%

 

Technology Hardware & Equipment

 

SOFR + 5.50% (1.00% floor)

 

 

10.74

%

 

10/20/2027

 

 

9,121

 

 

 

8,980

 

 

 

9,066

 

 

 

1.8

%

CreditAssociates, LLC - Revolving Credit Line (4)

 

Diversified Financials

 

SOFR + 7.00% (1.00% floor)

 

 

11.86

%

 

3/29/2027

 

 

-

 

 

 

(16

)

 

 

(20

)

 

 

0.0

%

 

Diversified Financials

 

SOFR + 7.00% (1.00% floor)

 

 

12.14

%

 

3/29/2027

 

 

-

 

 

 

(15

)

 

 

(18

)

 

 

0.0

%

CreditAssociates, LLC - Term Loan

 

Diversified Financials

 

SOFR + 7.00% (1.00% floor)

 

 

11.86

%

 

3/29/2027

 

 

22,752

 

 

 

22,421

 

 

 

22,365

 

 

 

4.9

%

 

Diversified Financials

 

SOFR + 7.00% (1.00% floor)

 

 

12.14

%

 

3/29/2027

 

 

22,404

 

 

 

22,090

 

 

 

22,069

 

 

 

4.4

%

CTM Group - Revolving Credit Line (4)(8)

 

Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

11.81

%

 

11/30/2026

 

 

406

 

 

 

379

 

 

 

382

 

 

 

0.1

%

CTM Group - Term Loan (8)

 

Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

11.81

%

 

11/30/2026

 

 

19,396

 

 

 

18,919

 

 

 

18,973

 

 

 

4.1

%

Educators Publishing Service - Revolving Credit Line (4)

 

Media

 

SOFR + 6.00% (1.00% floor)

 

 

10.80

%

 

2/24/2028

 

 

-

 

 

 

(43

)

 

 

(48

)

 

 

0.0

%

 

Media

 

SOFR + 6.00% (1.00% floor)

 

 

11.14

%

 

2/24/2028

 

 

-

 

 

 

(41

)

 

 

(32

)

 

 

0.0

%

Educators Publishing Service - Term Loan

 

Media

 

SOFR + 6.00% (1.00% floor)

 

 

10.80

%

 

2/24/2028

 

 

17,634

 

 

 

17,207

 

 

 

17,158

 

 

 

3.7

%

 

Media

 

SOFR + 6.00% (1.00% floor)

 

 

11.14

%

 

2/24/2028

 

 

17,590

 

 

 

17,178

 

 

 

17,273

 

 

 

3.4

%

Firebirds - Delayed Draw Term Loan (4)(8)

 

Consumer Services

 

SOFR + 6.25% (2.00% floor)

 

 

11.15

%

 

3/22/2028

 

 

-

 

 

 

(17

)

 

 

(35

)

 

 

0.0

%

 

Consumer Services

 

SOFR + 6.25% (2.00% floor)

 

 

11.49

%

 

3/22/2028

 

 

-

 

 

 

(16

)

 

 

(33

)

 

 

0.0

%

Firebirds - Revolving Credit Line (4)(8)

 

Consumer Services

 

SOFR + 6.25% (2.00% floor)

 

 

11.15

%

 

3/22/2028

 

 

-

 

 

 

(34

)

 

 

(35

)

 

 

0.0

%

 

Consumer Services

 

SOFR + 6.25% (2.00% floor)

 

 

11.49

%

 

3/22/2028

 

 

276

 

 

 

244

 

 

 

243

 

 

 

0.0

%

Firebirds - Term Loan (8)

 

Consumer Services

 

SOFR + 6.25% (2.00% floor)

 

 

11.15

%

 

3/22/2028

 

 

22,803

 

 

 

22,234

 

 

 

22,233

 

 

 

4.8

%

 

Consumer Services

 

SOFR + 6.25% (2.00% floor)

 

 

11.49

%

 

3/22/2028

 

 

22,746

 

 

 

22,199

 

 

 

22,201

 

 

 

4.4

%

Hasa - Delayed Draw Term Loan (4)(8)(9)

 

Capital Goods

 

SOFR + 5.75% (1.00% floor)

 

 

10.81

%

 

1/10/2029

 

 

1,181

 

 

 

1,100

 

 

 

1,102

 

 

 

0.2

%

Hasa - Delayed Draw Loan (4)(8)(9)

 

Capital Goods

 

SOFR + 5.75% (1.00% floor)

 

 

11.17

%

 

1/10/2029

 

 

1,181

 

 

 

1,103

 

 

 

1,094

 

 

 

0.2

%

Hasa - Revolving Credit Line (4)(8)(9)

 

Capital Goods

 

SOFR + 5.75% (1.00% floor)

 

 

10.81

%

 

1/10/2029

 

 

-

 

 

 

(45

)

 

 

(43

)

 

 

0.0

%

 

Capital Goods

 

SOFR + 5.75% (1.00% floor)

 

 

11.17

%

 

1/10/2029

 

 

621

 

 

 

578

 

 

 

573

 

 

 

0.1

%

Hasa - Term Loan (8)(9)

 

Capital Goods

 

SOFR + 5.75% (1.00% floor)

 

 

10.81

%

 

1/10/2029

 

 

13,453

 

 

 

13,067

 

 

 

13,076

 

 

 

2.8

%

 

Capital Goods

 

SOFR + 5.75% (1.00% floor)

 

 

11.17

%

 

1/10/2029

 

 

13,416

 

 

 

13,045

 

 

 

13,000

 

 

 

2.6

%

JG Wentworth - Term Loan (1)(8)

 

Diversified Financials

 

SOFR + 7.50% (1.00% floor)

 

 

12.41

%

 

11/30/2027

 

 

7,639

 

 

 

7,496

 

 

 

7,486

 

 

 

1.6

%

 

Diversified Financials

 

SOFR + 7.50% (1.00% floor)

 

 

12.75

%

 

11/30/2027

 

 

7,610

 

 

 

7,473

 

 

 

7,412

 

 

 

1.5

%

Kemper Sports Management - Delayed Draw Term Loan (4)(8)

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.40

%

 

1/12/2028

 

 

3,277

 

 

 

3,192

 

 

 

3,183

 

 

 

0.7

%

Kemper Sports Management - Delayed Draw Loan (4)(8)

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.74

%

 

1/12/2028

 

 

3,715

 

 

 

3,629

 

 

 

3,626

 

 

 

0.7

%

Kemper Sports Management - Revolving Credit Line (4)(8)(9)

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.40

%

 

1/12/2028

 

 

-

 

 

 

(32

)

 

 

(28

)

 

 

0.0

%

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.74

%

 

1/12/2028

 

 

-

 

 

 

(30

)

 

 

(27

)

 

 

0.0

%

Kemper Sports Management - Term Loan (8)

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.56

%

 

1/12/2028

 

 

18,951

 

 

 

18,585

 

 

 

18,629

 

 

 

4.1

%

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.92

%

 

1/12/2028

 

 

18,904

 

 

 

18,552

 

 

 

18,601

 

 

 

3.7

%

Kent Water Sports Holdings, LLC - Delayed Draw Loan

 

Consumer Durables & Apparel

 

L + 7.00% (1.00% floor) + 2.00% PIK

 

 

14.19

%

 

12/31/2025

 

 

16,295

 

 

 

16,110

 

 

 

14,600

 

 

 

3.2

%

 

Consumer Durables & Apparel

 

L + 7.00% (1.00% floor) + 2.00% PIK

 

 

14.55

%

 

12/31/2025

 

 

16,264

 

 

 

16,097

 

 

 

14,507

 

 

 

2.9

%

MerchantWise Solutions, LLC - Delayed Draw Loan (4)(8)

 

Software & Services

 

SOFR + 6.00% (0.75% floor)

 

 

10.91

%

 

6/1/2028

 

 

2,058

 

 

 

2,005

 

 

 

1,892

 

 

 

0.4

%

 

Software & Services

 

SOFR + 6.00% (0.75% floor)

 

 

11.27

%

 

6/1/2028

 

 

2,053

 

 

 

2,001

 

 

 

1,943

 

 

 

0.4

%

MerchantWise Solutions, LLC - Revolving Credit Line (4)(8)

 

Software & Services

 

SOFR + 6.00% (0.75% floor)

 

 

10.91

%

 

6/1/2028

 

 

-

 

 

 

(27

)

 

 

(83

)

 

 

0.0

%

 

Software & Services

 

SOFR + 6.00% (0.75% floor)

 

 

11.27

%

 

6/1/2028

 

 

-

 

 

 

(25

)

 

 

(56

)

 

 

0.0

%

MerchantWise Solutions, LLC - Term Loan (8)

 

Software & Services

 

SOFR + 6.00% (0.75% floor)

 

 

10.91

%

 

6/1/2028

 

 

12,246

 

 

 

12,031

 

 

 

11,584

 

 

 

2.5

%

 

Software & Services

 

SOFR + 6.00% (0.75% floor)

 

 

11.27

%

 

6/1/2028

 

 

12,215

 

 

 

12,002

 

 

 

11,775

 

 

 

2.3

%

Mollie Funding II LLC - Delayed Draw Loan (1)(4)(8)

 

Diversified Financials

 

SOFR + 8.00% (1.00% floor)

 

 

13.25

%

 

6/11/2027

 

 

1,760

 

 

 

1,726

 

 

 

1,675

 

 

 

0.3

%

Mollie Funding II LLC - Revolving Credit (1)(4)(8)

 

Diversified Financials

 

SOFR + 8.00% (1.00% floor)

 

 

13.25

%

 

6/11/2027

 

 

516

 

 

 

501

 

 

 

485

 

 

 

0.1

%

Mollie Funding II LLC - Term Loan (1)(8)

 

Diversified Financials

 

SOFR + 8.00% (1.00% floor)

 

 

13.25

%

 

6/11/2027

 

 

11,013

 

 

 

10,903

 

 

 

10,793

 

 

 

2.1

%

Narcote, LLC - Revolving Credit Line (1)(4)(8)

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

11.91

%

 

3/30/2027

 

 

871

 

 

 

852

 

 

 

871

 

 

 

0.2

%

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

12.25

%

 

3/30/2027

 

 

871

 

 

 

853

 

 

 

871

 

 

 

0.2

%

Narcote, LLC - Term Loan (1)(8)

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

11.91

%

 

3/30/2027

 

 

4,656

 

 

 

4,588

 

 

 

4,656

 

 

 

1.0

%

Narcote, LLC - Term Loan (1)(8)

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

11.91

%

 

3/30/2027

 

 

2,793

 

 

 

2,753

 

 

 

2,793

 

 

 

0.6

%

National Debt Relief - Delayed Draw Term Loan (4)(8)

 

Diversified Financials

 

SOFR + 6.00% (1.50% floor)

 

 

10.91

%

 

2/24/2027

 

 

525

 

 

 

366

 

 

 

372

 

 

 

0.1

%

5


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

AS OF MARCH 31,JUNE 30, 2023

(amounts in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portfolio Company(3)(7)

 

Industry

 

Spread Above Index

 

Interest Rate (5)

 

 

Maturity Date

 

Principal
/ Shares

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Percentage of
Net Assets
(2)

 

 

Industry

 

Spread Above Index

 

Interest Rate (5)

 

 

Maturity Date

 

Principal
/ Shares

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Percentage of
Net Assets
(2)

 

Narcote, LLC - Term Loan (1)(8)

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

12.25

%

 

3/30/2027

 

 

4,632

 

 

 

4,567

 

 

 

4,632

 

 

 

0.9

%

Narcote, LLC - Term Loan (1)(8)

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

12.25

%

 

3/30/2027

 

 

2,779

 

 

 

2,741

 

 

 

2,779

 

 

 

0.6

%

National Debt Relief - Delayed Draw Loan (4)(8)

 

Diversified Financials

 

SOFR + 6.00% (1.50% floor)

 

 

11.25

%

 

2/24/2027

 

 

2,976

 

 

 

2,826

 

 

 

2,758

 

 

 

0.5

%

National Debt Relief - Revolving Credit Line (4)(8)

 

Diversified Financials

 

SOFR + 6.00% (1.50% floor)

 

 

10.91

%

 

2/24/2027

 

 

-

 

 

$

(32

)

 

$

(31

)

 

 

0.0

%

 

Diversified Financials

 

SOFR + 6.00% (1.50% floor)

 

 

11.25

%

 

2/24/2027

 

 

-

 

 

 

(30

)

 

 

(44

)

 

 

0.0

%

National Debt Relief - Term Loan (8)

 

Diversified Financials

 

SOFR + 6.00% (1.50% floor)

 

 

10.91

%

 

2/24/2027

 

 

13,131

 

 

 

12,945

 

 

 

12,948

 

 

 

2.8

%

 

Diversified Financials

 

SOFR + 6.00% (1.50% floor)

 

 

11.25

%

 

2/24/2027

 

 

13,131

 

 

 

12,953

 

 

 

12,869

 

 

 

2.6

%

Nuspire, LLC - Delayed Draw Loan (4)(8)

 

Software & Services

 

SOFR + 5.75% (1.00% floor)

 

 

10.65

%

 

5/25/2027

 

 

-

 

 

 

(37

)

 

 

(207

)

 

 

0.0

%

Nuspire, LLC - Revolving Credit Line (4)(8)

 

Software & Services

 

SOFR + 5.75% (1.00% floor)

 

 

10.65

%

 

5/25/2027

 

 

-

 

 

 

(15

)

 

 

(41

)

 

 

0.0

%

 

Software & Services

 

SOFR + 5.75% (1.00% floor)

 

 

10.99

%

 

5/25/2027

 

 

-

 

 

 

(14

)

 

 

(39

)

 

 

0.0

%

Nuspire, LLC - Term Loan (8)

 

Software & Services

 

SOFR + 5.75% (1.00% floor)

 

 

10.65

%

 

5/25/2027

 

 

6,982

 

 

 

6,863

 

 

 

6,654

 

 

 

1.4

%

 

Software & Services

 

SOFR + 5.75% (1.00% floor)

 

 

10.99

%

 

5/25/2027

 

 

6,965

 

 

 

6,851

 

 

 

6,658

 

 

 

1.3

%

Oak Dental - Delayed Draw Term Loan (4)(8)

 

Health Care Equipment & Services

 

SOFR + 6.50% (2.00% floor)

 

 

11.41

%

 

3/22/2028

 

 

-

 

 

 

(91

)

 

 

(147

)

 

 

0.0

%

 

Health Care Equipment & Services

 

SOFR + 6.50% (2.00% floor)

 

 

11.75

%

 

3/22/2028

 

 

-

 

 

 

(87

)

 

 

(110

)

 

 

0.0

%

Oak Dental - Revolving Credit Line (4)(8)

 

Health Care Equipment & Services

 

SOFR + 6.50% (2.00% floor)

 

 

11.41

%

 

3/22/2028

 

 

-

 

 

 

(21

)

 

 

(17

)

 

 

0.0

%

 

Health Care Equipment & Services

 

SOFR + 6.50% (2.00% floor)

 

 

11.75

%

 

3/22/2028

 

 

344

 

 

 

324

 

 

 

331

 

 

 

0.1

%

Oak Dental - Term Loan (8)

 

Health Care Equipment & Services

 

SOFR + 6.50% (2.00% floor)

 

 

11.67

%

 

3/22/2028

 

 

18,068

 

 

 

17,617

 

 

 

17,706

 

 

 

3.9

%

 

Health Care Equipment & Services

 

SOFR + 6.50% (2.00% floor)

 

 

12.03

%

 

3/22/2028

 

 

18,023

 

 

 

17,588

 

 

 

17,752

 

 

 

3.5

%

OneCare Media, LLC - Revolving Credit Line (4)

 

Media

 

L + 6.50% (1.00% floor)

 

 

11.36

%

 

9/29/2026

 

 

-

 

 

 

(29

)

 

 

(43

)

 

 

0.0

%

 

Media

 

SOFR + 6.50% (1.00% floor)

 

 

11.64

%

 

9/29/2026

 

 

-

 

 

 

(27

)

 

 

(51

)

 

 

0.0

%

OneCare Media, LLC - Term Loan A

 

Media

 

L + 6.50% (1.00% floor)

 

 

11.36

%

 

9/29/2026

 

 

11,238

 

 

 

11,075

 

 

 

11,002

 

 

 

2.4

%

 

Media

 

SOFR + 6.50% (1.00% floor)

 

 

11.64

%

 

9/29/2026

 

 

10,705

 

 

 

10,557

 

 

 

10,437

 

 

 

2.1

%

OneCare Media, LLC - Term Loan B

 

Media

 

L + 6.50% (1.00% floor)

 

 

11.36

%

 

9/29/2026

 

 

2,492

 

 

 

2,452

 

 

 

2,440

 

 

 

0.5

%

 

Media

 

SOFR + 6.50% (1.00% floor)

 

 

11.64

%

 

9/29/2026

 

 

2,375

 

 

 

2,338

 

 

 

2,315

 

 

 

0.5

%

OneCare Media, LLC - Term Loan C

 

Media

 

L + 6.50% (1.00% floor)

 

 

11.36

%

 

4/12/2028

 

 

1,557

 

 

 

1,530

 

 

 

1,524

 

 

 

0.3

%

 

Media

 

SOFR + 6.50% (1.00% floor)

 

 

11.64

%

 

9/29/2026

 

 

1,484

 

 

 

1,459

 

 

 

1,446

 

 

 

0.3

%

OneCare Media, LLC - Term Loan D

 

Media

 

L + 6.50% (1.00% floor)

 

 

11.36

%

 

9/29/2026

 

 

945

 

 

 

927

 

 

 

925

 

 

 

0.2

%

 

Media

 

SOFR + 6.50% (1.00% floor)

 

 

11.64

%

 

9/29/2026

 

 

901

 

 

 

885

 

 

 

878

 

 

 

0.2

%

Peak Technologies - Term Loan

 

Technology Hardware & Equipment

 

SOFR + 6.25% (1.00% floor)

 

 

11.05

%

 

7/22/2027

 

 

28,653

 

 

 

28,076

 

 

 

27,794

 

 

 

6.0

%

 

Technology Hardware & Equipment

 

SOFR + 6.25% (1.00% floor)

 

 

11.39

%

 

7/22/2027

 

 

28,581

 

 

 

28,037

 

 

 

27,811

 

 

 

5.5

%

PJW Ultimate Holdings LLC - Delayed Draw Term Loan (4)

 

Consumer Services

 

L + 6.00% (1.00% floor)

 

 

10.86

%

 

11/17/2026

 

 

3,864

 

 

 

3,799

 

 

 

3,758

 

 

 

0.8

%

PJW Ultimate Holdings LLC - Delayed Draw Term Loan

 

Consumer Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.14

%

 

11/17/2026

 

 

4,205

 

 

 

4,141

 

 

 

4,091

 

 

 

0.8

%

PJW Ultimate Holdings LLC - Revolving Credit Line (4)

 

Consumer Services

 

L + 6.00% (1.00% floor)

 

 

10.86

%

 

11/17/2026

 

 

1,070

 

 

 

1,039

 

 

 

1,016

 

 

 

0.2

%

 

Consumer Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.14

%

 

11/17/2026

 

 

171

 

 

 

142

 

 

 

113

 

 

 

0.0

%

PJW Ultimate Holdings LLC - Term Loan

 

Consumer Services

 

L + 6.00% (1.00% floor)

 

 

10.86

%

 

11/17/2026

 

 

9,766

 

 

 

9,620

 

 

 

9,522

 

 

 

2.1

%

 

Consumer Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.14

%

 

11/17/2026

 

 

9,766

 

 

 

9,627

 

 

 

9,502

 

 

 

1.9

%

Planet DDS - Delayed Draw Term Loan (4)(8)(9)

 

Health Care Technology

 

SOFR + 7.50% (0.75% floor)

 

 

12.40

%

 

7/18/2028

 

 

-

 

 

 

(22

)

 

 

(22

)

 

 

0.0

%

Planet DDS - Delayed Draw Loan (4)(8)(9)

 

Health Care Technology

 

SOFR + 7.50% (0.75% floor)

 

 

12.74

%

 

7/18/2028

 

 

863

 

 

 

842

 

 

 

813

 

 

 

0.2

%

Planet DDS - Term Loan (8)(9)

 

Health Care Technology

 

SOFR + 7.50% (0.75% floor)

 

 

12.65

%

 

7/18/2028

 

 

14,348

 

 

 

13,950

 

 

 

13,946

 

 

 

3.0

%

 

Health Care Technology

 

SOFR + 7.50% (0.75% floor)

 

 

13.14

%

 

7/18/2028

 

 

14,348

 

 

 

13,960

 

 

 

13,946

 

 

 

2.8

%

Raven Engineered Films, Inc. - Revolving Credit Line (4)(8)

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

11.91

%

 

4/29/2027

 

 

528

 

 

 

466

 

 

 

422

 

 

 

0.1

%

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

12.25

%

 

4/29/2027

 

 

226

 

 

 

168

 

 

 

121

 

 

 

0.0

%

Raven Engineered Films, Inc. - Term Loan (8)

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

11.91

%

 

4/29/2027

 

 

21,772

 

 

 

21,407

 

 

 

21,162

 

 

 

4.6

%

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

12.25

%

 

4/29/2027

 

 

21,489

 

 

 

21,142

 

 

 

20,888

 

 

 

4.1

%

Rushmore Intermediate - Delayed Draw Loan (4)

 

Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.19

%

 

11/1/2027

 

 

1,262

 

 

 

1,240

 

 

 

1,218

 

 

 

0.3

%

Rushmore Intermediate - Delayed Draw Loan

 

Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.27

%

 

11/1/2027

 

 

1,262

 

 

 

1,242

 

 

 

1,222

 

 

 

0.2

%

Rushmore Intermediate - Delayed Draw Loan 2nd Amend (4)

 

Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.27

%

 

11/1/2027

 

 

407

 

 

 

370

 

 

 

364

 

 

 

0.1

%

Rushmore Intermediate - Revolving Credit Line (4)

 

Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.19

%

 

11/1/2027

 

 

-

 

 

 

(21

)

 

 

(44

)

 

 

0.0

%

 

Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.27

%

 

11/1/2027

 

 

-

 

 

 

(19

)

 

 

(43

)

 

 

0.0

%

Rushmore Intermediate - Term Loan

 

Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.19

%

 

11/1/2027

 

 

12,096

 

 

 

11,904

 

 

 

11,697

 

 

 

2.5

%

 

Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.27

%

 

11/1/2027

 

 

12,096

 

 

 

11,913

 

 

 

11,709

 

 

 

2.3

%

S4T Holdings Corp. - Delayed Draw Loan (4)(8)

 

Commercial & Professional Services

 

SOFR + 6.00% (1.00% floor)

 

 

10.91

%

 

12/28/2026

 

 

-

 

 

 

(58

)

 

 

-

 

 

 

0.0

%

S4T Holdings Corp. - Delayed Draw Loan (8)

 

Commercial & Professional Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.25

%

 

12/28/2026

 

 

7,731

 

 

 

7,599

 

 

 

7,731

 

 

 

1.5

%

S4T Holdings Corp. - Term Loan (8)

 

Commercial & Professional Services

 

SOFR + 6.00% (1.00% floor)

 

 

10.91

%

 

12/28/2026

 

 

25,955

 

 

 

25,559

 

 

 

25,955

 

 

 

5.6

%

 

Commercial & Professional Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.25

%

 

12/28/2026

 

 

25,890

 

 

 

25,511

 

 

 

25,891

 

 

 

5.1

%

Select Rehabilitation - Term Loan (8)

 

Health Care Equipment & Services

 

SOFR + 8.50% (1.00% floor)

 

 

13.51

%

 

10/19/2027

 

 

20,049

 

 

 

19,585

 

 

 

19,348

 

 

 

4.2

%

 

Health Care Equipment & Services

 

SOFR + 8.50% (1.00% floor)

 

 

13.87

%

 

10/19/2027

 

 

19,999

 

 

 

19,559

 

 

 

19,599

 

 

 

3.9

%

The Smilist Management, Inc. - Delayed Draw Loan A

 

Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.30

%

 

12/23/2025

 

 

2,729

 

 

 

2,700

 

 

 

2,623

 

 

 

0.6

%

 

Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.64

%

 

12/23/2025

 

 

2,716

 

 

 

2,689

 

 

 

2,612

 

 

 

0.5

%

The Smilist Management, Inc. - Delayed Draw Loan B

 

Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.30

%

 

12/23/2025

 

 

5,813

 

 

 

5,748

 

 

 

5,587

 

 

 

1.2

%

 

Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.64

%

 

12/23/2025

 

 

5,784

 

 

 

5,724

 

 

 

5,564

 

 

 

1.1

%

The Smilist Management, Inc. - Delayed Draw Loan C (4)

 

Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.30

%

 

12/23/2025

 

 

2,556

 

 

 

2,516

 

 

 

2,376

 

 

 

0.5

%

 

Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.64

%

 

12/23/2025

 

 

3,488

 

 

 

3,445

 

 

 

3,313

 

 

 

0.7

%

The Smilist Management, Inc. - Revolving Credit Line (4)

 

Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.30

%

 

12/23/2025

 

 

-

 

 

 

(6

)

 

 

(21

)

 

 

0.0

%

 

Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.64

%

 

12/23/2025

 

 

-

 

 

 

(5

)

 

 

(21

)

 

 

0.0

%

The Smilist Management, Inc. - Term Loan

 

Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.30

%

 

12/23/2025

 

 

4,921

 

 

 

4,869

 

 

 

4,729

 

 

 

1.0

%

 

Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.64

%

 

12/23/2025

 

 

4,896

 

 

 

4,847

 

 

 

4,710

 

 

 

0.9

%

VardimanBlack Holdings LLC - Delayed Draw Loan (8)

 

Health Care Equipment & Services

 

SOFR + 7.00% (0.50% floor)

 

 

11.90

%

 

3/18/2027

 

 

6,785

 

 

 

6,728

 

 

 

6,676

 

 

 

1.5

%

 

Health Care Equipment & Services

 

SOFR + 7.00% (0.50% floor)

 

 

12.24

%

 

3/18/2027

 

 

6,768

 

 

 

6,714

 

 

 

6,632

 

 

 

1.3

%

VardimanBlack Holdings LLC - Delayed Draw Loan 1st Amendment (4)(8)

 

Health Care Equipment & Services

 

SOFR + 8.00% (0.50% floor)

 

 

12.90

%

 

3/18/2027

 

 

10,543

 

 

 

10,437

 

 

 

10,366

 

 

 

2.3

%

VardimanBlack Holdings LLC - Delayed Draw Loan 1st Amend (8)

 

Health Care Equipment & Services

 

SOFR + 8.00% (0.50% floor)

 

 

13.24

%

 

3/18/2027

 

 

11,058

 

 

 

10,957

 

 

 

10,837

 

 

 

2.1

%

VardimanBlack Holdings LLC - Term Loan (8)

 

Health Care Equipment & Services

 

SOFR + 7.00% (0.50% floor)

 

 

11.90

%

 

3/18/2027

 

 

8,166

 

 

 

8,098

 

 

 

8,036

 

 

 

1.7

%

 

Health Care Equipment & Services

 

SOFR + 7.00% (0.50% floor)

 

 

12.24

%

 

3/18/2027

 

 

8,146

 

 

 

8,081

 

 

 

7,983

 

 

 

1.6

%

Vecta Environmental Services - Delayed Draw Term Loan (4)(8)

 

Industrials

 

SOFR + 6.25% (1.00% floor)

 

 

11.31

%

 

12/30/2027

 

 

-

 

 

 

(23

)

 

 

(49

)

 

 

0.0

%

 

Industrials

 

SOFR + 6.25% (1.00% floor)

 

 

11.67

%

 

12/30/2027

 

 

-

 

 

 

(22

)

 

 

(40

)

 

 

0.0

%

Vecta Environmental Services - Revolving Credit Line (4)(8)

 

Industrials

 

SOFR + 6.25% (1.00% floor)

 

 

11.15

%

 

12/30/2027

 

 

124

 

 

 

107

 

 

 

106

 

 

 

0.0

%

 

Industrials

 

SOFR + 6.25% (1.00% floor)

 

 

11.49

%

 

12/30/2027

 

 

124

 

 

 

108

 

 

 

110

 

 

 

0.0

%

Vecta Environmental Services - Term Loan (8)

 

Industrials

 

SOFR + 6.25% (1.00% floor)

 

 

11.31

%

 

12/30/2027

 

 

8,160

 

 

 

8,006

 

 

 

7,997

 

 

 

1.7

%

 

Industrials

 

SOFR + 6.25% (1.00% floor)

 

 

11.67

%

 

12/30/2027

 

 

8,140

 

 

 

7,992

 

 

 

8,009

 

 

 

1.6

%

VENU+ - Revolving Credit Line (4)(8)

 

Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.04

%

 

11/30/2026

 

 

480

 

 

 

455

 

 

 

456

 

 

 

0.1

%

VENU+ - Term Loan (8)

 

Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.04

%

 

11/30/2026

 

 

19,347

 

 

 

18,895

 

 

 

18,922

 

 

 

3.8

%

Whitestone Home Furnishings, LLC - Term Loan

 

Consumer Durables & Apparel

 

L + 9.00% (1.00% floor)

 

 

13.86

%

 

8/20/2026

 

 

15,300

 

 

 

15,082

 

 

 

14,244

 

 

 

3.1

%

 

Consumer Durables & Apparel

 

SOFR + 9.00% (1.00% floor)

 

 

14.14

%

 

8/20/2026

 

 

14,819

 

 

 

14,618

 

 

 

13,900

 

 

 

2.8

%

Wilnat, Inc. - Revolving Credit Line (4)

 

Capital Goods

 

SOFR + 6.00% (1.00% floor)

 

 

10.80

%

 

12/29/2026

 

 

-

 

 

 

(18

)

 

 

-

 

 

 

0.0

%

Wilnat, Inc. - Term Loan

 

Capital Goods

 

SOFR + 6.00% (1.00% floor)

 

 

10.80

%

 

12/29/2026

 

 

12,191

 

 

 

12,003

 

 

 

12,191

 

 

 

2.7

%

Total First Lien Senior Secured

 

 

 

 

 

542,748

 

 

 

531,807

 

 

 

523,048

 

 

 

113.6

%

Total Debt Investments

 

 

 

 

 

542,748

 

 

 

531,807

 

 

 

523,048

 

 

 

113.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Equity Investments

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Equity

 

 

 

 

 

 

 

 

 

 

 

 

Atlas US Holdings, LP - class B-2 units (6)

 

Diversified Financials

 

NA

 

NA

 

 

NA

 

 

857,787

 

 

$

873

 

 

$

530

 

 

 

0.1

%

Educators Publishing Service - Series A-1 Preferred Units (6)

 

Media

 

NA

 

NA

 

 

NA

 

 

887,237

 

 

 

887

 

 

 

890

 

 

 

0.2

%

6


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

AS OF MARCH 31,JUNE 30, 2023

(amounts in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Portfolio Company(3)(7)

 

Industry

 

Spread Above Index

 

Interest Rate (5)

 

 

Maturity Date

 

Principal
/ Shares

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Percentage of
Net Assets
(2)

 

 

Industry

 

Spread Above Index

 

Interest Rate (5)

 

 

Maturity Date

 

Principal
/ Shares

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Percentage of
Net Assets
(2)

 

Wilnat, Inc. - Revolving Credit Line (4)

 

Capital Goods

 

SOFR + 5.00% (1.00% floor)

 

 

10.14

%

 

12/29/2026

 

 

-

 

 

 

(17

)

 

 

-

 

 

 

0.0

%

Wilnat, Inc. - Term Loan

 

Capital Goods

 

SOFR + 5.00% (1.00% floor)

 

 

10.14

%

 

12/29/2026

 

 

12,160

 

 

 

11,980

 

 

 

12,160

 

 

 

2.4

%

Wilnat, Inc. - Term Loan

 

Capital Goods

 

SOFR + 5.00% (1.00% floor)

 

 

10.14

%

 

12/29/2026

 

 

3,159

 

 

 

3,096

 

 

 

3,159

 

 

 

0.6

%

Total First Lien Senior Secured

 

 

 

 

 

587,837

 

 

 

576,637

 

 

 

570,382

 

 

 

113.0

%

Total Debt Investments

 

 

 

 

 

587,837

 

 

 

576,637

 

 

 

570,382

 

 

 

113.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Equity Investments

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Equity

 

 

 

 

 

 

 

 

 

 

 

 

Atlas US Holdings, LP - class X preferred (6)

 

Diversified Financials

 

15.00% PIK

 

 

15.00

%

 

NA

 

 

113,989

 

 

$

114

 

 

$

228

 

 

 

0.0

%

Atlas US Holdings, LP - class B-2 units (6)

 

Diversified Financials

 

NA

 

 

 

 

 

857,787

 

 

 

873

 

 

 

214

 

 

 

0.0

%

Educators Publishing Service - Series A-1 Preferred Units (6)

 

Media

 

NA

 

NA

 

 

NA

 

 

887,237

 

 

 

887

 

 

 

905

 

 

 

0.2

%

TVG OCM III (FT) Blocker, LLC - Class B Units (6)

 

Media

 

NA

 

NA

 

 

NA

 

 

706

 

 

 

706

 

 

 

971

 

 

 

0.2

%

 

Media

 

NA

 

NA

 

 

NA

 

 

706

 

 

 

706

 

 

 

890

 

 

 

0.2

%

Total Preferred Equity

 

 

 

 

 

 

2,466

 

 

 

2,391

 

 

 

0.5

%

 

 

 

 

 

 

 

2,580

 

 

 

2,237

 

 

 

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

190 Octane Holdings, LLC - series A-1 units (6)(9)

 

Consumer Services

 

NA

 

NA

 

 

NA

 

 

223,551

 

 

$

377

 

 

$

407

 

 

 

0.1

%

 

Consumer Services

 

NA

 

NA

 

 

NA

 

 

223,551

 

 

$

377

 

 

$

398

 

 

 

0.1

%

Cardiovascular Logistics - Class O2 Units (6)

 

Health Care Providers & Services

 

NA

 

NA

 

 

NA

 

 

142,509

 

 

 

143

 

 

 

143

 

 

 

0.0

%

 

Health Care Providers & Services

 

NA

 

NA

 

 

NA

 

 

142,509

 

 

 

143

 

 

 

142

 

 

 

0.0

%

CTM Group - Class A-1 Units (6)

 

Consumer Services

 

NA

 

NA

 

 

NA

 

 

664,865

 

 

 

665

 

 

 

677

 

 

 

0.1

%

Firebirds - Class A Units (6)

 

Consumer Services

 

NA

 

NA

 

 

NA

 

 

590,012

 

 

 

590

 

 

 

590

 

 

 

0.1

%

 

Consumer Services

 

NA

 

NA

 

 

NA

 

 

590,012

 

 

 

590

 

 

 

553

 

 

 

0.1

%

Firebirds - Class B Units

 

Consumer Services

 

NA

 

NA

 

 

NA

 

 

590,012

 

 

 

-

 

 

 

-

 

 

 

0.0

%

Kemper Sports Management - Series A Units (6)(9)

 

Consumer Services

 

NA

 

NA

 

 

NA

 

 

610,763

 

 

 

611

 

 

 

641

 

 

 

0.1

%

Oak Dental - Class C Units (6)

 

Health Care Equipment & Services

 

NA

 

NA

 

 

NA

 

 

45

 

 

 

344

 

 

 

344

 

 

 

0.1

%

Firebirds - Class B Units (6)

 

Consumer Services

 

NA

 

NA

 

 

NA

 

 

590,012

 

 

 

-

 

 

 

38

 

 

 

0.0

%

Kemper Sports Management Holdings LLC Equity (6)(9)

 

Consumer Services

 

NA

 

NA

 

 

NA

 

 

610,763

 

 

 

611

 

 

 

647

 

 

 

0.1

%

Oak Dental - Class C Units (6)(9)

 

Health Care Equipment & Services

 

NA

 

NA

 

 

NA

 

 

45

 

 

 

344

 

 

 

355

 

 

 

0.1

%

Rushmore Lender Co-Invest Blocker, LLC - Common Stock (6)

 

Health Care Equipment & Services

 

NA

 

NA

 

 

NA

 

 

537,606

 

 

 

539

 

 

 

479

 

 

 

0.1

%

 

Health Care Equipment & Services

 

NA

 

NA

 

 

NA

 

 

537,606

 

 

 

538

 

 

 

514

 

 

 

0.1

%

Sea-K Investors, LLC - Class A Units (6)(9)

 

Consumer Durables & Apparel

 

NA

 

NA

 

 

NA

 

 

399,694

 

 

 

733

 

 

 

117

 

 

 

0.0

%

 

Consumer Durables & Apparel

 

NA

 

NA

 

 

NA

 

 

399,694

 

 

 

732

 

 

 

104

 

 

 

0.0

%

VENU+ - Class A-1 Units (6)

 

Consumer Services

 

NA

 

NA

 

 

NA

 

 

664,865

 

 

 

664

 

 

 

662

 

 

 

0.1

%

Vistria ESS Holdings, LLC - Equity (6)

 

Commercial & Professional Services

 

NA

 

NA

 

 

NA

 

 

326

 

 

 

327

 

 

 

487

 

 

 

0.1

%

 

Commercial & Professional Services

 

NA

 

NA

 

 

NA

 

 

326

 

 

 

326

 

 

 

549

 

 

 

0.1

%

Total Common Equity

 

 

 

 

 

 

4,329

 

 

 

3,885

 

 

 

0.7

%

 

 

 

 

 

 

 

4,325

 

 

 

3,962

 

 

 

0.7

%

Total Equity Investments

 

 

 

 

 

 

6,795

 

 

 

6,276

 

 

 

1.2

%

 

 

 

 

 

 

 

6,905

 

 

 

6,199

 

 

 

1.1

%

Total Investments

 

 

 

 

 

$

538,602

 

 

 

529,324

 

 

 

114.8

%

 

 

 

 

 

 

$

583,542

 

 

 

576,581

 

 

 

114.1

%

Liabilities in Excess of Other Assets

 

 

 

 

 

 

 

 

(69,906

)

 

 

-14.8

%

 

 

 

 

 

 

 

 

 

(72,014

)

 

 

-14.1

%

Net Assets

 

 

 

 

 

 

 

$

459,418

 

 

 

100.0

%

 

 

 

 

 

 

 

 

$

504,567

 

 

 

100.0

%

(1)
The Company deemed this asset to be a "non-qualifying asset" under Section 55(a) of the Investment Company Act of 1940, as amended. Qualifying assets must represent at least 70.0% of the Company's total assets at the time of acquisition of any additional non-qualifying assets. As of March 31,June 30, 2023, 2.934.88% of the Company's total assets are represented by investments at fair value that are considered non-qualifying assets.
(2)
Percentages are based on net assets as of March 31,June 30, 2023.
(3)
The fair value of investments with respect to securities for which market quotations are not readily available are valued using significant unobservable inputs (See Note 3 – Fair Value of Financial Instruments).
(4)
For investments in revolving credit facilities and delayed draw commitments, the cost basis of the funded investments purchased is offset by any costs/netbacks received for any unfunded portion on the total balance committed. The Company has variousfair value is also adjusted for the price appreciation or depreciation on the unfunded portion. As a result, the purchase of commitments to portfolio companies.not completely funded may result in a negative fair value until it is called and funded. Please refer to Note 6 - Commitments and Contingencies for details of these unfunded commitments. The negative cost, if applicable, is the result of the capitalized discount or unfunded commitment being greater than the principal amounts outstanding on the loan. 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.
(5)
The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) or Secured Overnight Financing Rate (“SOFR") and which reset monthly, quarterly, semiannually, or annually. For each, the Company has provided the spread over the reference rate and the current interest rate in effect at the reporting date. As of March 31,June 30, 2023, the reference rates for the Company's variable rate loans were the 1 mo. LIBOR at 4.86%, the 3 mo. LIBOR at 5.19%, the 1 mo. SOFR at 4.815.14%, the 3 mo. SOFR at 4.925.27%, and the 6 mo. SOFR at 4.905.39%. Certain investments are subject to an interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable.
(6)
Equity and member interests are non-income-producing unless otherwise noted.
(7)
All investments domiciled in the United States unless otherwise noted.
(8)
Positions that have a SOFR reference rate, from time to time have an additional spread adjustment. This spread adjustment ranges from 0% - 0.26% depending on the contractual arrangement. These spread adjustments have been included in the all-in rate shown.
(9)
Ownership of this investment is through a wholly-owned subsidiary.

7


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

AS OF MARCH 31,JUNE 30, 2023

(amounts in thousands, except per share data)

(Unaudited)

The following table shows the portfolio composition by industry grouping based on fair value at March 31,June 30, 2023:

 

 

At March 31, 2023

 

 

At June 30, 2023

 

Industry

 

Investments at
Fair Value

 

 

Percentage of
Total Portfolio

 

 

Investments at
Fair Value

 

 

Percentage of
Total Portfolio

 

Consumer Services

 

$

127,386

 

 

 

24.0

%

 

$

143,628

 

 

 

25.0

%

Health Care Equipment & Services

 

 

75,662

 

 

 

14.3

 

 

 

77,145

 

 

 

13.4

 

Diversified Financials

 

 

55,553

 

 

 

10.5

 

 

 

70,131

 

 

 

12.2

 

Technology Hardware & Equipment

 

 

37,737

 

 

 

6.5

 

Health Care Providers & Services

 

 

37,552

 

 

 

6.5

 

Industrials

 

 

37,958

 

 

 

7.2

 

 

 

37,370

 

 

 

6.5

 

Technology Hardware & Equipment

 

 

37,779

 

 

 

7.1

 

Commercial & Professional Services

 

 

34,171

 

 

 

5.9

 

Media

 

 

34,819

 

 

 

6.6

 

 

 

34,061

 

 

 

5.9

 

Health Care Providers & Services

 

 

33,391

 

 

 

6.3

 

Capital Goods

 

 

29,986

 

 

 

5.2

 

Consumer Durables & Apparel

 

 

28,961

 

 

 

5.5

 

 

 

28,511

 

 

 

4.9

 

Commercial & Professional Services

 

 

26,442

 

 

 

5.0

 

Capital Goods

 

 

26,326

 

 

 

5.0

 

Health Care Technology

 

 

25,248

 

 

 

4.8

 

 

 

26,008

 

 

 

4.5

 

Software & Services

 

 

19,799

 

 

 

3.7

 

 

 

20,281

 

 

 

3.5

 

 

$

529,324

 

 

 

100.0

%

 

$

576,581

 

 

 

100.0

%

 

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

8


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

(amounts in thousands, except per share data)

December 31, 2022

 

Portfolio Company(3)(7)

 

Industry

 

Interest Rate

 

Maturity
Date

 

Principal
/ Shares

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Percentage
of Net
Assets (2)

 

Debt Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Lien Senior Secured(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

190 Octane Financing - Delayed Draw Loan (4)(8)(9)

 

 Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

5/10/2027

 

 

2,734

 

 

$

2,678

 

 

$

2,656

 

 

 

0.7

%

190 Octane Financing -Revolving Credit Line (4)(8)(9)

 

 Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

5/10/2027

 

 

 

 

 

(20

)

 

 

(29

)

 

 

0.0

%

190 Octane Financing - Term Loan (9)

 

 Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

5/10/2027

 

 

8,519

 

 

 

8,364

 

 

 

8,305

 

 

 

2.3

%

Abea Acquisition, Inc. - Delayed Draw Loan

 

 Consumer Services

 

L + 6.50% (1.00% floor)

 

11/30/2026

 

 

1,513

 

 

 

1,490

 

 

 

1,457

 

 

 

0.4

%

Abea Acquisition, Inc. - Term Loan

 

 Consumer Services

 

L + 6.50% (1.00% floor)

 

11/30/2026

 

 

12,056

 

 

 

11,883

 

 

 

11,610

 

 

 

3.2

%

AccessOne Medcard, Inc. - Term Loan

 

 Health Care Technology

 

L + 6.00% (0.50% floor)

 

8/20/2026

 

 

11,847

 

 

 

11,689

 

 

 

11,503

 

 

 

3.2

%

Aurora Solutions LLC - Delayed Draw Loan (4)(8)(9)

 

 Diversified Financials

 

SOFR + 6.00% (0.75% floor)

 

12/31/2027

 

 

3,319

 

 

 

3,251

 

 

 

3,087

 

 

 

0.8

%

Aurora Solutions LLC -Revolving Credit Line (4)(8)(9)

 

 Diversified Financials

 

SOFR + 6.00% (0.75% floor)

 

12/31/2027

 

 

511

 

 

 

495

 

 

 

468

 

 

 

0.1

%

Aurora Solutions LLC - Term Loan (9)

 

 Diversified Financials

 

SOFR + 6.00% (0.75% floor)

 

12/31/2027

 

 

9,502

 

 

 

9,378

 

 

 

9,189

 

 

 

2.5

%

Bradford Health Services -Delayed Draw Term Loan (4)(8)

 

 Health Care Equipment & Services

 

SOFR + 6.00% (1.00% floor)

 

10/27/2024

 

 

 

 

 

(69

)

 

 

(189

)

 

 

-0.1

%

Bradford Health Services - Term Loan

 

 Health Care Equipment & Services

 

SOFR + 6.00% (1.00% floor)

 

10/27/2028

 

 

13,195

 

 

 

12,935

 

 

 

12,865

 

 

 

3.5

%

CheckedUp -Revolving Credit Line (4)(8)

 

 Technology Hardware & Equipment

 

SOFR + 5.50% (1.00% floor)

 

10/20/2027

 

 

377

 

 

 

345

 

 

 

339

 

 

 

0.1

%

CheckedUp - Delayed Draw Term Loan (4)(8)

 

 Technology Hardware & Equipment

 

SOFR + 5.50% (1.00% floor)

 

10/20/2027

 

 

705

 

 

 

670

 

 

 

645

 

 

 

0.2

%

CheckedUp - Term Loan

 

 Technology Hardware & Equipment

 

SOFR + 5.50% (1.00% floor)

 

10/20/2027

 

 

9,166

 

 

 

9,010

 

 

 

8,984

 

 

 

2.5

%

CreditAssociates, LLC -Revolving Credit Line (4)(8)

 

 Diversified Financials

 

L + 7.00% (1.00% floor)

 

3/29/2027

 

 

 

 

 

(17

)

 

 

(41

)

 

 

0.0

%

CreditAssociates, LLC - Term Loan

 

 Diversified Financials

 

L + 7.00% (1.00% floor)

 

3/29/2027

 

 

22,898

 

 

 

22,540

 

 

 

22,074

 

 

 

6.1

%

JG Wentworth -Term Loan (1)(9)

 

 Diversified Financials

 

SOFR + 7.50% (1.00% floor)

 

11/30/2027

 

 

7,667

 

 

 

7,515

 

 

 

7,514

 

 

 

2.1

%

Kent Water Sports Holdings, LLC - Delayed Draw Loan

 

 Consumer Durables & Apparel

 

L + 7.00% (1.00% floor)

 

12/31/2025

 

 

16,164

 

 

 

15,962

 

 

 

14,434

 

 

 

4.0

%

MerchantWise Solutions, LLC -Delayed Draw Loan (4)(8)(9)

 

 Software & Services

 

SOFR + 6.00% (0.75% floor)

 

6/1/2028

 

 

2,081

 

 

 

2,007

 

 

 

1,973

 

 

 

0.5

%

MerchantWise Solutions, LLC -Revolving Credit Line (4)(8)(9)

 

 Software & Services

 

SOFR + 6.00% (0.75% floor)

 

6/1/2028

 

 

 

 

 

(28

)

 

 

(54

)

 

 

0.0

%

MerchantWise Solutions, LLC -Term Loan (9)

 

 Software & Services

 

SOFR + 6.00% (0.75% floor)

 

6/1/2028

 

 

12,277

 

 

 

12,051

 

 

 

11,847

 

 

 

3.3

%

Narcote, LLC - Revolving Credit Line (1)(4)(8)(9)

 

 Industrials

 

SOFR + 7.00% (1.00% floor)

 

3/30/2027

 

 

871

 

 

 

850

 

 

 

854

 

 

 

0.2

%

Narcote, LLC - Term Loan (1)(9)

 

 Industrials

 

SOFR + 7.00% (1.00% floor)

 

3/30/2027

 

 

3,216

 

 

 

3,166

 

 

 

3,177

 

 

 

0.9

%

Narcote, LLC - Term Loan (1)(9)

 

 Industrials

 

SOFR + 7.00% (1.00% floor)

 

3/30/2027

 

 

5,360

 

 

 

5,276

 

 

 

5,295

 

 

 

1.5

%

Nuspire, LLC - Delayed Draw Loan (4)(8)(9)

 

 Software & Services

 

SOFR + 5.75% (1.00% floor)

 

5/25/2027

 

 

 

 

 

(39

)

 

 

(198

)

 

 

-0.1

%

Nuspire, LLC - Revolving Credit Line (4)(8)(9)

 

 Software & Services

 

SOFR + 5.75% (1.00% floor)

 

5/25/2027

 

 

 

 

 

(15

)

 

 

(40

)

 

 

0.0

%

Nuspire, LLC - Term Loan (9)

 

 Software & Services

 

SOFR + 5.75% (1.00% floor)

 

5/25/2027

 

 

7,000

 

 

 

6,873

 

 

 

6,685

 

 

 

1.8

%

OneCare Media, LLC - Term Loan D

 

 Media

 

L + 6.50% (1.00% floor)

 

9/29/2026

 

 

957

 

 

 

938

 

 

 

936

 

 

 

0.3

%

OneCare Media, LLC -Revolving Credit Line (4)(8)

 

 Media

 

L + 6.50% (1.00% floor)

 

9/29/2026

 

 

 

 

 

(31

)

 

 

(45

)

 

 

0.0

%

OneCare Media, LLC -Term Loan A

 

 Media

 

L + 6.50% (1.00% floor)

 

9/29/2026

 

 

11,389

 

 

 

11,210

 

 

 

11,139

 

 

 

3.1

%

OneCare Media, LLC - Term Loan B

 

 Media

 

L + 6.50% (1.00% floor)

 

9/29/2026

 

 

2,526

 

 

 

2,482

 

 

 

2,470

 

 

 

0.7

%

OneCare Media, LLC - Term Loan C

 

 Media

 

L + 6.50% (1.00% floor)

 

9/29/2026

 

 

1,577

 

 

 

1,548

 

 

 

1,543

 

 

 

0.4

%

Peak Technologies -Term Loan

 

 Software & Services

 

SOFR + 6.25% (1.00% floor)

 

7/22/2027

 

 

28,725

 

 

 

28,114

 

 

 

27,720

 

 

 

7.6

%

PJW Ultimate Holdings LLC - Delayed Draw Term Loan (4)(8)

 

 Consumer Services

 

L + 6.00% (1.00% floor)

 

11/17/2026

 

 

3,561

 

 

 

3,495

 

 

 

3,433

 

 

 

0.9

%

PJW Ultimate Holdings LLC -Revolving Credit Line (4)(8)

 

 Consumer Services

 

L + 6.00% (1.00% floor)

 

11/17/2026

 

 

214

 

 

 

181

 

 

 

150

 

 

 

0.0

%

PJW Ultimate Holdings LLC -Term Loan

 

 Consumer Services

 

L + 6.00% (1.00% floor)

 

11/17/2026

 

 

9,766

 

 

 

9,608

 

 

 

9,473

 

 

 

2.6

%

Raven Engineered Films, Inc. -Revolving Credit Line (4)(8)(9)

 

 Industrials

 

SOFR + 7.00% (1.00% floor)

 

4/29/2027

 

 

 

 

 

(65

)

 

 

(113

)

 

 

0.0

%

Raven Engineered Films, Inc. -Term Loan (9)

 

 Industrials

 

SOFR + 7.00% (1.00% floor)

 

4/29/2027

 

 

22,055

 

 

 

21,658

 

 

 

21,393

 

 

 

5.9

%

Rushmore Intermediate -Delayed Draw Loan (4)(8)

 

 Health Care Equipment & Services

 

L + 7.00% (0.75% floor)

 

11/1/2027

 

 

877

 

 

 

858

 

 

 

829

 

 

 

0.2

%

Rushmore Intermediate - Revolving Credit Line (4)(8)

 

 Health Care Equipment & Services

 

L + 7.00% (0.75% floor)

 

11/1/2027

 

 

 

 

 

(22

)

 

 

(48

)

 

 

0.0

%

79


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

(amounts in thousands, except per share data)

December 31, 2022

Portfolio Company(3)(7)

 

Industry

 

Interest Rate

 

Maturity
Date

 

Principal
/ Shares

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Percentage
of Net
Assets (2)

 

 

Industry

 

Interest Rate

 

Maturity
Date

 

Principal
/ Shares

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Percentage
of Net
Assets (2)

 

Rushmore Intermediate -Term Loan

 

 Health Care Equipment & Services

 

L + 7.00% (0.75% floor)

 

11/1/2027

 

 

12,096

 

 

$

11,891

 

 

$

11,661

 

 

 

3.2

%

 

 Health Care Equipment & Services

 

L + 7.00% (0.75% floor)

 

11/1/2027

 

 

12,096

 

 

 

11,891

 

 

 

11,661

 

 

 

3.2

%

S4T Holdings Corp. - Delayed Draw Loan (4)(8)(9)

 

 Commercial & Professional Services

 

SOFR + 6.00% (1.00% floor)

 

12/28/2026

 

 

 

 

 

(62

)

 

 

(155

)

 

 

0.0

%

 

 Commercial & Professional Services

 

SOFR + 6.00% (1.00% floor)

 

12/28/2026

 

 

 

 

 

(62

)

 

 

(155

)

 

 

0.0

%

S4T Holdings Corp. - Term Loan (9)

 

 Commercial & Professional Services

 

SOFR + 6.00% (1.00% floor)

 

12/28/2026

 

 

26,021

 

 

 

25,592

 

 

 

25,501

 

 

 

7.0

%

 

 Commercial & Professional Services

 

SOFR + 6.00% (1.00% floor)

 

12/28/2026

 

 

26,021

 

 

 

25,592

 

 

 

25,501

 

 

 

7.0

%

Select Rehabilitation - Term Loan

 

 Health Care Equipment & Services

 

SOFR + 8.50% (1.00% floor)

 

10/19/2027

 

 

20,100

 

 

 

19,608

 

 

 

19,517

 

 

 

5.4

%

 

 Health Care Equipment & Services

 

SOFR + 8.50% (1.00% floor)

 

10/19/2027

 

 

20,100

 

 

 

19,608

 

 

 

19,517

 

 

 

5.4

%

The Smilist Management, Inc. -Delayed Draw Loan A

 

 Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

12/23/2025

 

 

2,743

 

 

 

2,710

 

 

 

2,620

 

 

 

0.7

%

 

 Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

12/23/2025

 

 

2,743

 

 

 

2,710

 

 

 

2,620

 

 

 

0.7

%

The Smilist Management, Inc. -Delayed Draw Loan B

 

 Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

12/23/2025

 

 

5,842

 

 

 

5,770

 

 

 

5,580

 

 

 

1.5

%

 

 Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

12/23/2025

 

 

5,842

 

 

 

5,770

 

 

 

5,580

 

 

 

1.5

%

The Smilist Management, Inc. -Delayed Draw Loan c (4)(8)

 

 Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

12/23/2025

 

 

787

 

 

 

751

 

 

 

579

 

 

 

0.2

%

 

 Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

12/23/2025

 

 

787

 

 

 

751

 

 

 

579

 

 

 

0.2

%

The Smilist Management, Inc. -Revolving Credit Line (4)(8)

 

 Health Care Providers & Services

 

L + 6.00% (1.00% floor)

 

12/23/2025

 

 

 

 

 

(6

)

 

 

(25

)

 

 

0.0

%

 

 Health Care Providers & Services

 

L + 6.00% (1.00% floor)

 

12/23/2025

 

 

 

 

 

(6

)

 

 

(25

)

 

 

0.0

%

The Smilist Management, Inc. -Term Loan

 

 Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

12/23/2025

 

 

4,946

 

 

 

4,888

 

 

 

4,723

 

 

 

1.3

%

 

 Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

12/23/2025

 

 

4,946

 

 

 

4,888

 

 

 

4,723

 

 

 

1.3

%

VardimanBlack Holdings LLC -Delayed Draw Loan (4)(8)(9)

 

 Health Care Equipment & Services

 

SOFR + 7.00% (0.50% floor)

 

3/18/2027

 

 

6,802

 

 

 

6,739

 

 

 

6,632

 

 

 

1.8

%

 

 Health Care Equipment & Services

 

SOFR + 7.00% (0.50% floor)

 

3/18/2027

 

 

6,802

 

 

 

6,739

 

 

 

6,632

 

 

 

1.8

%

VardimanBlack Holdings LLC -Delayed Draw Loan 1st Amend (4)(8)(9)

 

 Health Care Equipment & Services

 

SOFR + 7.00% (0.50% floor)

 

3/18/2027

 

 

9,851

 

 

 

9,735

 

 

 

9,573

 

 

 

2.6

%

 

 Health Care Equipment & Services

 

SOFR + 7.00% (0.50% floor)

 

3/18/2027

 

 

9,851

 

 

 

9,735

 

 

 

9,573

 

 

 

2.6

%

VardimanBlack Holdings LLC - Term Loan (9)

 

 Health Care Equipment & Services

 

SOFR + 7.00% (0.50% floor)

 

3/18/2027

 

 

8,187

 

 

 

8,112

 

 

 

7,982

 

 

 

2.2

%

 

 Health Care Equipment & Services

 

SOFR + 7.00% (0.50% floor)

 

3/18/2027

 

 

8,187

 

 

 

8,112

 

 

 

7,982

 

 

 

2.2

%

Vecta Environmental Services - Delayed Draw Term Loan (4)(8)

 

 Industrials

 

SOFR + 6.25% (1.00% floor)

 

12/30/2027

 

 

 

 

 

(25

)

 

 

(49

)

 

 

0.0

%

 

 Industrials

 

SOFR + 6.25% (1.00% floor)

 

12/30/2027

 

 

 

 

 

(25

)

 

 

(49

)

 

 

0.0

%

Vecta Environmental Services - Revolving Credit Line (4)(8)

 

 Industrials

 

SOFR + 6.25% (1.00% floor)

 

12/30/2027

 

 

124

 

 

 

106

 

 

 

106

 

 

 

0.0

%

 

 Industrials

 

SOFR + 6.25% (1.00% floor)

 

12/30/2027

 

 

124

 

 

 

106

 

 

 

106

 

 

 

0.0

%

Vecta Environmental Services - Term Loan

 

 Industrials

 

SOFR + 6.25% (1.00% floor)

 

12/30/2027

 

 

8,160

 

 

 

7,997

 

 

 

7,997

 

 

 

2.2

%

 

 Industrials

 

SOFR + 6.25% (1.00% floor)

 

12/30/2027

 

 

8,160

 

 

 

7,997

 

 

 

7,997

 

 

 

2.2

%

Whitestone Home Furnishings, LLC - Term Loan

 

 Consumer Durables & Apparel

 

L + 9.00% (1.00% floor)

 

8/20/2026

 

 

15,379

 

 

 

15,140

 

 

 

14,287

 

 

 

3.9

%

 

 Consumer Durables & Apparel

 

L + 9.00% (1.00% floor)

 

8/20/2026

 

 

15,379

 

 

 

15,140

 

 

 

14,287

 

 

 

3.9

%

Wilnat, Inc. - Revolving Credit Line (4)(8)

 

 Capital Goods

 

L + 6.00% (1.00% floor)

 

12/29/2026

 

 

 

 

 

(20

)

 

 

 

 

 

0.0

%

 

 Capital Goods

 

L + 6.00% (1.00% floor)

 

12/29/2026

 

 

 

 

 

(20

)

 

 

 

 

 

0.0

%

Wilnat, Inc. - Term Loan

 

 Capital Goods

 

L + 6.00% (1.00% floor)

 

12/29/2026

 

 

12,222

 

 

 

12,018

 

 

 

12,222

 

 

 

3.4

%

 

 Capital Goods

 

L + 6.00% (1.00% floor)

 

12/29/2026

 

 

12,222

 

 

 

12,018

 

 

 

12,222

 

 

 

3.4

%

Total First Lien Senior Secured

 

 

 

 

 

 

365,885

 

 

 

359,158

 

 

 

352,041

 

 

 

96.8

%

 

 

 

 

 

 

365,885

 

 

 

359,158

 

 

 

352,041

 

 

 

96.8

%

Total Debt Investments

 

 

 

 

 

 

365,885

 

 

 

359,158

 

 

 

352,041

 

 

 

96.8

%

 

 

 

 

 

 

365,885

 

 

 

359,158

 

 

 

352,041

 

 

 

96.8

%

Equity Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Atlas US Holdings, LP -
Class B-2 Units (6)

 

 Diversified Financials

 

NA

 

NA

 

 

857,787

 

 

$

873

 

 

$

700

 

 

 

0.2

%

 

 Diversified Financials

 

NA

 

NA

 

 

857,787

 

 

$

873

 

 

$

700

 

 

 

0.2

%

TVG OCM III (FT) Blocker, LLC - Class B Units (6)

 

 Media

 

NA

 

NA

 

 

706

 

 

 

706

 

 

 

997

 

 

 

0.3

%

 

 Media

 

NA

 

NA

 

 

706

 

 

 

706

 

 

 

997

 

 

 

0.3

%

Total Preferred Equity

 

 

 

 

 

 

 

 

 

1,579

 

 

 

1,697

 

 

 

0.5

%

 

 

 

 

 

 

 

 

 

1,579

 

 

 

1,697

 

 

 

0.5

%

Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

190 Octane Holdings, LLC - series A-1 units (6)(10)

 

 Consumer Services

 

NA

 

NA

 

 

223,551

 

 

$

377

 

 

$

420

 

 

 

0.1

%

 

 Consumer Services

 

NA

 

NA

 

 

223,551

 

 

$

377

 

 

$

420

 

 

 

0.1

%

Rushmore Lender Co-Invest Blocker, LLC - Common Stock (6)

 

 Health Care Equipment & Services

 

NA

 

NA

 

 

537,606

 

 

 

539

 

 

 

481

 

 

 

0.1

%

 

 Health Care Equipment & Services

 

NA

 

NA

 

 

537,606

 

 

 

539

 

 

 

481

 

 

 

0.1

%

Sea-K Investors, LLC -Class A Units (6)(10)

 

 Consumer Durables & Apparel

 

NA

 

NA

 

 

333,730

 

 

 

733

 

 

 

205

 

 

 

0.1

%

 

 Consumer Durables & Apparel

 

NA

 

NA

 

 

333,730

 

 

 

733

 

 

 

205

 

 

 

0.1

%

Vistria ESS Holdings, LLC -Equity (6)

 

 Commercial & Professional Services

 

NA

 

NA

 

 

326

 

 

 

327

 

 

 

390

 

 

 

0.1

%

 

 Commercial & Professional Services

 

NA

 

NA

 

 

326

 

 

 

327

 

 

 

390

 

 

 

0.1

%

Total Common Equity

 

 

 

 

 

 

 

 

 

1,976

 

 

 

1,496

 

 

 

0.4

%

 

 

 

 

 

 

 

 

 

1,976

 

 

 

1,496

 

 

 

0.4

%

Total Equity Investments

 

 

 

 

 

 

 

 

 

3,555

 

 

 

3,193

 

 

 

0.9

%

 

 

 

 

 

 

 

 

 

3,555

 

 

 

3,193

 

 

 

0.9

%

Total Investments

 

 

 

 

 

 

 

 

$

362,713

 

 

 

355,234

 

 

 

97.7

%

 

 

 

 

 

 

 

 

$

362,713

 

 

 

355,234

 

 

 

97.7

%

Liabilities in Excess of Other Assets

 

 

 

 

 

 

 

 

 

 

 

 

9,274

 

 

 

2.3

%

 

 

 

 

 

 

 

 

 

 

 

 

9,274

 

 

 

2.3

%

Net Assets

 

 

 

 

 

 

 

 

 

 

 

$

364,508

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

$

364,508

 

 

 

100.0

%

 

 

(1)
The Company deemed this asset to be a “non-qualifying asset” under Section 55(a) of the Investment Company Act of 1940, as amended. Qualifying assets must represent at least 70.0% of the Company’s total assets at the time of acquisition of any additional non-qualifying assets. As of December 31, 2022, 4.60% of the Company’s total assets are represented by investments at fair value that are considered non-qualifying assets.
(2)
Percentages are based on net assets as of December 31, 2022.
(3)
The fair value of investments with respect to securities for which market quotations are not readily available are valued using significant unobservable inputs (See Note 3 – Fair Value of Financial Instruments).

810


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

(amounts in thousands, except per share data)

December 31, 2022

(4)
The Company has various unfunded commitments to portfolio companies. Please refer to Note 6—Commitments and Contingencies for details of these unfunded commitments. The negative cost, if applicable, is the result of the capitalized discount or unfunded commitment being greater than the principal amounts outstanding on the loan. The negative fair value, if applicable, is the result of the capitalized discount or unfunded commitment on the loan.
(5)
The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) or Secured Overnight Financing Rate (“SOFR”) and which reset monthly, quarterly, semiannually, or annually. For each, the Company has provided the spread over the reference rate and the current interest rate in effect at the reporting date. As of December 31, 2022, the reference rates for the Company’s variable rate loans were the 1 mo. LIBOR at 4.39%, the 3 mo. LIBOR at 4.77%, the 1 mo. SOFR at 4.36%, and the 3 mo. SOFR at 4.59%. Certain investments are subject to an interest
(6)
Equity and member interests are non-income-producing unless otherwise noted.
(7)
All investments domiciled in the United States unless otherwise noted.
(8)
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 or amortized cost.
(9)
Positions that have a SOFR reference rate, from time to time have an additional spread adjustment. This spread adjustment ranges from 0% - 0.21% depending on the contractual arrangement. These spread adjustments have been included in the all-in rate shown.
(10)
Ownership of this investment is through a wholly-owned subsidiary.

The following table shows the portfolio composition by industry grouping based on fair value at December 31, 2022:

 

 

 

At December 31, 2022

 

 

 

Investments at

 

 

Percentage of

 

Industry

 

Fair Value

 

 

Total Portfolio

 

Health Care Equipment & Services

 

$

69,303

 

 

 

19.6

%

Software & Services

 

 

47,933

 

 

 

13.6

 

Diversified Financials

 

 

42,991

 

 

 

12.1

 

Industrials

 

 

38,660

 

 

 

10.9

 

Consumer Services

 

 

37,475

 

 

 

10.5

 

Consumer Durables & Apparel

 

 

28,926

 

 

 

8.1

 

Commercial & Professional Services

 

 

25,736

 

 

 

7.2

 

Media

 

 

17,040

 

 

 

4.8

 

Health Care Providers & Services

 

 

13,477

 

 

 

3.8

 

Capital Goods

 

 

12,222

 

 

 

3.4

 

Health Care Technology

 

 

11,503

 

 

 

3.2

 

Technology Hardware & Equipment

 

 

9,968

 

 

 

2.8

 

 

 

$

355,234

 

 

 

100

%

 

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

911


 

COMMONWEALTH CREDIT PARTNERS BDC I, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages, and as otherwise indicated)

March 31,June 30, 2023

(Unaudited)

Note 1—Organization

Commonwealth Credit Partners BDC I, Inc. (“we”, “us”, “our”, or the “Company”) is an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company (a “BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”) and has elected to be treated for U.S. federal income tax purposes, and intends to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company was formed on January 15, 2021 (Inception Date) as a Delaware corporation. The Company commenced investment operations on August 17, 2021.

The Company is managed by Commonwealth Credit Advisors LLC (the “Investment Adviser”), a Delaware limited liability company and an affiliate of Comvest Capital Advisors LLC and Comvest Credit Advisors LLC (collectively “Comvest Partners”). The Investment Adviser is registered as an investment adviser under the Investment Advisers Act of 1940, as amended. The Investment Adviser oversees the management of the Company’s activities and is responsible for making investment decisions with respect to the Company’s portfolio.

The Company’s investment objective is to generate both current income and capital appreciation by investing in middle-market companies in a wide range of industries primarily structured as senior credit facilities, and to a lesser extent, junior credit facilities. The Company also may purchase interests in loans through secondary market transactions.

The Company is conducting private placements of shares of its common stock, par value $0.001 per share (the “Common Stock” or “Shares”), to investors in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). Each investor in the private placement will make a capital commitment (the “Capital Commitments”) to purchase shares of Common Stock pursuant to a subscription agreement (a “Subscription Agreement”). Investors will be required to make capital contributions to purchase additional shares of Common Stock (the “Drawdown Purchase Price”) each time the Company delivers a drawdown notice (the “Drawdown Notice”), which will be delivered at least ten business days prior to the required funding date, in an aggregate amount not to exceed their respective Capital Commitments.

The Company has established CCP BDC Blocker I, LLC, CCP BDC Blocker II, LLC, and CCP Blocker III, LLC, wholly-owned direct subsidiaries. These subsidiaries allow the Company to hold equity securities of portfolio companies organized as a pass-through entity while continuing to satisfy the requirements of a RIC under the Code.

On February 7, 2022, the Company established CCP BDC California LLC, a California limited liability company that is a disregarded entity for tax purposes, which has been established to acquire investments in the State of California, as required by California law. Prior to February 7, 2022 and through this date, financial information presented represents Commonwealth Credit Partners BDC I, Inc. only.

Note 2—Summary of Significant Accounting Policies

Basis of Presentation

The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”). The Company is an investment company following accounting and reporting guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 946, Financial Services—Investment Companies (“ASC 946”). The Company consolidates its wholly-owned direct subsidiaries, CCP BDC Blocker I, LLC, CCP BDC Blocker II, LLC, CCP Blocker III, LLC, and CCP BDC California LLC.

The Company’s consolidated financial statements reflect all adjustments and reclassifications which, in the opinion of management, are necessary for the fair presentation of the results of operations and financial condition for the period(s)periods presented. All intercompany transactions have been eliminated. Revenues are recognized when earned and expenses when incurred. The financial results of the Company’s portfolio investments are not consolidated in the financial statements.

The Company’s consolidated interim financial statements are prepared in accordance with GAAP and pursuant to the requirements for reporting on Form 10-Q and Article 6 of Regulation S-X. Accordingly, the Company’s consolidated interim financial

1012


 

statements do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications consisting solely of normal accruals that are necessary for the fair presentation of financial results as of and for the periods presented. The unaudited interim consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto in the Company’s Form 10-K for the year ended December 31, 2022, as filed with the U.S. Securities and Exchange Commission (the “SEC”).

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in these consolidated financial statements. Actual results could differ from those estimates.

Valuation of Portfolio Investments

The Investment Adviser applies fair value accounting in accordance with GAAP. Fair value is 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. Investments are reflected on the Company’s Consolidated Statement of Assets and Liabilities at fair value, with changes in unrealized gains and losses resulting from changes in fair value reflected in the Company’s Consolidated Statement of Operations as “Net change in unrealized gains (losses) of investments” and realizations of portfolio investments reflected in the Company’s Consolidated Statements of Operations as “Net realized gains (losses) on investments”.

The Investment Adviser values the Company’s portfolio investments on a quarterly basis, or more frequently if required under the 1940 Act. For purposes of the 1940 Act, the Company’s board of directors (“Board”) has designated the Investment Adviser as the Company’s “valuation designee” under Rule 2a-5 under the 1940 Act. The Board provides oversight of the Investment Adviser’s fair value determinations of the Company’s portfolio investments on a quarterly basis in good faith, including investments that are not publicly traded and those whose market prices are not readily available. Security transactions are accounted for on a trade date basis.

ToGiven that the extent (i) “benefit plan investors”,Company's assets are currently treated as defined in Section 3(42) of"plan assets" under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and any regulations promulgated thereunder (“Benefit Plan Investors”), hold 25% or moreSection 4975 of the Company’s outstanding Shares, and (ii) the Company’s Shares are not listed on a national securities exchange,Code, one or more independent valuation firms (each a “Valuation Agent”) will be engaged to independently value the Company’s investments, in consultation with the Investment Adviser. The Company’s quarterly valuation procedures, which are the procedures that will be followed by such Valuation Agent to the extent (i) Benefit Plan Investors hold 25% the Company’s assets are treated as "plan assets" under ERISA and/or moreSection 4975 of the Company’s outstanding Shares, and (ii) the Company’s Shares are not listed on a national securities exchange,Code, are set forth in more detail below:

1)
Investments for which market quotations are readily available on an exchange are valued at such market quotations based on the closing price indicated from independent pricing services.
2)
Investments for which indicative prices are obtained from various pricing services and/or brokers or dealers are valued through a multi-step valuation process, as described below, to determine whether the quote(s) obtained is representative of fair value in accordance with GAAP.

a) Bond quotes are obtained through independent pricing services. Internal reviews are performed by the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, to ensure that the quote obtained is representative of fair value in accordance with GAAP and if so, the quote is used. If the Valuation Agent is unable to sufficiently validate the quote(s) internally and if the investment’s par value exceeds a certain materiality threshold, the investment is valued similarly to those assets with no readily available quotes (see (3) below); and

b) For investments other than bonds, the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, look at the number of quotes readily available and perform the following:

i) Investments for which two or more quotes are received from a pricing service are valued using the mean of the mean of the bid and ask of the quotes obtained. If quotes from pricing services differ by +/- five points or if the spread between the bid and ask for a quote is greater than 10 points, the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, will evaluate the reasonableness of the quote, and if the quote is determined to not be representative of fair value, the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, will use one or more of the methodologies outlined below to determine fair value;

ii) Investments for which one quote is received from a pricing service are validated by the Valuation Agent, in consultation with the investment professionals of the Investment Adviser. The personnel of the Valuation Agent,

11


in consultation with the investment professionals of the Investment Adviser, analyze the market quotes obtained using an array of valuation methods (further described below) to validate the fair value. For assets where a

13


supporting analysis is prepared, the Valuation Agent will document the selection and appropriateness of the indices selected for yield comparison and a conclusion documenting how the yield comparison analysis supports the proposed mark. The quarterly portfolio company monitoring reports which detail the qualitative and quantitative performance of the portfolio company will also be included. If the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, is unable to sufficiently validate the quote internally and if the investment’s par value exceeds a certain materiality threshold, the investment is valued similarly to those assets with no readily available quotes (see (3) below).

3)
Investments for which quotations are not readily available through exchanges, pricing services, brokers, or dealers are valued through a multi- step valuation process:

a) Each portfolio company or investment is initially valued by the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser; and

b) Preliminary valuation conclusions will then be documented and discussed with our senior management.

For investments in revolving credit facilities and delayed draw commitments, the cost basis of the funded investments purchased is offset by any costs/netbacks received for any unfunded portion on the total balance committed. The fair value is also adjusted for the price appreciation or depreciation on the unfunded portion. As a result, the purchase of commitments not completely funded may result in a negative fair value until it is called and funded.

The values assigned to investments are based upon available information and do not necessarily represent amounts which might ultimately be realized, since such amounts depend on future circumstances and cannot be reasonably determined until the individual positions are liquidated. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period and the fluctuations could be material.

In the event Benefit Plan Investors do not hold 25% or more of the Company’s outstanding Shares, or the Company’s Shares are listed on a national securities exchange, then (i) personnel of the Investment Adviser willmay undertake the roles to be performed by the personnel of the Valuation Agent, as described above and (ii) if an investment falls into category (3) above for four consecutive quarters and if the investment’s par value or its fair value exceeds a certain materiality threshold, then at least once each fiscal year, the valuation for each portfolio investment for which the Company does not have a readily available market quotation will be reviewed by an independent valuation firm engaged by the Board.

For all valuations, the Valuation Committee of the Board, which consists solely of directors who are not “interested persons” of the Company, as such term is used under the 1940 Act (the “Independent Directors”), will review these preliminary valuations and the Board, a majority of whom are Independent Directors, will discuss the Investment Adviser’s valuations; provided, however, that to the extent the Company’s assets are treated as “plan assets” for purposesunder ERISA, and/or Section 4975 of ERISA,the Code, the Valuation Agent will determine valuations using only those valuation methodologies reviewed and approved by the Valuation Committee and the Board, and, absent manifest error, the Board will accept such valuations prepared by the Valuation Agent in accordance therewith.

Investment Classification

The Company classifies its investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, “Control” is defined as the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company. In addition, in accordance with Section 2(a)(9) of the 1940 Act, any person who owns beneficially, either directly or through one or more controlled companies, more than 25% of the voting securities of a company shall be presumed to control such company. Any person who does not so own more than 25% of the voting securities of any company shall be presumed not to control such company. Any person who does not so own more than 25% of the voting securities of any company and/or does not have the power to exercise control over the management or policies of such portfolio company shall be presumed not to control such company. Consistent with the 1940 Act, “Affiliated Investments” are defined as those investments in companies in which the Company owns 5% or more of the voting securities. Consistent with the 1940 Act, “Non-affiliated Investments” are defined as investments that are neither Control Investments nor Affiliated Investments. As of March 31,June 30, 2023 and as of December 31, 2022, the Company did not “control” and was not an “affiliated person” of any of its portfolio companies, each as defined in the 1940 Act.

14


Cash and Cash Equivalents

12


Cash and cash equivalents include cash held in banks and short-term, liquid investments in a money market deposit account. Cash and cash equivalents are carried at cost which approximates fair value. The Company deposits at financial institutions for its cash and cash equivalents may exceed FDIC insured limits under applicable law.

The Company considers all highly liquid investments with a maturity of three months or less, when acquired, to be cash equivalents. As of March 31,June 30, 2023 and December 31, 2022, the Company held cash and cash equivalents in the form of money market fund shares held in First American Government Obligations Fund with a fair value of $1.52.0 million and $3.8 million, respectively, representing 0.320.39% and 1.04%, respectively, of the Company’s net assets. Cash equivalents in the form of money market fund shares are valued at their reported net asset value (generally $1 per share) on the measurement date and are categorized within Level 1 of the fair value hierarchy under ASC 820, as inputs in the valuation are observable.

Organizational Expenses and Offering Costs

Organizational expenses consist of costs incurred to establish the Company and enable it legally to do business. Organization costs are expensed as incurred. Offering costs consist of costs incurred in connection with the offering of Common Stock of the Company. Offering costs are capitalized as a deferred charge and amortized to expense on a straight-line basis over 12 months from the inception date. ForOffering costs for the three and six months ended March 31,June 30, 2023 and 2022, the Company incurredwere $0.00 million and $0.00 million, respectively. Offering costs for the three and six months ended June 30, 2022 were $0.04 million of offering costs,and $0.08 million, respectively. As of March 31,June 30, 2023 and December 31, 2022, no offering costs were deferred.

The Company will bearbears the organizational expenses and offering costs incurred in connection with the formation of the Company and the offering of shares of its Common Stock, including the out-of-pocket expenses of the Investment Adviser and its agents and affiliates. In addition, the Company will reimbursereimburses the Investment Adviser for the organizational expenses and offering costs it incurs on the Company’s behalf. For the period from January 15, 2021 (Inception Date) through March 31,June 30, 2023, the Company has incurred $0.48 million of organizational costs. If actual organizational expenses and offering costs incurred exceed $0.75 million, the Investment Adviser or its affiliate bear the excess costs.

Deferred Financing Costs

Financing costs incurred in connection with the Company’s credit facilities are capitalized and amortized into expense using the straight-line method, which approximates the effective yield method over the life of the respective facility. See Note 5—Borrowings.

Revenue Recognition

Interest Income

Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discount and premium on investments purchased are accreted/amortized over the expected life of the respective investment using the effective yield method. Loan origination fees, original issue discount (“OID”) and market discounts or premiums are capitalized and amortized into interest income using the effective interest method. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income. The Company may have loans in its portfolio that contain a payment-in-kind ("PIK") interest provision).provision. PIK interest is accrued and recorded as income at the contractual rates, if deemed collectible. The PIK interest is added to the principal balance on the capitalization date and is generally due at maturity or when deemed by the issuer. For the three months ended March 31,June 30, 2023 and March 31, 2022, the Company recognized PIK interest from investments of $2440 thousand and $0 thousand respectively, which is included in Interest Income on the Consolidated Statement of Operations. For the six months ended June 30, 2023 and 2022, the Company recognized PIK interest from investments of $331 thousand and $86 thousand respectively, which is included in Interest Income on the Consolidated Statement of Operations.

Fee Income

Fee income, such as structuring fees, loan monitoring, amendment, syndication, commitment, termination, and other loan fees are recognized as income when earned, either upon receipt or amortized into fee income. Upon the re-payment of a loan or debt security, any prepayment penalties and unamortized loan fees are recorded as fee income.

Non-accrual

Investments may be placed on non-accrual status when principal or interest payments are past due and/or when there is reasonable doubt that principal or interest will be collected. Accrued interest is generally reversed when an investment is placed on

15


non-accrual status. Interest payments received on non-accrual investments may be recognized as income or applied to principal depending upon management’s judgment of the ultimate outcome. Non-accrual investments are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current.

13


Net Realized Gain or Loss and Net Change in Unrealized Gain or Loss

Investment transactions are accounted for on the trade date. Gain or loss on the sale of investments is calculated using the specific identification method. Net change in unrealized gain or loss will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized gain or loss, when a gain or loss is realized.

Income Taxes

The Company has elected to be treated for federal income tax purposes as a RIC under Subchapter M of the Code. Generally, a corporation can qualify as a RIC if it distributes dividends for federal income tax purposes to stockholders in an amount generally equal to at least 90% of “investment company taxable income,” as defined in the Code, and determined without regard to any deduction for dividends paid. Distributions declared prior to the filing of the previous year’s tax return and paid up to twelve months after the previous tax year can be carried back to the prior tax year in determining the distributions paid in such tax year. The Company intends to make sufficient distributions to maintain its ability to be subject to be taxed as a RIC each year. The Company will be subject to a 4.0% nondeductible federal excise tax on certain undistributed income unless the Company distributes, in a timely manner as required by the Code, an amount at least equal to the sum of (1) 98.0% of its respective net ordinary income earned for the calendar year and (2) 98.2% of its respective capital gain net income for the one-year period ending October 31 in the calendar year, plus any net ordinary income or capital gain net income not distributed in previous years.

The Company evaluates tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether it is “more-likely-than-not” (i.e., greater than 50-percent) that each such tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes will be included in income tax expense, if any. The Company did not record any tax provision in the current period. However, management’s conclusions regarding tax positions taken may be subject to review and adjusted at a later date based on factors including, but not limited to, examination by tax authorities, on-going analysis of and changes to tax laws, regulations and interpretations thereof.

Recent Accounting Standards Update

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard iswas effective as of March 12, 2020 through December 31, 2022. In December 2022, the FASB issued Accounting Standards Update 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which deferred the sunset day of this guidance to December 31, 2024. As of March 31,June 30, 2023, the adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Note 3—Fair Value of Financial Instruments

Fair value is 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. Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosure (“ASC 820”) establishes a fair value hierarchy that prioritizes and ranks the inputs to valuation techniques used in measuring investments at fair value. The hierarchy classifies the inputs used in measuring fair value into three levels as follows:

Level 1—Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.
Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.
Level 3—Unobservable inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

16


The determination of where an asset or liability falls in the above hierarchy requires significant judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Investment Adviser evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.

14


Determination of fair values involves subjective judgments and estimates. Accordingly, the notes to the consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations on the consolidated financial statements.

The following table presents fair value measurements of investments, by major class, as of March 31,June 30, 2023, according to the fair value hierarchy:

 

 

Fair Value Measurements

 

 

Fair Value Measurements

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Totals

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Totals

 

First Lien Senior Secured

 

$

 

 

$

 

 

$

523,048

 

 

$

523,048

 

 

$

 

 

$

 

 

$

570,382

 

 

$

570,382

 

Equity

 

 

 

 

 

 

 

 

6,276

 

 

 

6,276

 

 

 

 

 

 

 

 

 

6,199

 

 

 

6,199

 

Total

 

$

 

 

$

 

 

$

529,324

 

 

$

529,324

 

 

$

 

 

$

 

 

$

576,581

 

 

$

576,581

 

 

The following table presents fair value measurements of investments, by major class, as of December 31, 2022, according to the fair value hierarchy:

 

 

 

Fair Value Measurements

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Totals

 

First Lien Senior Secured

 

$

 

 

$

 

 

$

352,041

 

 

$

352,041

 

Equity

 

 

 

 

 

 

 

 

3,193

 

 

 

3,193

 

Total

 

$

 

 

$

 

 

$

355,234

 

 

$

355,234

 

 

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the threesix months ended March 31,June 30, 2023:

 

 

First Lien
Senior
Secured

 

 

Equity

 

 

Total

 

 

First Lien
Senior
Secured

 

 

Equity

 

 

Total

 

Balance as of December 31, 2022

 

$

352,041

 

 

$

3,193

 

 

$

355,234

 

 

$

352,041

 

 

$

3,193

 

 

$

355,234

 

Purchases and other adjustments to cost

 

 

175,056

 

 

 

3,243

 

 

 

178,299

 

 

 

224,532

 

 

 

3,353

 

 

 

227,885

 

Sales and repayments

 

 

(2,998

)

 

 

 

 

 

(2,998

)

 

 

(8,119

)

 

 

 

 

 

(8,119

)

Net change in unrealized gain/(loss) on investments

 

 

(1,638

)

 

 

(160

)

 

 

(1,798

)

 

 

866

 

 

 

(347

)

 

 

519

 

Net accretion of discount on investments

 

 

587

 

 

 

 

 

 

587

 

 

 

1,062

 

 

 

 

 

 

1,062

 

Balance as of March 31, 2023

 

$

523,048

 

 

$

6,276

 

 

$

529,324

 

Balance as of June 30, 2023

 

$

570,382

 

 

$

6,199

 

 

$

576,581

 

Net change in unrealized gain/loss for the period relating to those Level 3 assets that were still held by the Company at the end of the period:

 

$

(1,638

)

 

$

(160

)

 

$

(1,798

)

 

$

866

 

 

$

(347

)

 

$

519

 

17


 

 

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the threesix months ended March 31,June 30, 2022:

 

 

First Lien
Senior
Secured

 

 

Equity

 

 

Total

 

 

First Lien
Senior
Secured

 

 

Equity

 

 

Total

 

Balance as of December 31, 2021

 

$

135,926

 

 

$

2,549

 

 

$

138,475

 

 

$

135,926

 

 

$

2,549

 

 

$

138,475

 

Purchases and other adjustments to cost

 

 

53,288

 

 

 

 

 

 

53,288

 

 

 

126,041

 

 

 

810

 

 

 

126,851

 

Sales and repayments

 

 

(1,442

)

 

 

 

 

 

(1,442

)

 

 

(8,710

)

 

 

-

 

 

 

(8,710

)

Net realized gains

 

 

32

 

 

 

-

 

 

 

32

 

Net change in unrealized gain/(loss) on investments

 

 

292

 

 

 

128

 

 

 

420

 

 

 

(897

)

 

 

(50

)

 

 

(947

)

Net accretion of discount on investments

 

 

156

 

 

 

 

 

 

156

 

 

 

365

 

 

 

-

 

 

 

365

 

Balance as of March 31, 2022

 

$

188,220

 

 

$

2,677

 

 

$

190,897

 

Balance as of June 30, 2022

 

$

252,757

 

 

$

3,309

 

 

$

256,066

 

Net change in unrealized gain/loss for the period relating to those Level 3 assets that were still held by the Company at the end of the period:

 

$

292

 

 

$

128

 

 

$

420

 

 

$

(897

)

 

$

(50

)

 

$

(947

)

 

Purchases represent the acquisition of new investments at cost. Sales and repayments represent principal payments received during the period.

Significant Unobservable Inputs

15


The following table summarizes the significant unobservable inputs used to value Level 3 investments as of March 31,June 30, 2023. The table is not intended to be all-inclusive, but instead identifies the significant unobservable inputs relevant to the determination of fair values.

 

 

 

 

 

 

 

 

 

Selected Input Range

 

 

 

 

 

 

 

 

 

 

Selected Input Range

 

 

Asset Category

 

Fair Value

 

 

Primary Valuation
Technique

 

Unobservable
Inputs

 

Minimum

 

Maximum

 

Weighted
Average (a)

 

Fair Value

 

 

Primary Valuation
Technique

 

Unobservable
Inputs

 

Minimum

 

Maximum

 

Weighted
Average (a)

First Lien Senior Secured

 

$

523,048

 

 

Discounted Cash Flow

 

Discount Rate

 

9.5%

 

20.9%

 

12.6%

 

$

570,382

 

 

Discounted Cash Flow

 

Discount Rate

 

8.6%

 

22.1%

 

12.1%

Equity

 

 

479

 

 

Market Comparables

 

Revenue Multiple

 

2.6x

 

2.8x

 

2.7x

 

 

514

 

 

Market Comparables

 

Revenue Multiple

 

2.6x

 

2.8x

 

2.7x

Equity

 

 

5,797

 

 

Market Comparables

 

EBITDA Multiple

 

7.0x

 

16.1x

 

10.6x

 

 

5,685

 

 

Market Comparables

 

EBITDA Multiple

 

6.0x

 

16.0x

 

10.4x

Total

 

$

529,324

 

 

 

 

 

 

 

 

 

 

 

 

$

576,581

 

 

 

 

 

 

 

 

 

 

 

(a)
Weighted averages are calculated based on fair value of investments.

The following table summarizes the significant unobservable inputs used to value Level 3 investments as of December 31, 2022. The table is not intended to be all-inclusive, but instead identifies the significant unobservable inputs relevant to the determination of fair values.

 

 

 

 

 

 

 

 

 

 

Selected Input Range

 

 

Asset Category

 

Fair Value

 

 

Primary Valuation
Technique

 

Unobservable
Inputs

 

Minimum

 

Maximum

 

Weighted
Average (a)

First Lien Senior Secured

 

$

352,041

 

 

Discounted Cash Flow

 

Discount Rate

 

9.8%

 

20.0%

 

12.5%

Equity

 

 

481

 

 

Market Comparables

 

Revenue Multiple

 

2.7x

 

2.9x

 

2.8x

Equity

 

 

2,712

 

 

Market Comparables

 

EBITDA Multiple

 

7.0x

 

16.5x

 

11.3x

Total

 

$

355,234

 

 

 

 

 

 

 

 

 

 

 

(a)
Weighted averages are calculated based on fair value of investments.

There were no significant changes in valuation approach or technique as of March 31,June 30, 2023 and December 31, 2022.

Level 3 inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category include investments in privately held entities where the fair value is based on unobservable inputs.

The income and market approaches were used in the determination of fair value of certain Level 3 assets as of March 31,June 30, 2023 and December 31, 2022. The significant unobservable inputs used in the income approach are the discount rate or market yield used to

18


discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments and any other end of term fees, as applicable. Included in the consideration and selection of discount rates are factors such as risk of default, interest rate risk, and changes in credit quality. The significant unobservable inputs used in the market approach are based on market comparable transactions and market multiples of publicly traded comparable companies. Increases or decreases in the valuation multiples in isolation may result in higher or lower fair value measurement, respectively, and increases or decreases in the discount rate in isolation may result in lower or higher fair value measurement, respectively.

As of March 31,June 30, 2023 and December 31, 2022, the Company had no portfolio companies on non-accrual status. Refer to Note 2 -Summary of Significant Accounting Policies—for additional details regarding the Company’s non-accrual policy.

For discussion of the fair value measurement of the Company’s borrowings, refer to Note 5—Borrowings.

Note 4—Related Party Transactions

Investment Advisory Agreement

The Company entered into an investment advisory and management agreement (the “Investment Advisory Agreement”) with the Investment Adviser in which the Investment Adviser, subject to the overall supervision of the Company’s Board, manages the day-to-day operations of, and provides investment advisory services to the Company.

Pursuant to the Investment Advisory Agreement with the Investment Adviser, the Company pays the Investment Adviser a fee for its services under the Investment Advisory Agreement consisting of an annual base management fee (“Management Fee”) and an incentive management fee (the “Incentive Fee”), each payable quarterly, in the manner set forth below.

16


Operating Advisory Group, LLC (“OAG”), is a consulting firm that exclusively provides management consulting services, substantially all of which are provided to portfolio companies of Comvest Partners’ affiliated funds investing in a control equity strategy. The Company also engages OAG to provide assistance with certain discrete diligence and other matters in connection with the Company’s investing activities. For the three months ended March 31,June 30, 2023 and March 31, 2022, OAG charged $0 and $11, respectively, for due diligence services which were paid by portfolio companies of the Company. InFor the six months ended June 30, 2023 and 2022, OAG charged $0 and $11, respectively, for due diligence services which were paid by portfolio companies of the Company.In addition, for the three months ended March 31,June 30, 2023 and March 31, 2022, OAG charged the Company $71 and $0, respectively, for diligence expense which were paid by the Company. For the six months ended June 30, 2023 and 2022, OAG charged the Company $8 and $0, respectively, for diligence expense which were paid by the Company. While neither the Company nor any of its affiliates or personnel own or share in any portion of the economics received by OAG, an affiliate of the Investment Adviser has been granted an option to acquire the shares of OAG’s parent company at a nominal value.

The Investment Adviser or its affiliates generally may pay operating expenses on behalf of the Company and are reimbursed. As of March 31, 2023 and December 31, 2022, the Company had a payable of approximately $0.09 million and $0.09 million, respectively, for expenses paid on its behalf.

Management Fee

During the Investment Period, the Management Fee will beis calculated at an annual rate of 1.00% with respect to the Company’s Adjusted Average Assets Invested (defined below) in respect of the relevant quarterly period, in the manner set forth in the table below. “Adjusted Average Assets Invested” shall mean (a) the average of the sum of the Company’s (i) Drawn Capital Commitments and (ii) outstanding principal on borrowings, in the case of clause (i) and clause (ii), as of the last business day of each month included in the relevant quarterly period less (b) the sum of the Company’s (iii) cumulative net unrealized losses, if any, and (iv) cumulative net realized losses, if any, in the case of clause (iii) and clause (iv), as of the last business day of the relevant quarter. For the avoidance of doubt, the quarterly Management Fees payable to the Investment Adviser are specifically set forth below.

After the Investment Period, the 1.00% Management Fee will be calculated based on the Company’s Adjusted Average Assets Invested in respect of each quarterly period.

Any Management Fees payable pursuant to the Investment Advisory Agreement will be calculated based on the Company’s Adjusted Average Assets Invested in respect of the most recently completed calendar quarter. Management Fees for any partial quarter will be appropriately prorated. For the avoidance of doubt, the quarterly Management Fees payable to the Investment Adviser shall be calculated based on the lower of the actual Adjusted Average Assets Invested as of the end of any quarter and the target Adjusted Average Assets Invested for that quarter, as specifically set forth in the table below:

19


The table set forth below shows the following quarterly fee percentages shall be payable with respect to the Company’s Target Adjusted Average Assets through the end of the Investment Period:

 

Quarter Ending

 

Quarter

 

 

Target Adjusted
Average Assets
Invested ($in
millions)
1

 

 

Quarterly
Management Fee
Percentage

 

 

Quarterly Dollar
Amount ($in
millions)
2

 

September 30, 2021

 

 

1

 

 

$

80

 

 

 

1

%

 

$

0.2

 

December 31, 2021

 

 

2

 

 

$

160

 

 

 

1

%

 

$

0.4

 

March 31, 2022

 

 

3

 

 

$

240

 

 

 

1

%

 

$

0.6

 

June 30, 2022

 

 

4

 

 

$

320

 

 

 

1

%

 

$

0.8

 

September 30, 2022

 

 

5

 

 

$

400

 

 

 

1

%

 

$

1

 

December 31, 2022

 

 

6

 

 

$

480

 

 

 

1

%

 

$

1.2

 

March 31, 2023

 

 

7

 

 

$

560

 

 

 

1

%

 

$

1.4

 

June 30, 2023

 

 

8

 

 

$

640

 

 

 

1

%

 

$

1.6

 

September 30, 2023

 

 

9

 

 

$

650

 

 

 

1

%

 

$

1.625

 

December 31, 2023

 

 

10

 

 

$

650

 

 

 

1

%

 

$

1.625

 

March 31, 2024

 

 

11

 

 

$

650

 

 

 

1

%

 

$

1.625

 

June 30, 2024

 

12 and beyond 3

 

 

$

650

 

 

 

1

%

 

$

1.625

 

 

(1)
For the avoidance of doubt, the Management Fee paid at the end of any quarter shall be calculated based on the lower of the actual Adjusted Average Assets Invested in respect of the quarter and the target Adjusted Average Assets Invested for that quarter.
(2)
Reflects dollar amount of Management Fees payable for the applicable quarter based on the Company’s target Adjusted Average Assets Invested as of the end of such quarter.
(3)
Reflects the Management Fee payable beginning in quarter 12 and extending through the end of the Investment Period.

17


For the three and six months ended March 31,June 30, 2023, the Company incurred $1.131.30 million and $2.42 million, respectively, in Management Fees under the Investment Advisory Agreement. For the three and six months ended March 31,June 30, 2022 the Company incurred $0.460.64 million and $1.10 million, respectively, in Management Fees under the Investment Advisory Agreement.

There were no management fee waivers for the three and six months ended March 31,June 30, 2023. The Investment Adviser has chosen to voluntarily waive $0.060.03 million and $0.09 million, respectively, of management fees earned in accordance with the Investment Advisory Agreement for the three and six months ended March 31,June 30, 2022. Any fees waived under the Investment Advisory Agreement are not subject to reimbursement to the Investment Adviser.

On June 29, 2023, the Company entered into an Amended and Restated Investment Advisory and Management Agreement to, among other things, clarify the methodology for calculating the Management Fees payable to ("the Advisor”) during and after the Investment Period. The Amended and Restated Investment Advisory and Management Agreement became effective on July 1, 2023 and would not have impacted Management Fees paid in prior periods.

Incentive Fee

If, as of the last day of the relevant quarter, the Company’s Total Return (as defined below) in respect of the relevant Measurement Period (as defined below) equals or exceeds the “Hurdle Amount” (as defined below), the Investment Adviser shall be paid an Incentive Fee calculated at an annual rate of 0.25% (0.0625% per quarter) with respect to the Company’s Incentive Fee Average Assets Invested (as defined below) on a cumulative basis for the Measurement Period less the aggregate amount of any previously paid Incentive Fees with respect to the Measurement Period.

If, as of the last day of the relevant quarter, the Company’s Total Return in respect of the relevant Measurement Period is less than the Hurdle Amount, the Investment Adviser shall not receive any Incentive Fee in respect of the relevant quarter.

“Total Return” means the sum of the Company’s net investment income (with Organizational Expenses (as defined herein) amortized ratably over a three-year period for the purposes of this calculation) in respect of the relevant Measurement Period and the Company’s realized and unrealized capital gains less realized and unrealized capital losses in respect of the relevant Measurement Period.

For the avoidance of doubt, the Total Return calculation will not take into account the deduction of the 0.25% Incentive Fee but will take into account the deduction of the 1.00% Management Fee.

20


“Hurdle Amount” means 7.25% times the average of the “Drawn Capital Commitments” (as defined below) for each quarter during the Measurement Period, (i) multiplied by the number of quarters in the Measurement Period, and (ii) divided by (4) four.

“Drawn Capital Commitments” means the simple average of the drawn Capital Commitments as of the last business day of each month included in the relevant quarterly period.

“Measurement Period” means the period from the Company’s inception date through the end of the most recently completed calendar quarter.

“Incentive Fee Average Assets Invested” means (a) the average of the sum of the Company’s (i) Drawn Capital Commitments and (ii) outstanding principal on borrowings, in the case of clause (i) and clause (ii), as of the last business day of each month included in the Measurement Period less (b) the Company’s net realized and unrealized losses, if any, in respect of each quarter included in the relevant Measurement Period.

For the three and six months ended March 31,June 30, 2023, the Company incurred $1.4 million in incentive fees under the Investment Advisory Agreement. For the three and six months ended June 30, 2022 there wasthe Company did not incur incentive fee earned and thus no amounts have been accrued.fees under the Investment Advisory Agreement.

18The Investment Adviser has chosen to voluntarily waive $


0.06 million of incentive fees in accordance with the Investment Advisory Agreement for the three and six months ended June 30, 2023.Any fees waived under the Investment Advisory Agreement are not subject to reimbursement to the Investment Adviser.

Administration Agreement

We have entered into an administration agreement (the “Administration Agreement”) with Commonwealth Credit Advisors LLC, a Delaware limited liability company (in such capacity, the “Administrator”), under which the Administrator provides administrative services for us, including arranging office facilities for us and providing office equipment and clerical, bookkeeping and recordkeeping services at such facilities. Under the Administration Agreement, the Administrator also performs, or oversees the performance of, our required administrative services, which includes being responsible for the financial records which we are required to maintain and preparing reports to our stockholders and reports filed with the SEC and providing the services of our chief financial officer and their respective staffs. In addition, the Administrator will assist us in determining and in publishing our net asset value, overseeing the preparation and filing of tax returns and the printingpreparation and dissemination of reports to our Stockholders, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others. The Administrator may also provide on our behalf managerial assistance to our portfolio companies.

The Administrator has hired a third-party sub-administrator to assist with the provision of administration services. For the three months ended March 31,June 30, 2023 and 2022, the Company incurred $0.070.08 million and $0.04 million, respectively, in administrative service fees under the administration agreement, payable to the sub-administrator. For the six months ended June 30, 2023 and 2022, the Company incurred $0.14 million and $0.08 million, respectively, in administrative service fees under the administration agreement, payable to the sub-administrator. Administration service fees are included in other general and administrative expenses on the Statements of Operations.

Co-Investment Relief

The 1940 Act generally prohibits BDCs from entering into negotiated co-investments with affiliates absent an order from the SEC. On August 2, 2021, the SEC granted the Company exemptive relief (the “Order”) that allows it to enter into certain negotiated co-investment transactions alongside other funds managed by the Adviser or its affiliates (“Affiliated Funds”) in a manner consistent with its investment objective, positions, policies, strategies, and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with conditions (the “Order”). Pursuant to the Order, the Company is permitted to co-invest with its affiliates if, among other things, a “required majority” (as defined in Section 57(o) of the 1940 Act) of the Company’s independent directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to the Company and the Company’s stockholders and do not involve overreaching in respect of the Company or the Company’s stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of the Company’s stockholders and is consistent with the Company’s investment objective and strategies.

21


Note 5—Borrowings

Goldman Credit Facility

On August 11, 2021, the Company entered into a Credit Agreement (the "Goldman Credit Facility") as the borrower and Goldman Sachs Bank USA (“Goldman Sachs”) as the lender. The Goldman Credit Facility is structured as a revolving credit facility secured by the capital commitments of the Company’s subscribed investors and certain related assets. On September 27, 2021, the Credit Agreement was amended, pursuant to which the maximum loan amount was increased to the lesser of $130 million and the Borrowing Base as defined below.

The Goldman Credit Facility is uncommitted and matures on the earlier of (i) the date on which either the Company or lender provide written notice of termination to the other party and (ii) the date that is 30 days prior to the last date on which the Company may issue capital drawdowns to its investors. Under the Goldman Credit Facility, the Company is permitted to borrow up to the lesser of $130 million and the Borrowing Base. The “Borrowing Base” is based upon the unfunded capital commitments of certain subscribed investors in the Company that have been approved by Goldman Sachs and meet certain criteria. The advance rate for such investors is currently 90%. The "Borrowing Base" was $130 million at June 30, 2023. The Goldman Credit Facility contains certain customary affirmative and negative covenants and events of default. The Goldman Credit Facility bears interest at a rate of Term SOFR + 0.11448% + 2.70%2.82% per weighted average annualized interest cost annum.

The weighted average annualized interest cost for all borrowings for the three months ended March 31,June 30, 2023 and 2022 was 7.377.92% and 2.953.53%, respectively. The weighted average annualized interest cost for all borrowings for the six months ended June 30, 2023 and 2022 was 7.72% and 3.41%, respectively. The average daily debt outstanding for the three months ended March 31,June 30, 2023 and 2022 was $42.676.2 million and $13.953.2 million, respectively. The average daily debt outstanding for the six months ended June 30, 2023 and 2022 was $59.5 million and $33.7 million, respectively. The maximum debt outstanding for the three months ended March 31,June 30, 2023 and 2022 was $86.1 million and $97.1 million, respectively. The maximum debt outstanding for the six months ended June 30, 2023 and 2022 was $101.5 million and $122122.0 million, respectively.

19


The following table represents borrowings as of March 31,June 30, 2023:

 

 

Total Aggregate
Borrowing Capacity

 

 

Total Principal
Outstanding

 

 

Less Deferred
Financing Costs

 

 

Amount per Statements of
Assets and Liabilities

 

 

Total Aggregate
Borrowing Capacity

 

 

Total Principal
Outstanding

 

 

Less Deferred
Financing Costs

 

 

Amount per Statements of
Assets and Liabilities

 

Goldman Credit Facility

 

$

130,000

 

 

$

78,000

 

 

$

75

 

 

$

77,925

 

 

$

130,000

 

 

$

79,100

 

 

$

67

 

 

$

79,033

 

Total

 

$

130,000

 

 

$

78,000

 

 

$

75

 

 

$

77,925

 

 

$

130,000

 

 

$

79,100

 

 

$

67

 

 

$

79,033

 

 

The following table represents borrowings as of December 31, 2022:

 

 

 

Total Aggregate
Borrowing Capacity

 

 

Total Principal
Outstanding

 

 

Less Deferred
Financing Costs

 

 

Amount per Statements of
Assets and Liabilities

 

Goldman Credit Facility

 

$

130,000

 

 

$

 

 

$

83

 

 

$

(83

)

Total

 

$

130,000

 

 

$

 

 

$

83

 

 

$

(83

)

 

The following table represents interest and debt fees for the three months ended March 31,June 30, 2023:

 

 

For the three months ended March 31, 2023

 

 

For the three months ended June 30, 2023

 

 

Interest Rate(2)

 

Interest
Expense

 

 

Deferred
Financing
Costs
(1)

 

 

Other Fees(1)

 

 

Interest Rate(2)

 

Interest
Expense

 

 

Deferred
Financing
Costs
(1)

 

 

Other Fees(1)

 

Goldman Credit Facility

 

SOFR + 0.11448% + 2.70%

 

$

785

 

 

$

8

 

 

$

32

 

 

SOFR + 2.82%

 

$

1,503

 

 

$

8

 

 

$

32

 

Total

 

 

 

$

785

 

 

$

8

 

 

$

32

 

 

 

 

$

1,503

 

 

$

8

 

 

$

32

 

 

The following table represents interest and debt fees for the six months ended June 30, 2023:

22


 

 

For the six months ended June 30, 2023

 

 

 

Interest Rate(2)

 

Interest
Expense

 

 

Deferred
Financing
Costs
(1)

 

 

Other Fees(1)

 

Goldman Credit Facility

 

SOFR + 2.82%

 

$

2,288

 

 

$

16

 

 

$

65

 

Total

 

 

 

$

2,288

 

 

$

16

 

 

$

65

 

(1)
Amortization of deferred financing costs and other fees are included in interest expense on the consolidated statement of operations.
(2)
As of March 31,June 30, 2023, the 1-month SOFR rate was 4.81%5.14%.

 

The following table represents interest and debt fees for the three months ended March 31,June 30, 2022:

 

 

For the three months ended March 31, 2022

 

 

For the three months ended June 30, 2022

 

 

Interest Rate(2)

 

Interest
Expense

 

 

Deferred
Financing
Costs
(1)

 

 

Other Fees(1)

 

 

Interest Rate(2)

 

Interest
Expense

 

 

Deferred
Financing
Costs
(1)

 

 

Other Fees(1)

 

Goldman Credit Facility

 

SOFR + 0.11448% + 2.70%

 

$

102

 

 

$

9

 

 

$

32

 

 

SOFR + 2.82%

 

$

471

 

 

$

8

 

 

$

32

 

Total

 

 

 

$

102

 

 

$

9

 

 

$

32

 

 

 

 

$

471

 

 

$

8

 

 

$

32

 

The following table represents interest and debt fees for the six months ended June 30, 2022:

 

 

 

For the six months ended June 30, 2022

 

 

 

Interest Rate(2)

 

Interest
Expense

 

 

Deferred
Financing
Costs
(1)

 

 

Other Fees(1)

 

Goldman Credit Facility

 

SOFR + 2.82%

 

$

574

 

 

$

17

 

 

$

65

 

Total

 

 

 

$

574

 

 

$

17

 

 

$

65

 

(1)
Amortization of deferred financing costs and other fees are included in interest expense on the consolidated statement of operations.
(2)
As of March 31,June 30, 2022, the 1-month SOFR rate was 0.16%1.69%.

At March 31,June 30, 2023 and December 31, 2022, the carrying amount of the Company’s secured borrowings approximated their fair value in accordance with ASC 820. As of March 31,June 30, 2023 and December 31, 2022, the Company’s borrowings would be deemed to be Level 3, as defined in Note 3—Fair Value of Financial Instruments.

Note 6—Commitments and Contingencies

Commitments

In the ordinary course of business, the Company may enter into future funding commitments. As of March 31,June 30, 2023 and December 31, 2022, the Company had unfunded commitments on delayed draw term loans and revolving credit lines of $95.984.8 million and $55.0 million, respectively. The Company maintains sufficient cash on hand, unfunded Capital Commitments, and available borrowings from the Goldman Credit Facility to fund such unfunded commitments.

2023


 

As of March 31,June 30, 2023, the Company’s unfunded commitments consisted of the following:

Portfolio Company Name

 

Investment Type

 

Commitment Type

 

Unfunded
Commitments

 

 

Investment Type

 

Commitment Type

 

Unfunded
Commitments

 

190 Octane Financing

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

$

1,142

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

$

1,142

 

Aurora Solutions LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

3,702

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

3,702

 

Aurora Solutions LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

766

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

766

 

Batteries Plus Holding Corporation

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

2,158

 

BKH

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,136

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,136

 

Bradford Health Services

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

7,540

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

7,540

 

Cardiovascular Logistics

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

5,095

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

3,478

 

Cardiovascular Logistics

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

4,899

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

4,899

 

CreditAssociates, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,167

 

CheckedUp

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,356

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,356

 

CheckedUp

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,367

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,697

 

CTM Group

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

702

 

CreditAssociates, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,167

 

Educators Publishing Service

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,774

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,774

 

Firebirds

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,382

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,382

 

Firebirds

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,382

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,106

 

Hasa

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,616

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,616

 

Hasa

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,553

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

932

 

Kemper Sports Management

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,302

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,855

 

Kemper Sports Management

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,675

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,676

 

MerchantWise Solutions, LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,020

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,020

 

MerchantWise Solutions, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,542

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,542

 

Mollie Funding II LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,488

 

Mollie Funding II LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,001

 

Narcote, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

490

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

490

 

National Debt Relief

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

10,418

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

7,965

 

National Debt Relief

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

2,189

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

2,189

 

Nuspire, LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

4,397

 

Nuspire, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

879

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

879

 

Oak Dental

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

7,333

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

7,334

 

Oak Dental

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

861

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

516

 

OneCare Media, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

2,056

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

2,056

 

PJW Ultimate Holdings LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

361

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,968

 

PJW Ultimate Holdings LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,070

 

Planet DDS

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

772

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,372

 

Raven Engineered Films, Inc.

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

3,242

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

3,544

 

Rushmore Intermediate

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

82

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

937

 

Rushmore Intermediate

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,344

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,344

 

S4T Holdings Corp.

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

7,731

 

The Smilist Management, Inc.

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,060

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,111

 

The Smilist Management, Inc.

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

549

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

549

 

VardimanBlack Holdings LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

541

 

Vecta Environmental Services

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,473

 

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,473

 

Vecta Environmental Services

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

742

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

742

 

Venu+

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

628

 

Wilnat, Inc.

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,235

 

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,235

 

Total

 

 

 

$

95,943

 

 

 

 

$

84,765

 

 

2124


 

As of December 31, 2022, the Company’s unfunded commitments consisted of the following:

Portfolio Company Name

 

Investment Type

 

Commitment Type

 

Unfunded
Commitments

 

190 Octane Financing

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

$

400

 

190 Octane Financing

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,142

 

Aurora Solutions LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

3,702

 

Aurora Solutions LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

766

 

Bradford Health Services

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

7,539

 

CheckedUp

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,356

 

CheckedUp

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,508

 

CreditAssociates, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,167

 

MerchantWise Solutions, LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,002

 

MerchantWise Solutions, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,542

 

Narcote, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

490

 

Nuspire, LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

4,397

 

Nuspire, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

879

 

OneCare Media, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

2,056

 

PJW Ultimate Holdings LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

682

 

PJW Ultimate Holdings LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,925

 

Raven Engineered Films, Inc.

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

3,770

 

Rushmore Intermediate

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

467

 

Rushmore Intermediate

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,344

 

S4T Holdings Corp.

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

7,730

 

The Smilist Management, Inc.

 

 First Lien Senior Secured

 

 Delayed Draw Loan-C

 

 

3,842

 

The Smilist Management, Inc.

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

549

 

VardimanBlack Holdings LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan-1st Amendment

 

 

1,258

 

Vecta Environmental Services

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,473

 

Vecta Environmental Services

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

742

 

Wilnat, Inc.

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,235

 

Total

 

 

 

 

 

$

54,963

 

 

The unrealized appreciation or depreciation associated with unfunded portfolio company commitments is recorded in the financial statements and reflected as an adjustment to the valuation of the related security in the Consolidated Schedule of Investments as of March 31,June 30, 2023 and December 31, 2022. The par amount of the unfunded portfolio company commitments is not recognized by the Company until the commitment is funded.

The credit agreements of the unfunded portfolio company commitments contain customary lending provisions which are subject to the portfolio company’s achievement of certain milestones. In instances where the underlying company experiences material adverse effects that would impact the financial condition or business outlook of the company, there is relief to the Company from funding obligations for previously made commitments. Unfunded portfolio company commitments may expire without being drawn upon, and therefore, do not necessarily represent future cash requirements or future earning assets for the Company. We believe that we maintain sufficient liquidity in the form of cash, financing capacity and undrawn capital commitments from our investors to cover any outstanding unfunded portfolio company commitments we may be required to fund.

Litigation and Regulatory Matters

In the ordinary course of its business, the Company, our wholly-owned direct subsidiaries, the Investment Adviser and the Administrator may become subject to litigation, claims, and regulatory matters. The Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time.

Indemnifications

In the ordinary course of its business, the Company may enter into contracts or agreements that contain indemnifications or warranties. Future events could occur that lead to the execution of these provisions against the Company. Based on its history and experience, management feels that the likelihood of such an event is remote.

2225


 

Note 7—Capital

Investor Commitments

As of March 31,June 30, 2023, the Company had $656.6 million, in Capital Commitments, of which $216.6186.6 million, were unfunded. As of December 31, 2022 the Company had $656.6 million, in Capital Commitments, of which $301.6 million, were unfunded.

Capital Drawdowns

The following table summarizes the total shares issued and proceeds (in thousands) related to capital drawdowns for the three and six months ended March 31,June 30, 2023:

 

Share Issue Date

 

Shares Issued

 

 

Net Proceeds Received

 

 

Shares Issued

 

 

Net Proceeds Received

 

February 24, 2023

 

 

87,145

 

 

$

85,000

 

 

 

87,145

 

 

$

85,000

 

June 21, 2023

 

 

30,797

 

 

 

30,001

 

Total Shares Issued

 

 

87,145

 

 

$

85,000

 

 

 

117,942

 

 

$

115,001

 

 

The following table summarizes the total shares issued and net proceeds (in thousands) through the Dividend Reinvestment Plan (“DRIP”) for the three and six months ended March 31,June 30, 2023:

 

Share Issue Date

 

Shares Issued

 

 

Net Proceeds

 

 

Shares Issued

 

 

Net Proceeds

 

March 28, 2023

 

 

10,772

 

 

$

10,507

 

 

 

10,772

 

 

$

10,507

 

June 28, 2023

 

 

12,482

 

 

 

12,158

 

Total Shares Issued

 

 

10,772

 

 

$

10,507

 

 

 

23,254

 

 

$

22,665

 

 

The following table summarizes the total shares issued and net proceeds (in thousands) related to capital drawdowns for the three and six months ended March 31,June 30, 2022:

 

Share Issue Date

Shares Issued

Net Proceeds Received

$

Total Shares Issued

$

Share Issue Date

 

Shares Issued

 

 

Net Proceeds Received

 

May 6, 2022

 

 

59,892

 

 

$

60,000

 

Total Shares Issued

 

 

59,892

 

 

$

60,000

 

 

The following table summarizes the total shares and net proceeds (in thousands) issued through the DRIP for the three and six months ended March 31,June 30, 2022:

 

Share Issue Date

 

Shares Issued

 

 

Net Proceeds

 

 

Shares Issued

 

 

Net Proceeds

 

March 29, 2022

 

 

1,694

 

 

$

1,687

 

 

 

1,694

 

 

$

1,687

 

 

 

1,694

 

 

$

1,687

 

June 28, 2022

 

 

2,826

 

 

 

2,831

 

Total Shares Issued

 

 

4,520

 

 

$

4,518

 

 

As of March 31,June 30, 2023 and December 31, 2022, 4,7205,153 and 3,740, respectively, of the Company’s common shares were owned by Comvest Group Holdings SPV II LLC, a wholly owned subsidiary of an affiliate of Comvest Partners.

Distributions and Dividends

Distributions declared for the three and six months ended March 31,June 30, 2023 totaled approximately $10.512.2 million.million and $22.7 million, respectively.

The following table reflects distributions declared, per share that have been declared by our Board for the threesix months ended March 31,June 30, 2023:

 

Date Declared

 

Record Date

 

Payment Date

 

Per Share Amount

 

 

Record Date

 

Payment Date

 

Per Share Amount

 

March 27, 2023

 

March 27, 2023

 

March 28, 2023

 

$

22.80

 

 

March 27, 2023

 

March 28, 2023

 

$

22.80

 

June 27, 2023

 

June 27, 2023

 

June 28, 2023

 

$

24.20

 

The following table reflects distributions declared, per share that have been declared by our Board for the threesix months ended March 31,June 30, 2022:

 

Date Declared

 

Record Date

 

Payment Date

 

Per Share Amount

 

March 28, 2022

 

March 28, 2022

 

March 29, 2022

 

$

12.00

 

26


 

23


Date Declared

 

Record Date

 

Payment Date

 

Per Share Amount

 

March 28, 2022

 

March 28, 2022

 

March 29, 2022

 

$

12.00

 

June 28, 2022

 

June 28, 2022

 

June 29, 2022

 

$

14.00

 

 

Distributions to the Company’s stockholders are recorded on the record date as set by the Company’s Board. The Company intends to make distributions to its stockholders that will be sufficient to enable the Company to qualify and maintain its status as a RIC. The Company intends to distribute approximately all of its net investment income on a quarterly basis and substantially all of its taxable income on an annual basis, except that the Company may retain certain net capital gains for reinvestment.

The Company has adopted a DRIP that provides for reinvestment of any distributions declared on behalf of its stockholders, unless a stockholder elects to receive cash.

The Company applies the following in implementing the DRIP. The Company shall useuses only newly-issued shares of its common stock to implement the DRIP. The number of shares to be issued to a stockholder that has not elected to have its distributions in cash shall be determined by dividing the total dollar amount of the distribution payable to such participant by the net asset value per share as of the last day of the Company’s fiscal quarter immediately preceding the date such distribution was declared (the “Reference NAV”); provided that in the event a distribution is declared on the last day of a fiscal quarter, the Reference NAV shall be deemed to be the net asset value per share as of such day.

Note 8—Net Assets

The Company commenced investment operations on August 17, 2021. The Company did not have significant net asset activity prior to this date.

The following table reflects the net assets activity for the three months ended March 31,June 30, 2023:

 

 

Common
stock-shares

 

 

Common
stock-par

 

 

Additional
paid in
capital

 

 

Total
distributable
earnings
(loss)

 

 

Total net
assets

 

Balance as of March 31, 2023

 

 

471,622

 

 

$

 

 

$

467,874

 

 

$

(8,456

)

 

$

459,418

 

Issuance of common stock, net of issuance costs

 

 

30,797

 

 

 

1

 

 

 

30,000

 

 

 

 

 

 

30,001

 

Reinvestment of distributions

 

 

12,482

 

 

 

 

 

 

12,158

 

 

 

 

 

 

12,158

 

Distributions to stockholders

 

 

 

 

 

 

 

 

 

 

 

(12,158

)

 

 

(12,158

)

Net investment income (loss)

 

 

 

 

 

 

 

 

 

 

 

12,831

 

 

 

12,831

 

Net realized gain (loss) from investment transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in unrealized gain (loss) on investments

 

 

 

 

 

 

 

 

 

 

 

2,317

 

 

 

2,317

 

Balance as of June 30, 2023

 

 

514,901

 

 

$

1

 

 

$

510,032

 

 

$

(5,466

)

 

$

504,567

 

 

 

 

Common
stock-shares

 

 

Common
stock-par(1)

 

 

Additional
paid in
capital

 

 

Total
distributable
earnings
(loss)

 

 

Total net
assets

 

Balance as of December 31, 2022

 

 

373,705

 

 

$

 

 

$

372,367

 

 

$

(7,859

)

 

$

364,508

 

Issuance of common stock, net of issuance costs

 

 

87,145

 

 

 

 

 

 

85,000

 

 

 

 

 

 

85,000

 

Reinvestment of distributions

 

 

10,772

 

 

 

 

 

 

10,507

 

 

 

 

 

 

10,507

 

Distributions to stockholders

 

 

 

 

 

 

 

 

 

 

 

(10,507

)

 

 

(10,507

)

Net investment income (loss)

 

 

 

 

 

 

 

 

 

 

 

11,708

 

 

 

11,708

 

Net change in unrealized gain (loss) on investments

 

 

 

 

 

 

 

 

 

 

 

(1,798

)

 

 

(1,798

)

Balance as of March 31, 2023

 

 

471,622

 

 

$

 

 

$

467,874

 

 

$

(8,456

)

 

$

459,418

 

The following table reflects the net assets activity for the six months ended June 30, 2023:

 

 

Common
stock-shares

 

 

Common
stock-par(1)

 

 

Additional
paid in
capital

 

 

Total
distributable
earnings
(loss)

 

 

Total net
assets

 

Balance as of December 31, 2022

 

 

373,705

 

 

$

 

 

$

372,367

 

 

$

(7,859

)

 

$

364,508

 

Issuance of common stock, net of issuance costs

 

 

117,942

 

 

 

1

 

 

 

115,000

 

 

 

 

 

 

115,001

 

Reinvestment of distributions

 

 

23,254

 

 

 

 

 

 

22,665

 

 

 

 

 

 

22,665

 

Distributions to stockholders

 

 

 

 

 

 

 

 

 

 

 

(22,665

)

 

 

(22,665

)

Net investment income (loss)

 

 

 

 

 

 

 

 

 

 

 

24,539

 

 

 

24,539

 

Net change in unrealized gain (loss) on investments

 

 

 

 

 

 

 

 

 

 

 

519

 

 

 

519

 

Balance as of June 30, 2023

 

$

514,901

 

 

$

1

 

 

$

510,032

 

 

$

(5,466

)

 

$

504,567

 

27


 

The following table reflects the net assets activity for the three months ended March 31,June 30, 2022:

 

 

Common
stock-shares

 

 

Common
stock-par(1)

 

 

Additional
paid in
capital

 

 

Total
distributable
earnings
(loss)

 

 

Total net
assets

 

 

Common
stock-shares

 

 

Common
stock-par(1)

 

 

Additional
paid in
capital

 

 

Total
distributable
earnings
(loss)

 

 

Total net
assets

 

Balance as of December 31, 2021

 

 

140,620

 

 

$

 

 

$

139,949

 

 

$

145

 

 

$

140,094

 

Balance as of March 31, 2022

 

 

142,314

 

 

$

 

 

$

141,636

 

 

$

934

 

 

$

142,570

 

Issuance of common stock, net of issuance costs

 

 

1,694

 

 

 

 

 

 

1,687

 

 

 

 

 

 

1,687

 

 

 

59,892

 

 

 

 

 

 

60,000

 

 

 

 

 

 

60,000

 

Reinvestment of distributions

 

 

2,826

 

 

 

 

 

 

2,831

 

 

 

 

 

 

2,831

 

Distributions to stockholders

 

 

 

 

 

 

 

 

 

 

 

(1,687

)

 

 

(1,687

)

 

 

 

 

 

 

 

 

 

 

 

(2,831

)

 

 

(2,831

)

Net investment income (loss)

 

 

 

 

 

 

 

 

 

 

 

2,056

 

 

 

2,056

 

 

 

 

 

 

 

 

 

 

 

 

3,288

 

 

 

3,288

 

Net realized gain (loss) from investment transactions

 

 

 

 

 

 

 

 

 

 

 

32

 

 

 

32

 

Net change in unrealized gain (loss) on investments

 

 

 

 

 

 

 

 

 

 

 

420

 

 

 

420

 

 

 

 

 

 

 

 

 

 

 

 

(1,367

)

 

 

(1,367

)

Balance as of March 31, 2022

 

 

142,314

 

 

$

 

 

$

141,636

 

 

$

934

 

 

$

142,570

 

Balance as of June 30, 2022

 

 

205,032

 

 

$

 

 

$

204,467

 

 

$

56

 

 

$

204,523

 

The following table reflects the net assets activity for the six months ended June 30, 2022:

 

 

Common
stock-shares

 

 

Common
stock-par(1)

 

 

Additional
paid in
capital

 

 

Total
distributable
earnings
(loss)

 

 

Total net
assets

 

Balance as of December 31, 2021

 

 

140,620

 

 

$

 

 

$

139,949

 

 

$

145

 

 

$

140,094

 

Issuance of common stock, net of issuance costs

 

 

59,892

 

 

 

 

 

 

60,000

 

 

 

 

 

 

60,000

 

Reinvestment of distributions

 

 

4,520

 

 

 

 

 

 

4,518

 

 

 

 

 

 

4,518

 

Distributions to stockholders

 

 

 

 

 

 

 

 

 

 

 

(4,518

)

 

 

(4,518

)

Net investment income (loss)

 

 

 

 

 

 

 

 

 

 

 

5,344

 

 

 

5,344

 

Net realized gain (loss) from investment transactions

 

 

 

 

 

 

 

 

 

 

 

32

 

 

 

32

 

Net change in unrealized gain (loss) on investments

 

 

 

 

 

 

 

 

 

 

 

(947

)

 

 

(947

)

Balance as of June 30, 2022

 

 

205,032

 

 

$

 

 

$

204,467

 

 

$

56

 

 

$

204,523

 

 

(1)
Less than $1.

24


Note 9—Earnings Per Share

Basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of shares outstanding during the period. Other potentially dilutive shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The following information sets forth the computation of the weighted average basic and diluted net decreasechange in net assets per share resulting from operations for the three and six months ended March 31,June 30, 2023, as well as the three and six months ended March 31,June 30, 2022.

 

 

For the Three Months Ended

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

March 31, 2023

 

 

March 31, 2022

 

 

June 30, 2023

 

 

June 30, 2022

 

 

June 30, 2023

 

 

June 30, 2022

 

Net increase (decrease) in net assets resulting from operations

 

$

9,910

 

 

$

2,476

 

 

$

15,148

 

 

$

1,953

 

 

$

25,058

 

 

$

4,429

 

Weighted average shares of common stock outstanding—basic and diluted

 

 

409,042

 

 

 

140,676

 

 

 

475,418

 

 

 

179,264

 

 

 

442,413

 

 

 

160,076

 

Earnings (loss) per share of common stock—basic and diluted

 

$

24.23

 

 

$

17.60

 

 

$

31.86

 

 

$

10.89

 

 

$

56.64

 

 

$

27.67

 

28


 

Note 10—Financial Highlights

The following is a schedule of financial highlights for the threesix months ended March 31,June 30, 2023 and March 31, 2022:

 

 

For the Six Months Ended

 

 

For the Three Months
Ended March 31, 2023

 

 

For the Three Months
Ended March 31, 2022

 

 

June 30, 2023

 

 

June 30, 2022

 

Per Common Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

Net Asset Value, Beginning of Period

 

$

975.39

 

 

$

996.26

 

 

$

975.39

 

 

$

996.26

 

Results of Operations: (1)

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Income (Loss)

 

 

28.62

 

 

 

14.62

 

 

 

55.47

 

 

 

33.38

 

Net Realized and Unrealized Gain (Loss) on Investments

 

 

(7.09

)

 

 

2.92

 

 

 

(3.93

)

 

 

(6.12

)

Net Increase (Decrease) in Net Assets Resulting from Operations

 

 

21.53

 

 

 

17.54

 

 

 

51.54

 

 

 

27.26

 

Distributions to Common Stockholders

 

 

 

 

 

 

 

 

 

 

 

 

Distributions from Net Investment Income

 

 

(22.80

)

 

 

(12.00

)

 

 

(47.00

)

 

 

(26.00

)

Net Decrease in Net Assets Resulting from Distributions

 

 

(22.80

)

 

 

(12.00

)

 

 

(47.00

)

 

 

(26.00

)

Net Asset Value, End of Period

 

$

974.12

 

 

$

1,001.80

 

 

$

979.93

 

 

$

997.52

 

Shares Outstanding, End of Period

 

 

471,622

 

 

 

142,314

 

 

 

514,901

 

 

 

205,032

 

Total Return(3)

 

 

2.20

%

 

 

1.75

%

 

 

5.37

%

 

 

2.75

%

Net assets, end of period

 

$

459,418

 

 

$

142,570

 

 

$

504,567

 

 

$

204,523

 

Ratio/Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding

 

 

409,042

 

 

 

140,676

 

 

 

442,413

 

 

 

160,076

 

Ratio of net investment income (loss) to average net assets without waiver(2)

 

 

11.90

%

 

 

5.78

%

 

 

11.45

%

 

 

6.62

%

Ratio of net investment income (loss) to average net assets with waiver(2)

 

 

11.90

%

 

 

5.95

%

 

 

11.48

%

 

 

6.74

%

Ratio of total expenses to average net assets without waiver(2)(5)

 

 

2.45

%

 

 

2.82

%

 

 

3.27

%

 

 

3.17

%

Ratio of total expenses to average net assets with waiver(2)(5)

 

 

2.45

%

 

 

2.66

%

 

 

3.24

%

 

 

3.05

%

Asset Coverage Ratio (6)

 

 

687

%

 

 

217

%

 

 

734

%

 

 

311

%

Portfolio turnover rate (4)

 

 

1

%

 

 

1

%

 

 

2

%

 

 

4

%

 

(1)
The per common share data was derived by using weighted average shares outstanding.
(2)
Ratios, excluding nonrecurring expenses, such as organization and offering costs, are annualized.
(3)
Total return is calculated assuming a purchase of shares of common stock at the current net asset value on the first day and a sale at the current net asset value on the last day of the period reported.
(4)
Portfolio turnover rate is calculated using the lesser of year-to-date purchases or sales over the average of the invested assets at fair value. Portfolio turnover rate is not annualized.
(5)
Ratio of total expenses to average net assets is calculated using total operating expenses over average net assets.
(6)
Asset coverage ratio is presented as of March 31,June 30, 2023 and as of March 31,June 30, 2022.

25


Note 11 - Subsequent Events

On June 29, 2023, the Company entered into an Amended and Restated Investment Advisory and Management Agreement to, among other things, clarify the methodology for calculating the Management Fees payable to (the “Advisor”) during and after the Investment Period. The Company has evaluated subsequent events through the filing of this Form 10-QAmended and has determined that there have been no subsequent events that require recognition or disclosure in these consolidated financial statements.Restated Investment Advisory and Management Agreement became effective on July 1, 2023.

2629


 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of Commonwealth Credit Partners BDC I, Inc. (“the Company”) and the notes thereto and other financial information included elsewhere in this Quarterly Report on Form 10-Q. We are externally managed by our adviser, Commonwealth Credit Advisors LLC (the “Investment Adviser”).

Forward Looking Statements

Statements we may make may contain forward-looking statements, that are not historical facts and are based on current expectations, estimates, projections, opinions and/or beliefs of the Company, the Investment Adviser and/or its affiliates (collectively, “Commonwealth”). These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “potential”, “project”, “seek”, “should”, “target”, “will”, “would” or variations of these words and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements for any reason, including the factors set forth in Item 1A.—Risk Factors contained in our annual report on Form 10-K for the year ended December 31, 2022 and in this quarterly report on Form 10-Q.

Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and we assume no duty to and do not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance. The occurrence of the events described in these risk factors and elsewhere in this Form 10-Q could have a material adverse effect on our business, results of operation and financial position.

In addition to factors previously disclosed in our U.S. Securities and Exchange Commission (“SEC”) reports and those identified elsewhere in this report, including the “Risk Factors” section, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance:

the Company’s future operating results;
changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets;
lack of sufficient investment opportunities;
volatility of leveraged loan markets;
risk of borrower default;
the restricted nature of investment positions;
the illiquid nature of our portfolio;
interest rate volatility, including volatility associated with the decommissioning of LIBOR and the transition to new reference rates;
the Company’s business prospects and the prospects of the Company’s prospective portfolio companies;
the impact of increased competition;
the Company’s contractual arrangements and relationships with third parties;
the dependence of the Company’s future success on the general economy and its impact on the industries in which the Company invests;
the ability of the Company’s prospective portfolio companies to achieve their objectives;
the relative and absolute performance of the Investment Adviser;
the ability of the Investment Adviser and its affiliates to retain talented professionals;
the Company’s expected financings and investments;
the Company’s ability to pay dividends or make distributions;

2730


 

the adequacy of the Company’s cash resources;
risks associated with possible disruptions due to terrorism in the Company’s operations or the economy generally;
the impact of future acquisitions and divestitures;
the Company’s regulatory structure and tax status as a BDCbusiness development company (a "BDC") and a regulated investment company (a “RIC”);
future changes in laws or regulations and conditions in the Company’s operating areas; and
turmoil in Ukraine and Russia, including sanctions related to such turmoil, and the potential for volatility in energy prices and other supply chain issues and any impact on the industries in which we invest;

You should not place undue reliance on these forward-looking statements. The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligations to update any forward-looking statement to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Overview

The Company is an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company (a “BDC”)"BDC" under the Investment Company Act of 1940, as amended (the “1940 Act”) and intends to elect to be treated for U.S. federal income tax purposes, and to qualify annually thereafter, as a regulated investment company (“RIC”)“RIC” under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company was formed on January 15, 2021 (Inception Date) as a Delaware corporation. The Company commenced investment operations on August 17, 2021.

The Company is managed by the Investment Adviser, a Delaware limited liability company and an affiliate of Comvest. The Investment Adviser is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended (“Advisers Act”). The Investment Adviser oversees the management of the Company’s activities and is responsible for making investment decisions with respect to the Company’s portfolio.

The Company’s investment objective is to generate both current income and capital appreciation by investing in middle-market companies in a wide range of industries primarily structured as senior credit facilities, and to a lesser extent, junior credit facilities. The Company also may purchase interests in loans through secondary market transactions.

Portfolio and Investment Activity

During the threesix months ended March 31,June 30, 2023, we made $178.3$227.6 million of investments in new investmentsor existing portfolio companies and had $3.0$8.1 million in aggregate amount of sales and repayments, resulting in net investments of $175.3$219.5 million for the period. The total portfolio of debt investments at fair value consisted of 100% bearing variable interest rates and 0% bearing fixed interest rates.

Our portfolio composition, based on fair value at March 31,June 30, 2023 was as follows:

 

 

March 31, 2023

 

 

June 30, 2023

 

 

Percentage
of Total
Portfolio

 

 

Weighted Average
Current Yield for
Total Portfolio

 

 

Percentage
of Total
Portfolio

 

 

Weighted Average
Current Yield for
Total Portfolio

 

First Lien Senior Secured

 

 

98.8

%

 

 

11.4

%

 

 

98.9

%

 

 

11.9

%

Equity

 

 

1.2

%

 

 

 

 

 

1.1

%

 

 

 

Total

 

 

100.0

%

 

 

11.4

%

 

 

100.0

%

 

 

11.9

%

 

Our portfolio composition, based on fair value at December 31, 2022 was as follows:

 

 

 

December 31, 2022

 

 

 

Percentage
of Total
Portfolio

 

 

Weighted Average
Current Yield for
Total Portfolio

 

First Lien Senior Secured

 

 

99.1

%

 

 

11.2

%

Equity

 

 

0.9

 

 

 

 

Total

 

 

100.0

%

 

 

11.2

%

 

2831


 

The following table shows the asset mix of our new investment fundings for the threesix months ended March 31,June 30, 2023:

 

 

Fair Value
(In thousands)

 

 

Percentage

 

 

Fair Value
(In thousands)

 

 

Percentage

 

First Lien Senior Secured

 

$

175,056

 

 

 

98.2

%

 

$

224,532

 

 

 

98.5

%

Equity

 

 

3,243

 

 

 

1.8

%

 

 

3,353

 

 

 

1.5

%

Total

 

$

178,299

 

 

 

100.0

%

 

$

227,885

 

 

 

100.0

%

 

Portfolio Asset Quality

Our Investment Adviser employs an investment rating system to categorize our investments. In addition to various risk management and monitoring tools, our Investment Adviser grades the credit risk of all debt investments on a scale of 1 to 6 no less frequently than quarterly. This system is intended primarily to reflect the underlying risk of a portfolio debt investment relative to the inherent risk at the time the original debt investment was made (i.e., at the time of acquisition), although it may also takewhich takes into account under certain circumstancesfactors such as the performance of the portfolio company’s business, the collateral coverage of the investment and other relevant factors.

 

Loan

Rating

 

Summary Description

 

1

 

Investments that are performing at or above expectations. No issues or foreseen issues on performance, covenants, liquidity, etc. The credit is expected to be repaid at maturity through available cash flow or to be refinanced.

 

2

 

Investments that are performing substantially within our expectations, with the risks remaining neutral or favorable. All new loans are initially rated 2. The credit is expected to be repaid at maturity through available cash flow or to be refinanced by a third party.

 

3

 

Investments that are performing below our expectations and that require closer monitoring, but where we expect no loss of investment return or principal.

 

4

 

Investments that are performing below our expectations and for which risk has increased materially since the original investment. There is a probability of some loss of investment return, but no loss of principal is expected.

 

5

 

Investments that are performing substantially below our expectations and whose risks have increased substantially since the original investment. Typically, the borrower will be in default, or the loan will have been modified to address a default.

 

6

 

Investments that are performing poorly; it is unlikely that the enterprise or asset values currently exceed the debt and/or material reduction in enterprise value is reasonably foreseen.

The weighted average risk rating of our investments based on fair value was 2.12.2 as of March 31,June 30, 2023. As of March 31,June 30, 2023, the Company had no portfolio companies on non-accrual status. Refer to Note 2—Summary of Significant Accounting Policies—for additional details regarding the Company’s non-accrual policy.

 

 

As of March 31, 2023

 

 

As of June 30, 2023

 

Internal
Performance
Rating

 

Investments at
Fair Value
(In thousands)

 

 

Percentage
of Total
Investments

 

 

Investments at
Fair Value
(In thousands)

 

 

Percentage
of Total
Investments

 

6

 

$

 

 

 

 

 

$

 

 

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

61,193

 

 

 

11.6

 

 

 

114,199

 

 

 

19.8

 

2

 

 

468,131

 

 

 

88.4

 

 

 

462,382

 

 

 

80.2

 

1

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

529,324

 

 

 

100.0

%

 

$

576,581

 

 

 

100.0

%

 

2932


 

The weighted average risk rating of our investments based on fair value was 2.1 as of December 31, 2022. As of December 31, 2022, the Company had no portfolio companies on non-accrual status. Refer to Note 2—Summary of Significant Accounting Policies—for additional details regarding the Company’s non-accrual policy.

 

 

 

As of December 31, 2022

 

Internal
Performance
Rating

 

Investments at
Fair Value
(In thousands)

 

 

Percentage
of Total
Investments

 

6

 

$

 

 

 

%

5

 

 

 

 

 

 

4

 

 

 

 

 

 

3

 

 

42,370

 

 

 

11.9

 

2

 

 

312,864

 

 

 

88.1

 

1

 

 

 

 

 

 

Total

 

$

355,234

 

 

 

100.0

%

 

The following tables show the weighted average rate, spread over the reference rate of floating rate and fees of investments
originated and the weighted average rate of sales and payoffs of portfolio companies during the threesix months ended March 31,June 30, 2023.

 

 

 

For the Three Months
Ended March 31,June 30, 2023

 

Weighted average rate of new investment fundings

 

 

11.4112.32

%

Weighted average spread over Reference Rate of new
floating rate investment fundings

 

 

6.417.08

%

Weighted average fees of new investment fundings

 

 

2.342.25

%

 

RESULTS OF OPERATIONS

Our operating results for the three and six months ended March 31,June 30, 2023 (dollars in thousands):

 

 

For the Three
Months Ended
March 31, 2023

 

 

For the Three
Months Ended
June 30, 2023

 

 

For the Six
Months Ended
June 30, 2023

 

Total investment income

 

$

14,115

 

 

$

17,359

 

 

$

31,474

 

Less: Net expenses

 

 

2,407

 

 

 

4,528

 

 

 

6,935

 

Net investment income (loss)

 

 

11,708

 

 

 

12,831

 

 

 

24,539

 

Net realized gains (losses)

 

 

 

 

 

 

 

 

 

Net change in unrealized gains (losses)

 

 

(1,798

)

 

 

2,317

 

 

 

519

 

Net increase (decrease) in net assets resulting from
operations

 

$

9,910

 

 

$

15,148

 

 

$

25,058

 

 

Our operating results for the three and six months ended March 31,June 30, 2022 were as follows (dollars in thousands):

 

 

For the Three
Months Ended
March 31, 2022

 

 

For the Three
Months Ended
June 30, 2022

 

 

For the Six
Months Ended
June 30, 2022

 

Total investment income

 

$

2,974

 

 

$

4,793

 

 

$

7,767

 

Less: Net expenses

 

 

918

 

 

 

1,505

 

 

 

2,423

 

Net investment income (loss)

 

 

2,056

 

 

 

3,288

 

 

 

5,344

 

Net realized gains (losses)

 

 

 

 

 

32

 

 

 

32

 

Net change in unrealized gains (losses)

 

 

420

 

 

 

(1,367

)

 

 

(947

)

Net increase (decrease) in net assets resulting from
operations

 

$

2,476

 

 

$

1,953

 

 

$

4,429

 

 

3033


 

Investment Income

Investment income for the three and six months ended March 31,June 30, 2023 was driven by our deployment of capital and interest income from our investments. The composition of our investment income for the three and six months ended March 31,June 30, 2023 was as follows (dollars in thousands):

 

 

For the Three
Months Ended
March 31, 2023

 

 

For the Three Months
Ended June 30, 2023

 

 

For the Six Months
Ended June 30, 2023

 

Interest from investments

 

$

13,657

 

Interest income from investments

 

$

17,130

 

 

$

30,787

 

Fee income

 

 

458

 

 

 

229

 

 

 

687

 

Total investment income

 

$

14,115

 

 

$

17,359

 

 

$

31,474

 

 

The composition of our investment income for the three and six months ended March 31,June 30, 2022 was as follows (dollars in thousands):

 

 

For the Three
Months Ended
March 31, 2022

 

 

For the Three
Months Ended
June 30, 2022

 

 

For the Six
Months Ended
June 30, 2022

 

Interest from investments

 

$

2,922

 

Interest income from investments

 

$

4,690

 

 

$

7,612

 

Fee income

 

 

52

 

 

 

103

 

 

 

155

 

Total investment income

 

$

2,974

 

 

$

4,793

 

 

$

7,767

 

 

Operating Expenses

The composition of our operating expenses for the three and six months ended March 31,June 30, 2023 was as follows (dollars in thousands):

 

 

For the Three
Months Ended
March 31, 2023

 

 

For the Three Months
Ended June 30, 2023

 

 

For the Six Months
Ended June 30, 2023

 

Incentive fees

 

$

1,399

 

 

$

1,399

 

Management fees

 

$

1,126

 

 

$

1,295

 

 

$

2,421

 

Interest expense

 

 

825

 

 

 

1,543

 

 

 

2,369

 

Professional fees

 

 

148

 

 

 

175

 

 

 

323

 

Directors’ fees

 

 

26

 

 

 

25

 

 

 

50

 

Other general and administrative expenses

 

 

282

 

 

 

154

 

 

 

436

 

Incentive fee waiver

 

 

(63

)

 

 

(63

)

Net expenses

 

$

2,407

 

 

$

4,528

 

 

$

6,935

 

 

The composition of our operating expenses for the three and six months ended March 31,June 30, 2022 was as follows (dollars in thousands):

 

 

For the Three
Months Ended
March 31, 2022

 

 

For the Three
Months Ended
June 30, 2022

 

 

For the Six
Months Ended
June 30, 2022

 

Management fees

 

$

461

 

 

$

643

 

 

$

1,104

 

Interest expense

 

 

143

 

 

 

512

 

 

 

655

 

Professional fees

 

 

140

 

 

 

120

 

 

 

260

 

Directors’ fees

 

 

26

 

 

 

26

 

 

 

51

 

Amortization of offering costs

 

 

42

 

 

 

38

 

 

 

80

 

Other general and administrative expenses

 

 

164

 

 

 

199

 

 

 

364

 

Management fee waiver

 

 

(58

)

 

 

(33

)

 

 

(91

)

Net expenses

 

$

918

 

 

$

1,505

 

 

$

2,423

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3134


 

Net Realized Gains (Losses) and Net Change in Unrealized Gains (Losses) on Investments

Net realized gains (losses) and net change in unrealized gains (losses) on investments for the three and six months ended March 31,June 30, 2023 were as follows (dollars in thousands):

 

 

For the Three
Months Ended
March 31, 2023

 

 

For the Three Months
Ended June 30, 2023

 

 

For the Six Months
Ended June 30, 2023

 

Net realized gains (losses)

 

 

 

 

 

 

 

 

 

Non-affiliate investments

 

$

 

 

$

 

 

$

 

Total net realized gains (losses)

 

 

 

 

 

 

 

 

 

Net change in unrealized gains (losses) on investments

 

 

 

 

 

 

 

 

 

Non-affiliate investments

 

 

(1,798

)

 

 

2,317

 

 

 

519

 

Total net change in unrealized gains (losses) on investments

 

 

(1,798

)

 

 

2,317

 

 

 

519

 

Net realized and unrealized gains (losses)

 

$

(1,798

)

 

$

2,317

 

 

$

519

 

 

Net realized gains (losses) and net change in unrealized gains (losses) on investments for the three and six months ended March 31,June 30, 2022 were as follows (dollars in thousands):

 

 

For the Three
Months Ended
March 31, 2022

 

 

For the Three
Months Ended
June 30, 2022

 

 

For the Six
Months Ended
June 30, 2022

 

Net realized gains (losses)

 

 

 

 

 

 

 

 

 

Non-affiliate investments

 

$

 

 

$

32

 

 

$

32

 

Total net realized gains (losses)

 

 

 

 

 

32

 

 

 

32

 

Net change in unrealized gains (losses) on investments

 

 

 

 

 

 

 

 

 

Non-affiliate investments

 

 

420

 

 

 

(1,367

)

 

 

(947

)

Total net change in unrealized gains (losses) on investments

 

 

420

 

 

 

(1,367

)

 

 

(947

)

Net realized and unrealized gains (losses)

 

$

420

 

 

$

(1,335

)

 

$

(915

)

 

Recent Developments

None.

Liquidity and Capital Resources

We generate cash from (1) drawing down capital in respect of Shares, (2) cash flows from investments and operations and (3) borrowings from banks or other lenders.

As of March 31,June 30, 2023, we are party to the Goldman Credit Facility, as described in more detail in Note 5—Borrowings.

Our primary use of cash is to originate (1) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (2) the cost of operations (including expenses, the Management Fee and, to the extent permitted under ERISA, if applicable, and the 1940 Act, any indemnification obligations), (3) debt service of any borrowings and (4) cash distributions to the Stockholders.

35


Operating liquidity is our ability to meet our short-term liquidity needs. The following table presents our operating liquidity position as of March 31,June 30, 2023 and December 31, 2022:

 

 

 

As of

 

 

 

March 31, 2023

 

 

December 31, 2022

 

Unfunded portfolio company commitments

 

$

(95,943

)

 

$

(54,963

)

Undrawn capital commitments

 

 

216,571

 

 

 

301,571

 

Total operational liquidity

 

$

120,628

 

 

$

246,608

 

32


 

 

As of

 

 

 

June 30, 2023

 

 

December 31, 2022

 

Cash and cash equivalents

 

$

7,738

 

 

$

8,355

 

Unfunded portfolio company commitments

 

 

(84,765

)

 

 

(54,963

)

Undrawn capital commitments

 

 

186,571

 

 

 

301,571

 

Total operational liquidity

 

$

109,544

 

 

$

254,963

 

 

Taxation as a RIC

We have elected to be treated 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 as dividends for U.S. federal income tax purposes to our stockholders. To maintain our qualification as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. In addition, in order to maintain RIC tax treatment, we must distribute to our stockholders, for each tax year, an amount equal to at least 90% of our “investment company taxable income,” which is generally our net ordinary income plus the excess, if any, of realized net short-term capital gain over realized net long-term capital loss and determined without regard to any deduction for dividends paid.

Additionally, in order to avoid the imposition of a U.S. federal excise tax, we are required to distribute, in respect of each calendar year, dividends to our stockholders of an amount at least equal to the sum of 98% of our calendar year net ordinary income (taking into account certain deferrals and elections); 98.2% of our capital gain net income (adjusted for certain ordinary losses) for the one year period ending on October 31 of such calendar year; and any net ordinary income and capital gain net income for preceding calendar years that were not distributed during such calendar years and on which we previously did not incur any U.S. federal income tax. If we fail to qualify as a RIC for any reason and become subject to corporate tax, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions.

Related Party Transactions and Agreements

Investment Advisory Agreement

We entered into an Investment Advisory Agreement, dated as of June 29, 2021, which was approved by our Board for an initial two-year term, under which the Investment Adviser, subject to the overall supervision of our Board manages the day-to-day operations of, and provides investment advisory services to us. The Board, including a majority of the directors that are not “interested persons” as defined in Section 2(a)(19) of the 1940 Act, approved the renewal of the Investment Advisory Agreement on May 11, 2023. Such approvals were made in accordance with, and on the basis of an evaluation satisfactory to the Board as required by, Section 15(c) of the 1940 Act and applicable rules and regulations thereunder, including a consideration of, among other factors, (i) the nature, quality and extent of the advisory and other services to be provided under the agreement, (ii) the investment performance of the personnel who manage investment portfolios with objectives similar to the Company’s, (iii) comparative data with respect to advisory fees or similar expenses paid by other BDCs with similar investment objectives and (iv) information about the services to be performed and the personnel performing such services under the agreement.

Administration Agreement

On June 29, 2021, we entered into an administration agreement (the “Administration Agreement”) with Commonwealth Credit Advisors LLC, a Delaware limited liability company (in such capacity, the “Administrator”), under which the Administrator will provide administrative services for us, including arranging office facilities for us and providing office equipment and clerical, bookkeeping and recordkeeping services at such facilities. The Board, including a majority of the directors that are not “interested persons” as defined in Section 2(a)(19) of the 1940 Act, approved the renewal of the Administration Agreement on May 11, 2023.

36


Such approvals were made in accordance with, and on the basis of an evaluation satisfactory to the Board as required by, Section 15(c) of the 1940 Act and applicable rules and regulations thereunder.

Co-Investment Relief

The 1940 Act generally prohibits BDCs from entering into negotiated co-investments with affiliates absent an order from the SEC. On August 2, 2021, the SEC granted the Company exemptive relief (the “Order”) that allows it to enter into certain negotiated co-investment transactions alongside other funds managed by the Adviser or its affiliates (“Affiliated Funds”) in a manner consistent with its investment objective, positions, policies, strategies, and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with the conditions of the Order.

Pursuant to the Order, the Company is permitted to co-invest with its affiliates if a “among other things, required majority” (as defined in Section 57(o) of the 1940 Act) of the Company’s independent directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to the Company and the Company’s stockholders and do not involve overreaching in respect of the Company or the Company’s stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of the Company’s stockholders and is consistent with the Company’s investment objective and strategies. In addition, to the extent that our assets are treated as “plan assets” under ERISA, we will only co-invest in the same issuer with certain funds or entities managed by the Investment Adviser or its affiliates, so long as their and our respective investments are at the same level of such issuer’s capital structure; provided, that in no event will we co-invest with any other fund or entity in contravention of the 1940 Act.

33


Distributions and Dividends

Distributions declared for the three and six months ending March 31,ended June 30, 2023 totaled approximately $10.51 million.$12.16 million and $22.67 million, respectively.

 

The following table reflects cash distributions, including dividends and returns of capital, if any, per share that have been declared by our Board for the most recent fiscal year and current fiscal quarter to date:

 

Fiscal Year Quarter

 

Date Declared

 

Record Date

 

Payment Date

 

Per Share Amount

 

 

Date Declared

 

Record Date

 

Payment Date

 

Per Share Amount

 

First Quarter

 

March 27, 2023

 

March 27, 2023

 

March 28, 2023

 

$

22.80

 

 

March 27, 2023

 

March 27, 2023

 

March 28, 2023

 

$

22.80

 

Second Quarter

 

June 27, 2023

 

June 27, 2023

 

June 28, 2023

 

$

24.20

 

 


Fiscal Year Ended

 

Date Declared

 

Record Date

 

Payment Date

 

Per Share Amount

 

December 31, 2022

 

 

 

 

 

 

 

 

 

First Quarter

 

March 28, 2022

 

March 28, 2022

 

March 29, 2022

 

$

12.00

 

Second Quarter

 

June 27, 2022

 

June 27, 2022

 

June 28, 2022

 

$

14.00

 

Third Quarter

 

September 27, 2022

 

September 27, 2022

 

September 28, 2022

 

$

18.00

 

Fourth Quarter

 

December 27, 2022

 

December 27, 2022

 

December 28, 2022

 

$

24.00

 

 

Borrowings

We are only allowed to borrow money such that our asset coverage, which, as defined in the 1940 Act, measures the ratio of total assets less total liabilities not represented by senior securities to total borrowings, equals at least 150% after such borrowing, with certain limited exceptions. As a result, in addition to the foregoing 1940 Act restriction on leverage, we do not currently expect to borrow in excess of the lesser of 20% of our Aggregate Committed Capital and $130 million. We may in the future, though, determine to utilize a greater amount of leverage, including for investment purposes.

Goldman Credit Facility

On August 11, 2021, Commonwealth Credit Partners BDC, Inc. (the “Company”), entered into a Credit Agreement (the "Goldman Credit Facility") as the borrower and Goldman Sachs Bank USA (“Goldman Sachs”) as the lender. The Goldman Credit Facility is structured as a revolving credit facility secured by the Capital Commitments of the Company’s subscribed investors and certain related assets. On September 27, 2021, the Credit Agreement was amended, pursuant to which the maximum loan amount was increased to the lesser of $130 million and the Borrowing Base as defined below.

The Goldman Credit Facility is uncommitted and matures on the earlier of (i) the date on which either the Company or lender provide written notice of termination to the other party and (ii) the date that is 30 days prior to the last date on which the Company

37


may issue capital drawdowns to its investors. Under the Goldman Credit Facility, the Company is permitted to borrow up to the lesser of $130 million and the Borrowing Base. The “Borrowing Base” is based upon the unfunded capital commitments of certain subscribed investors in the Company that have been approved by Goldman Sachs and meet certain criteria. The advance rate for such investors is currently 90% but may be subject to modification. The Goldman Credit Facility contains certain customary affirmative and negative covenants and events of default.

The Goldman Credit Facility bears interest at a rate of Term SOFR plus 0.11448% plus 2.70%2.82% per annum.

Contractual Obligations

The following table shows our payment obligations for repayment of debt and other contractual obligations as of March 31,June 30, 2023 (dollars in thousands):

 

 

Total Aggregate
Borrowing
Capacity
(1)

 

 

Total Principal
Outstanding

 

 

Total Aggregate
Borrowing
Capacity
(1)

 

 

Total Principal
Outstanding

 

Goldman Sachs Credit Facility

 

$

130,000

 

 

$

78,000

 

 

$

130,000

 

 

$

79,100

 

Total

 

$

130,000

 

 

$

78,000

 

 

$

130,000

 

 

$

79,100

 

(1)
As of March 31,June 30, 2023, we had $52.0$50.9 million in unused borrowing capacity under the Goldman Credit Facility, subject to borrowing base limits.

34


Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

Commitments

In the ordinary course of business, we may enter into future funding commitments. As of March 31,June 30, 2023, we had unfunded commitments on revolving credit lines of $95.9$84.8 million. We maintain sufficient financial resources to satisfy unfunded commitments, including cash on hand, undrawn capital commitments from our investors, and available borrowings to fund such unfunded commitments. Please refer to Note 6—Commitments and Contingencies in the notes to our consolidated financial statements for further detail of these unfunded commitments.

Significant Accounting Estimates and Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we will evaluate our estimates, including those related to the matters described below. Actual results could differ from those estimates.

While our significant accounting policies are also described in Note 2 of notes to our consolidated financial statements appearing elsewhere in this report, we believe the following accounting policies require the most significant judgment in the preparation of our consolidated financial statements.

Valuation of Portfolio Investments

The Investment Adviser values our portfolio investments on a quarterly basis, or more frequently if required under the 1940 Act. For purposes of the 1940 Act, the Board has designated the Investment Adviser as the Company’s “valuation designee” under Rule 2a-5 under the 1940 Act. The Board provides oversight of the Investment Adviser’s fair value determinations of our portfolio investments on a quarterly basis in good faith, including investments that are not publicly traded, those whose market prices are not readily available. Security transactions are accounted for on a trade date basis.

To38


Given that the extent (i) Benefit Plan Investors hold 25% or moreCompany's assets are currently treated as "plan assets" under the Employee Retirement Income Security Act of our outstanding Shares,1974, as amended ("ERISA") and (ii) our Shares are not listed on a national securities exchange,Section 4975 of the Code, one or more Valuation Agentsindependent valuation firms (each a "Valuation Agent") will be engaged to independently value ourthe Company's investments, in consultation with the Investment Adviser. OurThe Company's quarterly valuation procedures, which are the procedures that will be followed by such Valuation Agent to the extent (i) Benefit Plan Investors hold 25% the Company's assets are treated as "plan assets" under ERISA and/or moreSection 4975 of our outstanding Shares, and (ii) our Shares are not listed on a national securities exchange,the code, are set forth in more detail below:

1)
Investments for which market quotations are readily available on an exchange are valued at such market quotations based on the closing price indicated from independent pricing services.
2)
Investments for which indicative prices are obtained from various pricing services and/or brokers or dealers are valued through a multi-step valuation process, as described below, to determine whether the quote(s) obtained is representative of fair value in accordance with GAAP.

a) Bond quotes are obtained through independent pricing services. Internal reviews are performed by the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, to ensure that the quote obtained is representative of fair value in accordance with GAAP and if so, the quote is used. If the Valuation Agent is unable to sufficiently validate the quote(s) internally and if the investment’s par value exceeds a certain materiality threshold, the investment is valued similarly to those assets with no readily available quotes (see (3) below); and

b) For investments other than bonds, the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, look at the number of quotes readily available and perform the following:

i) Investments for which two or more quotes are received from a pricing service are valued using the mean of the mean of the bid and ask of the quotes obtained. If quotes from pricing services differ by +/- five points or if the spread between the bid and ask for a quote is greater than 10 points, the personnel of the Valuation Agent, in

35


consultation with the investment professionals of the Investment Adviser, will evaluate the reasonableness of the quote, and if the quote is determined to not be representative of fair value, the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, will use one or more of the methodologies outlined below to determine fair value;

ii) Investments for which one quote is received from a pricing service are validated by the Valuation Agent, in consultation with the investment professionals of the Investment Adviser. The personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, analyze the market quotes obtained using an array of valuation methods (further described below) to validate the fair value. For assets where a supporting analysis is prepared, the Valuation Agent will document the selection and appropriateness of the indices selected for yield comparison and a conclusion documenting how the yield comparison analysis supports the proposed mark. The quarterly portfolio company monitoring reports which detail the qualitative and quantitative performance of the portfolio company will also be included. If the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, is unable to sufficiently validate the quote internally and if the investment’s par value exceeds a certain materiality threshold, the investment is valued similarly to those assets with no readily available quotes (see (3) below).

3)
Investments for which quotations are not readily available through exchanges, pricing services, brokers, or dealers are valued through a multi-step valuation process:

a) Each portfolio company or investment is initially valued by the personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser; and

b) Preliminary valuation conclusions will then be documented and discussed with our senior management.

The income and market approaches were used in the determination of fair value of certain Level 3 assets as of March 31,June 30, 2023. The significant unobservable inputs used in the income approach are the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments and any other end of term fees, as applicable. Included in the consideration and selection of discount rates are factors such as risk of default, interest rate risk, and changes in credit quality. The significant unobservable inputs used in the market approach are based on market comparable transactions and market multiples of publicly traded comparable companies.

For investments in revolving credit facilities and delayed draw commitments, the cost basis of the funded investments purchased is offset by any costs/netbacks received for any unfunded portion on the total balance committed. The fair value is also adjusted for the price appreciation or depreciation on the unfunded portion. As a result, the purchase of commitments not completely funded may result in a negative fair value until it is called and funded.

39


The values assigned to investments are based upon available information and do not necessarily represent amounts which might ultimately be realized, since such amounts depend on future circumstances and cannot be reasonably determined until the individual positions are liquidated. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period and the fluctuations could be material.

In the event Benefit Plan Investors do not hold 25% or more of our outstanding Shares, or our Shares are listed on a national securities exchange, then (i) personnel of the Investment Adviser will undertake the roles to be performed by the personnel of the Valuation Agent, as described above and (ii) if an investment falls into category (3) above for four consecutive quarters and if the investment’s par value or its fair value exceeds a certain materiality threshold, then at least once each fiscal year, the valuation for each portfolio investment for which we do not have a readily available market quotation will be reviewed by an independent valuation firm engaged by our Board.

For all valuations, the Valuation Committee of our Board, which consists solely of directors who are not “interested persons” of the Company, as such term is used under the 1940 Act (the “Independent Directors”), will review these preliminary valuations and our Board, a majority of whom are Independent Directors, will discuss the Investment Adviser’s valuations; provided, however, that to the extent our assets are treated as “plan assets” for purposesunder ERISA and/or Section 4975 of ERISA,the Code, the Valuation Agent will determine valuations using only those valuation methodologies reviewed and approved by the Valuation Committee and our Board, and our Board, absent manifest error, will accept such valuations prepared by the Valuation Agent in accordance therewith.

Revenue Recognition

Interest Income

Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discount and premium on investments purchased are accreted/amortized over the expected life of the respective investment using the effective

36


interest method. Loan origination fees, original issue discount (“OID”) and market discounts or premiums are capitalized and amortized into interest income using the effective interest method. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income. The Company may have loans in its portfolio that contain a payment-in-kind ("PIK") interest provision).provision. PIK interest is accrued and recorded as income at the contractual rates, if deemed collectible. The PIK interest is added to the principal balance on the capitalization date and is generally due at maturity or when deemed by the issuer.

Fee Income

Fee income, such as structuring fees, loan monitoring, amendment, syndication, commitment, termination, and other loan fees are recognized as income when earned, either upon receipt or amortized into fee income. Upon the re-payment of a loan or debt security, any prepayment penalties and unamortized loan fees are recorded as fee income.

Non-accrual

Investments may be placed on non-accrual status when principal or interest payments are past due and/or when there is reasonable doubt that principal or interest will be collected. Accrued interest is generally reversed when an investment is placed on non-accrual status. Interest payments received on non-accrual investments may be recognized as income or applied to principal depending upon management’s judgment of the ultimate outcome. Non-accrual investments are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current.

Net Realized Gain or Loss and Net Change in Unrealized Gain or Loss

Investment transactions are accounted for on the trade date. Gain or loss on the sale of investments is calculated using the specific identification method. Net change in unrealized gain or loss will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized gain or loss, when a gain or loss is realized.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to certain financial market risks, such as interest rate fluctuations. Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. The U.S. Federal Reserve and other central banks have raised interest rates multiple times in recent years. As a result, key base interest rates, such as SOFR, and LIBOR, may fluctuate over time. As of March 31,June 30, 2023, 100% of investments at fair value represent floating-rate investments with a reference rate floor and none of our debt investments at fair value represent fixed-rate

40


investments. Additionally, our Goldman Credit Facility is also subject to floating interest rates and are currently paid based on floating SOFR rates.

The following table estimates the potential changes in net cash flow generated from interest income and expenses, should interest rates increase by 100, 200 or 300 basis points, or decrease by 25 basis points. Interest income is calculated as revenue from interest generated from our portfolio of investments held as of March 31,June 30, 2023. Interest expense is calculated based on the terms of our outstanding revolving credit facility and subscription line. For our Goldman Credit Facility, we use the outstanding balance as of March 31,June 30, 2023. Interest expense on this balance is calculated using the interest rate as of March 31,June 30, 2023, adjusted for the hypothetical changes in rates, as shown below.

Assuming that the interim and unaudited Consolidated Statement of Assets and Liabilities as of March 31,June 30, 2023 was to remain constant and that we took no actions to alter our interest rate sensitivity as of such date, the following table shows the annualized impact of hypothetical base rate changes in interest rates. Actual results could differ significantly from those estimated in the table.

 

Change in Interest Rates

 

Net Increase
(Decrease) in
Interest Income
(in thousands)

 

Net Increase
(Decrease) in
Interest Expense
(in thousands)

 

Net Increase
(Decrease) in Net
Investment Income
(in thousands)

 

 

Net Increase
(Decrease) in
Interest Income
(in thousands)

 

Net Increase
(Decrease) in
Interest Expense
(in thousands)

 

Net Increase
(Decrease) in Net
Investment Income
(in thousands)

 

Down 25 basis points

 

$

(1,357

)

$

(195

)

$

(1,162

)

Down 100 basis points

 

$

(5,878

)

$

(791

)

$

(5,087

)

Down 200 basis points

 

 

(11,757

)

 

(1,582

)

 

(10,175

)

Up 100 basis points

 

 

5,427

 

780

 

4,647

 

 

 

5,878

 

791

 

5,087

 

Up 200 basis points

 

 

10,855

 

1,560

 

9,295

 

 

 

11,757

 

1,582

 

10,175

 

Up 300 basis points

 

 

16,282

 

2,340

 

13,942

 

 

 

17,635

 

2,373

 

15,262

 

 

Because we may borrow money to make investments, our net investment income may be dependent on the difference between the rate at which we borrow funds and the rate at which we invest these funds. In periods of increasing interest rates, our cost of funds

37


would increase, which may reduce our net investment income. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “1934 Act”) we evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the 1934 Act) as of March 31,June 30, 2023. Based on the foregoing evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of March 31,June 30, 2023, our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level that we would meet our disclosure obligations.

Changes in internal control over financial reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the 1934 Act) that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

3841


 

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We, and our wholly-owned direct subsidiaries, the Investment Adviser and the Administrator are not currently subject to any material legal proceedings as of March 31,June 30, 2023. From time to time, we our wholly-owned direct subsidiaries, the Investment Adviser and the Administrator may be a party to certain legal proceedings incidental to the normal course of our business including the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our business, financial condition or results of operations.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Item 1A.—Risk Factorspreviously disclosed in our Annual Report on Form 10-K10-K— for the fiscal year ended December 31, 2022, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may materially affect our business, our structure, our financial condition, our investments and/or operating results.

Other than as set forth below, there have been no material changes during the three months ended March 31, 2023 to the risk factors discussed in Item 1A.—Risk Factorspreviously disclosed in our Annual Report on Form 10-K.10-K— for the year ended December 31, 2022 and in our quarterly report on Form 10-Q for the quarter ended March 31, 2023, which you should carefully consider before transacting in our Shares. If any of such risks actually occur, our business, financial condition or results of operations could be materially adversely affected.

We, our wholly-owned direct subsidiaries and the Investment Adviser and our portfolio companies may maintain cash balances at financial institutions that exceed federally insured limits and may otherwise be materially affected by adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties.

Our cash and the cash of our wholly-owned direct subsidiaries and our Investment Adviser is held in accounts at U.S. banking institutions that we believe are of high quality. Cash held by us, our wholly-owned direct subsidiaries and our Investment Adviser and by our portfolio companies in non-interest-bearing and interest-bearing operating accounts may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. If such banking institutions were to fail, we, our wholly-owned direct subsidiaries or our Investment Adviser or our portfolio companies could lose all or a portion of those amounts held in excess of such insurance limitations. In addition, actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems, which could adversely affect our, our wholly-owned direct subsidiaries’, and our Investment Adviser’s and our portfolio companies’ business, financial condition, results of operations, or prospects.

Although we, our wholly-owned direct subsidiaries and our Investment Adviser assess our and our portfolio companies’ banking relationships as we believe necessary or appropriate, our and our portfolio companies’ access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our respective current and projected future business operations could be significantly impaired by factors that affect us, our wholly-owned direct subsidiaries or our Investment Adviser, or our portfolio companies, the financial institutions with which we, our wholly-owned direct subsidiaries or our Investment Adviser or our portfolio companies have arrangements directly, or the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry. These factors could involve financial institutions or financial services industry companies with which we, our wholly-owned direct subsidiaries or our Investment Adviser or our portfolio companies have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.

In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us, our wholly-owned direct subsidiaries or our Investment Adviser or our portfolio companies to acquire financing on acceptable terms or at all.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Previously disclosed by the Company on its current reports on Form 8-K.

42


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

39


ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

4043


 

ITEM 6. EXHIBITS

The following exhibits are filed as part of this report, or hereby incorporated by reference to exhibits previously filed with the United States Securities and Exchange Commission:

 

 

 

Exhibit

Number

Description of Document

3.1

Amended and Restated Certificate of Incorporation(1)

3.2

By-Laws(1)

 

 

10.1*

Amended and Restated Investment Advisory and Management Agreement dated as of July 1, 2023 by and between Commonwealth Credit Partners BDC I, Inc. and Commonwealth Credit Advisors LLC(2)

31.1*

Certification of the Chief Executive Officer pursuant to Rule 13a-14 (a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

Certification of the Chief Financial Officer pursuant to Rule 13a-14 (a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*

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

32.2*

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

 

 

101.INS

Inline XBRL Instance Document.

 

 

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

 

 

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase 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.

(1) Incorporated by reference to the Exhibits accompanying the Company’s Form 10 Registration Statement filed on July 6, 2021.

41(2) Incorporated by reference to the Exhibits accompanying the Company's Form 8-K filed on July 5, 2023.

44


 

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.

Commonwealth Credit Partners BDC I, Inc.

Date: May 11,August 10, 2023

By:

/s/ Robert O’Sullivan

Name:

Title:

Robert O’Sullivan

Chief Executive Officer

Date: May 11,August 10, 2023

By:

/s/ Cecilio M. Rodriguez

Name:

Title:

Cecilio M. Rodriguez

Chief Financial Officer

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