UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________________________

FORM 10-Q

_______________________________________________________________________

(Mark One)


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

For the quarterly period ended ~~March 31,~~September 30, 2023


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

Commission File Number 814-01481

_______________________________________________________________________

MSD Investment Corp.

(Exact name of Registrant as specified in its Charter)

_______________________________________________________________________


Maryland		87-4195402
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

One Vanderbilt Avenue, 26th Floor New York, New York		10017
(Address of principal executive offices)		(Zip Code)

212-303-4728

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

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

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definition 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 Act). YES ☐ NO ☒

The number of shares of Registrant’s Common Stock, $0.001 par value per share, outstanding as of ~~May 12,~~November 9, 2023 was ~~29,812,264~~34,621,102.

Table of Contents


		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Assets and Liabilities as of ~~March 31,~~September 30, 2023 (Unaudited) and December 31, 2022	2
	Consolidated Statements of Operations for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 (Unaudited)	3
	Consolidated Statements of Changes in Net Assets for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 (Unaudited)	4
	Consolidated Statements of Cash Flows for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022 (Unaudited)	56
	Consolidated Schedules of Investments as of ~~March 31,~~September 30, 2023 (Unaudited) and December 31, 2022	67
	Notes to Consolidated Financial Statements (Unaudited)	1416
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2934
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3541
Item 4.	Controls and Procedures	3642
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	3642
Item 1A.	Risk Factors	3642
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3743
Item 3.	Defaults Upon Senior Securities	3743
Item 4.	Mine Safety Disclosures	3743
Item 5.	Other Information	3743
Item 6.	Exhibits	3845
Signatures		3946

Table of Contents

CERTAIN DEFINITIONS

· the terms “we,” “us,” “our,” and “Company” refer to MSD Investment, LLC prior to the Corporate Conversion (as defined below) and MSD Investment Corp. after the ~~Conversion (as defined below);~~Corporate Conversion;

· the terms “Adviser” and “MSD” refer to MSD Partners, L.P., a Delaware limited partnership, in its capacity as our investment adviser; and the term “Administrator” refers to MSD Partners, L.P., a Delaware limited partnership, in its capacity as our administrator.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about MSD Investment Corp. (together, with its consolidated subsidiaries, the “Company,” “we,” “us” or “our”), our current and prospective portfolio investments, our industry, our beliefs and opinions, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:

•

an economic downturn could impair our portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies;

•

an economic downturn could disproportionately impact the companies that we intend to target for investment, potentially causing us to experience a decrease in investment opportunities and diminished demand for capital from these companies;

•

an economic downturn could also impact availability and pricing of our financing and our ability to access the debt capital markets;

•

a contraction of available credit and/or an inability to access the equity markets could impair our lending and investment activities;

•

interest rate volatility, including the ~~decommissioning~~replacement of the London Inter-Bank Offered Rate (“LIBOR”), with alternate rates and the rising interest rate environment, could adversely affect our results, particularly if we elect to use leverage as part of our investment strategy;

•

currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;

•

our limited operating history as a business development company (“BDC”);

•

our future operating results;

•

the impact of rising interest and inflation rates and the risk of recession on our business prospects and the prospects of our portfolio companies;

•

our contractual arrangements and relationships with third parties;

•

the ability of our portfolio companies to achieve their objectives;

•

competition with other entities and our affiliates for investment opportunities;

•

the loss of key personnel;

•

the adequacy of our cash resources, financing sources and working capital;

•

the timing and amount of cash flows, distributions and dividends, if any, from our portfolio companies;

•

our use of financial leverage;

•

risks related to the uncertainty of the value of our portfolio investments;

•

the impact of geopolitical conditions, including revolution, insurgency, terrorism or war, including those arising out of the ongoing war between Russia and Ukraine, ongoing conflict in the Middle East, and general uncertainty surrounding the financial and political stability of the United States, the United Kingdom, the European Union, China, and other countries;

•

the impact that environmental, social, and governance matters could have on our brand and reputation and our portfolio companies;

•

the ability of MSD Partners, L.P. (the “Adviser”) to source suitable investments for us and to monitor and administer our investments;

•

the ability of the Adviser or its affiliates to attract and retain highly talented professionals;

•

our ability to qualify for and maintain our qualification, for U.S. Federal income tax purposes, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), and our ability to operate as a BDC;

•

the effect of legal, tax and regulatory changes ~~including the Inflation Reduction Act of 2022 signed into law in August 2022;~~on our business and our portfolio companies; and

•

other risks, uncertainties and other factors previously identified in the reports and other documents we have filed with the Securities and Exchange Commission (the “SEC”).

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this report should not be regarded as a representation by us that our plans and objectives will be achieved. These forward-looking statements apply only as of the date of this report. We do not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law. The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which preclude civil liability for certain forward-looking statements, do not apply to the forward-looking statements in this report because we are an investment company. In addition to the other information set forth in this report, you should carefully consider the risk factors set forth in our most recent Annual Report on Form 10-K filed with the SEC on March 23, 2023, which ~~are~~is accessible on the SEC’s website at sec.gov. These factors could materially affect our business, financial condition and/or operating results.

Table of Contents

MSD Investment Corp.

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share amounts)


	March 31, 2023			December 31, 2022			September 30, 2023			December 31, 2022
	(Unaudited)						(Unaudited)
ASSETS
Non-controlled/non-affiliated investments, at fair value (1)	$	1,187,235		$	981,738		$	1,736,113		$	981,738
Cash and cash equivalents		42,360			36,616			75,433			36,616
Restricted cash		66,656			4,320			—			4,320
Interest receivable		8,581			6,803			11,446			6,803
Principal receivable		6,676			16,523			26,854			16,523
Unrealized appreciation on forward contracts								724			—
Prepaid expenses and other assets		82			1,077			138			1,077
Total assets	$	1,311,590		$	1,047,077		$	1,850,708		$	1,047,077

LIABILITIES
SPV I facility	$	485,000		$	392,000		$	409,000		$	392,000
SPV II facility								220,000			—
Subscription facility		200,000			145,000			163,000			145,000
Loan repurchase obligations								103,282			—
Deferred financing costs net of accumulated amortization		(4,510	)		(4,911	)		(9,434	)		(4,911	)
Total debt, net of financing costs		680,490			532,089			885,848			532,089
Payable for investments purchased		42,807			24,729			130,667			24,729
Interest payable		12,596			6,157			15,255			6,157
Income based incentive fee payable								4,542			59
Management fees payable								3,121			83
Financing costs payable		1,195			1,194			1,195			1,194
Distributions payable		16,073			—
Due to affiliates								1,097			—
Accrued professional fees		534			350			501			350
Accrued expenses and other liabilities								484			234
Unrealized depreciation on forward contracts		1,580			336			—			336
Accrued expenses and other liabilities		414			234
Management fees payable		2,109			83
Income based incentive fee payable		3,089			59
Due to affiliates		543			—
Total liabilities	$	761,430		$	565,231		$	1,042,710		$	565,231
Commitments and contingencies (Note 8)
NET ASSETS
Common stock, par value $0.001 (100,000,000 shares authorized, 24,728,043 and 22,126,135 shares issued and outstanding, respectively)	$	25		$	22
Common stock, par value $0.001 (100,000,000 shares authorized, 34,621,102 and 22,126,135 shares issued and outstanding, respectively)							$	35		$	22
Paid-in capital in excess of par value		595,297			535,300			819,914			535,300
Distributable earnings (accumulated losses)		(45,162	)		(53,476	)		(11,951	)		(53,476	)
Total net assets	$	550,160		$	481,846		$	807,998		$	481,846
Net asset value per share	$	22.25		$	21.78		$	23.34		$	21.78

(1)

Non-controlled/non-affiliated investments at amortized cost $~~1,227,449~~1,753,652 and $1,031,067 as of ~~March 31,~~September 30, 2023 and December 31, 2022, respectively.

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

Table of Contents

MSD Investment Corp.

Consolidated Statement of Operations (Unaudited)

(in thousands, except share and per share amounts)

For the Three Months Ended March 31,

2023

2022

Investment income:

From non-controlled/non-affiliated investments:

Interest income
$
31,516

$
12,695

Payment-in-kind interest income

2,228

463

Payment-in-kind dividend income

931

829

Other income

443

44

Total investment income

35,118

14,031

Expenses:

Interest expense

11,665

3,103

Income based incentive fee

3,030

1,289

Management fees

2,026

1,328

Administration expense

677

491

Professional fees

204

258

Board of directors’ fee

77

58

Custody expense

61

21

Transfer agency fees

52

13

General and other expenses

45

42

Organization and offering costs

18

120

Capital gains incentive fee

—

(256
)
Total expenses

17,855

6,467

Net investment income (loss)

17,263

7,564

Realized and unrealized gain (loss):

Net realized gains (losses):

Non-controlled/non-affiliated investments

(1,128
)

3,323

Foreign currency forward contracts

606

—

Foreign currency transactions

(220
)

(3
)
Net realized gain (loss)

(742
)

3,320

Net change in unrealized appreciation (depreciation):

Non-controlled/non-affiliated investments

9,114

(6,294
)
Foreign currency forward contracts

(1,245
)

—

Foreign currency transactions

(3
)

—

Net change in unrealized appreciation (depreciation)

7,866

(6,294
)
Net realized and unrealized gain (loss)

7,124

(2,974
)
Net increase (decrease) in net assets resulting from operations
$
24,387

$
4,590

Per share information - basic and diluted:

Net investment income (loss) per share (basic and diluted)
$
0.76

$
0.63

Earnings per share (basic and diluted)
$
1.07

$
0.38

Distributions declared per share
$
0.65

$
0.60

Weighted average shares outstanding (basic and diluted)

22,812,352

12,000,000


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2023			2022			2023			2022
Investment income:
From non-controlled/non-affiliated investments:
Interest income	$	49,513		$	20,079		$	118,935		$	45,939
Dividend Income		1,021			—			1,021			—
Payment-in-kind interest income		1,434			570			8,603			3,975
Payment-in-kind dividend income		—			886			1,903			2,558
Other income		654			52			3,311			172
Total investment income		52,622			21,587			133,773			52,644
Expenses:
Interest expense		17,798			6,849			43,200			14,567
Income based incentive fee		4,542			1,820			11,827			4,614
Management fees		3,121			1,641			7,751			4,425
Administration expense		767			470			2,091			1,343
Professional fees		359			270			945			783
Custody expense		103			30			260			72
General and other expenses		95			(14	)		239			102
Board of directors’ fee		77			78			232			213
Transfer agency fees		20			13			95			39
Organization and offering costs		2			124			21			345
Capital gains incentive fee		—			—			—			(256	)
Total expenses		26,884			11,281			66,661			26,247
Net investment income (loss)		25,738			10,306			67,112			26,397

Realized and unrealized gain (loss):
Net realized gains (losses):
Non-controlled/non-affiliated investments		2,140			(292	)		1,255			3,255
Foreign currency forward contracts		2,609			—			(1,024	)		—
Foreign currency transactions		(186	)		(54	)		(329	)		(124	)
Net realized gain (loss)		4,563			(346	)		(98	)		3,131
Net change in unrealized appreciation (depreciation):
Non-controlled/non-affiliated investments		7,184			(13,677	)		31,790			(46,595	)
Foreign currency forward contracts		343			3,374			1,060			3,374
Foreign currency transactions		—			(32	)		(6	)		(48	)
Net change in unrealized appreciation (depreciation)		7,527			(10,335	)		32,844			(43,269	)
Net realized and unrealized gain (loss)		12,090			(10,681	)		32,746			(40,138	)
Net increase (decrease) in net assets resulting from operations	$	37,828		$	(375	)	$	99,858		$	(13,741	)

Per share information - basic and diluted:
Net investment income (loss) per share (basic and diluted)	$	0.79		$	0.67		$	2.39		$	1.99
Earnings per share (basic and diluted)	$	1.17		$	(0.02	)	$	3.56		$	(1.03	)
Distributions declared per share	$	0.68		$	0.57		$	1.98		$	1.80
Weighted average shares outstanding (basic and diluted)		32,466,609			15,408,512			28,032,111			13,297,224

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

Table of Contents

MSD Investment Corp.

Consolidated Statement of Changes in Net Assets (Unaudited)

(in thousands, except shares)

Accumulated Earnings

Common Shares

Paid-in-Capital in

(Loss), Net of

Total

Shares

Par Value

Excess of Par Value

Distributions

Net Assets

Balance, December 31, 2022

22,126,135

$
22

$
535,300

$
(53,476
)

$
481,846

Operations:

Net investment income

—

—

—

17,263

17,263

Net realized gain (loss)

—

—

—

(742
)

(742
)
Net change in unrealized appreciation (depreciation)

—

—

—

7,866

7,866

Net increase (decrease) in net assets resulting from operations

—

—

—

24,387

24,387

Shareholder distributions:

Distributions paid or accrued

—

—

—

(16,073
)

(16,073
)
Net increase (decrease) in net assets resulting from shareholder distributions

—

—

—

(16,073
)

(16,073
)
Capital Share Transactions:

Issuance of shares

2,601,908

3

59,997

—

60,000

Net increase (decrease) for the period

2,601,908

3

59,997

8,314

68,314

Balance, March 31, 2023

24,728,043

$
25

$
595,297

$
(45,162
)

$
550,160

Accumulated Earnings

Common Shares

Paid-in-Capital in

(Loss), Net of

Total

Shares

Par Value

Excess of Par Value

Distributions

Net Assets

Balance, December 31, 2021 (1)

12,000,000

$
12

$
299,988

$
1,998

$
301,998

Operations:

Net investment income

—

—

—

7,564

7,564

Net realized gain (loss)

—

—

—

3,320

3,320

Net change in unrealized appreciation (depreciation)

—

—

—

(6,294
)

(6,294
)
Net increase (decrease) in net assets resulting from operations

—

—

—

4,590

4,590

Shareholder distributions:

Distributions paid or accrued

—

—

—

(7,200
)

(7,200
)
Net increase (decrease) in net assets resulting from shareholder distributions

—

—

—

(7,200
)

(7,200
)
Net increase (decrease) for the period

—

—

—

(2,610
)

(2,610
)
Balance, March 31, 2022

12,000,000

$
12

$
299,988

$
(612
)

$
299,388

~~(1)~~

~~The Company converted from MSD Investment, LLC to MSD Investment Corp. on January 1, 2022.~~


							Accumulated Earnings
	Common Shares				Paid-in-Capital in		(Loss), Net of			Total
	Shares		Par Value		Excess of Par Value		Distributions			Net Assets
Balance, December 31, 2022		22,126,135	$	22	$	535,300	$	(53,476	)	$	481,846
Operations:
Net investment income		—		—		—		17,263			17,263
Net realized gain (loss)		—		—		—		(742	)		(742	)
Net change in unrealized appreciation (depreciation)		—		—		—		7,866			7,866
Net increase (decrease) in net assets resulting from operations		—		—		—		24,387			24,387
Shareholder distributions:
Distributions paid or accrued		—		—		—		(16,073	)		(16,073	)
Net increase (decrease) in net assets resulting from shareholder distributions		—		—		—		(16,073	)		(16,073	)
Capital Share Transactions:
Issuance of shares		2,601,908		3		59,997		—			60,000
Net increase (decrease) for the period		2,601,908		3		59,997		8,314			68,314
Balance, March 31, 2023		24,728,043	$	25	$	595,297	$	(45,162	)	$	550,160
Operations:
Net investment income		—		—		—		24,111			24,111
Net realized gain (loss)		—		—		—		(3,919	)		(3,919	)
Net change in unrealized appreciation (depreciation)		—		—		—		17,451			17,451
Net increase (decrease) in net assets resulting from operations		—		—		—		37,643			37,643
Shareholder distributions:
Distributions to shareholders		—		—		—		(19,378	)		(19,378	)
Net increase (decrease) in net assets resulting from shareholder distributions		—		—		—		(19,378	)		(19,378	)
Capital Share Transactions:
Common Shares issued from reinvestment of distributions		1,392,371		1		30,680		—			30,681
Issuance of shares		4,446,421		5		99,995		—			100,000
Net increase (decrease) for the period		5,838,792		6		130,675		18,265			148,946
Balance, June 30, 2023		30,566,835	$	31	$	725,972	$	(26,897	)	$	699,106
Operations:
Net investment income		—		—		—		25,738			25,738
Net realized gain (loss)		—		—		—		4,563			4,563
Net change in unrealized appreciation (depreciation)		—		—		—		7,527			7,527
Net increase (decrease) in net assets resulting from operations		—		—		—		37,828			37,828
Shareholder distributions:
Distributions to shareholders		—		—		—		(22,882	)		(22,882	)
Net increase (decrease) in net assets resulting from shareholder distributions		—		—		—		(22,882	)		(22,882	)
Capital Share Transactions:
Common Shares issued from reinvestment of distributions		828,460		1		18,945		—			18,946
Issuance of shares		3,225,807		3		74,997		—			75,000
Net increase (decrease) for the period		4,054,267		4		93,942		14,946			108,892
Balance, September 30, 2023		34,621,102	$	35	$	819,914	$	(11,951	)	$	807,998

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

Table of Contents

MSD Investment Corp.

Consolidated Statement of ~~Cash Flows~~Changes in Net Assets (Unaudited)

(in thousands, except shares)

For the Three Months Ended March 31,

2023

2022

Cash flow from operating activities

Net increase (decrease) in net assets resulting from operations

$
24,387

$
4,590

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

Accrued interest and dividends received in-kind

(2,228
)

(1,282
)
Net accretion of discount and amortization of premium

(1,877
)

(910
)
Proceeds from sale of investments and principal repayments

37,348

86,461

Purchases of investments

(230,754
)

(106,080
)
Net realized (gains) losses on investments

1,128

(3,323
)
Net change in unrealized (appreciation) depreciation on investments

(9,114
)

6,294

Net receipt of settlement of derivatives

606

—

Net realized (gains) losses on derivatives

(606
)

—

Net change in unrealized (appreciation) depreciation on foreign currency forward contracts

1,245

—

Amortization of deferred financing costs

401

375

(Increase) decrease in operating assets:

Interest receivable

(1,778
)

(2,078
)
Principal receivable

9,847

2,418

Prepaid expenses and other assets

995

(27
)
Increase (decrease) in operating liabilities:

Due to affiliates

543

141

Payable for investments purchased

18,078

—

Management fees payable

2,026

1,173

Income based incentive fee payable

3,030

1,233

Capital gains incentive fee payable

—

(256
)
Interest payable

6,439

781

Accrued professional fees

184

(6
)
Accrued expenses and other liabilities

180

103

Net cash provided (used in) by operating activities

(139,920
)

(10,393
)
Cash flow from financing activities

Proceeds from issuance of shares

60,000

—

Debt borrowings

228,000

114,000

Debt repayments

(80,000
)

(95,000
)
Deferred financing costs paid

—

(171
)
Net cash provided by (used in) financing activities

208,000

18,829

Net increase in cash, cash equivalents, and restricted cash

68,080

8,436

Cash, cash equivalents, and restricted cash, beginning of period

40,936

12,203

Cash, cash equivalents, and restricted cash, end of period

$
109,016

$
20,639

Reconciliation of cash, cash equivalents, and restricted cash

Cash and cash equivalents

$
42,360

$
20,639

Restricted cash

$
66,656

$
—

Total cash, cash equivalents, and restricted cash

$
109,016

$
20,639

Supplemental disclosure of cash flow information and non-cash financing activities

Cash paid for interest

$
4,824

$
1,947

Change in distributions payable

$
16,073

$
7,200

Financing cost payable

$
—

$
54


							Accumulated Earnings
	Common Shares				Paid-in-Capital in		(Loss), Net of			Total
	Shares		Par Value		Excess of Par Value		Distributions			Net Assets
Balance, December 31, 2021 (1)		12,000,000	$	12	$	299,988	$	1,998		$	301,998
Operations:
Net investment income		—		—		—		7,564			7,564
Net realized gain (loss)		—		—		—		3,320			3,320
Net change in unrealized appreciation (depreciation)		—		—		—		(6,294	)		(6,294	)
Net increase (decrease) in net assets resulting from operations		—		—		—		4,590			4,590
Shareholder distributions:
Distributions paid or accrued		—		—		—		(7,200	)		(7,200	)
Net increase (decrease) in net assets resulting from shareholder distributions		—		—		—		(7,200	)		(7,200	)
Net increase (decrease) for the period		—		—		—		(2,610	)		(2,610	)
Balance, March 31, 2022		12,000,000	$	12	$	299,988	$	(612	)	$	299,388
Operations:
Net investment income		—		—		—		8,527			8,527
Net realized gain (loss)		—		—		—		157			157
Net change in unrealized appreciation (depreciation)		—		—		—		(26,640	)		(26,640	)
Net increase (decrease) in net assets resulting from operations		—		—		—		(17,956	)		(17,956	)
Shareholder distributions:
Distributions to shareholders		—		—		—		(9,321	)		(9,321	)
Net increase (decrease) in net assets resulting from shareholder distributions		—		—		—		(9,321	)		(9,321	)
Capital Share Transactions:
Common Shares issued from reinvestment of distributions (2)		286,055		—		7,200		—			7,200
Issuance of shares		2,509,410		3		59,997		—			60,000
Net increase (decrease) for the period		2,795,465		3		67,197		(27,277	)		39,923
Balance, June 30, 2022		14,795,465	$	15	$	367,185	$	(27,889	)	$	339,311
Operations:
Net investment income		—		—		—		10,306			10,306
Net realized gain (loss)		—		—		—		(346	)		(346	)
Net change in unrealized appreciation (depreciation)		—		—		—		(10,335	)		(10,335	)
Net increase (decrease) in net assets resulting from operations		—		—		—		(375	)		(375	)
Shareholder distributions:
Distributions to shareholders		—		—		—		(8,646	)		(8,646	)
Net increase (decrease) in net assets resulting from shareholder distributions		—		—		—		(8,646	)		(8,646	)
Capital Share Transactions:
Common Shares issued from reinvestment of distributions (2)		373,593		—		9,321		—			9,321
Issuance of shares		2,787,307		3		64,997		—			65,000
Net increase (decrease) for the period		3,160,900		3		74,318		(9,021	)		65,300
Balance, September 30, 2022		17,956,365	$	18	$	441,503	$	(36,910	)	$	404,611

(1)

The Company converted from MSD Investment, LLC to MSD Investment Corp. on January 1, 2022.

(2)

Common shares issued from reinvestment of distributions par value is zero due to rounding.

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

Table of Contents

MSD Investment Corp.

Consolidated ~~Schedule~~Statement of ~~Investments~~Cash Flows (Unaudited)

~~March 31, 2023~~

(in thousands, except shares)

Investments (1)(2)(3)
Footnotes

Reference Rate and Spread (4)

Interest Rate Floor

Interest Rate (5)

Maturity Date

Par Amount / Shares (6)

Cost (7)

Fair Value

Percentage of Net Assets

Investments - non-controlled/non-affiliated

First Lien Debt

Aerospace & Defense

Chromalloy Holdings LLC
(8)

S + 7.00%

1.00%

11.83%

11/23/2028

49,875

$
47,965

$
47,989

8.72

%
Chromalloy Holdings LLC - Revolving Credit Facility
(8)(9)(12)

S + 7.00%

1.00%

11.91%

11/23/2027

—

(172
)

(174
)

(0.03
)

Frontgrade Technologies Inc.
(8)(15)

S + 6.75%

0.75%

11.65%

1/9/2030

50,750

49,278

49,263

8.95

Frontgrade Technologies Inc. - Revolving Credit Facility
(8)(9)(12)(15)

S + 6.75%

0.75%

11.66%

1/9/2028

—

(150
)

(154
)

(0.03
)

Systems Planning and Analysis, Inc.
(8)

S + 5.90%

1.00%

10.69%

8/16/2027

10,795

10,621

10,348

1.88

Systems Planning and Analysis, Inc. - Revolving Credit Facility
(8)(9)(12)

S + 5.90%

1.00%

11.10%

8/16/2027

896

847

766

0.14

Systems Planning and Analysis, Inc. - Delayed Draw Term Loan
(8)(9)(12)

S + 5.90%

0.00%

10.69%

8/16/2027

2,006

1,955

1,762

0.32

The Nordam Group Inc.

S + 5.60%

0.00%

10.41%

4/9/2026

11,736

10,546

9,113

1.66

120,890

118,913

21.61

Automobile

McLaren Finance PLC
UK(10)(11)

N/A

N/A

7.50%

8/1/2026

2,689

2,716

2,242

0.41

Beverage, Food & Tobacco

LJ Perimeter Buyer, Inc.
(8)

S + 6.65%

1.00%

11.33%

10/31/2028

19,462

18,909

18,926

3.44

LJ Perimeter Buyer, Inc. - Delayed Draw Term Loan
(8)(9)(12)

S + 6.65%

1.00%

11.54%

10/31/2028

273

197

199

0.04

19,106

19,125

3.48

Capital Equipment

Faraday Buyer, LLC
(8)

S + 7.00%

1.00%

11.86%

10/10/2028

34,833

33,857

33,860

6.16

Faraday Buyer, LLC - Delayed Draw Term Loan
(8)(9)(12)

S + 7.00%

1.00%

11.80%

10/11/2028

—

(40
)

(41
)

(0.01
)

Trillium FlowControl
LU(8)(10)(11)

S + 5.61%

1.00%

10.42%

6/28/2026

17,865

17,725

17,122

3.11

51,542

50,941

9.26

Chemicals, Plastics & Rubber

Dubois Chemicals Group Inc.
(8)

S + 4.60%

0.00%

9.41%

9/30/2026

2,747

2,740

2,657

0.48

Hexion Holdings Corporation

S + 4.65%

0.50%

9.45%

3/15/2029

9,925

9,223

8,852

1.61

11,963

11,509

2.09

Consumer Goods: Durable

Mattress Firm, Inc.
(9)

L + 4.25%

0.75%

9.56%

9/25/2028

1,329

1,266

1,238

0.22

Victra Finance Corp.
(9)

S + 7.25%

0.00%

12.16%

3/31/2029

6,726

6,545

6,535

1.19

Victra Finance Corp. - Corporate Bond
(9)

N/A

N/A

7.75%

2/15/2026

100

89

91

0.02

7,900

7,864

1.43

Energy: Oil & Gas

CITGO Holdings Inc.
(9)

N/A

N/A

9.25%

8/1/2024

26,051

25,700

26,116

4.74

CITGO Petroleum Corp.

N/A

N/A

6.38%

6/15/2026

2,121

2,153

2,083

0.38

Saturn Oil and Gas Inc.
CN(8)(10)(11)

C + 11.50%

1.00%

16.52%

2/28/2026

CAD 135,434

99,131

96,984

17.63

126,984

125,183

22.75

Healthcare & Pharmaceuticals

Bayer Environmental Services

S + 4.38%

0.50%

8.96%

8/4/2029

19,950

18,423

18,861

3.43

Charlotte Buyer, Inc.

S + 5.25%

0.00%

10.10%

2/11/2028

33,250

31,135

31,692

5.76

Natural Partners, Inc.
(8)

S + 6.15%

1.00%

11.04%

11/29/2027

38,053

37,429

36,886

6.70

Natural Partners, Inc. - Revolving Credit Facility
(8)(9)(12)

S + 6.15%

1.00%

11.06%

11/29/2027

—

(46
)

(86
)

(0.02
)

Press Ganey Holdings
(9)

L + 3.50%

0.00%

8.36%

7/24/2026

4,281

3,940

3,990

0.73

90,881

91,343

16.60


	For the Nine Months Ended September 30,
	2023			2022
Cash flow from operating activities
Net increase (decrease) in net assets resulting from operations	$	99,858		$	(13,741	)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities:
Accrued interest and dividends received in-kind		(8,603	)		(6,539	)
Net accretion of discount and amortization of premium		(5,765	)		(2,933	)
Proceeds from sale of investments and principal repayments		224,007			224,437
Purchases of investments		(930,969	)		(455,991	)
Net realized (gains) losses on investments		(1,255	)		(3,255	)
Net change in unrealized (appreciation) depreciation on investments		(31,790	)		46,595
Net receipt of settlement of derivatives		(1,024	)		—
Net realized (gains) losses on derivatives		1,024			—
Net change in unrealized (appreciation) depreciation on foreign currency forward contracts		(1,060	)		(3,374	)
Amortization of deferred financing costs		1,351			1,139
(Increase) decrease in operating assets:
Interest receivable		(4,643	)		(4,229	)
Principal receivable		(10,331	)		(9,381	)
Prepaid expenses and other assets		939			72
Increase (decrease) in operating liabilities:
Due to affiliates		1,097			352
Payable for investments purchased		105,938			26,684
Management fees payable		3,038			1,486
Income based incentive fee payable		4,483			1,763
Capital gains incentive fee payable		—			(256	)
Interest payable		9,098			2,418
Accrued professional fees		151			128
Accrued expenses and other liabilities		250			258
Net cash provided (used in) by operating activities		(544,206	)		(194,367	)
Cash flow from financing activities
Proceeds from issuance of shares		235,000			125,000
Proceeds from repurchase obligations		263,816			—
Repayment of repurchase obligations		(160,534	)		—
Debt borrowings		569,000			246,000
Debt repayments		(314,000	)		(145,000	)
Distributions paid		(8,706	)		—
Deferred financing costs paid		(5,873	)		(287	)
Net cash provided by (used in) financing activities		578,703			225,713
Net increase in cash, cash equivalents, and restricted cash		34,497			31,346
Cash, cash equivalents, and restricted cash, beginning of period		40,936			12,203
Cash, cash equivalents, and restricted cash, end of period	$	75,433		$	43,549
Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents	$	75,433		$	43,549
Restricted cash	$	—		$	—
Total cash, cash equivalents, and restricted cash	$	75,433		$	43,549
Supplemental disclosure of cash flow information and non-cash financing activities
Cash paid for interest	$	32,720		$	11,010
Reinvestment of shareholder distributions	$	49,627		$	16,521
Change in distributions payable	$	—		$	8,646
Incremental financing cost payable	$	—		$	54

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

Table of Contents

MSD Investment Corp.

Consolidated Schedule of Investments (Unaudited) ~~- (Continued)~~

~~March 31,~~September 30, 2023

(in thousands, except shares)

Investments (1)(2)(3)
Footnotes

Reference Rate and Spread (4)

Interest Rate Floor

Interest Rate (5)

Maturity Date

Par Amount / Shares (6)

Cost (7)

Fair Value

Percentage of Net Assets

First Lien Debt (continued)

High Tech Industries

Watchguard Technologies, Inc.

S + 5.25%

0.75%

10.11%

7/2/2029

34,825

$
32,705

$
33,127

6.02

%
Hotel, Gaming & Leisure

Chuck E. Cheese

N/A

N/A

6.75%

5/1/2026

17,534

16,459

16,657

3.03

TouchTunes
(8)

S + 5.25%

0.50%

9.90%

4/2/2029

29,850

29,586

29,253

5.32

Viad Corp.
(11)

L + 5.00%

0.50%

9.92%

7/30/2028

4,358

4,351

4,151

0.75

50,396

50,061

9.10

Media: Advertising, Printing & Publishing

Patientpoint Network Solutions, LLC
(8)

S + 7.26%

1.00%

12.16%

3/7/2025

31,728

31,259

31,112

5.66

Media: Diversified & Production

FilmRise Acquisitions, LLC
(8)(9)

N/A

N/A

13.50%

9/17/2025

18,086

18,094

17,473

3.18

Getty Images Inc.
(11)

S + 4.60%

0.00%

9.50%

2/19/2026

18,831

18,781

18,799

3.42

Candle Media Co Ltd
(8)

L + 6.00%

0.75%

10.84% (Incl 4.00% PIK)

6/18/2027

42,110

41,462

39,795

7.23

Candle Media Co Ltd - Delayed Draw Term Loan
(8)(9)(12)

L + 6.00%

0.75%

10.84% (Incl 4.00% PIK)

6/18/2027

15,393

15,170

14,489

2.63

93,507

90,556

16.46

Metals & Mining

Conuma Coal Resources LTD
CN(9)(10)(11)

N/A

N/A

10.00%

5/1/2023

3,181

3,181

3,170

0.58

Retail

Xponential Fitness LLC
(8)(11)

L + 6.50%

1.00%

11.53%

2/28/2025

53,316

52,295

53,582

9.74

Services: Business

Muine Gall, LLC
(8)(9)(11)

L + 7.00%

0.50%

12.15% PIK

9/21/2024

46,047

46,063

46,396

8.43

Travelport Finance (Luxembourg) S.A.R.L.
LU(10)(11)

S + 8.75%

1.00%

13.59% (Incl 7.25% PIK)

2/28/2025

34,687

34,407

35,489

6.45

Wood Mackenzie, Inc.
(8)

S + 6.75%

0.75%

11.43%

2/1/2030

37,037

35,960

35,939

6.53

Wood Mackenzie, Inc. - Revolving Credit Facility
(8)(9)(12)

S + 6.75%

0.75%

11.66%

2/1/2028

—

(86
)

(88
)

(0.02
)

116,344

117,736

21.39

Services: Consumer

CSC Serviceworks
(9)

L + 4.00%

0.75%

8.99%

3/4/2028

221

201

185

0.03

Spring Education Group Inc.

S + 4.00%

0.00%

8.90%

7/30/2025

46,629

44,938

46,112

8.38

Vision Purchaser Corp.
(8)

S + 6.40%

1.00%

11.30%

6/10/2025

28,871

28,501

27,544

5.01

Vision Purchaser Corp. - Incremental Term Loan
(8)

S + 6.40%

1.00%

11.30%

6/10/2025

2,517

2,481

2,402

0.44

76,121

76,243

13.86

Telecommunications

Innovate Corp.
(11)

N/A

N/A

8.50%

2/1/2026

24,000

24,046

18,615

3.38

Intelsat S.A.
LU(9)(10)(11)

S + 4.35%

0.50%

9.25%

2/1/2029

3,490

3,383

3,447

0.63

Ligado Networks LLC
(9)(13)

N/A

N/A

15.50% PIK

11/1/2023

11,928

11,287

3,638

0.66

38,716

25,700

4.67

Wholesale

DFS Holdings Company, Inc. - Delayed Draw Term Loan
(8)(9)(12)

S + 7.10%

0.75%

12.01%

1/31/2029

—

(65
)

(65
)

(0.01
)

DFS Holdings Company, Inc.
(8)

S + 7.10%

0.75%

11.78%

1/31/2029

22,154

21,514

21,507

3.91

FleetPride Inc.

L + 4.50%

0.00%

9.34%

2/4/2026

21,654

21,639

21,454

3.90

43,088

42,896

7.80

Total First Lien Debt

969,594

951,303

172.91

%


Investments (1)(2)(3)	Footnotes	Reference Rate and Spread (4)	Interest Rate Floor	Interest Rate (5)	Maturity Date	Par Amount / Shares (6)		Cost (7)			Fair Value			Percentage of Net Assets
Investments - non-controlled/non-affiliated
First Lien Debt
Aerospace & Defense
Chromalloy Holdings LLC	(8)	S + 7.00%	1.00%	12.38%	11/23/2028		49,625	$	47,860		$	49,055			6.07		%
Chromalloy Holdings LLC - Revolving Credit Facility	(8)(9)(12)	S + 7.00%	1.00%	12.39%	11/23/2027		—		(153	)		(53	)		(0.01	)
Frontgrade Technologies Inc.	(8)(15)	S + 6.75%	0.75%	12.14%	1/9/2030		60,300		58,746			59,629			7.38
Frontgrade Technologies Inc. - Revolving Credit Facility	(8)(9)(12)(15)	S + 6.75%	0.75%	12.14%	1/9/2028		—		(172	)		(80	)		(0.01	)
Systems Planning and Analysis, Inc.	(8)	S + 6.15%	1.00%	11.24%	8/16/2027		10,741		10,582			10,614			1.31
Systems Planning and Analysis, Inc. - Revolving Credit Facility	(8)(9)(12)	S + 6.15%	1.00%	11.62%	8/16/2027		—		(43	)		(37	)		(0.00	)
Systems Planning and Analysis, Inc. - Delayed Draw Term Loan	(8)(9)(12)	S + 6.15%	0.00%	11.49%	8/16/2027		5,535		5,467			5,466			0.68
The Nordam Group Inc.		S + 5.60%	0.00%	10.92%	4/9/2026		11,675		10,649			10,552			1.31
									132,936			135,146			16.73
Automobile
McLaren Finance PLC	UK(10)(11)	N/A	N/A	7.50%	8/1/2026		2,689		2,712			2,349			0.29
Banking, Finance, Insurance & Real Estate
Accession Risk Management - Delayed Draw Term Loan	(8)(9)(12)	S + 6.00%	0.75%	11.31%	10/30/2026		—		(716	)		(726	)		(0.09	)
Beverage, Food & Tobacco
LJ Perimeter Buyer, Inc.	(8)	S + 6.65%	1.00%	12.02%	10/31/2028		19,365		18,850			19,164			2.37
LJ Perimeter Buyer, Inc. - Delayed Draw Term Loan	(8)(9)(12)	S + 6.65%	1.00%	12.05%	10/31/2028		2,489		2,393			2,478			0.31
									21,243			21,642			2.68
Capital Equipment
Faraday Buyer, LLC	(8)	S + 7.00%	1.00%	12.39%	10/10/2028		34,659		33,763			34,589			4.28
Faraday Buyer, LLC - Delayed Draw Term Loan	(8)(9)(12)	S + 7.00%	1.00%	12.04%	10/11/2028		2,414		2,344			2,419			0.30
Trillium FlowControl	LU(8)(10)(11)	S + 5.61%	1.00%	10.93%	6/28/2026		17,775		17,646			17,263			2.14
									53,753			54,271			6.72
Chemicals, Plastics & Rubber
Dubois Chemicals Group Inc.		S + 4.60%	0.00%	9.92%	9/30/2026		2,732		2,727			2,703			0.33
Hexion Holdings Corporation		S + 4.65%	0.50%	10.03%	3/15/2029		9,875		9,220			9,363			1.16
									11,947			12,066			1.49
Consumer Goods: Durable
Mattress Firm, Inc.	(9)	L + 4.25%	0.75%	9.95%	9/25/2028		1,322		1,263			1,310			0.16
Victra Finance Corp.		S + 7.25%	0.00%	12.64%	3/31/2029		12,958		12,714			12,395			1.54
Victra Finance Corp. - Corporate Bond	(9)	N/A	N/A	7.75%	2/15/2026		100		90			91			0.01
									14,067			13,796			1.71

Table of Contents

MSD Investment Corp.

Consolidated Schedule of Investments (Unaudited) - (Continued)

~~March 31,~~September 30, 2023

(in thousands, except shares)

Investments (1)(2)(3)
Footnotes

Reference Rate and Spread (4)

Interest Rate Floor

Interest Rate (5)

Maturity Date

Par Amount / Shares (6)

Cost (7)

Fair Value

Percentage of Net Assets

Second Lien Debt

Chemicals, Plastics & Rubber

Hexion Holdings Corporation
(9)

S + 7.54%

0.50%

12.30%

3/15/2030

35,000

$
34,125

$
28,846

5.24

%
Consumer goods: Non-durable

Protective Industrial Products Inc.
(8)

L + 8.25%

1.00%

13.09%

12/30/2028

34,198

33,464

31,687

5.76

Hotel, Gaming & Leisure

Mohegan Gaming & Entertainment
(9)

N/A

N/A

8.00%

2/1/2026

16,378

16,466

14,986

2.72

Services: Business

DISA Holdings Corp.
(8)

S + 10.00%

0.75%

14.73%

3/9/2029

14,641

14,222

14,224

2.59

DISA Holdings Corp. - Delayed Draw Term Loan
(8)(9)

S + 10.00%

0.75%

14.73%

3/9/2029

2,745

2,669

2,667

0.48

Trace3 Inc.
(8)(9)

L + 7.50%

0.50%

12.28%

10/8/2029

33,750

32,945

32,154

5.85

49,836

49,045

8.92

Services: Consumer

Midwest Veterinary Partners LLC
(8)(9)

L + 7.50%

0.75%

12.34%

4/26/2029

50,000

50,041

46,945

8.53

Southern Veterinary Partners LLC
(9)

S + 7.85%

1.00%

12.61%

10/5/2028

45,000

44,087

41,175

7.49

Spring Education Group Inc.
(9)

L + 8.25%

0.00%

13.41%

7/30/2026

100

91

92

0.02

94,219

88,212

16.04

Total Second Lien Debt

228,110

212,776

38.68

%
Preferred Equity

Consumer goods: Non-durable

Protective Industrial Products Inc. - Series A Preferred
(8)(9)

13.00% PIK

30

29,461

22,761

4.14

Retail

Xponential Fitness LLC - Series A Preferred Stock
(8)(9)(11)

6.50%

7/27/2031

—

284

395

0.07

Total Preferred Equity

29,745

23,156

4.21

Total Investments - non-controlled/non-affiliated

$
1,227,449

$
1,187,235

215.80

%
Cash and Cash Equivalents

Cash and Cash Equivalents
(14)

99,625

99,625

18.11

Total Cash and Cash Equivalents

99,625

99,625

18.11

Total Portfolio Investments, Cash and Cash Equivalents

$
1,327,074

$
1,286,860

233.91

%


Investments (1)(2)(3)	Footnotes	Reference Rate and Spread (4)	Interest Rate Floor	Interest Rate (5)	Maturity Date	Par Amount / Shares (6)		Cost (7)			Fair Value			Percentage of Net Assets
First Lien Debt (continued)
Energy: Oil & Gas
CITGO Petroleum Corp.		N/A	N/A	6.38%	6/15/2026		2,121		2,149			2,094			0.26
Saturn Oil and Gas Inc.	CN(8)(10)(11)	C + 11.50%	1.00%	17.01%	2/28/2026		CAD 112,844		82,905			80,737			9.99
									85,054			82,831			10.25
Healthcare & Pharmaceuticals
Bayer Environmental Services		S + 4.38%	0.50%	9.77%	10/4/2029		19,850		18,411			19,097			2.36
Charlotte Buyer, Inc.		S + 5.25%	0.00%	10.58%	2/11/2028		33,083		31,137			32,699			4.05
Natural Partners, Inc.	(8)	S + 6.15%	1.00%	11.57%	11/29/2027		37,861		37,294			37,301			4.62
Natural Partners, Inc. - Revolving Credit Facility	(8)(9)(12)	S + 6.15%	1.00%	11.54%	11/29/2027		—		(41	)		(42	)		(0.01	)
Press Ganey Holdings	(9)	S + 3.76%	0.00%	9.18%	7/24/2026		4,259		3,944			4,090			0.51
									90,745			93,145			11.53
High Tech Industries
Inmar, Inc.		S + 5.50%	1.00%	10.90%	5/1/2026		39,900		38,608			39,518			4.89
Watchguard Technologies, Inc.		S + 5.25%	0.75%	10.57%	7/2/2029		34,650		32,650			32,679			4.05
									71,258			72,197			8.94
Hotel, Gaming & Leisure
Chuck E. Cheese		N/A	N/A	6.75%	5/1/2026		17,534		16,612			16,536			2.05
ClubCorp Holdings Inc.	(9)	L + 2.75%	0.00%	8.18%	9/18/2024		10,187		9,754			10,009			1.24
TouchTunes		S + 5.00%	0.50%	10.39%	4/2/2029		29,700		29,446			29,613			3.66
Viad Corp.	(11)	S + 5.11%	0.50%	10.80%	7/30/2028		4,336		4,329			4,242			0.53
									60,141			60,400			7.48
Media: Advertising, Printing & Publishing
Clear Channel Outdoor	(11)	S + 3.76%	0.00%	9.13%	8/21/2026		2,671		2,544			2,589			0.32
Emerald Exhibitions	(11)	S + 5.10%	0.00%	10.42%	5/22/2026		49,875		48,437			49,937			6.18
Sheffield United F.C.	UK(8)(9)(10)(11)	N/A	N/A	13.07%	7/22/2026		14,704		18,197			17,884			2.21
									69,178			70,410			8.71
Media: Diversified & Production
FilmRise Acquisitions, LLC	(8)(9)	N/A	N/A	13.50%	9/17/2025		16,774		16,782			16,807			2.08
Getty Images Inc.	(11)	S + 4.60%	0.00%	9.99%	2/19/2026		17,588		17,549			17,605			2.18
Candle Media Co Ltd	(8)	S + 6.10%	0.75%	11.49% (Incl 4.00% PIK)	6/18/2027		42,967		42,368			41,644			5.15
Candle Media Co Ltd -Delayed Draw Term Loan	(8)(9)	S + 6.10%	0.75%	11.49% (Incl 4.00% PIK)	6/18/2027		17,010		16,791			16,486			2.04
									93,490			92,542			11.45
Retail
Xponential Fitness LLC	(8)(11)	S + 6.76%	1.00%	12.16%	2/28/2025		68,520		67,108			68,863			8.52
MED ParentCo, LP		S + 4.36%	0.00%	9.68%	8/31/2026		56,938		54,550			54,250			6.71
									121,658			123,113			15.23

March 31, 2023

Derivative Counterparty

Settlement Date

Amount Purchased

Amount Sold

Amortized Cost

Fair Value

% of Net Assets

Foreign Currency Forward Contracts

Goldman Sachs International

June 21, 2023

$
97,042

CAD 133,162

—

$
(1,580
)

(0.3
)%

$
(1,580
)

(0.3
)%

Table of Contents

MSD Investment Corp.

Consolidated Schedule of Investments (Unaudited) - (Continued)

September 30, 2023

(in thousands, except shares)


Investments (1)(2)(3)	Footnotes	Reference Rate and Spread (4)	Interest Rate Floor	Interest Rate (5)	Maturity Date	Par Amount / Shares (6)		Cost (7)			Fair Value			Percentage of Net Assets
First Lien Debt (continued)
Services: Business
BDO USA, P.C.	(8)	S + 6.00%	2.00%	11.32%	8/31/2028		64,044		62,782			63,035			7.80
Momentive Global	(8)	S + 7.00%	1.00%	12.32%	5/31/2030		64,125		62,869			62,903			7.79
Momentive Global - Revolving Credit Facility	(8)(9)(12)	S + 7.00%	1.00%	12.31%	5/31/2029		—		(108	)		(109	)		(0.01	)
Travelport Finance (Luxembourg) S.A.R.L.	LU(10)(11)	S + 7.26%	1.00%	12.65%	2/28/2025		60,002		59,822			56,844			7.03
Wood Mackenzie, Inc.	(8)	S + 6.75%	0.75%	12.12%	2/1/2030		36,852		35,827			36,545			4.52
Wood Mackenzie, Inc. - Revolving Credit Facility	(8)(9)(12)	S + 6.75%	0.75%	12.14%	2/1/2028		—		(77	)		(25	)		(0.00	)
									221,115			219,193			27.13
Services: Consumer
CSC Serviceworks	(9)	S + 4.26%	0.75%	9.66%	3/4/2028		220		201			190			0.02
Spring Education Group Inc.		S + 4.00%	0.00%	9.43%	7/30/2025		46,384		45,028			46,343			5.74
Vision Purchaser Corp.	(8)	S + 6.40%	1.00%	11.79%	6/10/2025		28,720		28,418			28,029			3.47
Vision Purchaser Corp. - Incremental Term Loan	(8)	S + 6.40%	1.00%	11.79%	6/10/2025		2,504		2,475			2,444			0.30
									76,122			77,006			9.53
Transportation: Cargo
Boasso Global - Delayed Draw Term Loan	(8)(9)(12)	S + 6.75%	0.75%	12.08%	10/3/2024		6,916		6,694			6,874			0.85
Boasso Global - Revolving Credit Facility	(8)(9)(12)	S + 6.75%	0.75%	12.14%	7/1/2026		—		(159	)		(53	)		(0.01	)
Boasso Global	(8)	S + 6.75%	0.75%	12.08%	7/3/2028		59,078		57,416			58,581			7.25
									63,951			65,402			8.09
Transportation: Consumer
Virgin Atlantic	UK(8)(9)(10)(11)	S + 3.25%	0.00%	8.64%	11/17/2026		29,965		28,359			28,359			3.51
Beacon Mobility Corp. - Delayed Draw Term Loan	(8)(9)(12)	S + 8.60%	0.00%	13.91%	12/31/2025		—		(42	)		(43	)		(0.01	)
Beacon Mobility Corp.	(8)	S + 8.60%	0.00%	14.08% PIK	12/31/2025		48,578		47,148			47,121			5.84
									75,465			75,437			9.34
Telecommunications
FirstLight Fiber - Initial Term Loan	(9)	S + 3.61%	0.00%	8.93%	7/23/2025		14,369		13,858			14,081			1.74
FirstLight Fiber - 2023 Incremental Term Loan	(8)	S + 4.11%	0.00%	9.31%	7/23/2025		15,500		15,346			15,623			1.93
Innovate Corp.	(11)	N/A	N/A	8.50%	2/1/2026		24,000		24,039			18,329			2.27
Ligado Networks LLC	(9)(13)	N/A	N/A	15.50% PIK	11/1/2023		12,853		11,832			4,666			0.58
Maxar Technologies Inc. - Revolving Credit Facility	(8)(9)(12)	S + 7.25%	1.00%	12.64%	5/3/2029		5,663		5,306			5,707			0.71
Maxar Technologies Inc.	(8)	S + 7.25%	1.00%	12.64%	5/3/2030		82,212		79,842			82,489			10.21
ViaSat, Inc.	(11)	S + 4.61%	0.00%	9.93%	5/30/2030		48,000		44,660			44,430			5.50
									194,883			185,325			22.94
Wholesale
Cook & Boardman Group		S + 5.85%	1.00%	11.18%	10/18/2025		13,063		12,369			12,622			1.56
DFS Holdings Company, Inc. - Delayed Draw Term Loan	(8)(9)(12)	S + 7.10%	0.75%	12.42%	1/31/2029		1,615		1,537			1,601			0.20
DFS Holdings Company, Inc.	(8)	S + 7.10%	0.75%	12.42%	1/31/2029		22,043		21,442			21,759			2.69
									35,348			35,982			4.45
Total First Lien Debt									1,494,350			1,491,527			184.60		%

Table of Contents

MSD Investment Corp.

Consolidated Schedule of Investments (Unaudited) - (Continued)

September 30, 2023

(in thousands, except shares)


Investments (1)(2)(3)	Footnotes	Reference Rate and Spread (4)	Interest Rate Floor	Interest Rate (5)	Maturity Date	Par Amount / Shares (6)		Cost (7)		Fair Value		Percentage of Net Assets
Second Lien Debt
Chemicals, Plastics & Rubber
Hexion Holdings Corporation	(9)	S + 7.54%	0.50%	12.86%	3/15/2030		35,000		34,152		28,350		3.51
Consumer goods: Non-durable
Protective Industrial Products Inc.	(8)	S + 8.36%	1.00%	13.68%	12/30/2028		34,199		33,486		33,060		4.09
Hotel, Gaming & Leisure
Mohegan Gaming & Entertainment	(9)	N/A	N/A	8.00%	2/1/2026		16,378		16,451		15,071		1.87
Services: Business
DISA Holdings Corp.	(8)	S + 10.00%	0.75%	15.33% (Incl 2.00% PIK)	3/9/2029		14,793		14,391		14,754		1.83
DISA Holdings Corp. - Delayed Draw Term Loan	(8)(9)	S + 10.00%	0.75%	15.33% (Incl 2.00% PIK)	3/9/2029		2,774		2,701		2,767		0.34
Trace3 Inc.	(8)(9)	L + 7.50%	0.50%	12.79%	10/8/2029		33,750		32,982		33,052		4.09
									50,074		50,573		6.26
Services: Consumer
Midwest Veterinary Partners LLC	(8)	S + 7.60%	0.75%	12.92%	4/26/2029		50,000		50,013		50,000		6.19
Southern Veterinary Partners LLC	(9)	S + 7.85%	1.00%	13.27%	10/5/2028		45,000		44,129		42,300		5.23
Spring Education Group Inc.	(9)	S + 8.36%	0.00%	13.68%	7/30/2026		100		92		96		0.01
									94,234		92,396		11.43
Telecommunications
FirstLight Fiber - 2nd Lien Term Loan	(9)	S + 7.50%	0.00%	12.81%	7/23/2026		100		98		97		0.01
Total Second Lien Debt									228,495		219,547		27.17	%
Preferred Equity
Banking, Finance, Insurance & Real Estate
Accession Risk Management - Preferred Stock	(8)(9)			13.25% PIK			—		97		97		0.01
Consumer goods: Non-durable
Protective Industrial Products Inc. - Series A Preferred	(8)(9)			13.00% PIK			31		30,432		24,720		3.06
Retail
Xponential Fitness LLC - Series A Preferred Stock	(8)(9)(11)			6.50%	7/27/2031		—		278		222		0.03
Total Preferred Equity									30,807		25,039		3.10
Total Investments - non-controlled/non-affiliated								$	1,753,652	$	1,736,113		214.87	%
Cash and Cash Equivalents
Cash and Cash Equivalents	(14)							$	75,433	$	75,433		9.33
Total Cash and Cash Equivalents									75,433		75,433		9.33
Total Portfolio Investments, Cash and Cash Equivalents								$	1,829,085	$	1,811,546		224.20	%


September 30, 2023
Derivative Counterparty	Settlement Date	Amount Purchased		Amount Sold		Amortized Cost		Fair Value		% of Net Assets
Foreign Currency Forward Contracts
Macquarie	December 20, 2023	$	83,912		CAD 113,150	$	—	$	476		0.1	%
Macquarie	December 20, 2023	$	18,415		GBP 14,883	$	—	$	248		0.0	%
								$	724		0.1	%

(1)

Security may be an obligation of one or more entities affiliated with the named portfolio company.

(2)

All debt and equity investments are income producing unless otherwise noted.

Table of Contents

(3)

All investments are non-controlled/non-affiliated investments as defined by the Investment Company Act of 1940, as amended (the “1940 Act”). The provisions of the 1940 Act classify investments based on the level of control that we maintain in a particular portfolio company. As defined in the 1940 Act, a company is generally presumed to be “non-controlled” when we own 25% or less of the portfolio company’s voting securities and “controlled” when we own more than 25% of the portfolio company’s voting securities. The provisions of the 1940 Act also classify investments further based on the level of ownership that we maintain in a particular portfolio company. As defined in the 1940 Act, a company is generally deemed as “non-affiliated” when we own less than 5% of a portfolio company’s voting securities and “affiliated” when we own 5% or more of a portfolio company’s voting securities.

(4)

Variable rate loans to the portfolio companies are indexed to the London Interbank Offered Rate (“LIBOR” or “LIBO Rate”) (denoted as “L”), Canadian Dollar Offered Rate (“CDOR”) (denoted as “C”) or Secured Overnight Financing Rate (“SOFR”) (denoted as “S”) and generally reset periodically. For each loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of ~~March 31,~~September 30, 2023.

(5)

For portfolio companies with multiple interest rate contracts under a single credit agreement, the interest rate shown is a weighted average current interest rate in effect at ~~March 31,~~September 30, 2023.

~~Table of Contents~~

(6)

Unless noted otherwise, the principal amount (par amount) for all debt securities is denominated in U.S. dollars. Equity investments are recorded as number of shares/shares owned.

(7)

Cost represents amortized cost, inclusive of any capitalized paid-in-kind income (“PIK”), for debt securities, and cost plus capitalized PIK, if any, for preferred stock.

(8)

These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by ~~or under~~ the ~~supervision~~Adviser as the Company’s valuation designee, subject to the oversight of the Board of Directors of the Company (the“Board”) (see Note 2 and Note 6), pursuant to the Company’s valuation policy.

(9)

These debt investments are not pledged as collateral under any of the Company's credit facilities. For other debt investments that are pledged to the Company's ~~as defined below~~ (see Note 7), credit facilities, a single investment may be divided into parts that are individually pledged as collateral to our credit facilities.

(10)

The portfolio company is domiciled in a foreign country. The regulatory jurisdiction of security issuance may be a different jurisdiction than the domicile of the portfolio company. Foreign countries include Canada (denoted as “CN”), Luxembourg (denoted as “LU”), Spain (denoted as “ES”) and the United Kingdom (denoted as “UK”). Portfolio companies domiciled in a foreign country are not “qualifying assets” under Section 55(a) of the 1940 Act.

(11)

The investment is not a qualifying asset under Section 55(a) of the 1940 Act. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of ~~March 31,~~September 30, 2023, qualifying assets represented approximately ~~77.1~~77.9% of total assets as calculated in accordance with regulatory requirements.

(12)

Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may be subject to unused commitment fees. Negative cost and fair value results from unamortized fees, which are capitalized to the investment cost. See below for more information on the Company’s unfunded commitments (all commitments are first lien, unless otherwise noted):


Investments—non-controlled/non-affiliated	Commitment Type	Commitment Expiration Date	Unfunded Commitment		Fair Value			Commitment Type	Commitment Expiration Date	Unfunded Commitment		Fair Value
First and Second Lien Debt
Candle Media Co Ltd	Delayed Draw	6/18/2027	$	1,280	$	(58	)
Accession Risk Management								Delayed Draw	10/30/2026	$	49,700	$	(726	)
Beacon Mobility Corp.								Delayed Draw	12/31/2025		1,422		(43	)
Boasso Global								Delayed Draw	10/3/2024		2,438		16
Boasso Global								Revolver	7/1/2026		6,250		(53	)
Chromalloy Holdings LLC	Revolver	11/23/2027		4,615		(174	)	Revolver	11/23/2027		4,615		(53	)
Frontgrade Technologies Inc.	Revolver	1/9/2028		5,250		(154	)
DFS Holding Company	Delayed Draw	1/31/2029		4,615		(65	)	Delayed Draw	1/31/2029		3,000		6
Faraday Buyer, LLC	Delayed Draw	10/11/2028		3,167		(41	)	Delayed Draw	10/11/2028		741		10
Frontgrade Technologies Inc.								Revolver	1/9/2028		7,211		(80	)
LJ Perimeter Buyer, Inc	Delayed Draw	10/31/2028		5,265		(66	)	Delayed Draw	10/31/2028		3,042		14
Maxar Technologies Inc.								Revolver	5/3/2029		7,125		24
Momentive Global								Revolver	5/31/2029		5,714		(109	)
Natural Partners, Inc.	Revolver	11/29/2027		2,813		(86	)	Revolver	11/29/2027		2,813		(42	)
Wood Mackenzie, Inc.	Revolver	2/1/2028		2,963		(88	)
Systems Planning and Analysis, Inc.	Delayed Draw	8/16/2027		4,704		(160	)	Delayed Draw	8/16/2027		1,165		(5	)
Systems Planning and Analysis, Inc.	Revolver	8/16/2027		2,240		(93	)	Revolver	8/16/2027		3,136		(37	)
Wood Mackenzie, Inc.								Revolver	2/1/2028		2,963		(25	)
Total Unfunded Commitments			$	36,913	$	(985	)			$	101,335	$	(1,103	)

(13)

Investment was on non-accrual status as of ~~March 31,~~September 30, 2023, meaning that the Company has ceased recognizing interest income on these investments. As of ~~March 31,~~September 30, 2023, debt investments on non-accrual status represented ~~0.9~~0.7% and 0.3% of total investments on an amortized cost basis and fair value basis, respectively.

(14)

Cash and Cash equivalents balance represents amounts held in cash and in the interest-bearing money market fund - Goldman Sachs Financial Square Government Fund (FGTXX). As of ~~March 31,~~September 30, 2023, $~~29,741~~63,144 was held in FGTXX and had an average one year yield of ~~2.66~~4.49%.

(15)

Portfolio company formerly known as (fka) Cobham Holdings Inc.

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

911

Table of Contents

MSD Investment Corp.

Consolidated Schedule of Investments

December 31, 2022

(in thousands, except shares)


Investments (1)(2)(3)	Footnotes	Reference Rate and Spread (4)	Interest Rate Floor	Interest Rate (5)	Maturity Date	Par Amount / Shares (6)		Cost (7)			Fair Value			Percentage of Net Assets
Investments - non-controlled/non-affiliated
First Lien Debt
Aerospace & Defense
Chromalloy Holdings LLC	(8)	S + 7.00%	1.00%	11.32%	11/23/2028		50,000	$	48,025		$	48,027			9.97		%
Chromalloy Holdings LLC - Revolving Credit Facility	(8)(9)(12)	S + 7.00%	1.00%	11.32%	11/23/2027		—		(181	)		(182	)		(0.04	)
Systems Planning and Analysis, Inc.	(8)(15)	S + 6.15%	1.00%	10.94%	8/16/2027		10,823		10,637			10,433			2.17
Systems Planning and Analysis, Inc. - Revolving Credit Facility	(8)(9)(12)(15)	S + 6.15%	1.00%	10.74%	8/16/2027		—		(51	)		(113	)		(0.02	)
Systems Planning and Analysis, Inc. - Delayed Draw Term Loan	(8)(9)(12)(15)	S + 6.15%	0.00%	10.94%	8/16/2027		2,011		1,956			1,805			0.37
The Nordam Group Inc.		L + 5.50%	0.00%	9.94%	4/9/2026		11,767		10,491			9,119			1.89
									70,877			69,089			14.34
Automobile
McLaren Finance PLC	UK(10)(11)	N/A	N/A	7.50%	8/1/2026		2,689		2,717			1,984			0.41
Beverage, Food & Tobacco
LJ Perimeter Buyer, Inc.	(8)	S + 6.65%	1.00%	10.74%	10/31/2028		19,462		18,888			18,902			3.92
LJ Perimeter Buyer, Inc. - Delayed Draw Term Loan	(8)(9)(12)	S + 6.65%	1.00%	11.24%	10/31/2028		—		(78	)		(76	)		(0.01	)
									18,810			18,826			3.91
Capital Equipment
Faraday Buyer, LLC	(8)	S + 7.00%	1.00%	11.32%	10/10/2028		34,833		33,812			33,817			7.02
Faraday Buyer, LLC - Delayed Draw Term Loan	(8)(9)(12)	S + 7.00%	1.00%	11.32%	10/11/2028		—		(44	)		(45	)		(0.01	)
Trillium FlowControl	LU(8)(10)(11)	S + 5.61%	1.00%	9.94%	6/28/2026		17,910		17,744			16,919			3.51
									51,512			50,691			10.52
Chemicals, Plastics & Rubber
Dubois Chemicals Group Inc.	(8)	S + 4.50%	0.00%	8.92%	9/30/2026		2,754		2,745			2,588			0.53
Hexion Holdings Corporation		S + 4.65%	0.50%	8.93%	3/15/2029		9,950		9,224			8,517			1.77
									11,969			11,105			2.30
Energy: Oil & Gas
CITGO Holdings Inc.	(9)	N/A	N/A	9.25%	8/1/2024		26,051		25,640			26,155			5.43
CITGO Petroleum Corp.		N/A	N/A	6.38%	6/15/2026		2,121		2,156			2,036			0.42
Saturn Oil and Gas Inc.	CN(8)(10)(11)	C + 11.50%	1.00%	16.36%	7/6/2025		CAD 56,817		43,486			40,861			8.48
									71,282			69,052			14.33
Healthcare & Pharmaceuticals
Bayer Environmental Services		S + 4.38%	0.50%	7.97%	8/4/2029		20,000		18,422			18,185			3.77
Charlotte Buyer, Inc.		S + 5.25%	0.00%	9.53%	2/11/2028		33,333		31,119			31,514			6.54
Mallinckrodt International Financing SA	LU(10)(11)	L + 5.25%	0.75%	9.99%	9/30/2027		2,676		2,525			2,012			0.42
Natural Partners, Inc.	(8)	L + 6.00%	1.00%	9.57%	3/15/2028		38,149		37,481			36,874			7.65
Natural Partners, Inc. - Revolving Credit Facility	(8)(9)(12)	L + 6.00%	1.00%	11.14%	3/15/2028		—		(48	)		(94	)		(0.02	)
									89,499			88,491			18.36
High Tech Industries
Watchguard Technologies, Inc.		S + 5.25%	0.75%	9.57%	7/2/2029		34,913		32,717			33,272			6.91
Hotel, Gaming & Leisure
Chuck E. Cheese		N/A	N/A	6.75%	5/1/2026		17,534		16,385			16,263			3.38
TouchTunes	(8)	S + 5.25%	0.50%	8.98%	4/2/2029		29,925		29,644			29,102			6.04
Viad Corp.	(11)	L + 5.00%	0.50%	9.38%	7/30/2028		4,369		4,359			4,107			0.85
									50,388			49,472			10.27

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MSD Investment Corp.

Consolidated Schedule of Investments - (Continued)

December 31, 2022

(in thousands, except shares)


Investments (1)(2)(3)	Footnotes	Reference Rate and Spread (4)	Interest Rate Floor	Interest Rate (5)	Maturity Date	Par Amount / Shares (6)		Cost (7)		Fair Value		Percentage of Net Assets
Media: Advertising, Printing & Publishing
Patientpoint Network Solutions, LLC	(8)	S + 7.26%	1.00%	11.84%	3/7/2025		31,931		31,397		31,183		6.47
Real Betis Balompie SAD - Participation Interest	ES(8)(10)(11)	N/A	N/A	7.00%	6/5/2025		13,000		14,764		13,917		2.89
									46,161		45,100		9.36
Media: Diversified & Production
FilmRise Acquisitions, LLC	(8)(9)	N/A	N/A	13.50%	9/17/2025		18,086		18,094		18,043		3.75
Getty Images Inc.	(8)	L + 4.50%	0.00%	8.94%	2/19/2026		18,902		18,841		18,855		3.91
Candle Media Co Ltd	(8)	L + 6.00%	0.75%	10.38% (Incl 4.00% PIK)	6/18/2027		41,687		40,994		39,217		8.14
Candle Media Co Ltd - Delayed Draw Term Loan	(8)(9)(12)	L + 6.00%	0.75%	10.38% (Incl 4.00% PIK)	6/18/2027		15,239		14,998		14,273		2.96
									92,927		90,388		18.76
Metals & Mining
Conuma Coal Resources LTD	CN(9)(10)(11)	N/A	N/A	10.00%	5/1/2023		3,181		3,180		3,153		0.65
Retail
Xponential Fitness LLC	(8)(11)	L + 6.50%	1.00%	10.67%	2/28/2025		22,759		22,563		22,873		4.75
Services: Business
Muine Gall, LLC	(8)(9)(11)	L + 7.00%	0.50%	12.15% PIK	9/21/2024		46,047		46,063		46,308		9.61
Travelport Finance (Luxembourg) S.A.R.L.	LU(10)(11)	S + 8.75%	1.00%	13.48% (Incl 7.25% PIK)	2/28/2025		31,346		31,036		31,342		6.50
									77,099		77,650		16.11
Services: Consumer
CSC Serviceworks	(9)	L + 4.00%	0.75%	8.39%	3/4/2028		222		201		186		0.04
Spring Education Group Inc.		L + 4.00%	0.00%	8.73%	7/30/2025		46,750		44,890		45,540		9.45
Vision Purchaser Corp.	(8)	S + 6.40%	1.00%	10.98%	6/10/2025		28,946		28,530		26,989		5.60
Vision Purchaser Corp. - Incremental Term Loan	(8)	S + 6.40%	1.00%	10.98%	6/10/2025		2,523		2,484		2,353		0.49
									76,105		75,068		15.58
Telecommunications
Innovate Corp.	(11)	N/A	N/A	8.50%	2/1/2026		24,000		24,050		17,148		3.56
Ligado Networks LLC	(9)(13)	N/A	N/A	15.50% PIK	11/1/2023		11,928		11,071		3,853		0.80
									35,121		21,001		4.36
Wholesale
FleetPride Inc.	(8)	L + 4.50%	0.00%	8.88%	2/4/2026		21,710		21,684		21,330		4.43
									21,684		21,330		4.43
Total First Lien Debt									774,611		748,545		155.35	%

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MSD Investment Corp.

Consolidated Schedule of Investments - (Continued)

December 31, 2022

(in thousands, except shares)


Investments (1)(2)(3)	Footnotes	Reference Rate and Spread (4)	Interest Rate Floor	Interest Rate (5)	Maturity Date	Par Amount / Shares (6)		Cost (7)		Fair Value		Percentage of Net Assets
Second Lien Debt
Chemicals, Plastics & Rubber
Hexion Holdings Corporation	(8)(9)	S + 7.54%	0.50%	11.86%	3/15/2030		35,000		34,091		27,300		5.67
Consumer goods: Non-durable
Protective Industrial Products Inc.	(8)	L + 8.25%	1.00%	12.63%	12/30/2028		34,199		33,415		31,471		6.53
Hotel, Gaming & Leisure
Mohegan Gaming & Entertainment	(9)	N/A	N/A	8.00%	2/1/2026		16,378		16,473		15,150		3.14
Services: Business
DISA Holdings Corp.	(8)	S + 10.00%	0.75%	14.32%	3/9/2029		14,641		14,207		14,207		2.95
DISA Holdings Corp. - Delayed Draw Term Loan	(8)(9)	S + 10.00%	0.75%	14.22%	3/9/2029		2,745		2,666		2,664		0.55
Trace3 Inc.	(8)(9)	L + 7.50%	0.50%	10.56%	10/8/2029		33,750		32,914		32,068		6.65
									49,787		48,939		10.15
Services: Consumer
Midwest Veterinary Partners LLC	(8)(9)	L + 7.50%	0.75%	11.88%	4/26/2029		50,000		50,042		47,027		9.76
Southern Veterinary Partners LLC	(8)(9)	S + 7.85%	1.00%	12.17%	10/5/2028		45,000		44,038		40,950		8.50
Spring Education Group Inc.	(9)	L + 8.25%	0.00%	13.02%	7/30/2026		100		91		89		0.02
									94,171		88,066		18.28
Total Second Lien Debt									227,937		210,926		43.77	%
Preferred Equity
Consumer goods: Non-durable
Protective Industrial Products Inc. - Series A Preferred	(8)(9)			13.00% PIK			29		28,519		22,267		4.62
Total Preferred Equity									28,519		22,267		4.62
Total Investments - non-controlled/non-affiliated								$	1,031,067	$	981,738		203.74	%
Cash and Cash Equivalents
Cash and Cash Equivalents	(14)							$	36,616	$	36,616		7.60	%
Total Cash and Cash Equivalents									36,616		36,616		7.60
Total Portfolio Investments, Cash and Cash Equivalents								$	1,067,683	$	1,018,354		211.34	%

December 31, 2022

Derivative Counterparty

Settlement Date

Amount Purchased

Amount Sold

Amortized Cost

Fair Value

% of Net Assets

Foreign Currency Forward Contracts

Goldman Sachs International

March 15, 2023

$
13,574

€
12,688

—

$
(78
)

0.0
%
Goldman Sachs International

March 15, 2023

$
43,460

CAD 59,121

—

$
(252
)

(0.1
)%
Goldman Sachs International

March 15, 2023

CAD 3,151

$
2,336

—

$
(6
)

0.0
%

$
(336
)

(0.1
)%


December 31, 2022
Derivative Counterparty	Settlement Date	Amount Purchased		Amount Sold		Amortized Cost		Fair Value			% of Net Assets
Foreign Currency Forward Contracts
Goldman Sachs International	March 15, 2023	$	13,574	€	12,688	$	—	$	(78	)		0.0	%
Goldman Sachs International	March 15, 2023	$	43,460		CAD 59,121	$	—	$	(252	)		(0.1	)%
Goldman Sachs International	March 15, 2023		CAD 3,151	$	2,336	$	—	$	(6	)		0.0	%
								$	(336	)		(0.1	)%

(1)

Security may be an obligation of one or more entities affiliated with the named portfolio company.

(2)

All debt and equity investments are income producing unless otherwise noted.

(3)

All investments are non-controlled/non-affiliated investments as defined by the 1940 Act. The provisions of the 1940 Act classify investments based on the level of control that we maintain in a particular portfolio company. As defined in the 1940 Act, a company is generally presumed to be “non-controlled” when we own 25% or less of the portfolio company’s voting securities and “controlled” when we own more than 25% of the portfolio company’s voting securities. The provisions of the 1940 Act also classify investments further based on the level of ownership that we maintain in a particular portfolio company. As defined in the 1940 Act, a company is generally deemed as “non-affiliated” when we own less than 5% of a portfolio company’s voting securities and “affiliated” when we own 5% or more of a portfolio company’s voting securities.

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(4)

Variable rate loans to the portfolio companies are indexed to the London Interbank Offered Rate”~~("LIBOR"~~ (“LIBOR”, or ~~"LIBOR Rate"~~“LIBO Rate”) (denoted as ~~"L"~~“L”), Canadian Dollar Offered Rate ~~("CDOR"~~(“CDOR”) (denoted as ~~"C"~~“C”) or Secured Overnight Financing Rate ~~("SOFR"~~(“SOFR”) (denoted as "S") and generally reset periodically. For each loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2022.

(5)

For portfolio companies with multiple interest rate contracts under a single credit agreement, the interest rate shown is a weighted average current interest rate in effect at December 31, 2022.

(6)

Unless noted otherwise, the principal amount (par amount) for all debt securities is denominated in U.S. dollars. Equity investments are recorded as number of shares/shares owned.

(7)

Cost represents amortized cost, inclusive of any capitalized paid-in-kind income ~~("PIK"~~(“PIK”), for debt securities, and cost plus capitalized PIK, if any, for preferred stock.

(8)

These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by or under the direction of the Board (see Note 2 and Note 6), pursuant to the Company’s valuation policy.

(9)

These debt investments are not pledged as collateral under any of the Company's credit facilities. For other debt investments that are pledged to the Company's, as defined below (see Note 7), credit facilities, a single investment may be divided into parts that are individually pledged as collateral to our credit facilities.

(10)

The portfolio company is domiciled in a foreign country. The regulatory jurisdiction of security issuance may be a different jurisdiction than the domicile of the portfolio company. Foreign countries include Canada (denoted as ~~“CN”~~“CN”), Luxembourg (denoted as ~~“LU”~~“LU”), Spain (denoted as ~~“ES”~~“ES”) and the United Kingdom (denoted as ~~“UK”~~“UK”).

(11)

The investment is not a qualifying asset under Section 55(a) of the 1940 Act. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2022, qualifying assets represented approximately 80.8% of total assets as calculated in accordance with regulatory requirements.

(12)


Investments—non-controlled/non-affiliated	Commitment Type	Commitment Expiration Date	Unfunded Commitment		Fair Value
First and Second Lien Debt
Candle Media Co Ltd	Delayed Draw	6/18/2027	$	1,280	$	(63	)
Chromalloy Holdings LLC	Revolver	11/23/2027		4,615		(182	)
Faraday Buyer, LLC	Delayed Draw	10/11/2028		3,167		(45	)
LJ Perimeter Buyer, Inc	Delayed Draw	10/31/2028		5,538		(76	)
Natural Partners, Inc.	Revolver	3/15/2028		2,813		(94	)
Systems Planning and Analysis, Inc. (fka Management Consulting & Research LLC)	Delayed Draw	8/16/2027		4,704		(134	)
Systems Planning and Analysis, Inc. (fka Management Consulting & Research LLC)	Revolver	8/16/2027		3,136		(113	)
Total Unfunded Commitments			$	25,253	$	(707	)

(13)

Investment was on non-accrual status as of December 31, 2022, meaning that the Company has ceased recognizing interest income on these investments. As of December 31, 2022, debt investments on non-accrual status represented 1.1% and 0.4% of total investments on an amortized cost basis and fair value basis, respectively.

(14)

Cash and Cash equivalents balance represents amounts held in cash and in the interest-bearing money market fund - Goldman Sachs Financial Square Government Fund (FGTXX). As of December 31, 2022, $26,891 was held in FGTXX and had an average one year yield of 1.59%.

(15)

Portfolio company formerly known as (fka) Management Consulting Research, LLC.

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

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MSD Investment Corp.

Notes to Consolidated Financial Statements (Unaudited)

(in thousands, except share/per share data, percentages and as otherwise noted)

Note 1. Organization

MSD Investment Corp. (together with its consolidated ~~subsidiary,~~subsidiaries, the “Company”), was originally established as a Delaware limited liability company on February 18, 2021, converted to a Maryland limited liability company named MSD Investment, LLC on October 22, 2021 and converted into a Maryland corporation (the “Corporate Conversion”) effective January 1, 2022, pursuant to Articles of Conversion filed on December 28, 2021. In connection with the Corporate Conversion the Company changed its name from “MSD Investment, LLC” to “MSD Investment Corp.” As a result of the Corporate Conversion, the issued and outstanding equity interests of MSD Investment, LLC were converted into a corresponding number of shares of common stock, par value $0.001 per share, of the Company (“(the “Shares,” and each a “Share”), and each holder of equity interests of MSD Investment, LLC became a shareholder of the Company (collectively the “Shareholders”). The Company is structured as an externally managed, non-diversified closed-end investment company. On December 29, 2021, the Company elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, the Company has elected, and intends to qualify annually thereafter, to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”), as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

On January 1, 2023, the Adviser completed ~~the~~a previously announced business combination with BDT & Company Holdings, L.P. (the “Transaction”), and its subsidiaries, which includes BDT Capital Partners, LLC (“BDT Capital”), aan SEC-registered investment adviser, and BDT & MSD Partners, LLC, aan SEC registered broker-dealer and member of the Financial Industry Regulatory Authority (“FINRA”). Upon the closing of the Transaction, BDT & Company Holdings, L.P. was renamed BDT & MSD Holdings, L.P. (“BDT”) and BDT, and its subsidiaries, became affiliates of the Adviser and the Company.

The Company’s investment objective is to invest in a broad range of portfolio companies, primarily through senior secured loans and notes where we believe the probability of losses are limited and the opportunity to generate attractive risk adjusted returns is maximized. The Adviser (as defined below) expects to execute this strategy by continuing its long history of leveraging its network to source and diligence what it believes to be attractive opportunities across a broad range of industries. The strategy will be executed by a team of experienced investment professionals who have more than a 20-year history of successfully deploying capital in both liquid and illiquid investments.

The Company ~~has~~previously entered into an investment advisory agreement (the “Original Advisory Agreement”) with MSD Partners, L.P., a Delaware limited partnership (the “Adviser”), under which the Adviser ~~provides~~provided certain investment advisory and management services to the Company. Additionally, the ~~company has~~Company entered into an administrative services agreement (the “Original Administration Agreement”) with MSD Partners, L.P. (in this capacity, the “Administrator” and, collectively inwith its role as the Adviser “MSD”) under which the Administrator ~~provides~~provided certain administrative and other services necessary for the Company to operate.

Effective January 1, 2023, ~~MSD Investment Corp. (the “~~the Company”) entered into a new investment advisory agreement (the “Advisory Agreement”), by and between the Company and the Adviser, and a new administrative agreement (the “Administration Agreement” and together with the ~~New~~ Advisory ~~Agreements,~~Agreement, the “New Agreements”), by and between the Company and the Administrator. The terms of the New Agreements are substantially identical to those of the Original Advisory Agreement and Original Administrative Agreement, ~~respectively,~~ except that the reimbursement required to be made to the Administrator by the Company pursuant to the Administration Agreement will be capped such that the amounts will not exceed ~~an amount of~~ 0.15% of total gross assets of the Company in any one calendar year.

MSD BDC SPV I, LLC (“SPV I”) is a Delaware limited liability company formed on June 14, 2021 and commenced operations on December 21, 2021, the date the first investment transaction closed. SPV I’s investment objectives are the same as the Company. MSD BDC SPV I,II, LLC (“SPV II” and together with SPV I, the “SPVs”) is a Delaware limited liability company formed on January 4, 2023 and commenced operations on March 31, 2023. The SPVs are wholly owned subsidiaries of the Company and are consolidated in these consolidated financial statements, in accordance with the Company’s consolidation policy discussed in Note 2 Significant Accounting Policies.

The Company may from time to time conduct a private offering (each a “Private Offering”) of its ~~common shares of beneficial interest~~Shares (i) to accredited investors, as defined in Regulation D under the Securities Act of 1933, as amended (the “1933 Act”), and (ii) in the case of Shares sold outside the United States, to persons that are not “U.S. persons,” as defined in Regulation S under the 1933 Act, in reliance on exemptions from the registration requirements of the 1933 Act. At each closing of the Private Offering, each investor makes a capital commitment (“Capital Commitments”) to purchase Shares ~~of the beneficial interest of the Company~~ pursuant to a subscription agreement entered into with the Company. Investors are required to fund drawdowns to purchase the Company’s Shares up to the amount of their Capital Commitments on an as-needed basis each time the Company delivers a notice to investors.

The first closing date of a Private Offering (the “Initial Closing Date”) took place on December 21, 2021. Additional closings are expected to occur from time to time as determined by the Company (each, a “Subsequent Closing”), and the final such closing (the “Final Closing”) will occur no later than the fifth anniversary of the Initial Closing Date, subject to a one-year extension at the discretion of the Board of Directors of the Company (the “Board”) (the “Commitment Period”). The proceeds received at the Initial Closing Date ~~of the sale of Shares hereunder~~ were used to acquire the initial portfolio of the Company from several funds managed by the Adviser or its affiliates prior to the Corporate Conversion. Following the Initial Closing Date, proceeds from the sale of Shares in Subsequent Closings were used to acquire investments in accordance with the Company’s investment guidelines and for other permitted purposes.

Note 2. Significant Accounting Policies

Basis of Presentation

Management has determined that the Company meets the definition of an investment company and adheres to the accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies (“ASC 946”) issued by the Financial Accounting Standards

~~Table of Contents~~

Board (“FASB”). Accounting principles generally accepted in the United States ~~of America~~ (“U.S. GAAP”) for an investment company requires investments to be recorded at fair value.

Table of Contents

The accompanying consolidated financial statements and related financial information have been prepared in accordance with U.S. GAAP and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X under the 1933 Act.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities at the date of the financial statements, (ii) the reported amounts of income and expenses during the reported period and (iii) disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ materially from those estimates under different assumptions and conditions.

Basis of Consolidation

As provided under ASC 946, the Company will not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company ~~consolidated~~consolidates the results of its wholly-owned ~~subsidiary.~~subsidiaries. All intercompany balances and transactions have been eliminated.

Cash and Cash Equivalents

Cash and cash equivalents consist of demand deposits and highly liquid investments, such as money market funds, with original maturities of 90 days or less. Cash and cash equivalents are carried at cost, which approximates fair value. The Company deposits its cash and cash equivalents with financial institutions and, at times, these deposits may exceed the Federal Deposit Insurance Corporation insured limit.

Restricted Cash

Restricted cash ~~consists~~has historically consisted of cash collateral that ~~has~~had been pledged to cover obligations of the Company according to its derivative contracts and demand deposits held at Goldman Sachs International, in addition to cash funded to escrow for prefunding deals. Management believes the credit risk related to its demand deposits is minimal.

Investments

Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds received from a sale or paydown and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. The net change in unrealized gains or losses primarily reflects the change in investment values, including the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period.

Valuation of Investments

The Company measures the value of its investments in accordance with ASC Topic 820, F~~air~~Fair Value Measurement and Disclosures (“ASC 820”). Fair value is the price 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. Market participants are defined as buyers and sellers in the principal or most advantageous market (which may be a hypothetical market) that are independent, knowledgeable and willing and able to transact. In accordance with ASC 820, the Company considers its principal market to be the market that has the greatest volume and level of activity.

ASC 820 defines hierarchical levels of fair value that prioritize and rank the level of observability of inputs used in determination of fair value. These levels are summarized below:

•

Level 1 - Quoted prices are available in active markets for identical investments as of the reporting date. Publicly listed equities and debt securities, publicly listed derivatives and money market/short-term investment funds are generally included in Level 1.

•

Level 2 - Valuation inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date. In certain cases, debt and equity securities are valued on the basis of prices from orderly transactions for similar investments in active markets between market participants and provided by reputable dealers or independent pricing services. Investments generally included in this category less liquid and restricted securities listed in active markets, securities traded in markets that are not active, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.

•

Level 3 - Valuation inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant judgment or estimation. Investments generally included in this category include investments in privately-held entities, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

In certain cases, the inputs used to measure fair value may fall within different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Depending on the relative liquidity in the markets for certain investments, the Company may transfer investments to Level 3 if it determines that observable quoted prices, obtained directly or indirectly, are severely limited, or not available, or otherwise not reliable. Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfer occurs. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and the consideration of factors specific to the investment.

~~Table of Contents~~

date of determination. If no such sales of such securities occurred, such securities will be valued at the bid price as reported by an independent, third-party pricing service on the date of determination. Debt and equity securities that are not publicly traded or whose market prices are not readily available will be valued at fair value as determined by the Adviser as the Company's valuation designee (in such capacity, the “Valuation Designee”), subject to the ~~oversight and approval~~ overall supervision

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of the Board. Such determination of fair values may involve subjective judgments and estimates, although the Company will also engage independent valuation providers to review the valuation of each investment that constitutes a material portion of the Company’s portfolio and that does not have a readily available market quotation at least once annually. With respect to unquoted securities, the ~~Adviser,~~Valuation Designee, together with any independent valuation advisers, and subject to the oversight of the Board, will fair value each investment considering, among other measures, discounted cash flow models, comparisons of financial ratios of peer companies that are public and other factors. The types of factors that may be considered in determining the fair values of investments include, but are not limited to, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings. The Company intends to retain one or more independent providers of financial advisory services to assist the ~~Adviser~~Valuation Designee and the Board by performing certain third-party valuation services. The Company may appoint additional or different third-party valuation firms in the future.

When an external event such as a purchase transaction, public offering or subsequent equity sale occurs with respect to a fair-valued portfolio company or comparable company, the ~~Board~~Valuation Designee will use the pricing indicated by the external event to corroborate and/or assist the Company in the valuation of such portfolio company. Because the Company expects that there will not be readily available market quotations for many of the investments in its portfolio, the Company expects to value many of its investments at fair value as determined in good faith by the ~~board of directors~~Valuation Designee using a documented valuation policy and a consistently applied valuation process. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market ~~value,~~quotation, the fair value of the Company’s investments may differ significantly from the values that would have been used had readily available market quotations existed for such investments, and the differences could be material.

On a quarterly basis, with respect to investments for which market quotations are not readily available, the ~~Adviser~~Valuation Designee will undertake a multi-step valuation process, as described below:

•

Securities for which no market prices are readily available or reliable will be reviewed as part of the valuation process and preliminarily fair valued based on our estimate, or an independent third party’s estimate, of the fair value as of the date of determination, and provided to the Adviser’s valuation committee;

•

Preliminary valuation conclusions are documented and discussed with the Adviser’s valuation committee;

•

Agreed upon valuation recommendations are presented to the audit committee of the Board (the “Audit Committee”);

•

At least once annually, the valuation for each investment that constitutes a material portion of the Company’s portfolio and that does not have a readily available market quotation will be reviewed by an independent valuation firm; and

•

The Valuation Designee will provide the Board with the information relating to the fair value determination pursuant to the Company’s valuation policy in connection with each quarterly Board meeting, will ~~then~~comply with the periodic board reporting requirements set forth in the Company’s valuation policy, and will discuss ~~valuations and determine~~with the Board its determination of the fair value of each investment in ~~the Company’s portfolio in~~ good ~~faith, based on the input of the Adviser, the respective independent valuation firms and the audit committee.~~faith..

The Company utilizes several valuation techniques that use unobservable pricing inputs and assumptions in determining the fair value of its Level 3 investments. The valuation techniques, as well as the key unobservable inputs that have a significant impact on the Company’s investments classified and valued as Level 3 in the valuation hierarchy, are described in Note 6. Fair Value Measurements. The unobservable inputs and assumptions may differ by asset and in the application of the Company's valuation methodologies. The reported fair value estimates could vary materially if the Company had chosen to incorporate different unobservable inputs and assumptions.

All values assigned to investments by the procedures established by the Board will be binding on all Company investors. When pricing of the Company’s Shares is necessary outside of the normal quarterly process, the Adviser will, among other things, review whether, to its knowledge, significant events have occurred since the last quarterly valuation which might affect the fair value of any of the Company's portfolio investments.

The determination of fair value involves subjective judgements and estimates. Due to the inherent uncertainty of determining the fair value of portfolio investments that do not have a readily available market ~~value,~~quotation, the fair value of investments may differ materially from the values that would have been determined had a readily available market ~~value~~quotation existed for such investments. Further, such investments are generally less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment that does not have a readily available market ~~value~~quotation in a forced or liquidation sale, the Company could realize significantly less value than the value recorded by the Company.

Securities and Exchange Commission (“SEC”) Disclosure Update and Simplification

In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices. ~~New~~ Rule 2a-5 under the 1940 Act (“Rule 2a-5”) ~~establishes~~established requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 ~~will permit~~permits (but does not require) boards, subject to board oversight and certain other conditions, to designate certain parties to perform fair value determinations. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must determine the fair value of a security. In summary, a quote is readily available only when that quotation is a quoted price (unadjusted) in active markets for identical investments that the fund can access at the measurement date, provided that a quotation will not be readily available if it is not reliable. The SEC also adopted new Rule 31a-4 under the 1940 Act (“Rule 31a-4”), which provides the recordkeeping requirements associated with fair value determinations. Finally, the SEC ~~is rescinding~~rescinded previously issued guidance on related issues, including the role of the board in determining fair value and the accounting and auditing of fund investments. Rule 2a-5 and Rule 31a-4 became effective on March 8, 2021, and had a compliance date of September 8, 2022. ~~While our~~On August 3, 2023, the Board ~~has not~~ elected to designate the Adviser as the ~~valuation designee,~~Company's Valuation Designee, which became effective for the quarter ended September 30, 2023. The Company has adopted certain revisions to its valuation policies and procedures in order comply with the applicable requirements of Rule 2a-5 and Rule 31a-4.

Receivables/Payables From Investments Sold/Purchased

Receivables/payables from investments sold/purchased consist of amounts receivable or payable by the Company for transactions that have not settled at the reporting date.

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Foreign Currency Transactions

Amounts denominated in foreign currencies are translated into U.S. dollars on the following basis: (i) investments and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates effective on the last business day of the period; and (ii) purchases and sales of investments, borrowings and repayments of such borrowings, income, and expenses denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates prevailing on the transaction dates.

The Company includes net changes in fair values on investments held resulting from foreign exchange rate fluctuations in translation of assets and liabilities in foreign currencies on the consolidated statements of operations, if any. Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities.

Derivative Instruments

Derivative instruments solely consist of foreign currency forward contracts. All derivative instruments as assets or liabilities are recognized at fair value in the consolidated financial statements. Foreign currency forward contracts are not designated as hedging instruments, and as a result, changes in fair value through net change in unrealized appreciation (depreciation) on foreign currency forward contracts are presented in the consolidated statements of operations. Realized gains and losses that occur upon the cash settlement of the foreign currency forward contracts are included in net realized gains (losses) on foreign currency forward contracts on the consolidated statements of operations.

Revenue Recognition

Interest Income

Interest income is recorded on an accrual basis and includes the accretion of discounts and amortizations of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including loan origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. Upon prepayment of a loan or debt security, any prepayment premiums are recorded as interest income in the current period.

The Company has investments in its portfolio that contain PIK provisions. PIK represents interest that is accrued and recorded at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. Such income is included in interest income in the consolidated statement of operations. If at any point the Company believes PIK is not expected to be realized, the investment generating PIK will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized income is generally reversed through interest income. To maintain the Company’s status as a RIC after the Corporate Conversion, this non-cash source of income must be paid out to shareholders in the form of dividends, even though the Company has not yet collected cash.

If the portfolio company's valuation indicates the value of the PIK security is not sufficient to cover the contractual PIK interest, the Company will not accrue additional PIK interest income and will record an allowance for any accrued PIK interest receivable as a reduction of interest income in the period the Company determines it is not collectible.

Debt investments are generally placed on non-accrual status when interest payments are at least 90 days past due or there is reasonable doubt that principal or interest will be collected. Accrued interest is generally reversed when a loan is placed on non-accrual status. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid current and, in management’s judgment, are likely to remain current. Management may make exceptions to this treatment and determine to not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.

Dividend Income

Dividend income on preferred equity securities is recorded on the accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies.

Other Income

The Company may receive various fees in the ordinary course of business such as structuring, consent, waiver, amendment, syndication fees as well as fees for managerial assistance rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered.

Organization Expenses and Offering Expenses

Costs associated with the organization of the Company were expensed on the Company's consolidated statement of operations as incurred. These expenses consist primarily of legal fees and other costs of forming and organizing the Company.

Costs associated with the offering of the Company’s Shares, and any additional expenses for other offerings, are capitalized and included in prepaid expenses and other assets on the consolidated statement of assets and liabilities and amortized over a twelve-month period beginning with the commencement of operations or the point in time when the cost was incurred if after the commencement of operations. These expenses consist primarily of legal fees and other costs incurred in connection with the Company’s Private Offering of its Shares.

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Deferred Financing Costs and Debt Issuance Costs

Deferred financing and debt issuance costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. These expenses are deferred and amortized into interest expense over the life of the related debt instrument using the straight-line method. Debt issuance costs are presented in the consolidated statement of assets and liabilities as a direct deduction of the debt liability to which the costs pertain.

Income Taxes

The Company has elected to be regulated as a BDC under the 1940 Act. The Company has elected, and intends to ~~elect~~qualify annually, to be treated for U.S. federal income tax purposes as a RIC under the Code. So long as the Company maintains its ~~status~~tax treatment as a RIC, it generally will not ~~pay corporate-level~~be subject to U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually to its shareholders as dividends. Rather, any tax liability related to income earned and distributed by the Company would represent obligations of the Company’s investors and would not be reflected in the consolidated financial statements of the Company.

To qualify for and maintain qualification as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements. In addition, to qualify for RIC tax treatment, the Company must distribute to its shareholders, for each taxable year, at least 90% of the sum of (i) its “investment company taxable income” for that year (without regard to the deduction for dividends paid), which is generally its ordinary income plus the excess, if any, of its realized net short-term capital gains over its realized net long-term capital losses and (ii) its net tax-exempt income.

The Company is generally subject to a 4% nondeductible federal excise tax if it does not distribute to its shareholders in a timely manner in each taxable year an amount at least equal to the sum of (i) 98% of its ordinary income for the calendar year, (ii) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (iii) any income realized, but not distributed, in prior years.

The Company follows ASC 740, Income Taxes (“(“ASC 740”). ASC 740 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. ASC 740 requires the Company to evaluate tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are reserved and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof.

The Company’s tax returns are subject to tax examination by major taxing authorities for a period of three years from when they are filed. The Company is additionally not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months. As a result, no income tax liability or expense has been recorded on the accompanying consolidated financial statements as of both ~~March 31,~~September 30, 2023 and December 31, 2022. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense on the consolidated statement of operations. During the three and nine months ended ~~March 31,~~September 30, 2023 and 2022, the Company did not incur any interest or penalties.

Prior to the Corporate Conversion, the Company was treated as a partnership for U.S. tax purposes and incurred no U.S. federal, state, city, or foreign income tax liability on income earned during that period. Instead, each partner reported his or her share of the Company's income, capital gain/(loss) and credit on his or her own tax return. Consequently, no provision for income taxes had been recorded in the consolidated financial statements.

Distributions

To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its Shareholders. Distributions to Shareholders are recorded on the record date. All distributions will be paid at the discretion of the Board and will depend on the Company's earnings, financial condition, maintenance of the Company's tax treatment as a RIC, compliance with applicable BDC regulations and such other factors as the Board may deem relevant from time to time.

Recent Accounting Pronouncements

In January 2021, the FASB issued Accounting Standards Update 2021-01 (“ASU 2021-01”), Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. ASU 2021-01 iswas effective for all entities through December 31, 2022. On December 21, 2022, the FASB issued Accounting Standards Update 2022-06 (“ASU 2022-06“) to defer the sunset date of ASC 848 until December 31, 2024. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2024, except for hedging transactions as of December 31, 2024, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company has evaluated and will continue to evaluate the adoption of ASU 2021-01 and has determined it has no material impact on its consolidated financial statements at this time.

Note 3. Agreements and Related Party Transactions

Initial Portfolio Acquisition

Commencing on the Initial Closing Date and concluding prior to the Company's election to be regulated as a BDC, the Company completed its purchase of a portfolio of investments (the “Initial Portfolio”) pursuant to agreements entered into with several funds managed by the Adviser (the “Initial Portfolio Acquisition”). Subsequent to the Initial Portfolio Acquisition the Company elected to be regulated as a BDC.

Investment Advisory Agreement

On November 24, 2021, the Company entered into the Original Advisory Agreement with the Adviser, pursuant to which the Adviser manages the Company on a day-to-day basis. The Adviser is responsible for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring the Company’s investments and monitoring its investments and portfolio companies on an ongoing basis.

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Adviser. Effective January 1, 2023, the Company entered into the Advisory Agreement. The terms of the Advisory Agreement are substantially identical to those of the Original Advisory Agreement. Pursuant to the Advisory Agreement the Adviser is responsible for managing the investment and reinvestment of the assets of the Company, subject to the supervision of the Board, in accordance with the investment objective, policies and restrictions that are set forth in the Company’s registration statement on Form 10. The Adviser

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is also responsible for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring the Company’s investments and monitoring its investments and portfolio companies on an ongoing basis. For its services, the Adviser is entitled to receive a base management fee and an incentive fee as set forth in the ~~New~~ Advisory Agreement.

The Advisory Agreement may be terminated at any time, without the payment of any penalty upon 60 days' written notice, by the vote of a majority of the Board, in accordance with the requirements of the 1940 Act, or by the Adviser. Additionally, the Advisory Agreement will automatically terminate in event of an assignment. Unless earlier terminated, the Advisory Agreement will remain in effect for a period of two years from January 1, 2023 and will remain in effect year to year thereafter if approved annually (i) by a majority of the Board who are not “interested persons” ~~according to~~as defined in section 2(a)(19) of the 1940 Act (each an “Independent Director”) and (ii) the Board or the holders of a majority of the Company's outstanding voting securities.

From time to time, the Adviser may pay amounts owed by the Company to third-party providers of goods and services, and the Company will subsequently reimburse the Adviser for such amounts paid on its behalf. Amounts payable to the Adviser are settled in the normal course of business without formal payment terms

The Company pays the Adviser a fee for its services under the Advisory Agreement consisting of two components: a management fee (the “Management Fee”) and an incentive fee (the “Incentive Fee”). The cost of both the Management Fee and the Incentive Fee will ultimately be borne by the Shareholders.

Management Fee

The Management Fee is payable quarterly in arrears and shall be calculated as follows:

•

Prior to an initial public offering of the Company’s common stock and/or listing on a nationally recognized stock exchange (an “Exchange Listing”), the Management Fee shall be calculated at a rate of 0.1875% per quarter (0.75% per annum) of the Company’s average gross asset value, excluding cash and cash equivalents, at the end of the Company's two most recently completed calendar quarters.

•

Following an Exchange Listing, the Management Fee will be calculated at a rate of 0.3125% per quarter (1.25% per annum) of the Company's average gross asset value, excluding cash and cash equivalents, at the end of the Company's two most recently completed calendar quarters (or for the first quarter following an Exchange Listing, the average gross assets as of the date of the Exchange Listing and the end of such calendar quarter).

For purposes of the Advisory Agreement, gross assets means the Company’s total assets determined on a consolidated basis in accordance with U.S. GAAP, including assets purchased with borrowed amounts. For avoidance of a doubt total assets does not include any undrawn Capital Commitments. For the first calendar quarter in which the Company had operations, gross assets were measured as the average of gross assets at the Initial Drawdown Date and at the end of such first calendar quarter. The Management Fee will be appropriately adjusted for any share issuances or repurchases during the applicable period. If an Exchange Listing occurs on a date other than the first day of a calendar quarter, the management fee will be calculated for such calendar quarter at a weighted rate calculated based on the fee rates applicable before and after the Exchange Listing based on the number of days in such calendar quarter before and after the Exchange Listing.

Incentive Fees

The incentive fee consists of two components that are determined independently of each other, with the result that one component may be payable even if the other is not. One component is based on income (the “Income-Based Fee”) and the other component is based on capital gains (the “Capital Gains Fee”), each as described below:

The Company pays the Income-Based Fee with respect to the pre-incentive fee net investment income in each calendar quarter as follows:

•

No income-based incentive fee if the Company’s pre-incentive fee net investment income, expressed as a return on the value of our net assets at the end of the immediately preceding calendar quarter, does not exceed the hurdle rate of 1.5%;

•

100% of the Company’s pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than or equal to 1.77% (7.06% annualized) of the value of the Company’s net assets at the beginning of each applicable calendar quarter. This “catch-up” portion is meant to provide the Adviser with approximately 15% of the Company’s pre-incentive fee net investment income as if a hurdle rate did not apply if the “catch-up” is achieved; and

•

15% of the Company’s pre-incentive fee net investment income, if any, that exceeds the rate of return of 1.77% (7.06% annualized).

These calculations are prorated for any period of less than three months and adjusted for any share issuances or repurchases during the relevant quarter.

The Capital Gains Fee will be determined and payable in arrears as of the end of each calendar year in an amount equal to 15% of realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees as calculated in accordance with U.S. GAAP. The Company will accrue, but will not pay, a capital gains incentive fee with respect to unrealized appreciation because a capital gains incentive fee would be owed to the Adviser if the Company were to sell the relevant investment and realize a capital gain.

Administration Agreement

On November 24, 2021, the Company entered into the Original Administration Agreement with the Administrator. Under the terms of the ~~Original~~ Administration Agreement, the Administrator provides, or oversees the performance of, administrative and compliance services, including, but not limited to, maintaining financial records, overseeing the calculation of NAV, compliance monitoring (including diligence and oversight of the Company’s other service providers), preparing reports to Shareholders and reports filed with the ~~United States~~ SEC, preparing materials and coordinating meetings of the Board, managing

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the payment of expenses and the performance of administrative and professional services rendered by others and providing office space, equipment and office services. The Administrator may also offer to provide, on the Company’s behalf, managerial assistance to the Company’s portfolio companies.

~~Effective January 1, 2023, the Company entered into the Administration Agreement (the “Administration Agreement”).~~ The terms of the Administration Agreement

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are substantially similar to the ~~prior administration agreement that was executed on November 24, 2021,~~Original Administration Agreement, except that the reimbursements required to be made to the Administrator by the Company will be capped such that the amounts will not exceed an amount of 0.15% of the total gross assets of the Company in any one calendar year. Under the Administration Agreement, the Administrator furnishes the Company with office facilities and equipment and provides clerical, bookkeeping, recordkeeping and other administrative services at such ~~facilities~~facilities.

The Administration Agreement may be terminated at any time, without the payment of any penalty upon 60 days' written notice, by a vote of the outstanding voting securities of the Company, by the vote of a majority of the Board, or by the Administrator. Unless earlier terminated, the ~~Investment Advisory~~Administration Agreement will remain in effect for a period of two years from January 1, 2023 and will remain in effect year to year thereafter if approved annually (i) by a majority of the Independent Directors and (ii) the Board or the holders of a majority of the Company's outstanding voting securities

For providing these services, the Company will reimburse the Administrator for its costs, expenses and allocable portion of overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement, including but not limited to: (i) the Company’s chief compliance officer, chief financial officer and their respective staffs; (ii) investor relations, legal, information technology, operations and other non-investment professionals at the Administrator that perform duties for the Company; and (iii) any internal audit group personnel of MSD or any of its affiliates, subject to the limitations described in the Administration ~~Cap.~~Agreement.

Co-Investment Transactions Exemptive Relief

The Company was granted an SEC exemptive order, which grants the Company exemptive relief permitting the Company, subject to the satisfaction of specific conditions and requirements, to co-invest in privately negotiated investment transactions with certain affiliates of the Adviser.

License Agreement

The Company has entered into a license agreement (the “License Agreement”), pursuant to which the Adviser has granted the Company a non-exclusive license to use the name “MSD.” Under the License Agreement, the Company has a right to use the MSD name for so long as the Adviser or one of its affiliates remains the Company’s investment adviser. Other than with respect to this limited license, the Company will have no legal right to the “MSD” name or logo.

The following table presents the related party fees, expenses and transactions for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022:


		For the Three Months Ended March 31,						For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Related Party	Source Agreement & Description	2023		2022			Source Agreement & Description	2023		2022		2023		2022
	Consolidated statement of operations:						Consolidated statement of operations:
Adviser	Advisory Agreement - management fees	$	2,026	$	1,328		Advisory Agreement - management fees	$	3,121	$	1,641	$	7,751	$	4,425
Adviser	Advisory Agreement - income based incentive fee		3,030		1,289		Advisory Agreement - income based incentive fee		4,542		1,820		11,827		4,614
Adviser	Advisory Agreement - board of directors' fees		77		58		Advisory Agreement - board of directors' fees		77		78		232		213
Adviser	Advisory Agreement - capital gains incentive fee		—		(256	)	Advisory Agreement - capital gains incentive fee		—		—		—		(256	)
Administrator	Administration Agreement - administration expense		548		413		Administration Agreement - administration expense		581		372		1,621		1,075

Note 4. Investments

The composition of the Company’s investment portfolio at amortized cost and fair value as of ~~March 31,~~September 30, 2023 and December 31, 2022 was as follows:


	March 31, 2023							December 31, 2022							September 30, 2023							December 31, 2022
	Amortized Cost		Fair Value		% of Total Investments at Fair Value			Amortized Cost		Fair Value		% of Total Investments at Fair Value			Amortized Cost		Fair Value		% of Total Investments at Fair Value			Amortized Cost		Fair Value		% of Total Investments at Fair Value
First lien debt	$	969,594	$	951,303		80.13	%	$	774,611	$	748,545		76.25	%	$	1,494,350	$	1,491,527		85.91	%	$	774,611	$	748,545		76.25	%
Second lien debt		228,110		212,776		17.92			227,937		210,926		21.48			228,495		219,547		12.65			227,937		210,926		21.48
Preferred equity		29,745		23,156		1.95			28,519		22,267		2.27			30,807		25,039		1.44			28,519		22,267		2.27
Total investments	$	1,227,449	$	1,187,235		100.00	%	$	1,031,067	$	981,738		100.00	%	$	1,753,652	$	1,736,113		100.00	%	$	1,031,067	$	981,738		100.00	%

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The industry composition of investments at fair value as of ~~March 31,~~September 30, 2023 and December 31, 2022 was as follows:


	March 31, 2023			December 31, 2022			September 30, 2023			December 31, 2022
Aerospace & Defense		10.02	%		7.04	%		7.78	%		7.04	%
Automobile		0.19			0.20			0.14			0.20
Banking, Finance, Insurance & Real Estate								(0.04	)		—
Beverage, Food & Tobacco		1.61			1.92			1.25			1.92
Capital Equipment		4.29			5.16			3.13			5.16
Chemicals, Plastics & Rubber		3.40			3.91			2.33			3.91
Consumer goods: Durable		0.66			—			0.79			—
Consumer goods: Non-durable		4.59			5.47			3.33			5.47
Energy: Oil & Gas		10.54			7.03			4.77			7.03
Healthcare & Pharmaceuticals		7.69			9.01			5.37			9.01
High Tech Industries		2.79			3.39			4.16			3.39
Hotel, Gaming & Leisure		5.48			6.58			4.35			6.58
Media: Advertising, Printing & Publishing		2.62			4.60			4.06			4.60
Media: Diversified & Production		7.63			9.21			5.33			9.21
Metals & Mining		0.27			0.32			—			0.32
Retail		4.55			2.33			7.10			2.33
Services: Business		14.05			12.90			15.53			12.90
Services: Consumer		13.85			16.62			9.76			16.62
Telecommunications		2.16			2.14			10.67			2.14
Transportation: Cargo								3.77			—
Transportation: Consumer								4.35			—
Wholesale		3.61			2.17			2.07			2.17
Total		100.00	%		100.00	%		100.00	%		100.00	%

The geographic composition of investments at cost and fair value as of ~~March 31,~~September 30, 2023 and December 31, 2022 was as follows:


	March 31, 2023										September 30, 2023
	Amortized Cost		Fair Value		% of Total Investments at Fair Value			Fair Value as % of Net Assets			Amortized Cost		Fair Value		% of Total Investments at Fair Value			Fair Value as % of Net Assets
United States	$	1,066,906	$	1,028,781		86.65	%		187.00	%	$	1,544,011	$	1,532,677		88.28	%		189.69	%
Canada		102,312		100,154		8.44			18.20			82,905		80,737		4.65			9.99
Luxembourg		55,515		56,058		4.72			10.19			77,468		74,107		4.27			9.17
United Kingdom		2,716		2,242		0.19			0.41			49,268		48,592		2.80			6.02
Total	$	1,227,449	$	1,187,235		100.00	%		215.80	%	$	1,753,652	$	1,736,113		100.00	%		214.87	%


	December 31, 2022
	Amortized Cost		Fair Value		% of Total Investments at Fair Value			Fair Value as % of Net Assets
United States	$	915,615	$	871,550		88.78	%		180.88	%
Canada		46,666		44,014		4.48			9.13
Luxembourg		51,305		50,273		5.12			10.43
Spain		14,764		13,917		1.42			2.89
United Kingdom		2,717		1,984		0.20			0.41
Total	$	1,031,067	$	981,738		100.00	%		203.74	%

As of both ~~March 31,~~September 30, 2023 and December 31, 2022, one investment in the portfolio was on non-accrual status.

As of ~~March 31,~~September 30, 2023, on a fair value basis, approximately ~~91.0~~94.5% of our performing debt investments bore interest at a floating rate and approximately ~~9.0~~5.5% of our performing debt investments bore interest at a fixed rate.

As of December 31, 2022, on a fair value basis, approximately 87.7% of our performing debt investments bore interest at a floating rate and approximately 12.3% of our performing debt investments bore interest at a fixed rate.

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Note 5. Derivative Instruments

The Company may enter into foreign currency forward contracts from time to time to facilitate the settlement of purchases and sales of investments denominated in foreign currencies and to economically hedge the impact that an adverse change in foreign exchange rates would have on the value of investments denominated in foreign currencies. A foreign currency forward contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. These contracts are marked-to-market by recognizing the difference between the contract forward exchange rate and the forward market exchange

~~Table of Contents~~

rate on the last day of the period presented as unrealized appreciation or depreciation. Realized gains or losses are recognized when forward contracts are settled. Risks arise as a result of the potential inability of the counterparties to meet the terms of their contracts; we attempt to limit counterparty risk by only dealing with well-known counterparties and those that ~~it believes~~we believe have the financial resources to honor their obligations. The foreign currency forward contracts open at the end of the period are generally indicative of the volume of activity during the period.

The following tables present the open foreign currency forward contracts as of ~~March 31,~~September 30, 2023 and December 31, 2022:


March 31, 2023
September 30, 2023													September 30, 2023
Foreign Currency	Settlement Date	Statement Location	Counterparty	Amount Transacted		Notional Value at Settlement		Notional Value at Period End		Fair Value				Settlement Date	Statement Location	Counterparty	Amount Transacted		Notional Value at Settlement		Notional Value at Period End		Fair Value
CAD	June 21, 2023	Unrealized depreciation on foreign currency forward contracts	Goldman Sachs International		CAD 133,162	$	97,042	$	98,622	$	(1,580	)		December 20, 2023	Unrealized appreciation on foreign currency forward contracts	Macquarie		CAD 113,150	$	83,912	$	83,436	$	476
GBP														December 20, 2023	Unrealized appreciation on foreign currency forward contracts	Macquarie		GBP 14,883		18,415		18,167		248
Total						$	97,042	$	98,622	$	(1,580	)							$	102,327	$	101,603	$	724


December 31, 2022
Foreign Currency	Settlement Date	Statement Location	Counterparty	Amount Transacted		Notional Value at Settlement			Notional Value at Period End			Fair Value
EUR	March 15, 2023	Unrealized depreciation on foreign currency forward contracts	Goldman Sachs International	€	12,688	$	13,574		$	13,652		$	(78	)
CAD	March 15, 2023	Unrealized depreciation on foreign currency forward contracts	Goldman Sachs International		CAD 59,121		43,460			43,712			(252	)
CAD	March 15, 2023	Unrealized depreciation on foreign currency forward contracts	Goldman Sachs International		CAD (3,151)		(2,336	)		(2,330	)		(6	)
Total						$	54,698		$	55,034		$	(336	)

The following table presents the net realized and unrealized gains and losses on derivative instruments recorded for the three and nine months ended ~~March 31, 2023:~~September 30, 2023 and 2022:


						For the Three Months Ended September 30,				For the Three Months Ended September 30,
	Statement Location	For the Three Months Ended March 31, 2023			Statement Location	2023		2022		2023			2022
Net realized gains (losses)
Foreign currency forward contracts	Net realized gains (losses) on foreign currency forward contracts	$	606		Net realized gains (losses) on foreign currency forward contracts	$	2,609	$	—	$	(1,024	)	$	—
Net change in unrealized appreciation (depreciation)
Foreign currency forward contracts	Net change in unrealized appreciation (depreciation) on foreign currency forward contracts	$	(1,245	)	Net change in unrealized appreciation (depreciation) on foreign currency forward contracts		343		3,374		1,060			3,374
Net realized and unrealized gains on foreign currency forward contracts		$	(639	)		$	2,952	$	3,374	$	36		$	3,374

~~There was no activity for the three months ended March 31, 2022.~~

For derivatives traded under an International Swaps and Derivatives Association Master Agreement (“ISDA Master Agreement”), the collateral requirements are typically calculated by netting the mark-to-market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Company or the counterparty. Cash collateral that has been pledged, if any, to cover obligations of the Company and cash collateral received from the counterparty, if any, is reported on the consolidated statements of assets and liabilities as collateral deposits (received) for foreign currency forward contracts. Generally, the amount of collateral due from or to a party has to exceed a minimum transfer amount threshold before a transfer is required. To the extent amounts due to the Company from a counterparty are not fully collateralized, the Company bears the risk of loss from counterparty non-performance.

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The following table presents the derivative assets and liabilities by counterparty, net of amounts available for offset under a master netting agreement or similar arrangement, and net of related collateral received for assets or pledged for liabilities as of ~~March 31,~~September 30, 2023 and December 31, 2022:

As of

Counterparty

Gross Derivative Assets in Statement of Assets and Liabilities

Gross Derivative Liabilities in Statement of Assets and Liabilities

Collateral Pledged (1)

Net position of Derivative Assets, Liabilities and Pledged Collateral

March 31, 2023

Goldman Sachs International

$
—

$
(1,580
)

$
1,580

$
—


As of	Counterparty	Gross Derivative Assets in Consolidated Statement of Assets and Liabilities		Gross Derivative Liabilities in Consolidated Statement of Assets and Liabilities		Collateral Pledged (1)		Net position of Derivative Assets, Liabilities and Pledged Collateral
September 30, 2023	Macquarie	$	724	$	—	$	—	$	724

~~Table of Contents~~


As of	Counterparty	Gross Derivative Assets in Statement of Assets and Liabilities		Gross Derivative Liabilities in Statement of Assets and Liabilities			Collateral Pledged (1)		Net position of Derivative Assets, Liabilities and Pledged Collateral		Counterparty	Gross Derivative Assets in Consolidated Statement of Assets and Liabilities		Gross Derivative Liabilities in Consolidated Statement of Assets and Liabilities			Collateral Pledged (1)		Net position of Derivative Assets, Liabilities and Pledged Collateral
December 31, 2022	Goldman Sachs International	$	—	$	(336	)	$	336	$	—	Goldman Sachs International	$	—	$	(336	)	$	336	$	—

(1)

Lesser of the amount pledged and the amount needed to offset the liability.

Note 6. Fair Value Measurements

The following tables present the fair value hierarchy of financial instruments, as of ~~March 31,~~September 30, 2023 and December 31, 2022, according to the fair value hierarchy as described in Note 2. Significant Accounting Policies:


	March 31, 2023													September 30, 2023
	Level 1			Level 2				Level 3			Total			Level 1			Level 2			Level 3			Total
First lien debt	$	—		$	315,657			$	635,646		$	951,303		$	—		$	551,226		$	940,301		$	1,491,527
Second lien debt		—			85,099				127,677			212,776			—			85,914			133,633			219,547
Preferred equity		—			—				23,156			23,156			—			—			25,039			25,039
Cash and cash equivalents		99,625			—				—			99,625			75,433			—			—			75,433
Total Portfolio Investments, Cash and Cash Equivalents	$	99,625		$	400,756			$	786,479		$	1,286,860		$	75,433		$	637,140		$	1,098,973		$	1,811,546
Percentage of total		7.74	%		31.14		%		61.12	%		100.00	%		4.16	%		35.17	%		60.66	%		100.00	%
Foreign currency forward contracts	$	—		$	(1,580	)		$	—		$	—		$	—		$	724		$	—		$	724


	December 31, 2022													December 31, 2022
	Level 1			Level 2				Level 3			Total			Level 1			Level 2			Level 3			Total
First lien debt	$	—		$	254,386			$	494,159		$	748,545		$	—		$	254,386		$	494,159		$	748,545
Second lien debt		—			15,239				195,687			210,926			—			15,239			195,687			210,926
Preferred equity		—			—				22,267			22,267			—			—			22,267			22,267
Cash and cash equivalents		36,616			—				—			36,616			36,616			—			—			36,616
Total Portfolio Investments, Cash and Cash Equivalents	$	36,616		$	269,625			$	712,113		$	1,018,354		$	36,616		$	269,625		$	712,113		$	1,018,354
Percentage of total		3.60	%		26.48		%		69.93	%		100.00	%		3.60	%		26.48	%		69.93	%		100.00	%
Foreign currency forward contracts	$	—		$	(336	)		$	—		$	—		$	—		$	(336	)	$	—		$	(336	)

Table of Contents

The following tables present changes in the fair value of financial instruments for which Level 3 inputs were used to determine the fair value for the three and nine months ended ~~March 31, 2023 and 2022:~~September 30, 2023:


	Three Months Ended March 31, 2023												Three Months Ended September 30, 2023
	First Lien Debt			Second Lien Debt			Preferred Equity			Total Investments			First Lien Debt			Second Lien Debt		Preferred Equity			Total Investments
Fair value, beginning of period	$	494,159		$	195,687		$	22,267		$	712,113		$	839,286		$	132,740	$	25,820		$	997,846
Purchase of investments (including PIK)		212,848			—			1,443			214,291			188,440			92		97			188,629
Proceeds from principal repayments and sales of investments		(34,411	)		—			(214	)		(34,625	)		(66,458	)		—		—			(66,458	)
Amortization of premium/accretion of discount, net		823			97			(3	)		917			661			13		(4	)		670
Net realized gain (loss) on investments		(683	)		—			(1	)		(684	)		539			—		—			539
Net change in unrealized appreciation (depreciation) on investments		3,095			143			(336	)		2,902			7,459			788		(874	)		7,373
Transfers out of Level 3 (1)		(40,185	)		(68,250	)		—			(108,435	)		(29,626	)		—		—			(29,626	)
Fair value, end of period	$	635,646		$	127,677		$	23,156		$	786,479		$	940,301		$	133,633	$	25,039		$	1,098,973
Net change in unrealized appreciation (depreciation) on non-controlled/non-affiliated company investments still held at March 31, 2023	$	2,248		$	143		$	(336	)	$	2,055
Net change in unrealized appreciation (depreciation) on non-controlled/non-affiliated company investments still held at September 30, 2023													$	7,690		$	788	$	(874	)	$	7,604


	For the Nine Months Ended September 30, 2023
	First Lien Debt			Second Lien Debt			Preferred Equity			Total Investments
Fair value, beginning of year	$	494,159		$	195,687		$	22,267		$	712,113
Purchase of investments (including PIK)		635,499			181			2,512			638,192
Proceeds from principal repayments and sales of investments		(136,446	)		—			(214	)		(136,660	)
Amortization of premium/accretion of discount, net		2,408			151			(9	)		2,550
Net realized gain (loss) on investments		68			—			(1	)		67
Net change in unrealized appreciation (depreciation) on investments		16,489			5,864			484			22,837
Transfers out of Level 3 (1)		(71,876	)		(68,250	)		—			(140,126	)
Fair value, end of period	$	940,301		$	133,633		$	25,039		$	1,098,973
Net change in unrealized appreciation (depreciation) on non-controlled/non-affiliated company investments still held at September 30, 2023	$	15,671		$	5,864		$	484		$	22,019

~~Table of Contents~~

For the Three Months Ended March 31, 2022

First Lien Debt

Second Lien Debt

Preferred Equity

Total Investments

Fair value, beginning of period
$
269,162

$
133,447

$
24,697

$
427,306

Purchase of investments (including PIK)

57,628

—

818

58,446

Proceeds from principal repayments and sales of investments

(7,694
)

(37,763
)

—

(45,457
)
Amortization of premium/accretion of discount, net

461

36

11

508

Net realized gain (loss) on investments

85

2,630

—

2,715

Net change in unrealized appreciation (depreciation) on investments

(961
)

(842
)

(410
)

(2,213
)
Transfers out of Level 3 (1)

(2,775
)

—

—

(2,775
)
Fair value, end of period
$
315,906

$
97,508

$
25,116

$
438,530

Net change in unrealized appreciation (depreciation) on non-controlled/non-affiliated company investments still held at March 31, 2022
$
(961
)

$
(853
)

$
(410
)

$
(2,224
)

(1)

Transfers are done at the value of the investment at the beginning of the period. For the three and nine months ended ~~March 31,~~September 30, 2023 ~~and 2022~~ ~~four~~one and ~~one~~six investments, respectively, were transferred from Level 3 to Level 2, as valuation coverage was increased to two or more independent pricing services. For the three and nine months ended September 30, 2023 there were no investments transferred from Level 2 to Level 3, as valuation coverage on level 2 investments did not drop below two independent pricing services.

The following tables present changes in the fair value of financial instruments for which Level 3 inputs were used to determine the fair value for the three and nine months ended September 30, 2022.


	For the Three Months Ended September 30, 2022
	First Lien Debt			Second Lien Debt			Preferred Equity			Total Investments
Fair value, beginning of period	$	293,666		$	144,739		$	24,957		$	463,362
Purchase of investments (including PIK)		65,385			14,201.00			892			80,478
Proceeds from principal repayments and sales of investments		(25,664	)		—			—			(25,664	)
Amortization of premium/accretion of discount, net		385			63			(6	)		442
Net realized gain (loss) on investments		(106	)		—			—			(106	)
Net change in unrealized appreciation (depreciation) on investments		(5,192	)		(5,432	)		(1,519	)		(12,143	)
Transfers out of Level 3 (1)		(2,588.00	)		—			—			(2,588.00	)
Transfers to Level 3 (2)		9,770			43,481			—			53,251
Fair value, end of period	$	335,656		$	197,052		$	24,324		$	557,032
Net change in unrealized appreciation (depreciation) on non-controlled/non-affiliated company investments still held at September 30, 2022	$	(5,192	)	$	(5,945	)	$	(1,519	)	$	(12,656	)

Table of Contents


	For the Nine Months Ended September 30, 2022
	First Lien Debt			Second Lien Debt			Preferred Equity			Total Investments
Fair value, beginning of year	$	269,162		$	133,447		$	24,697		$	427,306
Purchase of investments (including PIK)		144,603			32,313			2,565			179,481
Proceeds from principal repayments and sales of investments		(77,817	)		(37,763	)		—			(115,580	)
Amortization of premium/accretion of discount, net		1,278			143			6			1,427
Net realized gain (loss) on investments		951			2,630			—			3,581
Net change in unrealized appreciation (depreciation) on investments		(9,655	)		(10,624	)		(2,944	)		(23,223	)
Transfers out of Level 3 (1)		(5,362	)		—			—			(5,362	)
Transfers to Level 3 (2)		12,496			76,906			—			89,402
Fair value, end of period	$	335,656		$	197,052		$	24,324		$	557,032
Net change in unrealized depreciation on non-controlled/non-affiliated company investments still held at September 30, 2022		(9,993	)		(11,764	)		(2,944	)		(24,701	)

(1)

Transfers are done at the value of the investment at the beginning of the period. For the three and nine months ended September 30, 2022 one and two investments, respectively, were transferred from Level 3 to Level 2, as valuation coverage was increased to two or more independent pricing services.

(2)

Transfers are done at the value of the investment at the beginning of the period. For the three and nine months ended September 30, 2022 two and three investments, respectively, were transferred from Level 2 to Level 3, as valuation coverage was reduced to one or less independent pricing service.

The Company generally employs the Income Based Approach (as described below) to estimate the fair value of the investment. Additionally, the Company may employ the Market Based Approach (as described below) to assess the total enterprise value of the portfolio company or any applicable collateral, in order to evaluate coverage of the Company’s debt investment.

Income Based Approach: The Company may use a discounted cash flow analysis to estimate the fair value of the investment, specifically the yield method. Projected cash flows represent the relevant investment’s contractual interest, fee and principal payments plus the assumption of full principal recovery at the investment’s expected maturity date. These cash flows are discounted at a rate that is calibrated to the initial transaction and monitored over time to adjust for changes in observed market spreads and yields since the issuance of the investment as well as changes in company specific factors. Significant increases or decreases in the discount rate would result in a decrease or increase in the fair value measurement.

Market Based Approach: The Company may estimate the total enterprise value of each portfolio company by utilizing cash flow (typically EBITDA or revenue, or the relevant industry metric) multiples of publicly traded comparable companies and comparable transactions. The Company considers numerous factors when selecting the appropriate companies whose trading multiples are used to value its portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, and relevant risk factors, as well as size, profitability and growth expectations. The Company may apply an average of various relevant comparable company multiples to the portfolio company’s latest twelve month EBITDA, revenue or other applicable metric to calculate the enterprise value of the portfolio company. The Company may also consider projected multiples in the assessment if applicable.

The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 financial instruments as of ~~March 31,~~September 30, 2023 and December 31, 2022, respectively. The tables are not intended to be all-inclusive, but instead capture the significant unobservable inputs relevant to the Company’s determination of fair value.


	March 31, 2023													September 30, 2023
					Range													Range
	Fair Value		Valuation Technique	Unobservable Input (1)	Low			High			Weighted Average (2)			Fair Value		Valuation Technique	Unobservable Input (1)	Low			High			Weighted Average (2)
First lien debt	$	603,736	Market Yield Analysis	Market Yield Discount Rates		9.98	%		24.10	%		13.93	%	$	865,591	Market Yield Analysis	Market Yield Discount Rates		10.43	%		25.15	%		13.24	%
															74,711	Recent Transaction	Transaction Price	n/a			n/a
															940,302
Second lien debt		127,678	Market Yield Analysis	Market Yield Discount Rates		12.74	%		16.30	%		14.27	%		133,632	Market Yield Analysis	Market Yield Discount Rates		12.77	%		15.39	%		13.81	%
															133,632
Preferred equity		22,761	Market Yield Analysis	Market Yield Discount Rates		17.53	%		20.94	%		19.24	%		25,039	Market Yield Analysis	Market Yield Discount Rates		9.25	%		21.23	%		18.43	%
																Black-Scholes	Volatility		39.20	%		39.20	%		39.20	%
Total	$	754,175												$	1,098,973

Table of Contents


	December 31, 2022
					Range
	Fair Value		Valuation Technique	Unobservable Input (1)	Low			High			Weighted Average (2)
First lien debt	$	408,366	Market Yield Analysis	Market Yield Discount Rates		10.48	%		24.98	%		14.09	%
		13,917	Recent Transaction	Transaction Price		100.00			100.00			100.00
		422,283
Second lien debt		127,437	Market Yield Analysis	Market Yield Discount Rates		13.24	%		15.87	%		14.49	%
		127,437
Preferred equity		22,267	Market Yield Analysis	Market Yield Discount Rates		17.11	%		20.52	%		18.81	%
Total	$	571,987

(1)

The Company generally uses prices provided by an independent pricing service, or directly from an independent broker, which are indicative prices on or near the valuation date as the primary basis for the fair valuation determinations for quoted senior secured bonds and loans. Since these prices are non-binding, they may not be indicative of fair value. Each quoted price is evaluated by the Adviser in conjunction with additional information compiled by it, including financial performance, recent business developments and various other factors. Investments with fair values determined in this manner were not included in the table above. As of ~~March 31,~~September 30, 2023 and December 31, 2022, the Company had investments of this nature measured at fair value totaling $~~32.3~~zero ~~million~~ and $140.1 million, respectively.

~~Table of Contents~~

(2)

Weighted averages are calculated based on fair value of investments.

Financial Instruments Disclosed, But Not Carried at Fair Value

Debt

The fair value of the Company’s credit facilities and loan repurchase obligations, which would be categorized as Level 3 within the fair value hierarchy, as of both ~~March 31,~~September 30, 2023 and December 31, 2022, respectively, approximates their carrying value as the credit facilities have variable interest based on selected short-term rates.

Other

The carrying amounts of the Company’s assets and liabilities, other than investments at fair value and debt, approximate fair value. These financial instruments are categorized as Level 3 within the fair value hierarchy.

Note 7. Borrowings

In accordance with the 1940 Act, with certain limitations, the Company is allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 150% after such ~~borrowing.~~borrowing if certain requirements are met.

The Company’s outstanding debt obligations as of ~~March 31,~~September 30, 2023 and December 31, 2022 were as follows:

March 31, 2023

Aggregate
Principal
Committed

Outstanding
Principal

Carrying
Value (1)

Unused
Portion (2)

Maturity Date
SPV I Facility

$
485,000

$
485,000

$
480,864

$
—

12/21/2026
Subscription Facility

200,000

200,000

199,626

—

12/21/2023
Total

$
685,000

$
685,000

$
680,490

$
—


	September 30, 2023
	Aggregate Principal Committed		Outstanding Principal		Carrying Value (1)		Unused Portion (2)		Maturity Date
SPV I facility	$	485,000	$	409,000	$	405,420	$	76,000	12/21/2026
SPV II facility		445,000		220,000		214,262		225,000	8/15/2028
Subscription facility		200,000		163,000		162,884		37,000	12/21/2023
Loan repurchase obligations		103,282		103,282		103,282		—	Various (3)
Total	$	1,233,282	$	895,282	$	885,848	$	338,000

December 31, 2022

Aggregate
Principal
Committed

Outstanding
Principal

Carrying
Value (1)

Unused
Portion (2)

Maturity Date
SPV I Facility

$
485,000

$
392,000

$
387,590

$
93,000

12/21/2026
Subscription Facility

200,000

145,000

144,499

55,000

12/21/2023
Total

$
685,000

$
537,000

$
532,089

$
148,000


	December 31, 2022
	Aggregate Principal Committed		Outstanding Principal		Carrying Value (1)		Unused Portion (2)		Maturity Date
SPV I facility	$	485,000	$	392,000	$	387,590	$	93,000	12/21/2026
Subscription facility		200,000		145,000		144,499		55,000	12/21/2023
Total	$	685,000	$	537,000	$	532,089	$	148,000

(1)

Carrying value is equal to outstanding principal amount net of unamortized financing costs.

(2)

The unused portion is the amount upon which commitment fees are based, if any.

(3)

Loan repurchase obligations entered into with Macquarie have a term of 90 days, with an option for repayment as early as 45 days. As of September 30, 2023, the remaining contractual maturities were between 33-61 days.

Table of Contents

The components of interest expense for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 were as follows:


	For the Three Months Ended March 31,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2023			2022			2023			2022			2023			2022
Stated interest expense	$	10,938		$	2,220		$	16,751		$	6,160		$	40,703		$	12,258
Unused/undrawn fees		31			258			192			54		$	234			420
Administration fees		295			250			310			250		$	912			750
Amortization of deferred financing costs		401			375			545			385		$	1,351			1,139
Total interest expense	$	11,665		$	3,103		$	17,798		$	6,849		$	43,200		$	14,567
Average borrowings	$	634,462		$	378,200		$	814,490		$	516,000		$	718,060		$	456,533

Weighted average interest rate (1)		7.10	%		2.89	%		8.47	%		5.01	%		7.77	%		3.92	%
Amortization of financing costs		0.25	%		0.40	%		0.27	%		0.30	%		0.25	%		0.33	%
Total borrowing costs		7.35	%		3.29	%		8.74	%		5.31	%		8.02	%		4.25	%

(1)

Calculated as the amount of the sum of stated interest expense, unused/undrawn fees, and administration fees all divided by the average borrowings during the reporting period. This number represents an annualized amount.

Description of the Company's Credit Facilities and Loan Repurchase Obligations

SPV I Facility

On December 21, 2021, SPV I, the Company’s wholly-owned subsidiary, entered into a senior secured revolving credit facility with Deutsche Bank AG, New York Branch (“DB”) ~~(the “SPV I Facility~~”), which was subsequently amended on November 21, 2022 and December 16, ~~2022.~~2022 (the “SPV I Facility”). DB serves as facility agent, U.S. Bank National Association serves as collateral agent and collateral custodian and the Company serves as servicer under the SPV I Facility.

As of the amendment on November 21, 2022 ~~amendment~~ advances under the SPV I Facility bear interest at a per annum rate equal to the three-month SOFR in effect, plus the applicable margin of 2.41% per annum, inclusive of a credit spread adjustment (“CSA”) of 0.26%, with a SOFR floor of 0.25%. SPV I pays a commitment fee of 0.25% per annum (or 0.50% per annum if borrowings are less than 75% of the commitment amount) on the average daily unused amount of the financing commitments until the third anniversary of the SPV I Facility. Additionally, SPV I pays DB an administrative agent fee 0.25% of the total commitment amount for serving as facility agent.

~~Table of Contents~~

Prior to the amendment on November 21, 2022, ~~amendment,~~ Advances under the SPV I Facility bore interest at a per annum rate equal to the three-month LIBOR in effect, plus the applicable margin of 2.15% per annum with a LIBOR floor of 0.25%. The commitment fee and the administrative agent fee were unchanged.

~~The~~In connection with the amendment on December 16, 2022, the maximum commitment amount of the SPV I Facility ~~which was~~increased from $400 million ~~as of December 31, 2021 increased~~ to $485 ~~million as of December 16, 2022.~~million. Proceeds from borrowings under the SPV I Facility ~~may be~~are used to fund portfolio investments by SPV I. The period during which SPV I may make borrowings under the SPV I Facility expires on December 31, 2024 and the SPV I Facility is scheduled to mature on December 21, 2026.

As of both September 30, 2023 and December 31, 2022, respectively, the Company was in compliance with all covenants associated with the SPV I Facility.

SPV II Facility

On August 15, 2023, SPV II entered into a Loan and Security Agreement (together with the exhibits and schedules thereto, the “Loan and Security Agreement”) with Citizens Bank N.A as lender and administrative agent, the Company as collateral manager, the other lenders party thereto, U.S. Bank Trust Company, National Association as collateral agent, and U.S. Bank National Association as account bank and collateral custodian (the “SPV II Facility”), which was subsequently amended on September 8, 2023.

Advances under the SPV II Facility bear interest at a per annum rate equal to SOFR in effect, plus an applicable margin of 2.75% per annum with a SOFR floor of 0.00%. SPV II pays a commitment fee of 0.25% per annum (or 0.50% per annum if borrowings are less than 75% of the commitment amount) on the average daily unused amount of the financing commitments until the third anniversary of the SPV II Facility.

The maximum commitment amount of the SPV II Facility is $445 million. Proceeds from borrowings under the SPV II Facility may be used to fund portfolio investments by SPV II. The period during which SPV II may make borrowings under the SPV II Facility expires on August 15, 2026 and the SPV II Facility is scheduled to mature on August 15, 2028.

As of September 30, 2023, the Company was in compliance with all covenants associated with the SPV II Facility.

Subscription Facility

On December 21, 2021, the Company entered into a senior secured revolving credit facility (the “Subscription Facility”) with Bank of America, N.A. (“BAML”). BAML serves as administrative agent and lender.

The Subscription Facility provides for secured borrowings of up to $200 million. The maximum principal amount is subject to availability under the Subscription Facility, which is based on certain of the Company’s unfunded investor equity capital commitments, and restrictions imposed on borrowings under the 1940 Act. The Subscription Facility provides for the issuance of letters of credit on behalf of the Company in an aggregate face amount not to exceed $40 million. Proceeds from the borrowings under the Subscription Facility ~~may be~~are used for general corporate purposes of the Company and its subsidiaries in the ordinary course of business. On December 21, 2022, the Subscription Facility’s maturity date was extended from December 21, 2022 to December 21, 2023.

Table of Contents

Advances under the Subscription Facility generally bear interest at a per annum rate equal to the daily Bloomberg Short-Term Bank Yield Index (“BSBY”) rate in effect, plus the applicable margin of 2.00% per annum. The Company pays a commitment fee of 0.25% per annum on the average daily unused amount of the financing commitments.

As of both ~~March 31,~~September 30, 2023 and December 31, 2022, respectively, the Company iswas in compliance with all covenants associated with ~~both~~the Subscription Facility.

Repurchase Obligations

In order to finance certain investment transactions, the Company may, from time to time, enter into repurchase agreements with Macquarie Bank Limited (“Macquarie”), whereby the Company sells to Macquarie an investment that it holds and concurrently enters into an agreement to repurchase the same investment at an agreed-upon price at a future date, not to exceed 90-days from the date it was sold (the “Macquarie Transaction”).

In accordance with ASC Topic 860, Transfers and Servicing, these Macquarie Transactions meet the criteria for secured borrowings. Accordingly, the investment financed by the Macquarie Transaction remains on the Company’s Statements of Assets and Liabilities as an asset, and the Company records a liability to reflect its ~~credit facilities.~~repurchase obligation to Macquarie (the “Repurchase Obligation”). The Repurchase Obligation is secured by the respective investment that is the subject of the repurchase agreement.

As of September 30, 2023, the Company had outstanding Repurchase Obligations of $103.3 million associated with repurchase agreements that were entered into on August 4, August 9, August 11, August 30, and September 1, 2023. Such Repurchase Obligations are collateralized by the Company’s term loan to Beacon Mobility Corp., in addition to a portion of the Company’s term loan holdings in Frontgrade Technologies, Emerald Exhibitions, Xponential Fitness, and BDO. Interest under these Repurchase Obligations is calculated at the inception of each repurchase agreement, as the 3 month SOFR rate in effect, plus the applicable margin of 3.50%. As of September 30, 2023, the remaining contractual maturities of the repurchase agreements were between 33-61 days. The Company had no outstanding Repurchase Obligations as of December 31, 2022.

Note 8. Commitments and Contingencies

Portfolio Company Commitments

The amounts associated with unfunded commitments to provide funds to portfolio companies are not recorded in the Company’s consolidated ~~statement~~statements of assets and liabilities. Since these commitments and the associated amounts may expire without being drawn upon, the total commitment amount does not necessarily represent a future cash requirement. As of ~~March 31,~~September 30, 2023 and December 31, 2022, the Company’s unfunded commitments consisted of the following:


March 31, 2023
September 30, 2023								September 30, 2023
Investments—non-controlled/non-affiliated	Commitment Type	Commitment Expiration Date	Unfunded Commitment		Fair Value				Commitment Type	Commitment Expiration Date	Unfunded Commitment		Fair Value
First and Second Lien Debt
Candle Media Co Ltd	Delayed Draw	6/18/2027	$	1,280	$	(58	)
Accession Risk Management									Delayed Draw	10/30/2026	$	49,700	$	(726	)
Beacon Mobility Corp.									Delayed Draw	12/31/2025		1,422		(43	)
Boasso Global									Delayed Draw	10/3/2024		2,438		16
Boasso Global									Revolver	7/1/2026		6,250		(53	)
Chromalloy Holdings LLC	Revolver	11/23/2027		4,615		(174	)		Revolver	11/23/2027		4,615		(53	)
Frontgrade Technologies Inc.	Revolver	1/9/2028		5,250		(154	)
DFS Holding Company	Delayed Draw	1/31/2029		4,615		(65	)		Delayed Draw	1/31/2029		3,000		6
Faraday Buyer, LLC	Delayed Draw	10/11/2028		3,167		(41	)		Delayed Draw	10/11/2028		741		10
Frontgrade Technologies Inc.									Revolver	1/9/2028		7,211		(80	)
LJ Perimeter Buyer, Inc	Delayed Draw	10/31/2028		5,265		(66	)		Delayed Draw	10/31/2028		3,042		14
Maxar Technologies Inc.									Revolver	5/3/2029		7,125		24
Momentive Global									Revolver	5/31/2029		5,714		(109	)
Natural Partners, Inc.	Revolver	11/29/2027		2,813		(86	)		Revolver	11/29/2027		2,813		(42	)
Wood Mackenzie, Inc.	Revolver	2/1/2028		2,963		(88	)
Systems Planning and Analysis, Inc.	Delayed Draw	8/16/2027		4,704		(160	)		Delayed Draw	8/16/2027		1,165		(5	)
Systems Planning and Analysis, Inc.	Revolver	8/16/2027		2,240		(93	)		Revolver	8/16/2027		3,136		(37	)
Wood Mackenzie, Inc.									Revolver	2/1/2028		2,963		(25	)
Total Unfunded Commitments			$	36,913	$	(985	)				$	101,335	$	(1,103	)


December 31, 2022
Investments—non-controlled/non-affiliated	Commitment Type	Commitment Expiration Date	Unfunded Commitment		Fair Value
First and Second Lien Debt
Candle Media Co Ltd	Delayed Draw	6/18/2027	$	1,280	$	(63	)
Chromalloy Holdings LLC	Revolver	11/23/2027		4,615		(182	)
Faraday Buyer, LLC	Delayed Draw	10/11/2028		3,167		(45	)
LJ Perimeter Buyer, Inc	Delayed Draw	10/31/2028		5,538		(76	)
Natural Partners, Inc.	Revolver	3/15/2028		2,813		(94	)
Systems Planning and Analysis, Inc. (fka Management Consulting & Research LLC)	Delayed Draw	8/16/2027		4,704		(134	)
Systems Planning and Analysis, Inc. (fka Management Consulting & Research LLC)	Revolver	8/16/2027		3,136		(113	)
Total Unfunded Commitments			$	25,253	$	(707	)

Table of Contents

Other Commitments and Contingencies

From time to time, the Company may become a party to certain legal proceedings incidental to the normal course of its business. At both ~~March 31,~~September 30, 2023 and December 31, 2022, management was not aware of any pending or threatened material litigation.

~~Table of Contents~~

Note 9. Net Assets

Subscriptions and Drawdowns

~~In connection with its formation, the~~The Company has the authority to issue up to 100 million shares. Through its Private Offerings the Company will from time to time enter into subscription agreements (the “Subscription Agreements”) with investors. Under the terms of the Subscription Agreements, investors are required to fund drawdowns to purchase the Company’s Shares up to the amount of their respective Capital Commitment on an as-needed basis each time the Company delivers a drawdown notice. As of ~~March 31,~~September 30, 2023, the Company had received Capital Commitments totaling $~~1.1~~1.4 billion ($~~502.6~~632.9 million remaining undrawn)~~, all of which were from affiliates of the Adviser.~~.

The following table summarizes the total shares issued and proceeds received related to the Company’s capital drawdowns delivered pursuant to the Subscription Agreements as of ~~March 31,~~September 30, 2023:


Share Issuance Date	Number of Shares Issued		Aggregate Offering Proceeds		Number of Shares Issued		Aggregate Offering Proceeds
December 21, 2021		12,000,000	$	299,988		12,000,000	$	299,988
June 23, 2022		2,509,410	$	60,000		2,509,410	$	60,000
September 21, 2022		2,787,307	$	65,000		2,787,307	$	65,000
December 29, 2022		2,991,256	$	65,000		2,991,256	$	65,000
March 8, 2023		2,601,909	$	60,000		2,601,909	$	60,000
April 21, 2023						4,446,421	$	100,000
August 8, 2023						3,225,807	$	75,000
Total		22,889,882	$	549,988		30,562,110	$	724,988

Distributions

The Company ~~had~~ declared the following distributions for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022:


			Regular		Special		Per Share						Regular		Special		Per Share
Date Declared	Record Date	Payment Date	Distribution		Distribution		Amount		Total Amount		Record Date	Payment Date	Distribution		Distribution		Amount		Total Amount
For Calendar Year 2023
March 13, 2023	March 29, 2023	April 17, 2023	$	0.65	$	—	$	0.65	$	16,073	March 29, 2023	April 17, 2023	$	0.65	$	—	$	0.65	$	16,073
June 21, 2023											June 21, 2023	June 28, 2023	$	0.65	$	—	$	0.65	$	19,378
August 3, 2023											August 4, 2023	September 28, 2023	$	—	$	0.03	$	0.03	$	917
August 3, 2023											September 15, 2023	September 28, 2023	$	0.65	$	—	$	0.65	$	21,965
							$	0.65	$	16,073							$	1.98	$	58,333
For Calendar Year 2022
March 30, 2022	March 31, 2022	April 15, 2022	$	0.57	$	0.03	$	0.60	$	7,200	March 31, 2022	April 15, 2022	$	0.57	$	0.03	$	0.60	$	7,200
June 28, 2022											June 29, 2022	July 15, 2022	$	0.57	$	0.06	$	0.63	$	9,321
September 20, 2022											September 20, 2022	October 17, 2022	$	0.57	$	—	$	0.57	$	8,646
							$	0.60	$	7,200							$	1.80	$	25,167

Dividend Reinvestment

The Company has adopted a dividend reinvestment plan (“DRP”), pursuant to which it reinvests all cash dividends declared by the Board on behalf of its Shareholders who elected not to receive their dividends in cash. Shareholders who have opted into the Company’s DRP will have their cash distributions automatically reinvested in additional shares as described below, rather than receiving the cash dividend or other distribution. A participating Shareholder will receive an amount of shares equal to the amount of the distribution on that participant’s shares divided by the most recent net asset value (“NAV”) per share that is available on the date such distribution was paid. Shareholders who receive distributions in the form of shares will generally be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions; however, since their cash distributions will be reinvested, those Shareholders will not receive cash with which to pay any applicable taxes. The Company intends to use newly issued shares to implement the ~~plan.~~DRP. Shares issued under the ~~dividend reinvestment plan~~DRP will not reduce outstanding Capital Commitments.

The following table summarizes the DRP shares issued to shareholders who have “opted in” to the DRP as of ~~March 31,~~September 30, 2023 and the value of such shares as of the payment dates:

Payment Date

DRP Shares Value

DRP Shares Issued

April 15, 2022

$
7,200

286,055

July 15, 2022

$
9,321

373,593

October 17, 2022

$
8,646

377,076

December 30, 2022

$
18,056

801,437

$
43,223

1,838,161

Table of Contents


Payment Date	DRP Shares Value		DRP Shares Issued
April 15, 2022	$	7,200		286,055
July 15, 2022	$	9,321		373,593
October 17, 2022	$	8,646		377,076
December 30, 2022	$	18,056		801,437
April 17, 2023	$	13,892		637,800
June 28, 2023	$	16,789		754,571
September 28, 2023	$	18,945		828,460
	$	92,849		4,058,992

~~The Company had~~ no ~~DRP shares issued to shareholders during the three months ended March 31, 2023 and 2022.~~

Note 10. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share during the three and nine months ended ~~March 31,~~September 30, 2023 and 2022:


	For the Three Months Ended March 31,				For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2023		2022		2023		2022			2023		2022
Net increase in net assets resulting from operations	$	24,387	$	4,590	$	37,828	$	(375	)	$	99,858	$	(13,741	)
Weighted average shares outstanding		22,812,352		12,000,000		32,466,609		15,408,512			28,032,111		13,297,224
Earnings per share	$	1.07	$	0.38	$	1.17	$	(0.02	)	$	3.56	$	(1.03	)

~~Table of Contents~~

Note 11. Financial Highlights

The following are the financial highlights for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022:


	For the Three Months Ended March 31,								For the Nine Months Ended September 30,
	2023				2022				2023			2022
Per Share Data:
Net assets, beginning of period	$	21.78			$	25.17			$	21.78		$	25.17
Net investment income (1)		0.76				0.63				2.39			1.99
Net realized gain (loss) (1)		(0.03	)			0.28				0.00			0.24
Net change in unrealized appreciation (depreciation) (2)		0.39				(0.53	)			1.19			(3.12	)
Net increase in net assets resulting from operations		1.12				0.38				3.58			(0.89	)
Distributions declared from net investment income (3)		(0.65	)			(0.60	)			(1.98	)		(1.80	)
Issuance of shares in connection with our DRP program										(0.04	)		0.05
Total increase (decrease) in net assets		0.47				(0.22	)			1.56			(2.64	)
Net assets, end of period	$	22.25			$	24.95			$	23.34		$	22.53
Shares outstanding, end of period		24,728,043				12,000,000				34,621,102			17,956,365
Total return based on NAV (4)		5.21		%		1.48		%		16.96	%		(3.69	)%
Ratios:
Expenses to average net assets (5)		13.83		%		8.74		%		14.04	%		10.28	%
Net investment income to average net assets (5)		13.14		%		9.88		%		13.96	%		10.34	%
Portfolio turnover rate (6)		3.44		%		12.32		%		16.36	%		29.30	%
Supplemental Data:
Net assets, end of period	$	550,161			$	299,388			$	807,998		$	404,611
Total capital commitments, end of period	$	1,052,651			$	800,000			$	1,357,933		$	975,906
Ratios of total contributed capital to total committed capital, end of period		52.25		%		37.50		%		53.39	%		43.55	%
Average debt outstanding	$	634,462			$	378,200			$	718,060		$	456,533
Asset coverage ratio (7)		180.3		%		169.8		%		190.3	%		179.2	%

(1)

The per share data was derived by using the weighted average shares outstanding during the period.

(2)

For the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022 the amount shown does not correspond with the aggregate amount for the period as it includes the effect of the timing of capital transactions.

(3)

The per share data was derived using the actual shares outstanding at the date of the relevant transaction (See Note 9).

(4)

Total return (not annualized) is calculated as the change in net assets per share during the period, plus distributions per share (assuming distributions are reinvested in accordance with the Company's distribution reinvestment plan), divided by the net assets per share at the beginning of the period.

(5)

Amounts are annualized except for non-recurring income and expenses (other income, organization and offering expenses and incentive fees on capital gains).

(6)

Portfolio turnover rate is calculated using the lesser of the year-to-date sales or year-to-date purchases over the average of the invested assets at fair value for the period reported.

(7)

In accordance with the 1940 Act, with certain, limitations, the Company is allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 150% after such borrowing.

Note 12. Subsequent Events

The Company’s management evaluated subsequent events through the date of ~~May 12,~~November 9, 2023, the date that the consolidated financial statements were ~~available to be~~ issued.

~~On April 7, 2023, the Company issued a capital drawdown~~32

Table of ~~its shareholders resulting in the issuance of~~ Contents~~4,446,421~~ ~~Shares for aggregate proceeds of $100.0~~ ~~million. The Shares were issued on April 21, 2023.~~

~~On April 14, 2023, the Company held a Subsequent Closing, resulting in additional Capital Commitments of $113.9~~ ~~million. As of May 12, 2023 the Company had total Capital Commitments of $1,166.6~~ ~~million.~~

Subsequent to ~~March 31,~~September 30, 2023, the Company invested in the senior secured loans of ~~Boasso Global,~~Circor International, Inc., and ~~Maxar Technologies,~~Highgate Hotels, L.P. In addition, the company increased its exposure in Charlotte Buyer, Inc., and Med ParentCo, LP.

Table of Contents

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

The information in this management's discussion and analysis of financial condition and results of operations relates to MSD Investment Corp., including its wholly-owned subsidiaries (collectively, "we", "us", "our" or the "Company"). The terms “Adviser” and “MSD” refer to MSD Partners, L.P., a Delaware limited partnership, in its capacity as our investment adviser, and the term “Administrator” refers to MSD Partners, L.P., a Delaware limited partnership, in its capacity as our administrator. The information contained in this section should be read in conjunction with “Item 1. Financial Statements.” The discussion contains forward-looking statements, which relate to future events our future performance or financial condition anand involves numerous risks and uncertainties, including, but not limited to, those risks set forth in section entitled “Part I Item 1A Risk Factors” in our most recent Annual Report on Form 10-K filed with the SEC on March 23, 2023.

Overview

We were established as a Delaware limited liability company on February 18, 2021, and converted to MSD Investment, LLC, a Maryland limited liability company, on October 22, 2021. On December 1, 2021, the Company entered into purchase agreements ~~with the Funds~~to acquire a portfolio of investments (the “Initial Portfolio”) pursuant to ~~which~~agreements entered into with several funds managed by the ~~Company agreed to acquire the~~ Adviser (the “Initial Portfolio Acquisition”). The Initial Portfolio was acquired for an aggregate cash purchase price equal to the fair value of such assets, plus accrued but unpaid interest as of the closing date, less any principal payments received between signing of the purchase agreements and the closing of the transactions contemplated thereby. The closing of the purchase of the Initial Portfolio by the Company occurred on December 21, 2021. As consideration for the Initial Portfolio, the Company paid ~~the Funds~~ an aggregate purchase price of $656.5 million. On December 28, 2021, the Company filed Articles of Conversion (and related Articles of Incorporation) with the Maryland Department of Assessments and Taxation in order to ~~effectuate the~~ convert to a Maryland corporation (the “Corporate ~~Conversion.~~Conversion”). In accordance with the Articles of Conversion and Maryland law, the Corporate Conversion became effective as of 12:01 a.m. on January 1, 2022 and, as result of the Corporate Conversion, each share representing a portion of the membership interests of the Company prior to the effective time of the Corporate Conversion was automatically converted into one share of common stock, par value $0.001 per share (the “Shares”), of the Company. In connection with the Corporate Conversion the Company changed its name from “MSD Investment, LLC” to “MSD Investment Corp.” On December 29, 2021, the Company filed a Form N-54A to elect to be ~~treated~~regulated as a business development company (”BDC”) under the Investment Company Act of 1940, ~~Act.~~as amended (the “1940 Act”).

We have elected, and intend to qualify annually thereafter, to be treated as a regulated investment company (”RIC”) for U.S. federal income tax purposes under Subchapter M of the Internal Revenue Code ~~for U.S. federal income tax purposes.~~of 1986, as amended (the “Code”). As a BDC and a RIC, we will be required to comply with certain regulatory requirements.

The Company’s investment objective is to invest in a broad range of portfolio companies, primarily through senior secured loans and notes where we believe the probability of losses are limited and the opportunity to generate attractive risk adjusted returns is maximized. The Adviser ~~(as defined below)~~ expects to execute this strategy by continuing its long history of leveraging its network to source and diligence what it believes to be attractive opportunities across a broad range of industries. The strategy will be executed by a team of experienced investment professionals who have more than a 20-year history of successfully deploying capital in both liquid and illiquid investments.

Economic Developments

Economic activity has continued to accelerate across sectors and regions. Nonetheless, we have observed and continue to observe supply chain interruptions, labor resource shortages, commodity inflation, rising interest rates, economic sanctions in response to international conflicts and instances of geopolitical, economic and financial market instability in the United States and abroad. One or more of these factors may contribute to increased market volatility and may have long- and short-term effects in the United States and worldwide financial markets.

Financial and Operating Highlights

The following table presents financial and operating highlights (i) as of ~~March 31,~~September 30, 2023 and December 31, 2022 and (ii) for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022:

As of

March 31, 2023

December 31, 2022

Total assets

$
1,311,590

$
1,047,077

Investments in portfolio companies, at fair value

$
1,187,235

$
981,738

Borrowings

$
685,000

$
537,000

Net assets

$
550,160

$
481,846

Net asset value per share

$
22.25

$
21.78

Leverage ratio (borrowings / total assets)

52.2
%

51.3
%

For the Three Months Ended March 31,

2023

2022

Average net assets
$
516,003

$
299,388

Average borrowings
$
634,462

$
378,200

Cost of investments purchased
$
230,754

$
106,080

Sales of investments
$
19,687

$
—

Principal repayments
$
17,661

$
86,461

Net investment income
$
17,263

$
7,564

Net realized gains (losses)
$
(742
)

$
3,320

Net change in unrealized appreciation (depreciation)
$
7,866

$
(6,294
)
Net increase (decrease) in net assets resulting from operations
$
24,387

$
4,590

Net investment income per share - basic and diluted
$
0.76

$
0.63

Earnings per share - basic and diluted
$
1.07

$
0.38


	As of
	September 30, 2023			December 31, 2022
Total assets	$	1,850,708		$	1,047,077
Investments in portfolio companies, at fair value	$	1,736,113		$	981,738
Borrowings	$	895,282		$	537,000
Net assets	$	807,998		$	481,846
Net asset value per share	$	23.34		$	21.78
Leverage ratio (borrowings / total assets)		48.4	%		51.3	%

2934

Table of Contents


	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2023		2022			2023			2022
Average net assets	$	753,552	$	371,961		$	634,778		$	336,327
Average borrowings	$	814,490	$	516,000		$	718,060		$	456,533
Cost of investments purchased	$	296,711	$	188,718		$	930,969		$	455,991
Sales of investments	$	28,249	$	23,583		$	47,936		$	58,842
Principal repayments	$	117,825	$	34,325		$	176,071		$	165,594
Net investment income	$	25,738	$	10,306		$	67,112		$	26,397
Net realized gains (losses)	$	4,563	$	(346	)	$	(98	)	$	3,131
Net change in unrealized appreciation (depreciation)	$	7,527	$	(10,335	)	$	32,844		$	(43,269	)
Net increase (decrease) in net assets resulting from operations	$	37,828	$	(375	)	$	99,858		$	(13,741	)
Net investment income per share - basic and diluted	$	0.79	$	0.67		$	2.39		$	1.99
Earnings per share - basic and diluted	$	1.17	$	(0.02	)	$	3.56		$	(1.03	)

Portfolio and Investment Activity for the Three and Nine Months Ended ~~March 31,~~September 30, 2023 and 2022

The following table presents our portfolio company activity for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022:


	For the Three Months Ended March 31,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2023			2022			2023			2022			2023			2022
Portfolio companies at beginning of period		41			30			55			36			41			30
Number of added portfolio companies		7			3			6			6			23			16
Number of exited portfolio companies		(2	)		(3	)		(5	)		(1	)		(8	)		(5	)
Portfolio companies at period end		46			30			56			41			56			41

Number of debt investments period end		61			35			78			48			78			48
Number of preferred equity investments at period end		2			1			3			1			3			1

The following ~~table presents~~tables present a roll-forward of all investment purchase, sale and repayment activity and changes in fair value, within our investment portfolio for the three and nine months ended ~~March 31, 2023 and 2022:~~September 30, 2023:


	Three Months Ended March 31, 2023													Three Months Ended September 30, 2023
	First Lien Debt			Second Lien Debt		Unsecured Debt		Preferred Equity			Total Investments			First Lien Debt			Second Lien Debt		Unsecured Debt		Preferred Equity			Total Investments
Fair value, beginning of period	$	748,545		$	210,926	$	—	$	22,267		$	981,738		$	1,328,721		$	218,228	$	—	$	25,820		$	1,572,769
Purchase of investments		230,253			—		—		501			230,754			296,516			98		—		97			296,711
Proceeds from principal repayments and sales of investments		(37,134	)		—		—		(214	)		(37,348	)		(146,074	)		—		—		—			(146,074	)
Other changes in fair value (1)		9,639			1,850		—		602			12,091			12,364			1,221		—		(878	)		12,707
Fair value, end of period	$	951,303		$	212,776	$	—	$	23,156		$	1,187,235		$	1,491,527		$	219,547	$	—	$	25,039		$	1,736,113


	Three Months Ended March 31, 2022														Nine Months Ended September 30, 2023
	First Lien Debt			Second Lien Debt			Unsecured Debt			Preferred Equity		Total Investments			First Lien Debt			Second Lien Debt		Unsecured Debt		Preferred Equity			Total Investments
Fair value, beginning of period	$	486,044		$	145,396		$	36,220		$	24,697	$	692,357
Fair value, beginning of year															$	748,545		$	210,926	$	—	$	22,267		$	981,738
Purchase of investments		67,145			38,935			—			—		106,080			930,273			98		—		598			930,969
Proceeds from principal repayments and sales of investments		(12,083	)		(37,763	)		(36,616	)		—		(86,462	)		(223,793	)		—		—		(214	)		(224,007	)
Other changes in fair value (1)		(2,213	)		619			396			419		(779	)		36,502			8,523		—		2,388			47,413
Fair value, end of period	$	538,893		$	147,187		$	—		$	25,116	$	711,196		$	1,491,527		$	219,547	$	—	$	25,039		$	1,736,113

(1)

Other changes in fair value includes changes resulting from realized and unrealized gains and losses, amortization/accretion and increases from PIK income.

The following tables present a roll-forward of all investment purchase, sale and repayment activity and changes at fair value, within our investment portfolio for the three and nine months ended September 30, 2022:


	Three Months Ended September 30, 2022
	First Lien Debt			Second Lien Debt			Unsecured Debt		Preferred Equity			Total Investments
Fair value, beginning of period	$	543,979		$	201,793		$	—	$	24,957		$	770,729
Purchase of investments		174,517			14,201			—		—			188,718
Proceeds from principal repayments and sales of investments		(57,909	)		—			—		—			(57,909	)
Other changes in fair value (1)		(5,595	)		(5,267	)		—		(633	)		(11,495	)
Fair value, end of period	$	654,992		$	210,727		$	—	$	24,324		$	890,043

Table of Contents


	Nine Months Ended September 30, 2022
	First Lien Debt			Second Lien Debt			Unsecured Debt			Preferred Equity			Total Investments
Fair value, beginning of year	$	486,044		$	145,396		$	36,220		$	24,697		$	692,357
Purchase of investments		340,756			115,235			—			—			455,991
Proceeds from principal repayments and sales of investments		(150,058	)		(37,763	)		(36,616	)		—			(224,437	)
Other changes in fair value (1)		(21,750	)		(12,141	)		396			(373	)		(33,868	)
Fair value, end of period	$	654,992		$	210,727		$	—		$	24,324		$	890,043

(1)

Other changes in fair value includes changes resulting from realized and unrealized gains and losses, amortization/accretion and increases from payment in kind (”PIK”) income.

The following table presents selected information regarding our investment portfolio as of ~~March 31,~~September 30, 2023 and December 31, 2022:

As of
March 31, 2023

December 31, 2022
Investments:

Number of portfolio companies

46

41

Number of investments

63

53

Average investment at fair value
$
18,845

$
18,523

Average cost of debt investments as a percentage of par (1)

97.68

%

97.88

%
Debt investments on non-accrual status as a percent of amortized cost of total debt investments

0.94

%

1.10

%
Debt investments on non-accrual status as a percent of fair value of total debt investments

0.31

%

0.40

%
Number of debt investments on non-accrual status

1

1

Weighted average net debt through tranche
4.3x

4.6x

Weighted average interest rate coverage
3.3x

3.5x

Percentage of sponsored investments

81.64

%

83.20

%

Floating interest rate debt investments:

Percent of debt portfolio (2)

91.0

%

87.7

%
Weighted average interest rate floors

0.72

%

0.70

%
Weighted average coupon spread to base interest rate

698

bps

674

bps
Weighted average effective yield on floating rate debt investments at amortized cost (3)

12.56

%

11.68

%

Fixed interest debt investments:

Percent of debt portfolio (2)

9.0

%

12.3

%
Weighted average coupon rate

9.74

%

9.43

%
Weighted average effective yield on fixed rate debt investments at amortized cost (3)

11.17

%

10.38

%

Other metrics:

Weighted average years to maturity on debt investments

4.17

years

4.23

years
Weighted average effective yield on the portfolio at amortized cost (3)

12.43

%

11.54

%

~~Table of Contents~~


	As of
	September 30, 2023			December 31, 2022
Investments:
Number of portfolio companies		56			41
Number of investments		81			53
Average investment at fair value	$	21,433		$	18,523
Average cost of debt investments as a percentage of par (1)		97.34	%		97.88	%
Debt investments on non-accrual status as a percent of amortized cost of total debt investments		0.69	%		1.10	%
Debt investments on non-accrual status as a percent of fair value of total debt investments		0.27	%		0.40	%
Number of debt investments on non-accrual status		1			1
Weighted Average EBITDA (mm) (2) (3)		244.5			249.2
Median EBITDA (mm) (2) (3)		156.7			95.4
Weighted average net debt through tranche (2)	4.27x			4.6x
Weighted average interest rate coverage (2)	2.35x			3.5x
Percentage of sponsored investments		83.28	%		83.20	%

Floating interest rate debt investments:
Percent of debt portfolio (4)		94.5	%		87.7	%
Weighted average interest rate floors		0.70	%		0.70	%
Weighted average coupon spread to base interest rate		657	bps		674	bps
Weighted average effective yield on floating rate debt investments at amortized cost (5)		12.87	%		11.68	%

Fixed interest debt investments: (6)
Percent of debt portfolio (4)		5.5	%		12.3	%
Weighted average coupon rate		9.76	%		9.43	%
Weighted average effective yield on fixed rate debt investments at amortized cost (5)		9.96	%		10.38	%

Other metrics:
Weighted average years to maturity on debt investments		4.06	years		4.23	years
Weighted average effective yield on the portfolio at amortized cost (5) (6)		12.71	%		11.54	%

(1)

Calculated as amortized cost of all debt investments divided by the par value of all debt investments.

(2)

Figures are based on portfolio company financial statements available to the Company at period end.

(3)

Added EBITDA data from December 31, 2022 for comparison purposes.

(4)

Percent is calculated as a percentage of fair value of total debt investments.

~~(3)~~(5)

Weighted average effective yield is calculated as the effective yield of each investment and weighted by its amortized cost as compared to the aggregate amortized cost of all ~~investments, regardless of whether they are income producing.~~investments.

(6)

Calculations exclude non-performing debt investments.

The following table presents the maturity schedule of our funded debt investments based on their principal amount as of:


	March 31, 2023					December 31, 2022					September 30, 2023					December 31, 2022
Maturity Year	Principal Amount		Percentage of Debt Portfolio			Principal Amount		Percentage of Debt Portfolio			Principal Amount		Percentage of Debt Portfolio			Principal Amount		Percentage of Debt Portfolio
2023	$	15,109		1.2	%	$	15,109		1.5	%	$	12,853		0.7	%	$	15,109		1.5	%
2024		72,098		5.9			72,098		7.0			17,103		1.0			72,098		7.0
2025		215,833		17.6			238,222		23.3			314,415		17.8			238,222		23.3
2026		240,239		19.6			135,865		13.3			397,422		22.5			135,865		13.3
2027		109,253		8.9			72,435		7.1			114,114		6.4			72,435		7.1
2028		222,800		18.2			259,567		25.3			349,834		19.8			259,567		25.3
2029		228,056		18.6			195,923		19.1			237,671		13.4			195,923		19.1
2030		122,787		10.0			35,000		3.4			326,489		18.4			35,000		3.4
	$	1,226,175		100.0	%	$	1,024,219		100.0	%	$	1,769,901		100.0	%	$	1,024,219		100.0	%

We utilize an investment rating system to monitor the credit profile of our underlying portfolio companies. We use a five-level ratings scale to classify individual investments.

Table of Contents

•

Investment Rating 1 - Investment is performing materially above expectations.

•

Investment Rating 2 - Investment is performing above expectations.

•

Investment Rating 3 - Investment is performing materially in-line with expectations. All new loans received a rating of 3 at initial investment.

•

Investment Rating 4 - Investment is performing materially below expectations. Investments with a rating of 4 receive more frequent attention from our team as the risks of impairment have increased substantially since investment. Loss of principal is not expected, however there may be lost interest.

•

Investment Rating 5 - Investment is performing materially below expectations and there is a high probability of impairment. Loss of principal and interest is probable.

The following tables show the investment rankings of the debt investments in our portfolio as of ~~March 31,~~September 30, 2023 and December 31, 2022:


	As of March 31, 2023							As of September 30, 2023
Risk Rating	Fair Value		% of Portfolio			# of Investments		Fair Value		% of Portfolio			# of Investments
1	$	—		0.0	%		—	$	—		0.0	%		—
2		148,207		12.5			8		117,396		6.8			4
3		1,015,675		85.5			52		1,611,702		92.8			75
4		23,353		2.0			3		7,015		0.4			2
5		—		0.0			—		—		0.0			—
	$	1,187,235		100.0	%		63	$	1,736,113		100.0	%		81


	As of December 31, 2022
Risk Rating	Fair Value		% of Portfolio			# of Investments
1	$	—		0.0	%		—
2		116,109		11.8			7
3		859,792		87.6			44
4		5,837		0.6			2
5		—		0.0			—
	$	981,738		100.0	%		53

Results of Operations

Revenues

We generate revenues primarily in the form of interest on the debt securities of portfolio companies that we acquire and hold for investment purposes. Our investments in debt securities generally have expected maturities of two to eight years, although we have no lower or upper constraint on maturity, and typically earn interest at floating and fixed interest rates. Interest on our debt securities is generally payable to us monthly, quarterly or semi-annually. The outstanding principal amount of our debt securities and any accrued but unpaid interest will generally become due at the respective maturity dates. In addition, we may generate revenue in the form of dividends from preferred and common equity investments, amortization of original issue discount, prepayment fees, commitment fees, origination fees and fees for providing significant managerial assistance.

~~Table of Contents~~

Operating Expenses

Our primary operating expenses include a management fee and, depending on our operating results, a performance-based incentive fee, interest expense, administrative services, custodian and accounting services and other third-party professional services fees and expenses. The management and performance-based incentive fees compensate the Adviser for its services in identifying, evaluating, negotiating, closing and monitoring our investments.

Operating ~~Results~~results for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 are presented below:


	For the Three Months Ended March 31,						For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2023			2022			2023		2022			2023			2022
Total investment income	$	35,118		$	14,031		$	52,622	$	21,587		$	133,773		$	52,644
Total expenses		17,855			6,467			26,884		11,281			66,661			26,247
Net investment income		17,263			7,564			25,738		10,306			67,112			26,397
Net realized gain (loss)		(742	)		3,320			4,563		(346	)		(98	)		3,131
Net change in unrealized appreciation (depreciation)		7,866			(6,294	)		7,527		(10,335	)		32,844			(43,269	)
Net increase (decrease) in net assets resulting from operations	$	24,387		$	4,590		$	37,828	$	(375	)	$	99,858		$	(13,741	)

Table of Contents

Investment Income

Investment income consisted of the following components for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022:


	For the Three Months Ended March 31,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2023			2022			2023			2022			2023			2022
Interest income on debt securities
Cash interest	$	29,640		$	11,796		$	47,563		$	19,061		$	113,169		$	43,013
PIK interest		2,228			463			1,434			570			8,603			3,975
Net accretion/amortization of discounts/premiums		1,876			899			1,950			1,018			5,766			2,926
Total interest on debt securities		33,744			13,158			50,947			20,649			127,538			49,914
Dividend Income								1,021			—			1,021			—
PIK dividend		931			829			—			886			1,903			2,558
Total interest and dividend income		34,675			13,987			51,968			21,535			130,462			52,472
Other income		443			44			654			52			3,311			172
Total investment income	$	35,118		$	14,031		$	52,622		$	21,587		$	133,773		$	52,644
Average investments at cost (1)	$	1,129,258		$	703,299		$	1,675,572		$	868,518		$	1,402,415		$	785,908
Income return (2)		3.07	%		1.99	%		3.10	%		2.48	%		9.30	%		6.68	%

(1)

Average investments at cost is calculated as the simple average of the total investments at amortized cost at the beginning and end of the period.

(2)

Income return is calculated as total interest and dividend income for the period divided by average investments at cost.

Operating Expenses

Our operating expenses can be categorized into fixed operating expenses, variable operating expenses and performance-dependent expenses. Fixed operating expenses are generally static period over period. Variable expenses are calculated based on fund metrics such as total assets, net assets or total borrowings. Performance-dependent expenses fluctuate independent of our size.

The table below shows a breakdown of our operating expenses for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022:

~~Table of Contents~~


	For the Three Months Ended March 31,					For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2023		2022			2023		2022			2023		2022
Fixed Operating Expenses
Professional fees (1)	$	204	$	258		$	359	$	270		$	945	$	783
Board of directors' fees		77		58			77		78			232		213
General and other expenses		45		42			95		(14	)		239		102
Organization and offering costs (2)		18		120			2		124			21		345
Total fixed operating expenses		344		478			533		458			1,437		1,443

Variable operating expenses:
Interest expense (3)		11,665		3,103			17,798		6,849			43,200		14,567
Management fees		2,026		1,328			3,121		1,641			7,751		4,425
Administrative expense (4)		677		491			767		470			2,091		1,343
Custody expense		61		21			103		30			260		72
Transfer agency fees		52		13			20		13			95		39
Total variable operating expenses		14,481		4,956			21,809		9,003			53,397		20,446

Performance-dependent expenses:
Income based incentive fee		3,030		1,289			4,542		1,820			11,827		4,614
Capital gains incentive fee		—		(256	)		—		—			—		(256	)
Total performance-dependent expenses		3,030		1,033			4,542		1,820			11,827		4,358

Total expenses	$	17,855	$	6,467		$	26,884	$	11,281		$	66,661	$	26,247

(1)

Professional fees includes the expenses for third-party service providers such as internal and independent auditors, tax return preparer and tax consultant, third-party investment valuation firms, and fund legal counsel.

(2)

Organization and offering costs are associated with the initial formation, setup and distribution of the Company and may not be recurring.

(3)

The composition of our interest expense for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 is described more fully in Note 7. Borrowings of our accompanying consolidated financial statements.

(4)

Administrative services include the expenses for third-party services providers such as fund accountant, fund sub-administrator, and independent pricing services. Additionally, administrative expense includes costs reimbursable to the Administrator according to the terms of the administration agreement.

Net Realized and Unrealized Gains

For the three and nine months ended ~~March 31,~~September 30, 2023, ~~and 2022~~ our net realized gains (losses) were ~~($0.7)~~$4.6 million and ~~$3.3~~($0.1) million, respectively, and our net change in unrealized appreciation (depreciation) were ~~$7.9~~$7.5 million and ~~($6.3)~~$32.8 million.

Table of Contents

For the three and nine months ended September 30, 2022, our net realized gains (losses) were ($0.3) million and $3.1 million, respectively, and our net change in unrealized appreciation (depreciation) were ($10.3) million and ($43.3) million.

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States (“~~GAAP~~”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. The Company's comprehensive accounting policies are described more fully in Note 2. Significant Accounting Policies in the accompanying consolidated financial statements. We have identified “Basis of Presentation”, “Valuation of Investments”, and “Revenue Recognition” within Note 2 as critical accounting policies.

Valuation of Portfolio Investments and Net Asset Value of Shares

~~The Board, with~~Pursuant to Rule 2a-5 under the ~~assistance~~1940 Act, the Company's board of directors (the “Board”) has designated the Adviser as the Company's valuation designee (the “Valuation Designee”) to determine the fair value of the ~~Audit Committee, and in some cases an independent~~Company's investments that do not have readily available market quotations, which became effective for the fiscal quarter ended September 30, 2023. Pursuant to the Company’s valuation ~~firm,~~policy approved by the Board, the Valuation Designee will determine the fair value of the Company’s assets on at least a quarterly basis, in accordance with ~~ASC~~Accounting Standards Codification Topic ~~820.~~820, Fair Value Measurement. The audit committee of the Board (the “Audit Committee”) is comprised of directors who are not “interested persons,” as defined in Section 2(a)(19) of the 1940 Act, of the Company or the Adviser (each an “Independent ~~Directors.~~Director”).

Under procedures established by the Board, the Company intends to value investments for which market quotations are readily available at such market quotations. Assets listed on an exchange will be valued at their last sales prices as reported to the consolidated quotation service at 4:00 p.m. ~~eastern time~~Eastern Time on the date of determination. If no such sales of such securities occurred, such securities will be valued at the bid price as reported by an independent, third-party pricing service on the date of determination. Debt and equity securities that are not publicly traded or whose market prices are not readily available will be valued at fair value. Such determination of fair values may involve subjective judgments and estimates. The Company will also engage independent valuation providers to assist in the valuation of each investment that constitutes a material portion of the Company’s portfolio and that does not have a readily available market quotation at least once annually. With respect to unquoted securities, the ~~Adviser,~~Valuation Designee, together with any independent valuation advisers and the Audit Committee will ~~recommend~~determine fair ~~values to the Board for their ultimate determination.~~value. Elements that could be used to determine the fair value of an investment include, among other measures, discounted cash flow models, comparisons of financial ratios of peer companies that are public and other factors. The types of factors that may be considered in determining the fair values of investments include, but are not limited to, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings. The Company may appoint additional or different independent valuation firms in the future.

When an external event such as a purchase transaction, public offering or subsequent equity sale occurs with respect to a fair-valued portfolio company or comparable company, the ~~Board~~Valuation Designee will use the pricing indicated by the external event to corroborate and/or assist the Company in the valuation of such portfolio company. Because the Company expects that there will not be readily available market quotations for many of the investments in its portfolio, the Company expects to value many of its investments at fair value as determined in good faith by the ~~board of directors~~Valuation Designee using a documented valuation policy and a consistently applied valuation ~~process.~~process, subject to the continued oversight of the Board. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market ~~value,~~quotation, the fair value of the Company’s investments may differ significantly from the values that would have been used had readily available market quotations existed for such investments, and the differences could be material.

~~Table of Contents~~

On a quarterly basis, with respect to investments for which market quotations are not readily available, the Adviser will undertake a multi-step valuation process each quarter, as described below:

•

Securities for which no such market prices are readily available or reliable will be reviewed as part of the valuation process and preliminarily fair valued based on our estimate, or an independent third party's estimate, of the fair value as of the date of determination, and provided to the Adviser's valuation committee;

•

Preliminary valuation conclusions are documented and discussed with the Adviser's valuation committee;

•

Agreed upon valuation recommendations are presented to the ~~audit committee~~Audit Committee of the board of directors;

•

At least once annually, the valuation for each investment that constitutes a material portion of the Company's portfolio and that does not have readily available market quotation will be reviewed by an independent valuation firm; and

•

The Valuation Designee will providethe Board with the information relating to the fair value determination pursuant to the Company’s valuation policy in connection with each quarterly Board meeting, will ~~then~~complywith the periodic board reporting requirements set forth in the Company’s valuation policy, and will discuss ~~valuations and determine~~with the Board its determination of the fair value of each investment in ~~the Company's portfolio in~~ good ~~faith, based on the input of the Adviser, the respective independent valuation firms and the audit committee.~~faith.

All values assigned to securities and other assets by the ~~board of directors~~Valuation Designee will be binding on all Company investors. When pricing of the Company’s Shares is necessary outside of the normal quarterly process, the Adviser will, among other things, review whether, to its knowledge, significant events have occurred since the last quarterly valuation which might affect the fair value of any of the Company’s portfolio securities.

The ranges of unobservable inputs used in the fair value measurement of our investments classified as Level 3 fair valued as of ~~March 31,~~September 30, 2023 and December 31, 2022, respectively, are presented in Note 6. Fair Value Measurements in the accompanying consolidated financial statements.

In addition to impacting the fair value recorded for our investments on our consolidated statement of assets and liabilities, had we used different key unobservable inputs to determine the fair value of our investments, amounts recorded in our consolidated statement of operations, including the net change in unrealized appreciation and depreciation on investments, management and performance-based incentive fees would also be impacted. The table below outlines the impact on our results of a 5% increase in the fair value of our Level 3 investments for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022:

For the Three Months Ended March 31,

2023

2022

Fair value of level 3 investments at the end of the period
$
786,479

$
438,530

Fair value assuming a 5% increase in value

825,803

460,457

Increase in unrealized appreciation

39,324

21,927

(Increase) in management fees

(74
)

(41
)
(Increase) in capital gains incentive fees (1)

(5,899
)

(3,289
)
Increase in net assets resulting from operations
$
33,351

$
18,596

Weighted average shares outstanding

22,812,353

12,000,000

Shares outstanding at the end of the period

24,728,043

12,000,000

Increase in earnings per share
$
1.46

$
1.55

Increase in net assets per share
$
1.35

$
1.55

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	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2023			2022			2023			2022
Fair value of level 3 investments at the end of the period	$	1,098,973		$	557,032		$	1,098,973		$	557,032
Fair value assuming a 5% increase in value		1,153,922			584,884			1,153,922			584,884

Increase in unrealized appreciation		54,949			27,852			54,949			27,852
(Increase) in management fees		(103	)		(52	)		(309	)		(52	)
(Increase) in capital gains incentive fees (1)		(8,242	)		(4,177	)		(8,242	)		(4,177	)
Increase in net assets resulting from operations	$	46,603		$	23,623		$	46,397		$	23,623

Weighted average shares outstanding		32,466,609			15,408,512			28,032,111			13,297,224
Shares outstanding at the end of the period		32,621,102			17,956,365			32,621,102			17,956,365

Increase in earnings per share	$	1.44		$	1.53		$	1.66		$	1.78
Increase in net assets per share	$	1.43		$	1.32		$	1.42		$	1.32

(1)

Increase in capital gains incentive fee is calculated as 15% of the increase in unrealized appreciation.

Determination of Net Asset Value

The ~~Board~~Valuation Designee will determine the net asset value (”NAV”) of the ~~shares~~Shares at least quarterly. The NAV per share is equal to the value of the Company’s total assets minus its liabilities and the liquidation value of any preferred shares outstanding divided by the total number of shares outstanding. Additionally, in connection with each offering of shares, to the extent the Company does not have Shareholder approval to sell below NAV, the ~~Board~~Valuation Designee or an authorized committee thereof will be required to make a good faith determination that the Company is not selling shares at a price below the then current NAV of the shares at the time at which the sale is made.

The value of investments for which recent market quotations are readily available will be the market price. The ~~Board~~Valuation Designee will be responsible for determining the fair value of the portfolio investments for which market prices are not readily available in good faith, and in such other instances where portfolio investments require a fair value determination. Because the Company expects that there typically will not be a readily available market price for its target portfolio investments, the Company expects that the value of most of its portfolio investments will be their fair value as determined by the ~~Board~~Valuation Designee consistent with a documented valuation policy and consistently applied valuation process. In making these determinations, the ~~Board~~Valuation Designee will receive input from the Adviser, an independent valuation firm and the Audit Committee.

Hedging

The Company may enter into currency hedging contracts, interest rate hedging agreements such as futures, options, swaps and forward contracts, and credit hedging contracts, such as credit default swaps. As of ~~March 31,~~September 30, 2023 the Company had entered into foreign currency forward contracts in order to hedge its economic exposure to certain foreign currencies in which its investments were denominated (Note.5 Derivative Instruments). However, no assurance can be given that such hedging transactions will be effective.

Financial Condition, Liquidity and Capital Resources

~~Table of Contents~~

Our primary sources of cash and cash equivalents may include: (i) the sale of our Shares, (ii) borrowings under various financing arrangements, (iii) cash flows from interest, dividends and transaction fees earned from investment in portfolio companies and (iv) principal repayments and sale proceeds from our investments.

Our primary uses of cash will be for (i) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (ii) the cost of operations (including ~~paying~~fees payable to MSD in its capacity as the ~~Adviser)~~Adviser and the Administrator), (iii) debt service of any borrowings, and (iv) cash distributions to our Shareholders.

Liquidity

The tables below present a summary of our liquidity position as of ~~March 31,~~September 30, 2023 and December 31, 2022:


	March 31, 2023			December 31, 2022			September 30, 2023			December 31, 2022
Cash and cash equivalents	$	42,360		$	36,616		$	75,433		$	36,616
Unused borrowing capacity		—			148,000			338,000			148,000
Principal receivable		6,676			16,523			26,854			16,523
Unfunded investment commitments (1)		(36,913	)		(25,253	)		(101,334	)		(25,253	)
Undrawn capital commitments (2)		502,663			562,663			632,945			562,663
Other net working capital (3)		(72,359	)		(26,339	)		(145,416	)		(26,339	)
	$	442,427		$	712,210		$	826,482		$	712,210

(1)

For a comprehensive list of our unfunded investment commitments see the footnotes to our consolidated schedule of investments included in our accompanying consolidated financial statements.

(2)

Added undrawn capital commitments to December 31, 2022 for comparison purposes.

(3)

Other networking capital is interest receivable less all liabilities exclusive of debt.

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Capital Resources

We may from time to time enter into additional credit facilities and borrowing arrangements to increase the amount of our borrowings as our called equity capital increases. Accordingly, we cannot predict with certainty what terms any such financing would have or the costs we would incur in connection with any such financing arrangements. We are currently required to maintain a minimum asset coverage ratio (total assets-to-senior securities) of 150% under the 1940 ~~Act.~~Act if certain conditions are met.

The table below summarizes certain financing obligations that are expected to have an impact on our liquidity and cash flow in specified future interval periods:

Payments Due by Period

Total

Less than
1 year

1-3 years

3-5 years

After 5 years

SPV I Facility

$
485,000

$
—

$
—

$
485,000

$
—

Subscription Facility

200,000

200,000

—

—

—

Total Contractual Obligations

$
685,000

$
200,000

$
—

$
485,000

$
—


	Payments Due by Period
	Total		Less than 1 year		1-3 years		3-5 years		After 5 years
SPV I facility	$	409,000	$	—	$	—	$	409,000	$	—
SPV II facility		220,000		—		—		220,000		—
Subscription facility		163,000		163,000		—		—		—
Loan repurchase obligations		103,282		103,282		—		—		—
Total Contractual Obligations	$	895,282	$	266,282	$	—	$	629,000	$	—

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Valuation Risk

We have invested, and plan to continue to invest, primarily in illiquid debt and equity securities of private companies. Most of our investments will not have a readily available market price, and therefore, we will value these investments at fair value as determined in good faith by our Board, based on, among other things, the input of the Adviser, our Audit Committee and independent third-party valuation firm(s) engaged at the direction of the Board, and in accordance with our valuation policy. There is no single standard for determining fair value. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material.

Interest Rate Risk

We will be subject to financial market risks, including changes in interest rates. As of ~~March 31,~~September 30, 2023 ~~91.0%~~94.5% of our debt investments ~~(89.2%~~(93.2% of our total investments), or ~~$1,059.0 million~~$1.62 billion measured at fair value, are subject to floating interest rates. Additionally, ~~both of~~ the SPV I Facility, SPV II Facility, and the Subscription Facility are also subject to floating interest rates. A rise in the general level of interest rates can be expected to lead to (i) higher interest income from our floating rate debt investments, (ii) value declines for fixed interest rate investments we may hold and (iii) higher interest expense in connection with our credit facilities. Since the majority of our investments consist of floating rating investments, an increase in interest rates could also make it more difficult for borrowers to repay their loans, and a rise in interest rates may also make it easier for the Adviser to meet or exceed the quarterly threshold for Income-Based Fee as described in Note 3. Agreements and Related Party Transactions.

Since March 2022, the Federal Reserve has been rapidly raising interest rates and has indicated that it would consider additional rate hikes in response to ongoing inflation concerns. In a rising interest rate environment, our cost of funds would increase, which could reduce our net investment income if there is not a corresponding increase in interest income generated by our investment portfolio. It is possible that the Federal Reserve's tightening cycle could result the United States into a recession, which would likely decrease interest rates. A prolonged reduction in interest rates will reduce our gross investment income and could result in a decrease in our net investment income if such decreases in base rates, such as SOFR and other alternate rates, are not offset by corresponding increases in the spread over such base rate that we earn on any portfolio investments, a decrease in our operating expenses, or a decrease in the interest rate associated with our borrowings

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 100 or 200 basis points. Interest income is calculated as revenue from interest generated from our portfolio of investments held on ~~March 31,~~September 30, 2023. Interest expense is calculated based on the terms of the Financing Facilities, using the outstanding balances as of ~~March 31,~~September 30, 2023. The base interest rate case assumes the rates on our portfolio investments remain unchanged from the actual effective interest rates as of ~~March 31,~~September 30, 2023. These hypothetical calculations are based on a model of the investments in our portfolio, held as of ~~March 31,~~September 30, 2023, and are only adjusted for assumed changes in the underlying base interest rates. Actual results could differ significantly from those estimated in the table.


Change in Interest Rates	Interest Income			Interest Expense			Net Income
Up 300 basis points	$	49,879		$	(27,490	)	$	22,389
Up 200 basis points		33,300			(18,537	)		14,763
Up 100 basis points		16,721			(9,584	)		7,137
Down 100 basis points		(16,436	)		8,321			(8,115	)
Down 200 basis points		(33,015	)		17,274			(15,741	)

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Change in Interest Rates

Interest
Income

Interest
Expense

Net
Income

Up 300 basis points

$
33,874

$
(20,653
)

$
13,221

Up 200 basis points

22,833

(13,803
)

9,030

Up 100 basis points

11,792

(6,953
)

4,839

Down 100 basis points

(10,290
)

6,747

(3,543
)
Down 200 basis points

(21,331
)

13,597

(7,734
)

Currency Risk

From time to time, we may make investments that are denominated in a foreign currency. These investments are translated into U.S. dollars at each balance sheet date, exposing us to movements in foreign exchange rates. We have employed and may continue to employ hedging techniques to minimize these risks, but we cannot assure you that such strategies will be effective or without risk to us. We may seek to utilize instruments such as, but not limited to, forward contracts to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange rates. We also have the ability to borrow in certain foreign currencies under our credit facilities. Instead of entering into a foreign currency forward contract in connection with loans or other investments we have made that are denominated in a foreign currency, we may borrow in that currency to establish a natural hedge against our loan or investment. To the extent the loan or investment is based on a floating rate other than a rate under which we can borrow under our credit facilities, we may seek to utilize interest rate derivatives to hedge our exposure to changes in the associated rate.

Item 4. Controls and Procedures.

(a)

Evaluation of Disclosure Controls and Procedures

In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q and determined that our disclosure controls and procedures are effective as of the end of the period covered by the Quarterly Report on Form 10-Q.

(b)

Changes in Internal Controls Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended ~~March 31,~~September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Neither we nor the Adviser are currently subject to any material legal proceedings, nor, to our knowledge, are any material legal ~~proceeding~~proceedings threatened against us or them. From time to time, we and/or the Adviser may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. Our business is also subject to extensive regulation, which may result in regulatory proceedings against us. While the outcome of these legal or regulatory proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our 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 risk factors set forth below and in our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 23, 2023 (See “Part I Item 1A. Risk Factors”), which is accessible on the SEC’s website at sec.gov. These factors could materially affect our business, financial condition and/or operating results.

Russian Invasion of Ukraine and Conflict in the Middle East

Russia’s invasion of Ukraine, the current conflict in the Middle East, and corresponding events, have had, and could continue to have, severe adverse effects on regional and global economic markets. Following Russia’s actions, various governments, including the United States, have issued broad-ranging economic sanctions against Russia, including, among other actions, a prohibition on doing business with certain Russian companies, large financial institutions, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for Worldwide Interbank Financial Telecommunications, the electronic banking network that connects banks globally; and restrictive measures to prevent the Russian Central Bank from undermining the impact of the sanctions. The current sanctions and the potential for future sanctions, and other actions, and Russia’s retaliatory responses to those sanctions and actions, may continue to adversely impact the Russian economy and may result in the further decline of the value and liquidity of Russian securities, a continued weakening of the ruble, exchange closures and may have other adverse consequences on the Russian economy that could impact the value of Russian investments and impair the ability of a Client to buy, sell, receive, or deliver those securities. In addition, the escalating conflict in the Middle East could cause further volatility and uncertainty in global economic markets. Moreover, those events have, and could continue to have, an adverse effect on global markets’ performance and liquidity, thereby negatively affecting the value of a Client’s investments beyond any direct exposure to Russian or Middle Eastern issuers. The duration of ongoing hostilities and the vast array of sanctions and related events cannot be predicted. Those events present material uncertainty and risk with respect to markets globally and the performance of a Client and its investments or operations could be negatively impacted.

Financial Institution Risk; Distress Events

~~Table of Contents~~

An investment in the Company is subject to the risk that one of the Company’s banks, brokers, hedging counterparties, lenders or other custodians of some or all of the Company’s assets (each, a “Financial Institution”) fails to perform its obligations or experiences insolvency, closure, receivership or other financial distress or difficulty, similar to that experienced by Silicon Valley Bank and Signature Bank in March 2023 (each, a “Distress Event”). Distress Events can be caused by factors including eroding market sentiment, significant withdrawals, fraud, malfeasance, poor performance or accounting irregularities. In the event a Financial Institution experiences a Distress Event, the Company may not be able to access deposits, borrowing facilities or other services for an extended period of time or ever. Although assets held by regulated Financial Institutions in the United States frequently are insured up to stated balance amounts by organizations such as the Federal Deposit Insurance Corporation (“FDIC”), in the case of banks, or the Securities Investor Protection Corporation (“SIPC”), in

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the case of certain broker-dealers, amounts in excess of the relevant insurance are subject to risk of loss, and any non-U.S. Financial Institutions that are not subject to similar regimes pose increased risk of loss. In the event of a failure of a banking institution, access to the Company’s bank accounts could be restricted and FDIC protection may not be available for balances in excess of amounts insured by the FDIC (and similar considerations may apply to banking institutions in other jurisdictions not subject to FDIC protection). In such instances, the Company may not recover such excess, uninsured amounts and instead, would only have an unsecured claim against the banking institution and participate pro rata with other unsecured creditors in the residual value of the banking institution’s assets. Investors could also be similarly affected and unable to fund capital calls, further delaying or deferring new investments. In addition, the Company may not be able to identify all potential solvency or stress concerns with respect to a banking institution or to transfer assets from one bank to another in a timely manner in the event a banking institution comes under stress or fails. Although in recent years governmental intervention has resulted in additional protections for depositors, there can be no assurance that governmental intervention will be successful or avoid the risk of loss, substantial delays or negative impact on banking or brokerage conditions or markets.

Refinancing Risk

We cannot assure you that the Company’s business will generate sufficient cash flow from operations or that future borrowings will be available to the Company under existing credit facilities or otherwise in an amount sufficient to enable the Company to pay its indebtedness or to fund other liquidity needs. We may need to refinance all or a portion of the Company’s indebtedness on or before it matures. However, we cannot assure shareholders that the Company will be able to refinance any of its indebtedness on commercially reasonable terms or at all. If we cannot service the Company’s indebtedness, we may have to take actions such as selling assets or seeking additional equity. We cannot assure shareholders that any such actions, if necessary, could be effected on commercially reasonable terms or at all, or on terms that would not be disadvantageous to our shareholders or on terms that would not require us to breach the terms and conditions of the Company’s existing or future debt agreements.

The alternative reference rates that have replaced LIBOR in our credit arrangements and other financial instruments may not yield the same or similar economic results as LIBOR over the life of such transactions.

LIBOR, the London Interbank Offered Rate, is an index rate that historically was widely used in lending transactions and was a common reference rate for setting the floating interest rate on private loans. LIBOR was typically the reference rate used in floating-rate loans extended to our portfolio companies.

The ICE Benchmark Administration (“IBA”) (the entity that is responsible for calculating LIBOR) ceased providing overnight, one, three, six and twelve months USD LIBOR tenors on June 30, 2023. In addition, the United Kingdom’s Financial Conduct Authority (“FCA”), which oversees the IBA, now prohibits entities supervised by the FCA from using LIBORs, including USD LIBOR, except in very limited circumstances.

In the United States, the Secured Overnight Financing Rate (“SOFR”) is the preferred alternative rate for LIBOR. SOFR is a measure of the cost of borrowing cash overnight, collateralized by U.S. Treasury securities, and is based on directly observable U.S. Treasury-backed repurchase transactions. SOFR is published by the Federal Reserve Bank of New York each U.S. Government Securities Business Day, for transactions made on the immediately preceding US. Government Securities Business Day. Alternative reference rates that may replace LIBOR, including SOFR for USD transactions, may not yield the same or similar economic results as LIBOR over the lives of such transactions.

Substantially all of our loans that referenced LIBOR have been amended to reference the forward-looking term rate published by CME Group Benchmark Administration Limited based on the secured overnight financing rate (“CME Term SOFR”). CME Term SOFR rates are forward-looking rates that are derived by compounding projected overnight SOFR rates over one, three, and six months taking into account the values of multiple consecutive, executed, one-month and three-month CME Group traded SOFR futures contracts and, in some cases, over-the[1]counter SOFR Overnight Indexed Swaps as an indicator of CME Term SOFR reference rate values. CME Term SOFR and the inputs on which it is based are derived from SOFR. Since CME Term SOFR is a relatively new market rate, there will likely be no established trading market for credit agreements or other financial instruments when they are issued, and an established market may never develop or may not be liquid. Market terms for instruments referencing CME Term SOFR rates may be lower than those of later-issued CME Term SOFR indexed instruments. Similarly, if CME Term SOFR does not prove to be widely used, the trading price of instruments referencing CME Term SOFR may be lower than those of instruments indexed to indices that are more widely used.

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

~~Refer to~~ ~~Note 9. Net Assets~~ ~~in this Report and~~Except as previously reported by us on our Current Reports on Form 8-K, we did not sell any securities during the period covered by this Quarterly Report on Form ~~8-K~~ ~~filed on March 13, 2023 for a description~~10-Q that were not registered under the Securities Act of ~~the issuance of our Common Stock for the three months ended March 31, 2023. Such issuance was part of our Private Offering pursuant to Section 4(a)(2) of the~~ 1933, ~~Act and Regulation D thereunder.~~as amended.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

(a)

None.

(b)

None.

(c)

For the period covered by this Quarterly Report on Form 10-Q, no director or officer of the Company has entered into any contract, instruction or written plan for the purchase or sale of securities of the Company intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or (ii) any non-Rule 10b5-1 trading

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arrangement.

The Company has adopted insider trading policies and procedures governing the purchase, sale, and disposition of the Company’s securities by officers and directors of the Company that are reasonably designed to promote compliance with insider trading laws, rules and regulations.

3744

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Item 6. Exhibits.


Exhibit Number		Description of Exhibits
3.4		Articles of Incorporation effective as of January 1, 2022 (incorporated by reference to Exhibit 3.4 to the Registration Statement on Form 10 (File No. 000-56375) filed on February 8, 2022)
3.5		Amended and Restated By Laws (incorporated by reference to Exhibit 3.5 to the Registration Statement on Form 10 (File No. 000-56375) filed on March 3, 2022)
4.1		Description of Securities (incorporated by reference to Exhibit 4.1 to the Annual Report on Form 10-K (File No. 814-01481) filed on March 23, 2023)
10.1		Investment Advisory Agreement between the Company and the Adviser dated November 24, 2021 (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form 10 (File No. 000-56375) filed on February 8, 2022)
10.2		Investment Advisory Agreement between the Company and the Adviser effective January 1, 2023 (incorporated by reference to Exhibit 10.2 to the Annual Report on Form 10-K (File No. 814-01481) filed on March 23, 2023)
10.3		Administration Agreement Advisory Agreement between the Company and the Adviser dated November 24, 2021 (incorporated by reference to Exhibit 10.2 to the Registration Statement on Form 10 (File No. 000-56375) filed on February 8, 2022)
10.4		Administration Agreement Advisory Agreement between the Company and the Adviser effective January 1, 2023 (incorporated by reference to Exhibit 10.4 to the Annual Report on Form 10-K (File No. 814-01481) filed on March 23, 2023)
10.5		Distribution Reinvestment Plan (incorporated by reference to Exhibit 10.4 to the Registration Statement on Form 10 (File No. 000-56375) filed on February 8, 2022)
10.6		Custody Agreement between the Company and U.S. Bank National Association (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form 10 (File No. 000-56375) filed on February 8, 2022)
10.7		First Amendment to the Custody Agreement between the Company and U.S. Bank National Association (incorporated by reference to Exhibit 10.7 to the Annual Report on Form 10-K (File No. 814-01481) filed on March 23, 2023)
10.8		Transfer Agent Servicing Agreement between the Company and U.S. Bancorp Fund Services, LLC (incorporated by reference to Exhibit 10.6 to the Registration Statement on Form 10 (File No. 000-56375) filed on February 8, 2022)
10.9		Loan Financing and Servicing Agreement by and among MSD BDC SPV I, LLC as borrower, the Company as equity-holder and servicer, each of the lenders from time to time party thereto, Deutsche Bank AG, New York Branch as facility agent and U.S. Bank National Association as collateral agent and collateral custodian. (incorporated by reference to Exhibit 10.6 to the Registration Statement on Form 10 (File No. 000-56375) filed on February 8, 2022)
10.10		Amendment No.1 to the Loan Financing and Servicing Agreement by and among MSD BDC SPV I, LLC as borrower, the Company as equity-holder and servicer, each of the lenders from time to time party thereto, Deutsche Bank AG, New York Branch as facility agent and U.S. Bank National Association as collateral agent and collateral custodian (incorporated by reference to Exhibit 10.10 to the Annual Report on Form 10-K (File No. 814-01481) filed on March 23, 2023)
10.11		Amendment No. 2 to the Loan Financing and Servicing Agreement by and among MSD BDC SPV I, LLC as borrower, the Company as equity-holder and servicer, each of the lenders from time to time party thereto, Deutsche Bank AG, New York Branch as facility agent and U.S. Bank National Association as collateral agent and collateral custodian (incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K (File No. 814-01481) filed on March 23, 2023)
10.12		Revolving Credit Agreement by and among the Company as borrower, MSD Portfolio, L.P. - Investments as Guarantor and Bank of America, N.A. as the administrative agent, the sole lead arranger, the sole bookrunner, the structuring agent, the letter of credit issuer and a lender (incorporated by reference to Exhibit 10.12 to the Registration Statement on Form 10 (File No. 000-56375) filed on February 8, 2022)
10.13		Loan and Security Agreement by and among MSD BDC SPV II, LLC as borrower, Citizens Bank N.A as lender and administrative agent, MSD Investment Corp. as collateral manager, the other lenders party thereto, U.S. Bank Trust Company, National Association as collateral agent, and U.S. Bank National Association as account bank and collateral custodian. (incorporated by reference to Exhibit 10.1 on the Form 8-K (File No. 814-01481) filed on August 21, 2023)
10.14		Amendment No. 1 to Loan and Security Agreement by and among MSD BDC SPV II, LLC as borrower, Citizens Bank N.A as lender and administrative agent, MSD Investment Corp. as collateral manager, the other lenders party thereto, U.S. Bank Trust Company, National Association as collateral agent, and U.S. Bank National Association as account bank and collateral custodian.*
31.1		Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2		Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase
104		Cover page formatted as Inline XBRL and contained in Exhibit 101

* Filed herewith.

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Table of Contents

SIGNATURES

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


		MSD Investment Corp.

Date:	~~May 12,~~November 9, 2023	/s/ Robert Platek
		Robert Platek
		Chief Executive Officer

Date:	~~May 12,~~November 9, 2023	/s/ Brian S. Williams
		Brian S. Williams
		Chief Financial Officer & Treasurer

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