UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q

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


For the quarterly period ended March 31,September 30, 2021
OR

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


Commission File Number: 814-01259
AG Twin Brook BDC, Inc.
(Exact name of registrant as specified in its charter)
  
Delaware83-4184014
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
  
245 Park Avenue, 26th Floor, New York, NY
10167
(Address of principal executive offices)(Zip Code)
  
(Registrant’s telephone number, including area code):(212) 692-2000


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


Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001 per share
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer ☐
Accelerated filer ☐
 
 Non-accelerated filer ☒
Smaller reporting company ☐
 
  Emerging growth company ☒ 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒
  As of MayNovember 12, 2021, the registrant had 5,022,0007,005,615 shares of common stock, $0.001 par value per share, outstanding.





TABLE OF CONTENTS
   
PART I
CONSOLIDATED FINANCIAL INFORMATION
2
Item 1.
Consolidated Financial Statements
2

Consolidated Statements of Assets and Liabilities as of March 31,September 30, 2021 (Unaudited) and December 31, 2020
2

3

4

5

Consolidated Schedules of Investments as of March 31,September 30, 2021 (Unaudited) and December 31, 2020
6

Notes to Consolidated Financial Statements (Unaudited)
1314
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
3336
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
4953
Item 4.
Controls and Procedures
5054

PART II
OTHER INFORMATION
5155
Item 1.
Legal Proceedings
5155
Item 1A.
Risk Factors
5155
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
5155
Item 3.
Defaults Upon Senior Securities
5155
Item 4.
Mine Safety Disclosures
5155
Item 5.
Other Information
5155
Item 6.
Exhibits
5156
Signatures

5357


PART I – CONSOLIDATED FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

AG Twin Brook BDC, Inc.
Consolidated Statements of Assets and Liabilities
 (Amounts in thousands, except share and per share amounts)
 March 31, 2021    
 (Unaudited)  December 31, 2020  
September 30, 2021
(Unaudited)
  December 31, 2020 
Assets            
            
Investments at fair value:            
Non-controlled/non-affiliated investments at fair value (amortized cost of $80,976 $80,526  $75,812 
and $76,422, respectively)      
Non-controlled/affiliated investments at fair value (amortized cost of $3,329 4,061  3,721 
and $3,201, respectively)      
Non-controlled/non-affiliated investments at fair value (amortized cost of $105,708 and $76,422, respectively) $105,660  $75,812 
Non-controlled/affiliated investments at fair value (amortized cost of $4,444 and $3,201, respectively) 5,736  3,721 
Unrealized gain on foreign currency forward contracts 16   –  23  - 
Cash 16,574  10,320  14,566  10,320 
Prepaid expenses 237  162 
Interest receivable 233  181 
Deferred financing costs 206  236   107   236 
Interest receivable 172  181 
Prepaid expenses  40   162 
Total assets $101,595  $90,432  $126,562  $90,432 
Liabilities            
Unrealized loss on foreign currency forward contracts $15  $- 
Accrued expenses and other liabilities payable to affiliate $619  $459  680  459 
Income incentive fees payable 147  99  214  99 
Management fees payable 123  105  155  105 
Deferred income 94  91  78  91 
Interest payable 8  21  8  21 
Dividend payable  –   1,156   -   1,156 
Total liabilities  991   1,931   1,150   1,931 
Commitments and contingencies (Note 8)            
Net assets            
Common shares $0.001 par value, 100,000,000 shares authorized; $5  $4 
5,022,000 and 4,482,000 shares issued and outstanding, respectively      
Common shares $0.001 par value, 100,000,000 shares authorized; 6,199,809 and 4,482,000 shares issued and outstanding, respectively $6  $4 
Additional paid-in-capital 99,712  88,919  123,459  88,919 
Total distributable earnings (loss)  887   (422)  1,947   (422)
Total net assets  100,604   88,501   125,412   88,501 
Total liabilities and net assets $101,595  $90,432  $126,562  $90,432 
Net asset value per share $20.03  $19.75  $20.23  $19.75 



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

2
AG Twin Brook BDC, Inc.
Consolidated Statements of Operations
(Amounts in thousands, except share and per share amounts)
(Unaudited)


  Three Months  Three Months  Nine Months  Nine Months 
  Ended  Ended  Ended  Ended 
  September 30,  September 30,  September 30,  September 30, 
  2021  2020  2021  2020 
Investment income            
Investment income from non-controlled, non-affiliated investments:            
Interest $2,013  $1,201  $5,424  $3,399 
Other  94   67   301   198 
Total investment income from non-controlled, non-affiliated investments:  2,107   1,268   5,725   3,597 
Total investment income  2,107   1,268   5,725   3,597 
Expenses                
Income incentive fees $214  $38  $568  $114 
Management fees  155   94   416   259 
Accounting fees  107   98   317   323 
Insurance fees  90   125   312   368 
Professional fees  143   103   309   274 
Administrative fees(1)  97   85   267   358 
Interest  66   67   190   283 
Directors' fees  45   45   135   135 
Other  25   35   110   126 
Offering costs  -   73   -   409 
Total gross expenses  942   763   2,624   2,649 
Less waivers:                
Administrative fees waived(1)  -   (85)  -   (358)
Total net expenses  942   678   2,624   2,291 
Net investment income (loss)  1,165   590   3,101   1,306 
Net realized and unrealized gain (loss) on investment transactions                
Net realized gain (loss) on investment transactions:                
Non-controlled, non-affiliated investments $35  $1  $122  $5 
Foreign currency transactions  (5)  -   2   - 
Foreign currency forward transactions  12   -   (47)  - 
Net change in unrealized gain (loss) on investment transactions:                
Non-controlled, non-affiliated investments  87   490   562   (963)
Non-controlled, affiliated investments  220   270   772   (20)
Foreign currency forward contracts  4   -   8   - 
Total net realized and unrealized gain (loss) on investment transactions  353   761   1,419   (978)
Net increase (decrease) in net assets resulting from operations $1,518  $1,351  $4,520  $328 
Net investment income (loss) per share - basic and diluted $0.20  $0.17  $0.61  $0.45 
Earnings (loss) per share - basic and diluted $0.26  $0.40  $0.89  $0.11 
Weighted average shares outstanding - basic and diluted  5,754,844   3,402,000   5,092,922   2,907,131 

       Three Months  Three Months 
       Ended  Ended 
       March 31,  March 31, 
   2021  2020 
Investment income      
Investment income from non-controlled, non-affiliated investments:      
Interest  $1,622  $1,003 
Other   54   111 
Total investment income from non-controlled, non-affiliated investments:  1,676   1,114 
Total investment income  1,676   1,114 
Expenses         
Income incentive fees $147  $39 
Management fees  123   74 
Insurance fees  122   121 
Accounting fees  104   93 
Administrative fees(1)
  88   164 
Interest   60   125 
Directors' fees  45   45 
Professional fees  44   101 
Other
   38   50 
Offering costs
  –   170 
Total gross expenses
  771   982 
Less waivers:        
Administrative fees waived(1)
  –   (164)
Total net expenses  771   818 
Net investment income (loss)  905   296 
Net realized and unrealized gain (loss) on investment transactions        
Net realized gain (loss) on investment transactions:        
Non-controlled, non-affiliated investments $18  $– 
Foreign currency transactions  (8)  – 
Net change in unrealized gain (loss) on investment transactions:        
Non-controlled, non-affiliated investments  160   (1,591)
Non-controlled, affiliated investments  212   (361)
Foreign currency forward contracts  16   – 
Total net realized and unrealized gain (loss) on investment transactions  398   (1,952)
Net increase (decrease) in net assets resulting from operations $1,303  $(1,656)
Net investment income (loss) per share - basic and diluted $0.20  $0.13 
Earnings (loss) per share - basic and diluted $0.29  $(0.71)
Weighted average shares outstanding - basic and diluted  4,488,000   2,320,220 
          

(1) Refer to Note 6 - Agreements and Related Party Transactons




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


3

AG Twin Brook BDC, Inc.
Consolidated Statements of Changes in Net Assets
(Amounts in thousands, except share and per share amounts)
(Unaudited)
 Three Months  Three Months  Three Months  Three Months  Nine Months  Nine Months 
 Ended  Ended  Ended  Ended  Ended  Ended 
 March 31,  March 31,  September 30,  September 30,  September 30,  September 30, 
 2021  2020  2021  2020  2021  2020 
Increase (decrease) in net assets resulting from operations                  
Net investment income (loss) $905  $296  $1,165  $590  $3,101  $1,306 
Net realized gain (loss) 10  –  42  -  77  - 
Net change in unrealized gain (loss)  388   (1,952)  311   761   1,342   (978)
Net increase (decrease) in net assets resulting from operations  1,303   (1,656)  1,518   1,351   4,520   328 
Dividends            
Dividends declared from earnings  (1,165)  (680)  (2,169)  (680)
Net decrease in net assets resulting from dividends  (1,165)  (680)  (2,169)  (680)
Capital share transactions                  
Issuance of common shares  10,800   16,200   23,760   -   34,560   24,840 
Net increase in net assets resulting from capital share transactions  10,800   16,200   23,760   -   34,560   24,840 
Total increase in net assets  12,103   14,544   24,113   671   36,911   24,488 
Net assets, at beginning of period  88,501   42,701   101,299   66,518   88,501   42,701 
Net assets, at end of period $100,604  $57,245  $125,412  $67,189  $125,412  $67,189 
                  
Capital share activity                  
Shares issued  540,000   810,000   1,177,809   -   1,717,809   1,242,000 
Net increase in shares outstanding  540,000   810,000   1,177,809   -   1,717,809   1,242,000 
Dividends declared per share $0.20  $0.20  $0.40  $0.20 







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



4
AG Twin Brook BDC, Inc.
Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
  Three Months  Three Months 
  Ended  Ended 
  March 31,  March 31, 
  2021  2020 
Cash flows from operating activities      
Net increase (decrease) in net assets resulting from operations $1,303  $(1,656)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities:        
Net realized (gain) loss on investments  (18)  – 
Net change in unrealized (appreciation) depreciation on investments  (372)  1,952 
Net change in unrealized (appreciation) depreciation on foreign currency forward contracts  (16)  – 
Net accretion on debt instruments  (99)  (55)
Net paydown gain on debt instruments  (76)  (3)
Interest received in-kind  (1)  – 
Purchases and drawdowns of investments  (14,062)  (22,640)
Proceeds from sales and paydowns of investments  9,574   922 
Amortization of deferred financing costs  53   27 
Amortization of offering costs  –   170 
Change in operating assets and liabilities:        
(Increase) decrease in interest receivable  9   (88)
(Increase) decrease in prepaid expenses  122   119 
(Increase) decrease in due from affiliate  –   (48)
Increase (decrease) in organizational costs payable to affiliate  –   (5)
Increase (decrease) in accrued expenses and other liabilities payable to affiliate  160   198 
Increase (decrease) in management fees payable  18   29 
Increase (decrease) in income incentive fees payable  48   39 
Increase (decrease) in deferred income  3   3 
Increase (decrease) in interest payable  (13)  (2)
Increase (decrease) in due to affiliate  –   (16)
Net cash used in operating activities  (3,367)  (21,054)
Cash flows from financing activities        
Proceeds from issuance of common shares  10,800   16,200 
Dividends paid  (1,156)  – 
Borrowings on subscription facility  2,400   16,400 
Payments on subscription facility  (2,400)  (15,500)
Payments for deferred financing costs  (23)  – 
Payments for deferred offering costs  –   (3)
Net cash provided by financing activities  9,621   17,097 
Net change in cash  6,254   (3,957)
Cash        
Cash, beginning of period  10,320   9,008 
Cash, end of period $16,574  $5,051 
         
Supplemental and non-cash information        
Cash paid during the period for interest $20  $100 



  Nine Months  Nine Months 
  Ended  Ended 
  September 30,  September 30, 
  2021  2020 
Cash flows from operating activities      
Net increase (decrease) in net assets resulting from operations $4,520  $328 
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities:        
Net realized (gain) loss on investments  (122)  (5)
Net change in unrealized (appreciation) depreciation on investments  (1,334)  983 
Net change in unrealized (appreciation) depreciation on foreign currency forward contracts  (8)  - 
Net accretion on debt instruments  (309)  (180)
Net paydown gain on debt instruments  (146)  (20)
Interest received in-kind  (22)  - 
Purchases and drawdowns of investments  (55,199)  (34,815)
Proceeds from sales and paydowns of investments  25,269   9,632 
Amortization of deferred financing costs  167   94 
Amortization of offering costs  -   409 
Change in operating assets and liabilities:        
(Increase) decrease in interest receivable  (52)  (72)
(Increase) decrease in prepaid expenses  (75)  (128)
(Increase) decrease in other assets  -   (15)
(Increase) decrease in due from affiliate  -   23 
Increase (decrease) in accrued expenses and other liabilities payable to affiliate  221   78 
Increase (decrease) in management fees payable  50   49 
Increase (decrease) in income incentive fees payable  115   38 
Increase (decrease) in deferred income  (13)  9 
Increase (decrease) in interest payable  (13)  (6)
Increase (decrease) in due to affiliate  -   (44)
Increase (decrease) in organizational costs payable to affiliate  -   (26)
Net cash used in operating activities  (26,951)  (23,668)
Cash flows from financing activities        
Proceeds from issuance of common shares  34,560   24,840 
Dividends paid  (3,325)  (680)
Borrowings on subscription facility  3,100   19,800 
Payments on subscription facility  (3,100)  (25,300)
Payments for deferred financing costs  (38)  (120)
Payments for deferred offering costs  -   (20)
Net cash provided by financing activities  31,197   18,520 
Net change in cash  4,246   (5,148)
Cash        
Cash, beginning of period  10,320   9,008 
Cash, end of period $14,566  $3,860 
         
Supplemental and non-cash information        
Cash paid during the period for interest $36  $195 


The accompanying notes are an integral part of these consolidated financial statements.
5
AG Twin Brook BDC, Inc.
Consolidated Schedule of Investments
As of March 31,September 30, 2021
(Amounts in thousands)
(Unaudited)


Company(1)(2) 
Investment
 
Interest
Rate

Maturity
Date
 
Principal/
Par Amount(3)
  
Amortized
Cost(4)
  
Fair Value
  
Percentage
of Net
Assets
 
Investments    
             
Non-controlled/non-affiliated senior secured debt (5)
    
             
Aerospace and defense                  
Mattco Forge, Inc. (13) First lien senior secured revolving loan L+7.25%
12/6/2024 
$
506
  $(8) $(22)  (0.02)%
Mattco Forge, Inc. (8)(9) First lien senior secured term loan L+7.25%
12/6/2024  2,196   2,159   2,100   1.68%
     
       2,151   2,078   1.66%
Chemicals    
                 
AM Buyer, LLC (13) First lien senior secured revolving loan L+6.75%
5/1/2025 
$
111
  $(2) $(2)  (0.00)%
AM Buyer, LLC (8) First lien senior secured term loan L+6.75%
5/1/2025  480   471   473   0.38%
G2O Technologies, LLC (13) First lien senior secured revolving loan L+6.00%
3/31/2025  207   (3)  (3)  (0.00)%
G2O Technologies, LLC (6) First lien senior secured term loan L+6.00%
3/31/2025  1,565   1,540   1,543   1.23%
Revolution Plastics Buyer, LLC (6) First lien senior secured revolving loan L+5.00%
8/15/2025  704   507   509   0.41%
Revolution Plastics Buyer, LLC (6)(8) First lien senior secured term loan L+5.00%
8/15/2025  2,656   2,615   2,629   2.10%
Teel Plastics, LLC (13) First lien senior secured revolving loan L+5.00%
1/24/2025  324   (4)  (4)  (0.00)%
Teel Plastics, LLC (6) First lien senior secured term loan L+5.00%
1/24/2025  1,818   1,793   1,798   1.43%
     
       6,917   6,943   5.54%
Commercial services and supplies    
                 
Edko Acquisition, LLC (13) First lien senior secured revolving loan L+5.75%
6/25/2026 
$
38
  $(1) $(1)  (0.00)%
Edko Acquisition, LLC (8) First lien senior secured term loan L+5.75%
6/25/2026  1,023   1,003   1,005   0.80%
Nimlok Company, LLC (13)(17) First lien senior secured revolving loan L+7.50%
11/27/2024  320   (4)  (9)  (0.01)%
Nimlok Company, LLC (8) First lien senior secured term loan L+7.50%
11/27/2025  1,923   1,896   1,852   1.48%
     
       2,894   2,847   2.27%
Construction and engineering    
                 
Domino Equipment Company, LLC (13) First lien senior secured revolving loan L+6.00%
4/1/2026 
$
79
  $(1) $(1)  (0.00)%
Domino Equipment Company, LLC (8) First lien senior secured term loan L+6.00%
4/1/2026  582   572   573   0.46%
     
       571   572   0.46%
Containers and packaging    
                 
Innovative FlexPak, LLC (6) First lien senior secured revolving loan L+6.00%
1/23/2025 
$
94
  $90  $91   0.07%
Innovative FlexPak, LLC (12) First lien senior secured revolving loan P+5.00%
1/23/2025  
125
   120   122   0.10%
Innovative FlexPak, LLC (9) First lien senior secured term loan L+6.00%
1/23/2025  2,685   2,639   2,658   2.12%
Jansy Packaging, LLC (13) First lien senior secured revolving loan L+7.00%
9/30/2022  706   (7)  (22)  (0.02)%
Jansy Packaging, LLC (6) First lien senior secured term loan L+7.00%
9/30/2022  1,093   1,076   1,058   0.84%
MRC Keeler Acquisition, LLC (13) First lien senior secured delayed draw term loan L+5.75%
12/4/2025  150   (3)  (2)  (0.00)%
MRC Keeler Acquisition, LLC (13) First lien senior secured revolving loan L+5.75%
12/4/2025  150   (3)  (2)  (0.00)%
MRC Keeler Acquisition, LLC (8) First lien senior secured term loan L+5.75%
12/4/2025  969   952   954   0.76%
Vanguard Packaging, LLC (8) First lien senior secured revolving loan L+5.25%
8/9/2024  535   174   172   0.14%
Vanguard Packaging, LLC (8) First lien senior secured term loan L+5.25%
8/9/2024  1,209   1,198   1,195   0.95%
     
       6,236   6,224   4.96%
Distributors    
                 
RTP Acquisition, LLC (13) First lien senior secured revolving loan L+6.00%
8/17/2026  38   (1)  (1)  (0.00)%
RTP Acquisition, LLC (7) First lien senior secured term loan L+6.00%
8/17/2026  538   527   527   0.42%
     
       526   526   0.42%
Diversified consumer services    
                 
50Floor, LLC (13) First lien senior secured revolving loan L+5.75%
12/31/2025 
$
199
  $(3) $(3)  (0.00)%
50Floor, LLC (8) First lien senior secured term loan L+5.75%
12/31/2026  985   967   969   0.77%
Groundworks Operations, LLC (8) First lien senior secured delayed draw term loan L+4.75%
1/17/2026  1,622   1,348   1,351   1.08%
Groundworks Operations, LLC (13) First lien senior secured delayed draw term loan L+4.75%
1/17/2026  228   (3)  (3)  (0.00)%
Groundworks Operations, LLC (13) First lien senior secured revolving loan L+4.75%
1/17/2026  387   (5)  (5)  (0.00)%
Groundworks Operations, LLC (8) First lien senior secured term loan L+4.75%
1/17/2026  2,366   2,331   2,336   1.86%
ISSA, LLC (13) First lien senior secured revolving loan L+6.50%
3/1/2027  131   (2)  (2)  (0.00)%
ISSA, LLC (8) First lien senior secured term loan L+6.50%
3/1/2027  876   859   861   0.69%
Kalkomey Enterprises, LLC (13) First lien senior secured revolving loan L+6.50%
4/24/2025  77   (1)  (1)  (0.00)%
Kalkomey Enterprises, LLC (8) First lien senior secured term loan L+6.50%
4/24/2026  1,063   1,041   1,047   0.83%
NSG Buyer, Inc. (13) First lien senior secured revolving loan L+5.50%
9/30/2024  294   (2)  (1)  (0.00)%
NSG Buyer, Inc. (6) First lien senior secured term loan L+5.50%
9/30/2025  2,317   2,300   2,300   1.83%
PPW Acquisition, LLC (13) First lien senior secured revolving loan L+6.00%
9/30/2026  38   (1)  (1)  (0.00)%
PPW Acquisition, LLC (8) First lien senior secured term loan L+6.00%
9/30/2026  613   600   600   0.48%
United Land Services Opco Parent, LLC (8) First lien senior secured delayed draw term loan L+6.00%
3/23/2026  1,074   164   165   0.13%
United Land Services Opco Parent, LLC (13) First lien senior secured revolving loan L+6.00%
3/23/2026  131   (2)  (2)  (0.00)%
United Land Services Opco Parent, LLC (8) First lien senior secured term loan L+6.00%
3/23/2026  306   301   301   0.24%
     
       9,892   9,912   7.90%
Electronic equipment, instruments and components    
                 
Advanced Lighting Acquisition, LLC (13) First lien senior secured revolving loan L+9.00%
11/22/2025 
$
324
  $(5) $(8)  (0.01)%
Advanced Lighting Acquisition, LLC (6)(8) First lien senior secured term loan L+9.00%
11/22/2025  1,460   1,438   1,427   1.14%
     
       1,433   1,419   1.13%
Food and staples retailing    
                 
Engelman Baking Co., LLC (6) First lien senior secured revolving loan L+6.75%
2/28/2025 
$
207
  $46  $38   0.03%
Engelman Baking Co., LLC (6) First lien senior secured term loan L+6.75%
2/28/2025  
722
   707   679   0.54%
Mad Rose Company, LLC (13)(22) First lien senior secured revolving loan L+6.50%
5/7/2026  
104
   (2)  (2)  (0.00)%
Mad Rose Company, LLC (8) First lien senior secured term loan L+6.50%
5/7/2026  
315
   307   308   0.25%
NutriScience Innovations, LLC (13) First lien senior secured revolving loan L+7.00%
4/21/2026  
131
   (2)  (2)  (0.00)%
NutriScience Innovations, LLC (8) First lien senior secured term loan L+7.00%
4/21/2026  
483
   474   475   0.38%
     
       1,530   1,496   1.19%
Food products    
                 
Icelandirect, LLC (12) First lien senior secured revolving loan P+5.00%
7/30/2026 
$
38
  $4  $4   0.00%
Icelandirect, LLC (8) First lien senior secured term loan L+6.00%
7/30/2026  
693
   680   680   0.54%
Starwest Botanicals Acquisition, LLC (13) First lien senior secured revolving loan L+5.25%
4/30/2027  
174
   (3)  (3)  (0.00)%
Starwest Botanicals Acquisition, LLC (8) First lien senior secured term loan L+5.25%
4/30/2027  
817
   804   805   0.64%
     
       1,485   1,486   1.18%
Gas utilities    
                 
Hydromax USA, LLC (6) First lien senior secured delayed draw term loan L+6.25%
12/30/2026 
$
113
  $112  $112   0.09%
Hydromax USA, LLC (6) First lien senior secured revolving loan L+6.25%
12/30/2026  228   19   20   0.02%
Hydromax USA, LLC (6) First lien senior secured term loan L+6.25%
12/30/2026  1,250   1,230   1,232   0.98%
             1,361   1,364   1.09%
Company(1)(2) Investment  Interest Rate Maturity Date Principal/ Par Amount(3)  Amortized Cost(4)  Fair Value  Percentage of Net Assets 
Investments                  
Non-controlled/non-affiliated senior secured debt (5)                  
Aerospace and defense                  
Mattco Forge, Inc. (12) First lien senior secured revolving loan L+5.75% 12/6/2024 $506  $(7) $(22)  (0.02)%
Mattco Forge, Inc. (8)(9) First lien senior secured term loan L+5.75% 12/6/2024  2,207   2,174   2,113   2.09%
             2,167   2,091   2.07%
Chemicals                      
AM Buyer, LLC (12) First lien senior secured revolving loan L+6.75% 5/1/2025 $111  $(2) $(2)  (0.00)%
AM Buyer, LLC (8) First lien senior secured term loan L+6.75% 5/1/2025  496   486   489   0.49%
G2O Technologies, LLC (12) First lien senior secured revolving loan L+6.00% 3/31/2025  207   (3)  (3)  (0.00)%
G2O Technologies, LLC (8) First lien senior secured term loan L+6.00% 3/31/2025  1,573   1,545   1,548   1.53%
Revolution Plastics Buyer, LLC (6) First lien senior secured revolving loan L+5.00% 8/15/2025  704   412   414   0.41%
Revolution Plastics Buyer, LLC (6)(8) First lien senior secured term loan L+5.00% 8/15/2025  2,669   2,623   2,640   2.62%
Teel Plastics, LLC (12) First lien senior secured revolving loan L+5.00% 1/24/2025  324   (5)  (4)  (0.00)%
Teel Plastics, LLC (6) First lien senior secured term loan L+5.00% 1/24/2025  1,856   1,827   1,834   1.82%
             6,883   6,916   6.87%
Commercial services and supplies                      
BRTS Holdings, LLC (6) First lien senior secured delayed draw term loan L+5.75% 9/6/2022 $175  $127  $127   0.13%
BRTS Holdings, LLC (6)(15) First lien senior secured revolving loan L+5.75% 9/6/2022  588   232   231   0.23%
BRTS Holdings, LLC (6) First lien senior secured term loan L+5.75% 9/6/2022  3,118   3,102   3,095   3.08%
Nimlok Company, LLC (8)(17) First lien senior secured revolving loan L+6.00% 11/27/2025  320   306   292   0.29%
Nimlok Company, LLC (8) First lien senior secured term loan L+6.00% 11/27/2025  1,923   1,899   1,795   1.78%
             5,666   5,540   5.51%
Containers and packaging                      
Innovative FlexPak, LLC (12) First lien senior secured revolving loan L+6.75% 1/23/2025 $627  $(10) $(7)  (0.01)%
Innovative FlexPak, LLC (9) First lien senior secured term loan L+6.75% 1/23/2025  2,391   2,352   2,366   2.35%
Jansy Packaging, LLC (6)(12) First lien senior secured revolving loan L+7.00% 9/30/2022  706   (10)  (28)  (0.03)%
Jansy Packaging, LLC (6) First lien senior secured term loan L+7.00% 9/30/2022  1,099   1,079   1,055   1.05%
MRC Keeler Acquisition, LLC (12) First lien senior secured delayed draw term loan L+5.75% 12/4/2025  150   (3)  (3)  (0.00)%
MRC Keeler Acquisition, LLC (12) First lien senior secured revolving loan L+5.75% 12/4/2025  150   (3)  (3)  (0.00)%
MRC Keeler Acquisition, LLC (8) First lien senior secured term loan L+5.75% 12/4/2025  974   955   957   0.95%
Vanguard Packaging, LLC (12) First lien senior secured revolving loan L+5.25% 8/9/2024  535   (5)  (8)  (0.01)%
Vanguard Packaging, LLC (8) First lien senior secured term loan L+5.25% 8/9/2024  1,221   1,209   1,204   1.20%
             5,564   5,533   5.50%
Diversified consumer services                      
50Floor, LLC (12) First lien senior secured revolving loan L+6.25% 12/31/2025 $199  $(4) $(3)  (0.00)%
50Floor, LLC (8) First lien senior secured term loan L+6.25% 12/31/2026  990   971   973   0.97%
Groundworks Operations, LLC (8) First lien senior secured delayed draw term loan L+5.00% 1/17/2026  1,857   1,249
   1,250
   1.24
%
Groundworks Operations, LLC (12) First lien senior secured revolving loan L+5.00% 1/17/2026  387   (6)  (6)  (0.01)%
Groundworks Operations, LLC (8) First lien senior secured term loan L+5.00% 1/17/2026  2,378   2,341   2,342   2.32%
ISSA, LLC (12) First lien senior secured revolving loan L+6.50% 3/1/2027  131   (3)  (3)  (0.00)%
ISSA, LLC (6) First lien senior secured term loan L+6.50% 3/1/2027  880   863   862   0.86%
Kalkomey Enterprises, LLC (12) First lien senior secured revolving loan L+6.50% 4/24/2025  77   (2)  (1)  (0.00)%
Kalkomey Enterprises, LLC (8) First lien senior secured term loan L+6.50% 4/24/2026  835   817   821   0.82%
NSG Buyer, Inc. (12) First lien senior secured revolving loan L+5.75% 9/30/2024  294   (2)  (2)  (0.00)%
NSG Buyer, Inc. (6) First lien senior secured term loan L+5.75% 9/30/2025  2,418   2,399   2,397   2.38%
United Land Services Opco Parent, LLC (12) First lien senior secured delayed draw term loan L+6.00% 3/23/2026  1,074   (21)  (21)  (0.02)%
United Land Services Opco Parent, LLC (12) First lien senior secured revolving loan L+6.00% 3/23/2026  131   (3)  (3)  (0.00)%
United Land Services Opco Parent, LLC (8) First lien senior secured term loan L+6.00% 3/23/2026  308   302   302   0.30%
             8,901   8,908   8.86%
Electronic equipment, instruments and components                      
Advanced Lighting Acquisition, LLC (6) First lien senior secured revolving loan L+6.00% 11/22/2025 $324  $157  $149   0.15%
Advanced Lighting Acquisition, LLC (6) First lien senior secured term loan L+6.00% 11/22/2025  1,450   1,430   1,394   1.38%
             1,587   1,543   1.53%
Food and staples retailing                      
Engelman Baking Co., LLC (6) First lien senior secured revolving loan L+5.75% 2/28/2025 $207  $46  $30   0.03%
Engelman Baking Co., LLC (6) First lien senior secured term loan L+5.75% 2/28/2025  726   712   656   0.65%
             758   686   0.68%
Food products                      
Perimeter Brands Intermediate Holdco LLC (12) First lien senior secured revolving loan L+5.50% 12/11/2025 $210  $(4) $(4)  (0.00)%
Perimeter Brands Intermediate Holdco LLC (7) First lien senior secured term loan L+5.50% 12/11/2025  1,022   1,002   1,005   1.00%
             998   1,001   1.00%
Gas utilities                      
Hydromax USA, LLC (6) First lien senior secured delayed draw term loan L+6.25% 12/30/2026 $114  $112  $112   0.11%
Hydromax USA, LLC (6) First lien senior secured revolving loan L+6.25% 12/30/2026  228   8   8   0.01%
Hydromax USA, LLC (6) First lien senior secured term loan L+6.25% 12/30/2026  1,256   1,234   1,237   1.23%
             1,354   1,357   1.35%





The accompanying notes are an integral part of these consolidated financial statements.
6
AG Twin Brook BDC, Inc.
Consolidated Schedule of Investments
As of March 31,September 30, 2021
(Amounts in thousands)
(Unaudited)

 
 
Company(1)(2)
 
 
 
Investment
 
 
Interest
Rate
 
 
Maturity
Date
 
 
Principal/
Par Amount(3)
  
 
Amortized
Cost(4)
  
 
 
Fair Value
  
Percentage
of Net
Assets
 
Investments - Continued                  
Non-controlled/non-affiliated senior secured debt (5) - Continued                  
Health care equipment and supplies                  
EMSAR Acquisition LLC (8) First lien senior secured delayed draw term loan L+6.50%
3/30/2026 
$
667
  $194  $195   0.16%
EMSAR Acquisition LLC (8) First lien senior secured revolving loan L+6.50%
3/30/2026  134   24   24   0.02%
EMSAR Acquisition LLC (8) First lien senior secured term loan L+6.50%
3/30/2026  646   634   635   0.51%
Reliable Medical Supply LLC (13) First lien senior secured delayed draw term loan L+7.00%
4/8/2025  68   (1)  (1)  (0.00)%
Reliable Medical Supply LLC (13) First lien senior secured revolving loan L+7.00%
4/8/2025  138   (3)  (2)  (0.00)%
Reliable Medical Supply LLC (8) First lien senior secured term loan L+7.00%
4/8/2025  760   744   748   0.60%
SCA Buyer, LLC (8) First lien senior secured delayed draw term loan L+6.50%
1/20/2026  397   35   38   0.03%
SCA Buyer, LLC (8) First lien senior secured revolving loan L+6.50%
1/20/2026  133   23   24   0.02%
SCA Buyer, LLC (8) First lien senior secured term loan L+6.50%
1/20/2026  766   747   754   0.60%
Spectrum Solutions, LLC (13) First lien senior secured revolving loan L+6.00%
3/5/2026  267   (5)  (4)  (0.00)%
Spectrum Solutions, LLC (6) First lien senior secured term loan L+6.00%
3/5/2026  691   678   679   0.54%
     
       3,070   3,090   2.46%
Health care providers and services    
                 
Agility Intermediate, Inc. (13) First lien senior secured delayed draw term loan L+6.50%
4/15/2026 
$
401
  $(7) $(7)  (0.01)%
Agility Intermediate, Inc. (13) First lien senior secured revolving loan L+6.50%
4/15/2026  134   (2)  (2)  (0.00)%
Agility Intermediate, Inc. (9) First lien senior secured term loan L+6.50%
4/15/2026  245   241   241   0.19%
Anne Arundel Dermatology Management, LLC (8) First lien senior secured delayed draw term loan L+6.50%
10/16/2025  776   595   596   0.48%
Anne Arundel Dermatology Management, LLC (6) First lien senior secured revolving loan L+6.50%
10/16/2025  234   42   43   0.03%
Anne Arundel Dermatology Management, LLC (8) First lien senior secured term loan L+6.50%
10/16/2025  869   853   854   0.68%
Apex Dental Partners, LLC (8) First lien senior secured delayed draw term loan L+6.00%
11/23/2025  450   357   357   0.28%
Apex Dental Partners, LLC (13) First lien senior secured revolving loan L+6.00%
11/23/2025  150   (2)  (2)  (0.00)%
Apex Dental Partners, LLC (8) First lien senior secured term loan L+6.00%
11/23/2025  630   619   620   0.49%
ASP Global Acquisition, LLC (8) First lien senior secured delayed draw term loan L+5.50%
1/21/2025  734   675   674   0.54%
ASP Global Acquisition, LLC (13)(15) First lien senior secured revolving loan L+5.50%
1/21/2025  485   (6)  (7)  (0.01)%
ASP Global Acquisition, LLC (8) First lien senior secured term loan L+5.50%
1/21/2025  2,809   2,760   2,774   2.21%
Beacon Oral Specialists Management LLC (13) First lien senior secured delayed draw term loan L+5.75%
12/14/2025  161   (3)  (2)  (0.00)%
Beacon Oral Specialists Management LLC (8)(9) First lien senior secured delayed draw term loan L+5.75%
12/14/2025  536   528   529   0.42%
Beacon Oral Specialists Management LLC (13) First lien senior secured revolving loan L+5.75%
12/14/2025  150   (2)  (2)  (0.00)%
Beacon Oral Specialists Management LLC (8) First lien senior secured term loan L+5.75%
12/14/2025  956   942   944   0.75%
Behavior Frontiers, LLC (6)(21) First lien senior secured revolving loan L+6.25%
5/21/2026  38   18   18   0.01%
Behavior Frontiers, LLC (6) First lien senior secured term loan L+6.25%
5/21/2026  658   644   645   0.51%
Brightview, LLC (8) First lien senior secured delayed draw term loan L+5.50%
4/12/2024  400   49   49   0.04%
Brightview, LLC (13) First lien senior secured revolving loan L+5.50%
4/12/2024  80   (1)  (1)  (0.00)%
Brightview, LLC (8) First lien senior secured term loan L+5.50%
4/12/2024  1,293   1,278   1,280   1.02%
Canadian Orthodontic Partners Corp. (11)(14) First lien senior secured delayed draw term loan C+6.50%
3/19/2026 C$ 361   186   188   0.15%
Canadian Orthodontic Partners Corp. (12)(14) First lien senior secured revolving loan P+5.50%
3/19/2026 C$ 267   27   30   0.02%
Canadian Orthodontic Partners Corp. (11)(14) First lien senior secured term loan L+6.50%
3/19/2026  227   178   177   0.14%
Canadian Orthodontic Partners Corp. (13)(14) First lien senior secured revolving loan C+6.50%
3/19/2026 C$ 107   (2)  (1)  (0.00)%
Community Care Partners, LLC (13) First lien senior secured delayed draw term loan L+5.25%
8/11/2025  225   (4)  (4)  (0.00)%
Community Care Partners, LLC (13) First lien senior secured revolving loan L+5.25%
8/11/2025  38   (1)  (1)  (0.00)%
Community Care Partners, LLC (8) First lien senior secured term loan L+5.25%
8/11/2025  657   646   646   0.52%
Varsity DuvaSawko Operating Corp. (13) First lien senior secured revolving loan L+6.25%
11/27/2024  474   (6)  (5)  (0.00)%
Varsity DuvaSawko Operating Corp. (9) First lien senior secured term loan L+6.25%
11/27/2024  2,772   2,735   2,743   2.19%
EH Management Company, LLC (13) First lien senior secured revolving loan L+6.00%
7/15/2026  38   (1)  (1)  (0.00)%
EH Management Company, LLC (8) First lien senior secured term loan L+6.00%
7/15/2026  427   419   419   0.33%
Geriatric Medical and Surgical Supply, LLC (13) First lien senior secured revolving loan L+6.00%
12/21/2025  300   (5)  (5)  (0.00)%
Geriatric Medical and Surgical Supply, LLC (6) First lien senior secured term loan L+6.00%
12/21/2025  1,029   1,011   1,013   0.81%
Guardian Dentistry Practice Management, LLC (6) First lien senior secured delayed draw term loan L+5.75%
8/20/2026  323   121   121   0.10%
Guardian Dentistry Practice Management, LLC (6) First lien senior secured term loan L+5.75%
8/20/2026  884   869   869   0.69%
Peak Dental Services, LLC (8) First lien senior secured delayed draw term loan L+6.00%
12/31/2025  529   290   290   0.23%
Peak Dental Services, LLC (8) First lien senior secured revolving loan L+6.00%
12/31/2025  133   24   24   0.02%
Peak Dental Services, LLC (8) First lien senior secured term loan L+6.00%
12/31/2025  546   536   537   0.43%
Peak Investment Holdings, LLC (8) First lien senior secured delayed draw term loan L+6.00%
12/6/2024  603   9   10   0.01%
Peak Investment Holdings, LLC (8)(13) First lien senior secured revolving loan L+6.00%
12/6/2024  324   (4)  (5)  (0.00)%
Peak Investment Holdings, LLC (8) First lien senior secured term loan L+6.00%
12/6/2024  1,404   1,384   1,383   1.10%
Revival Animal Health, LLC (13) First lien senior secured revolving loan L+6.50%
4/6/2026  131   (2)  (2)  (0.00)%
Revival Animal Health, LLC (8) First lien senior secured term loan L+6.50%
4/6/2026  503   494   495   0.39%
RQM Buyer, Inc. (13) First lien senior secured delayed draw term loan L+5.75%
8/12/2026  84   (2)  (1)  (0.00)%
RQM Buyer, Inc. (9) First lien senior secured revolving loan L+5.75%
8/12/2026  150   12   14   0.01%
RQM Buyer, Inc. (8)(9) First lien senior secured term loan L+5.75%
8/12/2026  1,165   1,142   1,153   0.92%
SAMGI Buyer, Inc. (13) First lien senior secured revolving loan L+6.50%
4/14/2025  138   (2)  (2)  (0.00)%
SAMGI Buyer, Inc. (8) First lien senior secured term loan L+6.50%
4/14/2025  535   525   525   0.42%
SCP ENT and Allergy Services, LLC (9) First lien senior secured delayed draw term loan L+6.25%
9/25/2025  1,172   80   81   0.06%
SCP ENT and Allergy Services, LLC (13) First lien senior secured revolving loan L+6.25%
9/25/2025  218   (4)  (4)  (0.00)%
SCP ENT and Allergy Services, LLC (8)(9) First lien senior secured term loan L+6.25%
9/25/2025  907   889   890   0.71%
Silver Falls MSO, LLC (9) First lien senior secured revolving loan L+6.25%
8/30/2024  56   55   53.28   0.04%
Silver Falls MSO, LLC (12) First lien senior secured revolving loan P+5.25%
8/30/2024  61   59   58   0.05%
Silver Falls MSO, LLC (8) First lien senior secured term loan L+6.25%
8/30/2024  1,307   1,287   1,270   1.01%
SimiTree Acquisition LLC (13) First lien senior secured delayed draw term loan L+5.25%
5/17/2026  888   (16)  (15)  (0.01)%
SimiTree Acquisition LLC (13) First lien senior secured revolving loan L+5.25%
5/17/2026  178   (3)  (3)  (0.00)%
SimiTree Acquisition LLC (8) First lien senior secured term loan L+5.25%
5/17/2026  1,154   1,132   1,134   0.90%
Southeast Primary Care Partners, LLC (13) First lien senior secured delayed draw term loan L+6.25%
12/30/2025  300   (6)  (6)  (0.00)%
Southeast Primary Care Partners, LLC (13) First lien senior secured revolving loan L+6.25%
12/30/2025  225   (5)  (5)  (0.00)%
Southeast Primary Care Partners, LLC (6) First lien senior secured term loan L+6.25%
12/30/2025  727   710   712   0.57%
Southern Orthodontic Partners Management, LLC (8) First lien senior secured delayed draw term loan L+6.50%
1/27/2026  186   181   181   0.14%
Southern Orthodontic Partners Management, LLC (8) First lien senior secured delayed draw term loan L+6.50%
1/27/2026  531   518   519   0.41%
Southern Orthodontic Partners Management, LLC (8) First lien senior secured revolving loan L+6.50%
1/27/2026  134   38   39   0.03%
Southern Orthodontic Partners Management, LLC (8) First lien senior secured term loan L+6.50%
1/27/2026  333   326   327   0.26%
Vital Care Buyer, LLC (13) First lien senior secured revolving loan L+5.75%
10/19/2025  580   (8)  (7)  (0.01)%
Vital Care Buyer, LLC (8) First lien senior secured term loan L+5.75%
10/19/2025  919   905   907   0.72%
     
       26,295   26,342   21.00%
Health care technology    
                 
Millennia Patient Services, LLC (13) First lien senior secured delayed draw term loan L+6.50%
3/8/2026 
$
267
  $(5) $(4)  (0.00)%
Millennia Patient Services, LLC (13) First lien senior secured revolving loan L+6.50%
3/8/2026  134   (2)  (2)  (0.00)%
Millennia Patient Services, LLC (8) First lien senior secured term loan L+6.50%
3/8/2026  1,003   985   986   0.79%
Spear Education, LLC (13) First lien senior secured delayed draw term loan L+5.00%
2/26/2025  474   (3)  (8)  (0.01)%
Spear Education, LLC (13) First lien senior secured revolving loan L+5.00%
2/26/2025  414   (3)  (7)  (0.01)%
Spear Education, LLC (8)(9) First lien senior secured term loan L+5.00%
2/26/2025  864   858   849   0.68%
     
       1,830   1,814   1.45%

Company(1)(2) Investment  Interest Rate Maturity Date Principal/ Par Amount(3)  Amortized Cost(4)  Fair Value  Percentage of Net Assets 
Investments - Continued                      
Non-controlled/non-affiliated senior secured debt (5) - Continued                      
Health care equipment and supplies                      
EMSAR Acquisition LLC (12) First lien senior secured delayed draw term loan L+6.50% 3/30/2026 $668  $(13) $(13)  (0.01)%
EMSAR Acquisition LLC (8) First lien senior secured revolving loan L+6.50% 3/30/2026  134   24   24   0.02%
EMSAR Acquisition LLC (8) First lien senior secured term loan L+6.50% 3/30/2026  650   637   637   0.63%
Reliable Medical Supply LLC (12) First lien senior secured revolving loan L+6.50% 4/8/2025  138   (3)  (2)  (0.00)%
Reliable Medical Supply LLC (8)(9) First lien senior secured term loan L+6.50% 4/8/2025  620   608   609   0.61%
SCA Buyer, LLC (6) First lien senior secured delayed draw term loan L+6.50% 1/20/2026  398   10   14   0.01%
SCA Buyer, LLC (6) First lien senior secured revolving loan L+6.50% 1/20/2026  133   23   25   0.02%
SCA Buyer, LLC (6) First lien senior secured term loan L+6.50% 1/20/2026  770   751   758   0.75%
Spectrum Solutions, LLC (12) First lien senior secured revolving loan L+6.00% 3/5/2026  267   (5)  (5)  (0.01)%
Spectrum Solutions, LLC (8) First lien senior secured term loan L+6.00% 3/5/2026  694   681   681   0.69%
             2,713   2,728   2.71%
Health care providers and services                      
Anne Arundel Dermatology Management, LLC (8) First lien senior secured delayed draw term loan L+6.00% 10/16/2025 $778  $364  $365   0.36%
Anne Arundel Dermatology Management, LLC (12) First lien senior secured revolving loan L+6.00% 10/16/2025  234   (4)  (4)  (0.00)%
Anne Arundel Dermatology Management, LLC (8) First lien senior secured term loan L+6.00% 10/16/2025  874   858   859   0.85%
Apex Dental Partners, LLC (8) First lien senior secured delayed draw term loan L+6.00% 11/23/2025  450   26   27   0.03%
Apex Dental Partners, LLC (12) First lien senior secured revolving loan L+6.00% 11/23/2025  150   (3)  (3)  (0.00)%
Apex Dental Partners, LLC (8) First lien senior secured term loan L+6.00% 11/23/2025  633   621   622   0.62%
ASP Global Acquisition, LLC (8) First lien senior secured delayed draw term loan L+5.50% 1/21/2025  737   677   676   0.67%
ASP Global Acquisition, LLC (12)(14) First lien senior secured revolving loan L+5.50% 1/21/2025  485   (7)  (8)  (0.01)%
ASP Global Acquisition, LLC (8) First lien senior secured term loan L+5.50% 1/21/2025  2,214   2,176   2,175   2.17%
Beacon Oral Specialists Management LLC (12) First lien senior secured delayed draw term loan L+5.75% 12/14/2025  536   (9)  (8)  (0.01)%
Beacon Oral Specialists Management LLC (12) First lien senior secured revolving loan L+5.75% 12/14/2025  150   (2)  (2)  (0.00)%
Beacon Oral Specialists Management LLC (8) First lien senior secured term loan L+5.75% 12/14/2025  782   769   771   0.77%
Canadian Orthodontic Partners Corp. (11)(13) First lien senior secured delayed draw term loan C+6.50% 3/19/2026 C$ 1,068   608   610   0.61%
Canadian Orthodontic Partners Corp. (12)(13) First lien senior secured revolving loan C+6.50% 3/19/2026 C$ 267   (5)  (5)  (0.01)%
Canadian Orthodontic Partners Corp. (12)(13) First lien senior secured revolving loan L+6.50% 3/19/2026  107   (2)  (2)  (0.00)%
Canadian Orthodontic Partners Corp. (11)(13) First lien senior secured term loan C+6.50% 3/19/2026 C$ 2,324   1,817   1,808   1.80%
Varsity DuvaSawko Operating Corp. (12) First lien senior secured revolving loan L+6.25% 11/27/2024  474   (7)  (6)  (0.01)%
Varsity DuvaSawko Operating Corp. (8)(9) First lien senior secured term loan L+6.25% 11/27/2024  2,422   2,385   2,393   2.38%
Geriatric Medical and Surgical Supply, LLC (6) First lien senior secured revolving loan L+6.00% 12/21/2025  300   24   25   0.02%
Geriatric Medical and Surgical Supply, LLC (6) First lien senior secured term loan L+6.00% 12/21/2025  1,034   1,015   1,016   1.01%
Peak Dental Services, LLC (12) First lien senior secured delayed draw term loan L+6.25% 12/31/2025  530   (10)  (9)  (0.01)%
Peak Dental Services, LLC (8) First lien senior secured revolving loan L+6.25% 12/31/2025  133   24   24   0.02%
Peak Dental Services, LLC (8) First lien senior secured term loan L+6.25% 12/31/2025  549   538   539   0.54%
Peak Investment Holdings, LLC (12) First lien senior secured delayed draw term loan L+6.50% 12/6/2024  485   (7)  (21)  (0.02)%
Peak Investment Holdings, LLC (12) First lien senior secured revolving loan L+6.50% 12/6/2024  324   (5)  (14)  (0.01)%
Peak Investment Holdings, LLC (8) First lien senior secured term loan L+6.50% 12/6/2024  422   416   404   0.40%
SAMGI Buyer, Inc. (12) First lien senior secured revolving loan L+6.50% 4/14/2025  138   (3)  (3)  (0.00)%
SAMGI Buyer, Inc. (8) First lien senior secured term loan L+6.50% 4/14/2025  537   526   527   0.52%
SCP ENT and Allergy Services, LLC (8)(9) First lien senior secured delayed draw term loan L+6.50% 9/25/2025  1,172   77   78   0.08%
SCP ENT and Allergy Services, LLC (12) First lien senior secured revolving loan L+6.50% 9/25/2025  218   (5)  (5)  (0.01)%
SCP ENT and Allergy Services, LLC (8)(9) First lien senior secured term loan L+6.50% 9/25/2025  912   891   892   0.89%
Silver Falls MSO, LLC (9) First lien senior secured revolving loan L+6.25% 8/30/2024  235   53   45   0.04%
Silver Falls MSO, LLC (8) First lien senior secured term loan L+6.25% 8/30/2024  1,314   1,292   1,251   1.24%
Southeast Primary Care Partners, LLC (12) First lien senior secured delayed draw term loan L+6.25% 12/30/2025  300   (7)  (7)  (0.01)%
Southeast Primary Care Partners, LLC (12) First lien senior secured revolving loan L+6.25% 12/30/2025  225   (5)  (5)  (0.01)%
Southeast Primary Care Partners, LLC (6) First lien senior secured term loan L+6.25% 12/30/2025  730   712   714   0.71%
Southern Orthodontic Partners Management, LLC (12) First lien senior secured delayed draw term loan L+6.50% 1/27/2026  534   (13)  (13)  (0.01)%
Southern Orthodontic Partners Management, LLC (8) First lien senior secured revolving loan L+6.50% 1/27/2026  134   5   5   0.01%
Southern Orthodontic Partners Management, LLC (8) First lien senior secured term loan L+6.50% 1/27/2026  335   327   327   0.33%
Vital Care Buyer, LLC (12) First lien senior secured revolving loan L+6.00% 10/19/2025  580   (9)  (8)  (0.01)%
Vital Care Buyer, LLC (8) First lien senior secured term loan L+6.00% 10/19/2025  1,021   1,004   1,007   1.00%
             17,102   17,037   16.94%
Health care technology                      
Millennia Patient Services, LLC (12) First lien senior secured delayed draw term loan L+6.50% 3/8/2026 $267  $(5) $(5)  (0.01)%
Millennia Patient Services, LLC (12) First lien senior secured revolving loan L+6.50% 3/8/2026  134   (3)  (3)  (0.00)%
Millennia Patient Services, LLC (8) First lien senior secured term loan L+6.50% 3/8/2026  1,008   988   988   0.98%
Spear Education, LLC (12) First lien senior secured delayed draw term loan L+5.00% 2/26/2025  474   (4)  (13)  (0.01)%
Spear Education, LLC (12) First lien senior secured revolving loan L+5.00% 2/26/2025  414   (3)  (11)  (0.01)%
Spear Education, LLC (8)(9) First lien senior secured term loan L+5.00% 2/26/2025  868   861   845   0.84%
             1,834   1,801   1.79%
Internet and direct marketing retail                      
Aquatic Sales Solutions, LLC (12) First lien senior secured revolving loan L+5.50% 12/18/2025 $150  $(3) $(3)  (0.00)%
Aquatic Sales Solutions, LLC (8) First lien senior secured term loan L+5.50% 12/18/2025  657  $645  $646   0.64%
DealerOn Inc. (12) First lien senior secured revolving loan L+5.50% 11/19/2024  314   (5)  (4)  (0.00)%
DealerOn Inc. (6) First lien senior secured term loan L+5.50% 11/19/2024  1,307   1,286   1,291   1.28%
             1,923   1,930   1.92%
IT services                      
Data Source Intermediate Holdings, LLC (9) First lien senior secured revolving loan L+5.50% 2/11/2025 $123  $121  $120   0.12%
Data Source Intermediate Holdings, LLC (8)(9) First lien senior secured term loan L+5.50% 2/11/2025  830   818   811   0.81%
Legility, LLC (12) First lien senior secured revolving loan L+6.00% 12/17/2024  123   (2)  (3)  (0.00)%
Legility, LLC (6)(9) First lien senior secured term loan L+6.00% 12/17/2025  717   704   697   0.69%
Library Associates, LLC (12) First lien senior secured revolving loan L+7.00% 8/13/2023  211   (4)  (4)  (0.00)%
Library Associates, LLC (8) First lien senior secured term loan L+7.00% 8/13/2023  1,080   1,060   1,062   1.05%
             2,697   2,683   2.67%







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

7
AG Twin Brook BDC, Inc.
Consolidated Schedule of Investments
As of March 31,September 30, 2021
(Amounts in thousands)
(Unaudited)


Company(1)(2) Investment  Interest Rate Maturity Date Principal/ Par Amount(3)  Amortized Cost(4)  Fair Value  Percentage of Net Assets 
Investments - Continued                      
Non-controlled/non-affiliated senior secured debt (5) - Continued                      
Machinery                      
Industrial Dynamics Company, Ltd. (12)(16) First lien senior secured revolving loan L+6.00% 8/20/2024 $141  $(2) $(5)  (0.01)%
Industrial Dynamics Company, Ltd. (8) First lien senior secured term loan L+6.00% 8/20/2024  933   918   902   0.90%
             916   897   0.89%
Media                      
ALM Media, LLC (6)(18) First lien senior secured revolving loan L+7.00% 11/25/2024 $971  $178  $179   0.18%
ALM Media, LLC (8) First lien senior secured term loan L+7.00% 11/25/2024  2,725   2,677   2,680   2.66%
             2,855   2,859   2.84%
Metals and mining                      
Copperweld Group, Inc. (12) First lien senior secured revolving loan L+6.00% 9/27/2024 $400  $(6) $(6)  (0.01)%
Copperweld Group, Inc. (8)(9) First lien senior secured term loan L+6.00% 9/27/2024  2,072   2,037   2,037   2.03%
             2,031   2,031   2.02%
Personal products                      
Cosmetic Solutions, LLC (12) First lien senior secured delayed draw term loan L+5.75% 10/17/2025 $366  $(6) $(8)  (0.01)%
Cosmetic Solutions, LLC (12) First lien senior secured revolving loan L+5.75% 10/17/2025  344   (5)  (8)  (0.01)%
Cosmetic Solutions, LLC (9) First lien senior secured term loan L+5.75% 10/17/2025  2,837   2,791   2,774   2.76%
             2,780   2,758   2.74%
Real estate management and development                      
BBG Intermediate Holdings, Inc. (12) First lien senior secured revolving loan L+6.50% 1/8/2026 $210  $(4) $(4)  (0.00)%
BBG Intermediate Holdings, Inc. (8) First lien senior secured term loan L+6.50% 1/8/2026  1,679   1,647   1,647   1.63%
             1,643   1,643   1.63%
Software                      
Affinitiv, Inc. (12) First lien senior secured revolving loan L+6.00% 8/26/2024 $248  $(3) $(1)  (0.00)%
Affinitiv, Inc. (8) First lien senior secured term loan L+6.00% 8/26/2024  2,340   2,309   2,326   2.31%
ShiftKey, LLC (12) First lien senior secured revolving loan L+6.00% 3/17/2026  187   (3)  (3)  (0.00)%
ShiftKey, LLC (8) First lien senior secured term loan L+6.00% 3/17/2026  943   929   929   0.92%
             3,232   3,251   3.23%
Specialty retail                      
Leonard Group, Inc. (12) First lien senior secured revolving loan L+6.00% 2/26/2026 $197  $(4) $(4)  (0.00)%
Leonard Group, Inc. (8)(9)(10) First lien senior secured term loan L+6.00% 2/26/2026  1,265   1,240   1,240   1.24%
             1,236   1,236   1.24%
Textiles, apparel and luxury goods                      
Lakeshirts LLC (12) First lien senior secured delayed draw term loan L+4.75% 12/23/2025 $398  $(5) $(7)  (0.01)%
Lakeshirts LLC (8) First lien senior secured revolving loan L+4.75% 12/23/2024  398   141   141   0.14%
Lakeshirts LLC (8) First lien senior secured term loan L+4.75% 12/23/2024  1,578   1,557   1,551   1.54%
             1,693   1,685   1.67%
Trading companies and distributors                      
Banner Buyer, LLC (6) First lien senior secured delayed draw term loan L+5.75% 10/31/2025 $1,047  $66  $65   0.06%
Banner Buyer, LLC (6) First lien senior secured revolving loan L+5.75% 10/31/2025  370   69   69   0.07%
Banner Buyer, LLC (6)(10) First lien senior secured term loan L+5.75% 10/31/2025  1,396   1,377   1,378   1.37%
Empire Equipment Company, LLC (12) First lien senior secured delayed draw term loan L+6.25% 1/17/2025  941   (16)  (30)  (0.03)%
Empire Equipment Company, LLC (12) First lien senior secured revolving loan L+6.25% 1/17/2025  439   (8)  (14)  (0.01)%
Empire Equipment Company, LLC (8) First lien senior secured term loan L+6.25% 1/17/2025  1,346   1,321   1,302   1.29%
Montway LLC (12) First lien senior secured delayed draw term loan L+6.50% 11/4/2025  675   (14)  (13)  (0.01)%
Montway LLC (12) First lien senior secured revolving loan L+6.50% 11/4/2025  150   (3)  (3)  (0.00)%
Montway LLC (8) First lien senior secured term loan L+6.50% 11/4/2025  728   713   714   0.71%
Triad Technologies, LLC (12) First lien senior secured revolving loan L+4.75% 10/31/2025  314   (5)  (3)  (0.00)%
Triad Technologies, LLC (8) First lien senior secured term loan L+4.75% 10/31/2025  948   933   938   0.93%
             4,433   4,403   4.38%
Total non-controlled/non-affiliated senior secured debt               $80,966  $80,517   80.03%
                       
Non-controlled/non-affiliated sponsor subordinated note                      
Trading companies and distributors                      
Empire Equipment Company, LLC Sponsor subordinated note 12.50% + 7.00% PIK 7/17/2025      $10  $9   0.01%
Total non-controlled/non-affiliated sponsor subordinated note         
 $10  $9   0.01%
Total non-controlled/non-affiliated investments         
 $80,976  $80,526   80.04%
                       
Non-controlled/affiliated investments                      
Multisector holdings                      
Twin Brook Equity Holdings, LLC (19) Equity - 1.71% membership interest            $3,329  $4,061   4.04%
Total non-controlled/affiliated investments               $3,329  $4,061   4.04%
Total investments               $84,305  $84,587   84.08%
 
 
Company(1)(2)
 
 
 
Investment
 
Interest
Rate

 
Maturity
Date
 
Principal/
Par Amount(3)
  
Amortized
Cost(4)
  
Fair Value
  
Percentage
of Net
Assets
 
Investments - Continued    
             
Non-controlled/non-affiliated senior secured debt (5) - Continued    
             
Household durables    
             
Storm Smart Buyer LLC (13) First lien senior secured revolving loan L+6.00%
4/5/2026 $131  $(2) $(2)  (0.00)%
Storm Smart Buyer LLC (8)(9) First lien senior secured term loan L+6.00%
4/5/2026  919   902   904   0.72%
Trademark Global, LLC (13) First lien senior secured delayed draw term loan L+6.00%
7/30/2024  61   -   -   0.00%
Trademark Global, LLC (6) First lien senior secured revolving loan L+6.00%
7/30/2024  113   62   62   0.05%
Trademark Global, LLC (6) First lien senior secured term loan L+6.00%
7/30/2024  1,838   1,830   1,829   1.46%
     
       2,792   2,793   2.23%
Internet and direct marketing retail    
                 
Aquatic Sales Solutions, LLC (8) First lien senior secured revolving loan L+5.50%
12/18/2025 $150  $110  $110   0.09%
Aquatic Sales Solutions, LLC (8) First lien senior secured term loan L+5.50%
12/18/2025  1,364   1,339   1,342   1.07%
DealerOn Inc. (13) First lien senior secured revolving loan L+5.50%
11/19/2024  314   (4)  (3)  (0.00)%
DealerOn Inc. (9) First lien senior secured term loan L+5.50%
11/19/2024  1,618   1,593   1,603   1.28%
     
       3,038   3,052   2.43%
IT services    
                 
Data Source Intermediate Holdings, LLC (13) First lien senior secured revolving loan L+5.50%
2/11/2025 $123  $(2) $(2)  (0.00)%
Data Source Intermediate Holdings, LLC (8) First lien senior secured term loan L+5.50%
2/11/2025  826   815   816   0.65%
E-Phoenix Acquisition Co. Inc.  (13) First lien senior secured revolving loan L+5.75%
6/23/2027  75   (1)  (1)  (0.00)%
E-Phoenix Acquisition Co. Inc.  (8) First lien senior secured term loan L+5.75%
6/23/2027  1,448   1,431   1,434   1.14%
Legility, LLC (13) First lien senior secured revolving loan L+6.00%
12/17/2024  123   (2)  (1)  (0.00)%
Legility, LLC (6)(8) First lien senior secured term loan L+6.00%
12/17/2025  706   695   698   0.56%
Library Associates, LLC (13) First lien senior secured revolving loan L+7.00%
8/13/2023  127   (2)  (2)  (0.00)%
Library Associates, LLC (8) First lien senior secured term loan L+7.00%
8/13/2023  355   349   349   0.28%
     
       3,283   3,291   2.62%
Leisure equipment and products    
                 
MacNeill Pride Group Corp. (8) First lien senior secured delayed draw term loan L+6.50%
4/22/2026 $393  $258  $259   0.21%
MacNeill Pride Group Corp. (8) First lien senior secured revolving loan L+6.50%
4/22/2026  262   172   173   0.14%
MacNeill Pride Group Corp. (8) First lien senior secured term loan L+6.50%
4/22/2026  878   870   872   0.70%
Motis Brands, Inc. (13) First lien senior secured delayed draw term loan L+5.50%
8/31/2026  79   (2)  (2)  (0.00)%
Motis Brands, Inc. (8) First lien senior secured revolving loan L+5.50%
8/31/2026  9   8   8   0.01%
Motis Brands, Inc. (12) First lien senior secured revolving loan P+4.50%
8/31/2026  11   11   11   0.01%
Motis Brands, Inc. (8) First lien senior secured term loan L+5.50%
8/31/2026  598   586   586   0.47%
     
       1,903   1,907   1.52%
Life sciences tools and services    
                 
Aptitude Health Holdings, LLC (8) First lien senior secured revolving loan L+5.25%
5/3/2026 $267  $22  $22   0.02%
Aptitude Health Holdings, LLC (8) First lien senior secured term loan L+5.25%
5/3/2026  1,117   1,096   1,098   0.88%
     
       1,118   1,120   0.89%
Machinery    
                 
Abrasive Technology Intermediate, LLC (13) First lien senior secured revolving loan L+6.25%
4/30/2026 $173  $(3) $(3)  (0.00)%
Abrasive Technology Intermediate, LLC (9) First lien senior secured term loan L+6.25%
4/30/2026  947   929   931   0.74%
Industrial Dynamics Company, Ltd. (13)(16) First lien senior secured revolving loan L+6.00%
8/20/2024  141   (2)  (2)  (0.00)%
Industrial Dynamics Company, Ltd. (8) First lien senior secured term loan L+6.00%
8/20/2024  896   884   882   0.70%
     
       1,808   1,808   1.44%
Media    
                 
ALM Media, LLC (6)(18) First lien senior secured revolving loan L+6.50%
11/25/2024 $971  $83  $82   0.07%
ALM Media, LLC (8) First lien senior secured term loan L+6.50%
11/25/2024  2,653   2,610   2,611   2.08%
     
       2,693   2,693   2.15%
Metals and mining    
                 
Copperweld Group, Inc. (8)(7) First lien senior secured revolving loan L+5.50%
9/27/2024 $456  $221  $221   0.18%
Copperweld Group, Inc. (8) First lien senior secured term loan L+5.50%
9/27/2024  2,163   2,126   2,128   1.70%
     
       2,347   2,349   1.87%
Personal products    
                 
Cosmetic Solutions, LLC (13) First lien senior secured delayed draw term loan L+5.75%
10/17/2025 $366  $(5) $(5)  (0.00)%
Cosmetic Solutions, LLC (13) First lien senior secured revolving loan L+5.75%
10/17/2025  344   (5)  (5)  (0.00)%
Cosmetic Solutions, LLC (9) First lien senior secured term loan L+5.75%
10/17/2025  2,775   2,732   2,736   2.18%
     
       2,722   2,726   2.17%
Pharmaceuticals    
                 
Bio Agri Mix Holdings Inc. (13)(14) First lien senior secured revolving loan C+6.50%
7/23/2026 $105  $(2) $(2)  (0.00)%
Bio Agri Mix Holdings Inc. (11)(14) First lien senior secured term loan C+6.50%
7/23/2026  1,260   983   975   0.78%
Bio Agri Mix Holdings Inc. (13)(14) First lien senior secured revolving loan C+6.50%
7/23/2026  105   (2)  (2)  (0.00)%
Formulated Buyer, LLC (13) First lien senior secured delayed draw term loan L+5.25%
9/22/2026  300   (6)  (6)  (0.00)%
Formulated Buyer, LLC (13) First lien senior secured revolving loan L+5.25%
9/22/2026  188   (4)  (4)  (0.00)%
Formulated Buyer, LLC (8) First lien senior secured term loan L+5.25%
9/22/2026  1,244   1,219   1,219   0.97%
     
       2,188   2,180   1.74%
Real estate management and development    
                 
BBG Intermediate Holdings, Inc. (8)(19) First lien senior secured revolving loan L+6.00%
1/8/2026 $210  $41  $42   0.03%
BBG Intermediate Holdings, Inc. (8) First lien senior secured term loan L+6.00%
1/8/2026  1,671   1,642   1,644   1.31%
     
       1,683   1,686   1.34%
Semiconductors and semiconductor equipment    
                 
Altamira Material Solutions, LP (12) First lien senior secured revolving loan P+4.50%
9/2/2026 $38  $5  $5   0.00%
Altamira Material Solutions, LP (8) First lien senior secured term loan L+5.50%
9/2/2026  333   326   326   0.26%
     
       331   331   0.26%
Software    
                 
Affinitiv, Inc. (13) First lien senior secured revolving loan L+6.00%
8/26/2024 $248  $(2) $(1)  (0.00)%
Affinitiv, Inc. (8) First lien senior secured term loan L+6.00%
8/26/2024  2,328   2,300   2,317   1.85%
ShiftKey, LLC (6) First lien senior secured revolving loan L+6.00%
3/17/2026  187   91   91   0.07%
ShiftKey, LLC (8) First lien senior secured term loan L+6.00%
3/17/2026  938   925   927   0.74%
     
       3,314   3,334   2.66%
Specialty retail    
                 
Leonard Group, Inc. (13) First lien senior secured revolving loan L+6.00%
2/26/2026 $197  $(3) $(3)  (0.00)%
Leonard Group, Inc. (8)(10) First lien senior secured term loan L+6.00%
2/26/2026  1,259   1,236   1,238   0.99%
     
       1,233   1,235   0.98%
Textiles, apparel and luxury goods    
                 
Lakeshirts LLC (13) First lien senior secured delayed draw term loan L+4.75%
12/23/2025 $398  $(5) $(7)  (0.01)%
Lakeshirts LLC (8) First lien senior secured revolving loan L+4.75%
12/23/2024  398   128   128   0.10%
Lakeshirts LLC (8) First lien senior secured term loan L+4.75%
12/23/2024  1,569   1,550   1,542   1.23%
     
       1,673   1,663   1.33%



(1)Unless otherwise indicated, all investments are considered Level 3 investments.
(2)Unless otherwise indicated, all investments represent co-investments made with the Company’s affiliates in accordance with the terms of the exemptive relief that the Company received from the U.S. Securities and Exchange Commission. Refer to Note 6 for further information.
(3)Principal/par amount is denominated in U.S. Dollars (“$”) unless otherwise noted, e.g. Canadian Dollars (“C$”).
(4)The amortized cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.
(5)Unless otherwise indicated, the interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g. prime rate), which typically resets semiannually, quarterly, or monthly at the borrower’s option. The applicable base rate may be subject to a floor. The borrower may also elect to have multiple interest reset periods for each loan.  For each of these loans, we have provided the applicable margin over LIBOR based on each respective credit agreement.
(6)The interest rate on these loans is subject to 1 month LIBOR, which as of March 31, 2021 was 0.11%.
(7)The interest rate on these loans is subject to 2 month LIBOR, which as of March 31, 2021 was 0.13%.
(8)The interest rate on these loans is subject to 3 month LIBOR, which as of March 31, 2021 was 0.19%.
(9)The interest rate on these loans is subject to 6 month LIBOR, which as of March 31, 2021 was 0.21%.
(10)The interest rate on these loans is subject to 12 month LIBOR, which as of March 31, 2021 was 0.28%.
(11)The interest rate on these loans is subject to 3 Month Canadian Dollar Offer Rate (“CDOR”), which as of March 31, 2021 was 0.44%.
(12)Represents revolvers and delayed draw term loans where the entire balance is unfunded as of March 31, 2021. The negative fair value is a result of the commitment being valued below par. Refer to Note 8 for further information.
(13)Represents investments that the Company has determined are not “qualifying assets” under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. The status of these assets under the 1940 Act is subject to change. The Company monitors the status of these assets on an ongoing basis. As of March 31, 2021, non-qualifying assets represented approximately 2.70% of the total assets of the Company.
(14)Principal balance includes reserve for letter of credit of $2,834 on which the borrower pays 5.50%.
(15)Principal balance includes reserve for letter of credit of $32,340 on which the borrower pays 5.75%.
(16)Principal balance includes reserve for letter of credit of $5,159 on which the borrower pays 6.00%.
(17)Principal balance includes reserve for letter of credit of $10,663 on which the borrower pays 6.00%.
(18)Principal balance includes reserve for letter of credit of $141,677 on which the borrower pays 0.00%.
(19)As a practical expedient, the Company uses net asset value (“NAV”) to determine the fair value of this investment. Consistent with FASB guidance under ASC 820, these investments are excluded from the hierarchical levels. This represents an investment in an affiliated fund.



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


8

AG Twin Brook BDC, Inc.
Consolidated Schedule of Investments
As of March 31,September 30, 2021
(Amounts in thousands)
(Unaudited)


Additional Information
Company(1)(2) 
 
 
Investment
 
 
Interest
Rate

 
Maturity
Date
 
 
Principal/
Par Amount(3)
  
 
Amortized
Cost(4)
  
 
 
Fair Value
  
Percentage
of Net
Assets
 
Investments - Continued    
             
Non-controlled/non-affiliated senior secured debt (5) - Continued
    
             
Trading companies and distributor                  
AFC Industries, Inc. (8)(9) First lien senior secured delayed draw term loan L+6.25%
4/9/2027 
$
356
  $169  $170   0.14%
AFC Industries, Inc. (9)(20) First lien senior secured revolving loan L+6.25%
10/9/2026  34   33   33   0.03 %
AFC Industries, Inc. (12)(20) First lien senior secured revolving loan P+5.25%
10/9/2026  28   28   28   0.02 %
AFC Industries, Inc. (9) First lien senior secured term loan L+6.25%
4/9/2027  690   680   681   0.54 %
Banner Buyer, LLC (6) First lien senior secured delayed draw term loan L+5.75%
10/31/2025  1,045   565   571   0.46 %
Banner Buyer, LLC (6) First lien senior secured revolving loan L+5.75%
10/31/2025  370   20   22   0.02 %
Banner Buyer, LLC (6) First lien senior secured term loan L+5.75%
10/31/2025  1,389   1,370   1,378   1.10 %
Empire Equipment Company, LLC (13) First lien senior secured delayed draw term loan L+5.50%
1/17/2025  941   (14)  (28)  (0.02) %
Empire Equipment Company, LLC (13) First lien senior secured revolving loan L+5.50%
1/17/2025  439   (7)  (13)  (0.01) %
Empire Equipment Company, LLC (9) First lien senior secured term loan L+5.50%
1/17/2025  1,291   1,270   1,250   1.00 %
Montway LLC (13) First lien senior secured delayed draw term loan L+6.25%
11/4/2025  675   (12)  (12)  (0.01)%
Montway LLC (13) First lien senior secured revolving loan L+6.25%
11/4/2025  150   (3)  (3)  (0.00)%
Montway LLC (8) First lien senior secured term loan L+6.25%
11/4/2025  725   711   712   0.57%
Shearer Supply, LLC (13) First lien senior secured revolving loan L+5.50%
9/17/2027  113   (2)  (2)  (0.00)%
Shearer Supply, LLC (8) First lien senior secured term loan L+5.50%
9/17/2027  813   796   796   0.63 %
Triad Technologies, LLC (13) First lien senior secured revolving loan L+4.75%
10/31/2025  314   (4)  (3)  (0.00)%
Triad Technologies, LLC (9) First lien senior secured term loan L+4.75%
10/31/2025  943   930   934   0.74%
     
       6,530   6,514   5.19%
Water utilities    
                 
Diamondback Buyer, LLC (7) First lien senior secured revolving loan L+5.50%
7/22/2026 
$
75
  $6  $6   0.00%
Diamondback Buyer, LLC (8)(9) First lien senior secured term loan L+5.50%
7/22/2026  857   840   844   0.67%
     
       846   850   0.68%
Total non-controlled/non-affiliated senior secured debt    
      $105,693  $105,645   84.24 %
     
                 
Non-controlled/non-affiliated sponsor subordinated note    
                 
Trading companies and distributors    
                 
Empire Equipment Company, LLC Sponsor subordinated note 12.50% + 7.00% PIK
7/17/2025     $10  $10   0.01%
Shearer Supply, LLC Sponsor subordinated note 12.50% + 7.00% PIK
3/17/2028      5   5   0.00 %
Total non-controlled/non-affiliated sponsor subordinated note    
       15   15   0.01 %
Total non-controlled/non-affiliated investments    
      $105,708  $105,660   84.25 %
     
                 
Non-controlled/affiliated investments    
                 
Multisector holdings    
                 
Twin Brook Equity Holdings, LLC (23) Equity - 1.84% membership interest  
      $4,444  $5,736   4.57 %
Total non-controlled/affiliated investments    
      $4,444  $5,736   4.57 %
Total investments    
      $110,152  $111,396   88.82 %


Foreign currency forward contracts
(1) Unless otherwise indicated, all investments are considered Level 3 investments.

(2) Unless otherwise indicated, all investments represent co-investments made with the Company’s affiliates in accordance with the terms of the exemptive relief that the Company received from the U.S. Securities and Exchange Commission.  Refer to Note 6 for further information.
CounterpartyCurrency PurchasedCurrency SoldSettlement Unrealized Appreciation/ (Depreciation) 
Wells Fargo Bank, National Association USD 1,937CAD 2,4146/25/2021 $16 
Wells Fargo Bank, National AssociationUSD 490CAD 6166/25/2021  – 
Total      $16 
(3) Principal/par amount is denominated in U.S. Dollars (“$”) unless otherwise noted, Canadian Dollars (“C$”).
(4) The amortized cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.
(5) Unless otherwise indicated, the interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g. prime rate), which typically resets semiannually, quarterly, or monthly at the borrower’s option. The applicable base rate may be subject to a floor. The borrower may also elect to have multiple interest reset periods for each loan.  For each of these loans, we have provided the applicable margin over LIBOR based on each respective credit agreement.
(6) The interest rate on these loans is subject to 1 month LIBOR, which as of September 30, 2021 was 0.08%.
(7) The interest rate on these loans is subject to 2 month LIBOR, which as of September 30, 2021 was 0.11%.
(8) The interest rate on these loans is subject to 3 month LIBOR, which as of September 30, 2021 was 0.13%.
(9) The interest rate on these loans is subject to 6 month LIBOR, which as of September 30, 2021 was 0.16%.
(10) The interest rate on these loans is subject to 12 month LIBOR, which as of September 30, 2021 was 0.24%.
(11) The interest rate on these loans is subject to 3 Month CDOR, which as of September 30, 2021 was 0.45%.
(12) The interest rate on these loans is subject to the Prime Rate, which as of September 30, 2021 was 3.25%.
(13) Represents revolvers and delayed draw term loans where the entire balance is unfunded as of September 30, 2021.  The negative fair value is a result of the commitment being valued below par.  Refer to Note 8 for further information.
(14) Represents investments that the Company has determined are not “qualifying assets” under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. The status of these assets under the 1940 Act is subject to change. The Company monitors the status of these assets on an ongoing basis. As of September 30, 2021, non-qualifying assets represented approximately 3.38% of the total assets of the Company.
(15) Principal balance includes reserve for letter of credit of $2,834 on which the borrower pays 5.50%.
(16) Principal balance includes reserve for letter of credit of $13,826 on which the borrower pays 6.00%.
(17) Principal balance includes reserve for letter of credit of $10,663 on which the borrower pays 7.50%.
(18) Principal balance includes reserve for letter of credit of $141,677 on which the borrower pays 0.00%.
(19) Principal balance includes reserve for letter of credit of $4,538 on which the borrower pays 6.00%.
(20) Principal balance includes reserve for letter of credit of $4,978 on which the borrower pays 6.25%.
(21) Principal balance includes reserve for letter of credit of $5,410 on which the borrower pays 6.25%.
(22) Principal balance includes reserve for letter of credit of $4,152 on which the borrower pays 6.50%.
(23) As a practical expedient, the Company uses net asset value (“NAV”) to determine the fair value of this investment. Consistent with FASB guidance under ASC 820, these investments are excluded from the hierarchical levels.  This represents an investment in an affiliated fund.





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



9

AG Twin Brook BDC, Inc.
Consolidated Schedule of Investments
As of September 30, 2021
(Amounts in thousands)
(Unaudited)


Additional Information

Foreign currency forward contracts         
Counterparty Currency Purchased Currency Sold Settlement 
Unrealized Appreciation/
(Depreciation)
 
Wells Fargo Bank, National Association  USD 410 CAD 505 6/27/2022 $12 
Wells Fargo Bank, National Association  USD 65 CAD 80 6/27/2022  2 
Wells Fargo Bank, National Association  USD 32 CAD 41 10/22/2021  - 
Wells Fargo Bank, National Association  USD 2,098 CAD 2,675 10/21/2021  (14)
Wells Fargo Bank, National Association  CAD 823 USD 646 10/21/2021  4 
Wells Fargo Bank, National Association  CAD 520 USD 405 10/21/2021  5 
Wells Fargo Bank, National Association CAD 86 USD 68 10/21/2021  (1)
Total           $8 

Currency Abbreviations:
USD - U.S. Dollar
CAD - Canadian Dollar






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

910



AG Twin Brook BDC, Inc.
Consolidated Schedule of Investments
As of December 31, 2020
(Amounts in thousands)


Company(1)(2) Investment  Interest Rate Maturity Date Principal/ Par Amount  Amortized Cost(3)  Fair Value  Percentage of Net Assets 
Investments                  
Non-controlled/non-affiliated senior secured debt (4)                  
Aerospace and defense                  
Mattco Forge, Inc. (11) First lien senior secured revolving loan L+5.25% 12/6/2024 $506  $(8) $(19)  (0.02)%
Mattco Forge, Inc. (8) First lien senior secured term loan L+5.25% 12/6/2024  2,213   2,177   2,133   2.40%
         2,719   2,169   2,114   2.38%
Auto components                      
Continental Battery Company (5) First lien senior secured term loan L+6.75% 12/14/2022 $1,172  $1,149  $1,157   1.31%
         1,172   1,149   1,157   1.31%
Chemicals                      
AM Buyer, LLC (7) First lien senior secured revolving loan L+6.75% 5/1/2025 $111  $–  $1   0.00%
AM Buyer, LLC (7) First lien senior secured term loan L+6.75% 5/1/2025  498   487   489   0.55%
G2O Technologies, LLC (11) First lien senior secured revolving loan L+6.50% 3/31/2025  207   (4)  (4)  (0.00)%
G2O Technologies, LLC (7) First lien senior secured term loan L+6.50% 3/31/2025  1,577   1,546   1,550   1.75%
Revolution Plastics Buyer, LLC (5) First lien senior secured revolving loan L+5.00% 8/15/2025  704   200   202   0.23%
Revolution Plastics Buyer, LLC (5)(7) First lien senior secured term loan L+5.00% 8/15/2025  2,676   2,627   2,642   2.99%
Teel Plastics, LLC (11) First lien senior secured revolving loan L+5.00% 1/24/2025  324   (5)  (6)  (0.01)%
Teel Plastics, LLC (5) First lien senior secured term loan L+5.00% 1/24/2025  1,861   1,830   1,825   2.06%
         7,958   6,681   6,699   7.57%
Commercial services and supplies                      
BRTS Holdings, LLC (7) First lien senior secured delayed draw term loan L+5.75% 9/6/2022 $175  $127  $127   0.14%
BRTS Holdings, LLC (7)(13) First lien senior secured revolving loan L+5.75% 9/6/2022  588   290   290   0.33%
BRTS Holdings, LLC (7) First lien senior secured term loan L+5.75% 9/6/2022  3,125   3,105   3,106   3.51%
Nimlok Company, LLC (7)(15) First lien senior secured revolving loan L+6.00% 11/27/2025  320   305   288   0.33%
Nimlok Company, LLC (7) First lien senior secured term loan L+6.00% 11/27/2025  1,927   1,902   1,773   2.00%
         6,135   5,729   5,582   6.31%
Containers and packaging                      
Innovative FlexPak, LLC (11) First lien senior secured revolving loan L+6.75% 1/23/2025 $627  $(10) $(9)  (0.01)%
Innovative FlexPak, LLC (8) First lien senior secured term loan L+6.75% 1/23/2025  2,407   2,366   2,374   2.67%
Jansy Packaging, LLC (5) First lien senior secured revolving loan L+7.00% 9/30/2022  706   17   (4)  (0.00)%
Jansy Packaging, LLC (5) First lien senior secured term loan L+7.00% 9/30/2022  1,101   1,081   1,050   1.19%
MRC Keeler Acquisition, LLC (11) First lien senior secured delayed draw term loan L+5.75% 12/4/2025  150   (3)  (3)  (0.00)%
MRC Keeler Acquisition, LLC (11) First lien senior secured revolving loan L+5.75% 12/4/2025  150   (3)  (3)  (0.00)%
MRC Keeler Acquisition, LLC (7) First lien senior secured term loan L+5.75% 12/4/2025  976   957   956   1.08%
Vanguard Packaging, LLC (11) First lien senior secured revolving loan L+5.25% 8/9/2024  535   (6)  (8)  (0.01)%
Vanguard Packaging, LLC (8) First lien senior secured term loan L+5.25% 8/9/2024  1,225   1,211   1,206   1.36%
         7,877   5,610   5,559   6.28%
Diversified consumer services                      
50Floor, LLC (11) First lien senior secured revolving loan L+6.25% 12/31/2025 $199  $(4) $(4)  (0.00)%
50Floor, LLC (7) First lien senior secured term loan L+6.25% 12/31/2026  990   970   970   1.10%
Groundworks Operations, LLC (7) First lien senior secured delayed draw term loan L+6.25% 1/17/2026  1,632   1,257   1,258   1.42%
Groundworks Operations, LLC (11) First lien senior secured revolving loan L+6.25% 1/17/2026  387   (5)  (5)  (0.01)%
Groundworks Operations, LLC (7) First lien senior secured term loan L+6.25% 1/17/2026  2,384   2,350   2,351   2.65%
Kalkomey Enterprises, LLC (11) First lien senior secured revolving loan L+6.50% 4/24/2025  77   (2)  (1)  (0.00)%
Kalkomey Enterprises, LLC (7) First lien senior secured term loan L+6.50% 4/24/2026  838   818   822   0.93%
NSG Buyer, Inc. (11) First lien senior secured revolving loan L+5.75% 9/30/2024  294   (2)  (3)  (0.00)%
NSG Buyer, Inc. (5) First lien senior secured term loan L+5.75% 9/30/2025  2,465   2,444   2,429   2.74%
         9,266   7,826   7,817   8.83%
Electronic equipment, instruments and components                      
Advanced Lighting Acquisition, LLC (5) First lien senior secured revolving loan L+6.00% 11/22/2025 $324  $157  $151   0.17%
Advanced Lighting Acquisition, LLC (5) First lien senior secured term loan L+6.00% 11/22/2025  1,450   1,429   1,404   1.59%
         1,774   1,586   1,555   1.76%
Food and staples retailing                      
Engelman Baking Co., LLC (7) First lien senior secured revolving loan L+5.75% 2/28/2025 $207  $47  $37   0.04%
Engelman Baking Co., LLC (5)(7) First lien senior secured term loan L+5.75% 2/28/2025  728   715   682   0.77%
         935   762   719   0.81%
Food products                      
Perimeter Brands Intermediate Holdco LLC (11) First lien senior secured revolving loan L+5.50% 12/11/2025 $210  $(4) $(4)  (0.00)%
Perimeter Brands Intermediate Holdco LLC (6) First lien senior secured term loan L+5.50% 12/11/2025  1,025   1,004   1,004   1.13%
         1,235   1,000   1,000   1.13%
Gas utilities                      
Hydromax USA, LLC (11) First lien senior secured delayed draw term loan L+6.25% 12/30/2026 $114  $(2) $(2)  (0.00)%
Hydromax USA, LLC (10) First lien senior secured revolving loan L+6.25% 12/30/2026  228   7   7   0.01%
Hydromax USA, LLC (5) First lien senior secured term loan L+6.25% 12/30/2026  1,259   1,237   1,237   1.40%
         1,601   1,242   1,242   1.41%


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


1011

AG Twin Brook BDC, Inc.
Consolidated Schedule of Investments
As of December 31, 2020
(Amounts in thousands)

Company(1)(2) Investment 
 
Interest Rate
 Maturity Date Principal/ Par Amount  Amortized Cost(3)  Fair Value  Percentage of Net Assets  Investment 
 
Interest Rate
 Maturity Date Principal/ Par Amount  Amortized Cost(3)  Fair Value  Percentage of Net Assets 
Investments - Continued                                            
Non-controlled/non-affiliated senior secured debt (4) - Continued                                            
Health care equipment and supplies                                            
Reliable Medical Supply LLC (11) First lien senior secured revolving loan L+6.00% 4/8/2025 $138  $(2) $(2)  (0.00)% First lien senior secured revolving loan L+6.00% 4/8/2025 $138  $(2) $(2)  (0.00)%
Reliable Medical Supply LLC (8) First lien senior secured term loan L+6.00% 4/8/2025  622   611   612   0.69% First lien senior secured term loan L+6.00% 4/8/2025  622   611   612   0.69%
        760   609   610   0.69%        760   609   610   0.69%
Health care providers and services                                            
Anne Arundel Dermatology Management, LLC (7) First lien senior secured delayed draw term loan  L+6.00%  10/16/2025 $779
   217
   217
   0.25
% First lien senior secured delayed draw term loan  L+6.00%  10/16/2025 $779
   $217
   $217
   0.25
%
Anne Arundel Dermatology Management, LLC (11) First lien senior secured revolving loan  L+6.00%  10/16/2025  234
   (4
)
  (4
)
  (0.00
)%
 First lien senior secured revolving loan  L+6.00%  10/16/2025  234
   (4
)
  (4
)
  (0.00
)%
Anne Arundel Dermatology Management, LLC (7) First lien senior secured term loan
  L+6.00%  10/16/2025  867
   850
   850
   0.96
%
 First lien senior secured term loan
  L+6.00%  10/16/2025  867
   850
   850
   0.96
%
Apex Dental Partners, LLC (11) First lien senior secured delayed draw term loan L+6.00% 11/23/2025 
450  $(9) $(9)  (0.01)% First lien senior secured delayed draw term loan L+6.00% 11/23/2025 
450  
(9) 
(9)  (0.01)%
Apex Dental Partners, LLC (11) First lien senior secured revolving loan L+6.00% 11/23/2025  150   (3)  (3)  (0.00)% First lien senior secured revolving loan L+6.00% 11/23/2025  150   (3)  (3)  (0.00)%
Apex Dental Partners, LLC (7) First lien senior secured term loan L+6.00% 11/23/2025  634   622   622   0.70% First lien senior secured term loan L+6.00% 11/23/2025  634   622   622   0.70%
ASP Global Acquisition, LLC (7) First lien senior secured delayed draw term loan L+5.50% 1/21/2025  739   678   676   0.76% First lien senior secured delayed draw term loan L+5.50% 1/21/2025  739   678   676   0.76%
ASP Global Acquisition, LLC (11)(12) First lien senior secured revolving loan L+5.50% 1/21/2025  485   (8)  (9)  (0.01)% First lien senior secured revolving loan L+5.50% 1/21/2025  485   (8)  (9)  (0.01)%
ASP Global Acquisition, LLC (7) First lien senior secured term loan L+5.50% 1/21/2025  2,220   2,178   2,178   2.46% First lien senior secured term loan L+5.50% 1/21/2025  2,220   2,178   2,178   2.46%
Beacon Oral Specialists Management LLC (11) First lien senior secured delayed draw term loan L+5.75% 12/14/2025  536   (9)  (9)  (0.01)% First lien senior secured delayed draw term loan L+5.75% 12/14/2025  536   (9)  (9)  (0.01)%
Beacon Oral Specialists Management LLC (11) First lien senior secured revolving loan L+5.75% 12/14/2025  150   (3)  (3)  (0.00)% First lien senior secured revolving loan L+5.75% 12/14/2025  150   (3)  (3)  (0.00)%
Beacon Oral Specialists Management LLC (6) First lien senior secured term loan L+5.75% 12/14/2025  784   771   771   0.87% First lien senior secured term loan L+5.75% 12/14/2025  784   771   771   0.87%
Geriatric Medical and Surgical Supply, LLC (5) First lien senior secured term loan L+6.00% 12/21/2025  1,337   1,040   1,040   1.18% First lien senior secured term loan L+6.00% 12/21/2025  1,337   1,040   1,040   1.18%
Peak Dental Services, LLC (11) First lien senior secured delayed draw term loan L+6.25% 12/31/2025  530   (11)  (11)  (0.01)% First lien senior secured delayed draw term loan L+6.25% 12/31/2025  530   (11)  (11)  (0.01)%
Peak Dental Services, LLC (7) First lien senior secured revolving loan L+6.25% 12/31/2025  133   24   24   0.03% First lien senior secured revolving loan L+6.25% 12/31/2025  133   24   24   0.03%
Peak Dental Services, LLC (7) First lien senior secured term loan L+6.25% 12/31/2025  550   539   539   0.61% First lien senior secured term loan L+6.25% 12/31/2025  550   539   539   0.61%
Peak Investment Holdings, LLC (11) First lien senior secured delayed draw term loan L+6.50% 12/6/2024  485   (8)  (19)  (0.02)% First lien senior secured delayed draw term loan L+6.50% 12/6/2024  485   (8)  (19)  (0.02)%
Peak Investment Holdings, LLC (11) First lien senior secured revolving loan L+6.50% 12/6/2024  324   (5)  (13)  (0.01)% First lien senior secured revolving loan L+6.50% 12/6/2024  324   (5)  (13)  (0.01)%
Peak Investment Holdings, LLC (7) First lien senior secured term loan L+6.50% 12/6/2024  423   417   407   0.46% First lien senior secured term loan L+6.50% 12/6/2024  423   417   407   0.46%
SAMGI Buyer, Inc. (11) First lien senior secured revolving loan L+6.50% 4/14/2025  138   (3)  (3)  (0.00)% First lien senior secured revolving loan L+6.50% 4/14/2025  138   (3)  (3)  (0.00)%
SAMGI Buyer, Inc. (7) First lien senior secured term loan L+6.50% 4/14/2025  539   527   528   0.60% First lien senior secured term loan L+6.50% 4/14/2025  539   527   528   0.60%
SCP ENT and Allergy Services, LLC (8) First lien senior secured delayed draw term loan L+6.50% 9/25/2025  1,173   76   77   0.09% First lien senior secured delayed draw term loan L+6.50% 9/25/2025  1,173   76   77   0.09%
SCP ENT and Allergy Services, LLC (11) First lien senior secured revolving loan L+6.50% 9/25/2025  218   (5)  (5)  (0.01)% First lien senior secured revolving loan L+6.50% 9/25/2025  218   (5)  (5)  (0.01)%
SCP ENT and Allergy Services, LLC (8) First lien senior secured term loan L+6.50% 9/25/2025  914   893   894   1.01% First lien senior secured term loan L+6.50% 9/25/2025  914   893   894   1.01%
SCP Eye Care Services, LLC (7)(8) First lien senior secured delayed draw term loan L+6.00% 9/11/2022  2,915   2,892   2,889   3.25% First lien senior secured delayed draw term loan L+6.00% 9/11/2022  2,915   2,892   2,889   3.25%
SCP Eye Care Services, LLC (11) First lien senior secured revolving loan L+6.00% 9/11/2022  469   (4)  (4)  (0.00)% First lien senior secured revolving loan L+6.00% 9/11/2022  469   (4)  (4)  (0.00)%
SCP Eye Care Services, LLC (8) First lien senior secured term loan L+6.00% 9/11/2022  2,138   2,120   2,119   2.39% First lien senior secured term loan L+6.00% 9/11/2022  2,138   2,120   2,119   2.39%
Silver Falls MSO, LLC (8) First lien senior secured revolving loan L+5.75% 8/30/2024  235   52   44   0.05% First lien senior secured revolving loan L+5.75% 8/30/2024  235   52   44   0.05%
Silver Falls MSO, LLC (8) First lien senior secured term loan L+5.75% 8/30/2024  1,317   1,294   1,249   1.41% First lien senior secured term loan L+5.75% 8/30/2024  1,317   1,294   1,249   1.41%
Southeast Primary Care Partners, LLC (11) First lien senior secured delayed draw term loan L+6.25% 12/30/2025  300   (7)  (7)  (0.01)% First lien senior secured delayed draw term loan L+6.25% 12/30/2025  300   (7)  (7)  (0.01)%
Southeast Primary Care Partners, LLC (11) First lien senior secured revolving loan L+6.25% 12/30/2025  225   (6)  (6)  (0.01)% First lien senior secured revolving loan L+6.25% 12/30/2025  225   (6)  (6)  (0.01)%
Southeast Primary Care Partners, LLC (5) First lien senior secured term loan L+6.25% 12/30/2025  732   714   714   0.81% First lien senior secured term loan L+6.25% 12/30/2025  732   714   714   0.81%
Varsity DuvaSawko Operating Corp. (11) First lien senior secured revolving loan L+6.25% 11/27/2024  474   (7)  (7)  (0.01)% First lien senior secured revolving loan L+6.25% 11/27/2024  474   (7)  (7)  (0.01)%
Varsity DuvaSawko Operating Corp. (7)(8) First lien senior secured term loan L+6.25% 11/27/2024  2,428   2,388   2,392   2.69% First lien senior secured term loan L+6.25% 11/27/2024  2,428   2,388   2,392   2.69%
Vital Care Buyer, LLC (11) First lien senior secured revolving loan L+6.00% 10/19/2025  580   (10)  (10)  (0.01)% First lien senior secured revolving loan L+6.00% 10/19/2025  580   (10)  (10)  (0.01)%
Vital Care Buyer, LLC (7) First lien senior secured term loan L+6.00% 10/19/2025  1,024   1,006   1,006   1.14% First lien senior secured term loan L+6.00% 10/19/2025  1,024   1,006   1,006   1.14%
        27,629   19,196   19,114   21.60%        27,629   19,196   19,114   21.60%
Health care technology                                            
Spear Education, LLC (11) First lien senior secured delayed draw term loan L+5.50% 2/26/2025 $474  $(4) $(14)  (0.02)% First lien senior secured delayed draw term loan L+5.50% 2/26/2025 $474  $(4) $(14)  (0.02)%
Spear Education, LLC (7) First lien senior secured revolving loan L+5.50% 2/26/2025  414   411   402   0.45% First lien senior secured revolving loan L+5.50% 2/26/2025  414   411   402   0.45%
Spear Education, LLC (7) First lien senior secured term loan L+5.50% 2/26/2025  871   863   845   0.95% First lien senior secured term loan L+5.50% 2/26/2025  871   863   845   0.95%
        1,759   1,270   1,233   1.38%        1,759   1,270   1,233   1.38%
Internet and direct marketing retail                                            
Aquatic Sales Solutions, LLC (7) First lien senior secured revolving loan L+5.50% 12/18/2025 $150  $12  $12   0.01% First lien senior secured revolving loan L+5.50% 12/18/2025��$150  $12  $12   0.01%
Aquatic Sales Solutions, LLC (7) First lien senior secured term loan L+5.50% 12/18/2025  659   646   646   0.73% First lien senior secured term loan L+5.50% 12/18/2025  659   646   646   0.73%
DealerOn Inc. (11) First lien senior secured revolving loan L+5.50% 11/19/2024  314   (5)  (4)  (0.00)% First lien senior secured revolving loan L+5.50% 11/19/2024  314   (5)  (4)  (0.00)%
DealerOn Inc. (8) First lien senior secured term loan L+5.50% 11/19/2024  1,311   1,289   1,293   1.46% First lien senior secured term loan L+5.50% 11/19/2024  1,311   1,289   1,293   1.46%
        2,434   1,942   1,947   2.20%        2,434   1,942   1,947   2.20%
IT services                                            
Data Source Intermediate Holdings, LLC (8) First lien senior secured revolving loan L+5.50% 2/11/2025 $123  $121  $118   0.13% First lien senior secured revolving loan L+5.50% 2/11/2025 $123  $121  $118   0.13%
Data Source Intermediate Holdings, LLC (8) First lien senior secured term loan L+5.50% 2/11/2025  832   818   803   0.91% First lien senior secured term loan L+5.50% 2/11/2025  832   818   803   0.91%
Legility, LLC (11) First lien senior secured revolving loan L+6.00% 12/17/2024  123   (2)  (3)  (0.00)% First lien senior secured revolving loan L+6.00% 12/17/2024  123   (2)  (3)  (0.00)%
Legility, LLC (7)(8) First lien senior secured term loan L+6.00% 12/17/2025  721   708   698   0.79% First lien senior secured term loan L+6.00% 12/17/2025  721   708   698   0.79%
Library Associates, LLC (11) First lien senior secured revolving loan L+7.00% 8/13/2023  211   (4)  (4)  (0.00)% First lien senior secured revolving loan L+7.00% 8/13/2023  211   (4)  (4)  (0.00)%
Library Associates, LLC (7) First lien senior secured term loan L+7.00% 8/13/2023  1,114   1,093   1,095   1.24% First lien senior secured term loan L+7.00% 8/13/2023  1,114   1,093   1,095   1.24%
        3,124   2,734   2,707   3.07%        3,124   2,734   2,707   3.07%



The accompanying notes are an integral part of these consolidated financial statements.
1112

AG Twin Brook BDC, Inc.
Consolidated Schedule of Investments
As of December 31, 2020
(Amounts in thousands)

Company(1)(2) Investment 
 
Interest Rate
 Maturity Date Principal/ Par Amount  Amortized Cost(3)  Fair Value  Percentage of Net Assets 
Investments - Continued                      
Non-controlled/non-affiliated senior secured debt (4) - Continued                      
Machinery                      
Industrial Dynamics Company, Ltd. (7)(11)(14) First lien senior secured revolving loan L+6.25% 8/20/2024 $141  $(2) $(6)  (0.01)%
Industrial Dynamics Company, Ltd. (7) First lien senior secured term loan L+6.25% 8/20/2024  936   920   896   1.01%
         1,077   918   890   1.00%
Media                      
ALM Media, LLC (11)(16) First lien senior secured revolving loan L+6.50% 11/25/2024 $971  $(15) $(17)  (0.02)%
ALM Media, LLC (7) First lien senior secured term loan L+6.50% 11/25/2024  2,762   2,716   2,716   3.07%
         3,733   2,701   2,699   3.05%
Metals and mining                      
Copperweld Group, Inc. (11) First lien senior secured revolving loan L+6.00% 9/27/2024 $400  $(7) $(8)  (0.01)%
Copperweld Group, Inc. (8)(10) First lien senior secured term loan L+6.00% 9/27/2024  2,077   2,040   2,037   2.30%
         2,477   2,033   2,029   2.29%
Personal products                      
Cosmetic Solutions, LLC (11) First lien senior secured delayed draw term loan L+5.75% 10/17/2025 $366  $(6) $(9)  (0.01)%
Cosmetic Solutions, LLC (11) First lien senior secured revolving loan L+5.75% 10/17/2025  344   (5)  (9)  (0.01)%
Cosmetic Solutions, LLC (8) First lien senior secured term loan L+5.75% 10/17/2025  2,844   2,796   2,772   3.13%
         3,554   2,785   2,754   3.11%
Software                      
Affinitiv, Inc. (11) First lien senior secured revolving loan L+7.00% 8/26/2024 $248  $(3) $(2)  (0.00)%
Affinitiv, Inc. (7) First lien senior secured term loan L+7.00% 8/26/2024  2,346   2,313   2,330   2.63%
         2,594   2,310   2,328   2.63%
Textiles, apparel and luxury goods                      
Lakeshirts LLC (11) First lien senior secured delayed draw term loan L+4.75% 12/23/2025 $398  $(5) $(12)  (0.01)%
Lakeshirts LLC (7) First lien senior secured revolving loan L+4.75% 12/23/2024  398   88   84   0.09%
Lakeshirts LLC (7) First lien senior secured term loan L+4.75% 12/23/2024  1,582   1,560   1,535   1.74%
         2,378   1,643   1,607   1.82%
Trading companies and distributors                      
Banner Buyer, LLC (11) First lien senior secured delayed draw term loan L+5.75% 10/31/2025 $1,048  $(7) $(15)  (0.02)%
Banner Buyer, LLC (5) First lien senior secured revolving loan L+5.75% 10/31/2025  370   69   67   0.08%
Banner Buyer, LLC (5)(9) First lien senior secured term loan L+5.75% 10/31/2025  1,400   1,379   1,375   1.55%
Empire Equipment Company, LLC (11) First lien senior secured delayed draw term loan L+5.75% 1/17/2025  941   (18)  (41)  (0.05)%
Empire Equipment Company, LLC (8) First lien senior secured revolving loan L+5.75% 1/17/2025  439   117   106   0.12%
Empire Equipment Company, LLC (8) First lien senior secured term loan L+5.75% 1/17/2025  1,349   1,323   1,290   1.46%
Montway LLC (11) First lien senior secured delayed draw term loan L+6.50% 11/4/2025  675   (15)  (15)  (0.02)%
Montway LLC (11) First lien senior secured revolving loan L+6.50% 11/4/2025  150   (3)  (3)  (0.00)%
Montway LLC (8) First lien senior secured term loan L+6.50% 11/4/2025  730   714   714   0.81%
Triad Technologies, LLC (7) First lien senior secured revolving loan L+4.75% 10/31/2025  314   26   27   0.03%
Triad Technologies, LLC (8) First lien senior secured term loan L+4.75% 10/31/2025  950   935   938   1.06%
         8,366   4,520   4,443   5.02%
Total non-controlled/non-affiliated senior secured debt         $100,557  $76,415  $75,805   85.65%
                       
Non-controlled/non-affiliated sponsor subordinated note                      
Trading companies and distributors                      
Empire Equipment Company, LLC Sponsor subordinated note 12.50% + 7.00% PIK 7/17/2025 $7  $7  $7   0.01%
Total non-controlled/non-affiliated sponsor subordinated note         $7  $7  $7   0.01%
Total non-controlled/non-affiliated investments         $100,564  $76,422  $75,812   85.66%
                       
Non-controlled/affiliated investments                      
Multisector holdings                      
Twin Brook Equity Holdings, LLC (17) Equity - 1.84% membership interest         $3,201  $3,721   4.20%
Total non-controlled/affiliated investments           $3,201  $3,721   4.20%
Total investments           $79,623  $79,533   89.86%

(1)Unless otherwise indicated, all investments are considered Level 3 investments.
(2)Unless otherwise indicated, all investments represent co-investments made with the Company’s affiliates in accordance with the terms of the exemptive relief that the Company received from the U.S. Securities and Exchange Commission. Refer to Note 6 for further information.
(3)The amortized cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.
(4)Unless otherwise indicated, the interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g. prime rate), which typically resets semiannually, quarterly, or monthly at the borrower’s option. The applicable base rate may be subject to a floor. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, we have provided the applicable margin over LIBOR based on each respective credit agreement.
(5)The interest rate on these loans is subject to 1 month LIBOR, which as of December 31, 2020 was 0.14%.
(6)The interest rate on these loans is subject to 2 month LIBOR, which as of December 31, 2020 was 0.19%.
(7)The interest rate on these loans is subject to 3 month LIBOR, which as of December 31, 2020 was 0.24%.
(8)The interest rate on these loans is subject to 6 month LIBOR, which as of December 31, 2020 was 0.26%.
(9)The interest rate on these loans is subject to 12 month LIBOR, which as of December 31, 2020 was 0.34%.
(10)The interest rate on these loans is subject to the Prime Rate, which as of December 31, 2020 was 3.25%.
(11)Represents revolvers and delayed draw term loans where the entire balance is unfunded as of December 31, 2020. The negative fair value is a result of the commitment being valued below par. Refer to Note 7 for further information.
(12)Principal balance includes reserve for letter of credit of $2,834 on which the borrower pays 5.50%.
(13)Principal balance includes reserve for letter of credit of $20,286 on which the borrower pays 5.75%.
(14)Principal balance includes reserve for letter of credit of $5,159 on which the borrower pays 6.25%.
(15)Principal balance includes reserve for letter of credit of $10,663 on which the borrower pays 6.00%.
(16)Principal balance includes reserve for letter of credit of $141,677 on which the borrower pays 0.00%.
(17)As a practical expedient, the Company uses net asset value (“NAV”) to determine the fair value of this investment. Consistent with FASB guidance under ASC 820, these investments are excluded from the hierarchical levels. This represents an investment in an affiliated fund.



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

1213
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited)

Note 1.  Organization
AG Twin Brook BDC, Inc. (the “Company”), formerly known as 1889 BDC, Inc., is a Delaware corporation which was formed on February 4, 2016.  The Company has elected to be regulated as a Business Development Company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”).  In addition, for tax purposes, the Company has elected to be treated as a Regulated Investment Company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).  The Company seeks to provide risk-adjusted returns and current income to investors by investing primarily in senior secured debt of middle market companies.  The Company may also invest opportunistically in other parts of the capital structure, including senior secured stretch and unitranche facilities, second lien loans, mezzanine and mezzanine-related loans, and equity investments, as well as select other subordinated instruments either directly or through acquisitions in the secondary market.
AG Twin Brook Manager, LLC (the “Advisor”), a wholly-owned subsidiary of Angelo, Gordon & Co., L.P. (“Angelo Gordon”), serves as the investment adviser of the Company.  The Advisor is registered as an investment adviser with the U.S. Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940.
Twin Brook Capital Partners, LLC (“TBCP”) is an affiliate of Angelo Gordon and provides collateral agent, administrative and other services with respect to certain investments held by the Company.  Twin Brook Capital Servicer, LLC (“TBCS”) is an affiliate of Angelo Gordon and provides loan servicing with respect to certain investments held by the Company.
The Company conducts private offerings (each, a “Private Offering”), where investors make a capital commitment to purchase shares of the Company’s common stock pursuant to a subscription agreement entered into with the Company. Investors will be required to make capital contributions to purchase shares of the Company’s common stock each time the Company delivers a drawdown notice. The initial closing of the Private Offering occurred on July 19, 2019 (the “Initial Closing”), and additional closings of the Private Offering are expected to occur from time to time as determined by the Company.  Upon the earlier to occur of (i) a Qualified IPO (as defined below), and (ii) the five year anniversary of the Initial Closing, investors will be released from any further obligation to purchase additional shares, subject to certain exceptions. A “Qualified IPO” is an initial public offering (“IPO”) of the Company’s common stock that results in an unaffiliated public float of at least the lower of (A) $60 million and (B) 17.5% of the aggregate capital commitments received prior to the date of such initial public offering.
The Company commenced its loan origination and investment activities with the initial drawdown from investors in the Private Offering on July 29, 2019 (the commencement of operations).  The Company made its first portfolio company investment in August 2019.
Note 2.  Significant Accounting Policies
Basis of Accounting
The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).  The Company is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies.  These consolidated financial statements reflect adjustments that in the opinion of management are necessary for the fair statement of the financial position and results of operations for the periods presented herein.  The Company commenced operations on July 29, 2019 and its fiscal year ends on December 31.




1314
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) -– Continued

The interim consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 6 of Regulation S-X. Accordingly, certain disclosures accompanying the annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments, consisting solely of normal recurring accruals considered necessary for the fair presentation of financial statements for the interim period presented, have been included. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the fiscal year ending December 31, 2020.2021.

Principles of Consolidation
The Company conducts certain of its activities through its wholly-owned subsidiaries Twin Brook Capital Funding XVIII, LLC and Twin Brook Equity XVIII Corp.  The Company consolidates subsidiaries that are controlled by the Company.  All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.
Cash
Cash is comprised of cash on deposit with major financial institutions.  The Company places its cash with high credit quality institutions to minimize credit risk exposure.
Investment Related Transactions, Revenue Recognition and Expenses
Investment transactions and the related revenue and expenses are recorded on a trade-date basis.  Realized gains and losses on investment transactions are determined using the specific identification method.  All costs associated with consummated investments are included in the cost of such investments.  Broken deal expenses incurred in connection with investment transactions which are not successfully consummated are expensed as a component of “Other” expense on the consolidated statement of operations.
Interest income and interest expense are recognized on an accrual basis.  Interest income on debt instruments is accrued and recognized for those issuers who are currently paying in full or expected to pay in full.  For those issuers who are in default or expected to default, interest is not accrued and is only recognized when received.  Interest income and expense include discounts accreted and premiums amortized on certain debt instruments as determined in good faith by the Company and calculated using the effective interest method.  Loan origination fees, original issue discounts and market discounts or premiums are capitalized as part of the underlying cost of the investments and accreted or amortized over the life of the investment as interest income.
Paydown gains and losses on investments in debt instruments are reported in “Interest” income on the consolidated statement of operations.  Interest received in-kind, computed at the contractual rate specified in each investment agreement, is added to the principal balance of the investment and reported as “Interest” income on the consolidated statement of operations.  The Company records dividend income from private securities pursuant to the terms of the respective investments.


1415
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) -– Continued

The Company may earn various fees during the life of the loans.  Such fees include, but are not limited to, syndication, commitment, administration, prepayment and amendment fees, some of which are paid to the Company on an ongoing basis.  These fees and any other income are recognized as earned as a component of "Other" income on the consolidated statement of operations.

Investments at Fair Value
The Company applies Financial Accounting Standards Board Accounting Standards Codification Topic 820, Fair Value Measurements (“ASC 820”), as amended, which establishes a framework for measuring fair value in accordance with U.S. GAAP and required disclosures of fair value measurements.  ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.  In accordance with ASC 820, the Company discloses the fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value.  The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements).  ASC 820 establishes three levels of the fair value hierarchy as follows:

Level 1Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

Level 2Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active;

Level 3Inputs that are unobservable.
Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk.  Inputs may include price information, volatility statistics, interest rates, specific and broad credit data, liquidity statistics, and other factors.  A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement; however, the determination of what constitutes “observable” requires significant judgment by the Company.  The Company considers observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.  The categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Company’s perceived risk of that instrument.
The availability of observable inputs can vary from product to product and is affected by a wide variety of factors, including for example, the type of product, whether the product is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the transaction.  To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment.  Accordingly, the degree of judgment exercised by the Company, the Company’s Board of Directors (the “Board”), and the Advisor in determining fair value is greatest for instruments categorized in Level 3.  In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.
Investments in investment funds include vehicles structured for the purpose of investing in privately held common and preferred equity interests. Fair values are generally determined utilizing the NAV supplied by, or on behalf of, management of each investment fund, which is net of management and incentive fees or allocations charged by the investment fund, if applicable, and is in accordance with the “practical expedient”, as defined by FASB Accounting Standards Update (“ASU”) 2009-12, Investments in Certain Entities that Calculate Net Asset Value per Share. NAVs received by, or on behalf of, management of


1516
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) -– Continued

each investment fund are based on the fair value of the investment funds’ underlying investments in accordance with policies established by management of each investment fund, as described in each of their financial statements and offering memorandum. Withdrawals and distributions from investments in investment funds are at the discretion of the Advisor and may depend on the liquidation of underlying assets. Investments which are valued using NAV as a practical expedient are excluded from the above hierarchy.
The Board oversees and supervises a multi-step valuation process, which includes, among other procedures, the following:
The valuation process begins with each investment being initially valued by the investment professionals responsible for the portfolio investment in conjunction with the portfolio management team.
The Advisor’s management reviews the preliminary valuations with the investment professionals.  Agreed upon valuation recommendations are presented to the Board.
The Board reviews the recommended valuations and determines the fair value of each investment; valuations that are not based on readily available market quotations are valued in good faith, based on, among other things, the input of the Advisor and, where applicable, other third parties.
When determining the fair value of Level 3 investments, the Company may take into account the following factors, where relevant: recent transactions, the enterprise value of the underlying company, the nature and realizable value of any collateral, the underlying company’s ability to make payments and its earnings and discounted cash flows, the markets in which the underlying company does business, financial covenants, the seniority of the financial instrument in the capital structure of the company, comparisons to publicly traded securities, and changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made and other relevant factors. The primary method for determining enterprise value uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s net income before net interest expense, income tax expense, depreciation and amortization (“EBITDA”). The enterprise value analysis is performed to determine the value of equity investments and to determine if debt investments are credit impaired. If debt investments are credit impaired, the Company will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, the Company uses a market interest rate yield analysis to determine fair value.
The Company’s investments trade infrequently and when they are traded, the price may be unobservable, and as a result, multiple external pricing sources may not be available.  In such instances, the Company may use an internal pricing model as either a corroborating or sole data point in determining the price.  Pricing models take into account the contractual terms of the financial instrument, as well as relevant inputs, including where applicable, equity prices, interest rate yield curves, credit curves, correlation, and the creditworthiness of the counterparty.  The Company generally engages third party firm(s) to assist in validating certain financial instruments where multiple external prices cannot be obtained.  The third party firm(s) either independently determine prices or assess the reasonableness of the Company’s prices.  The analyses provided by such third party firm(s) are reviewed and considered by the Company.  As part of the risk management process, the Company reviews and analyzes the prices obtained from external pricing sources to evaluate their reliability and accuracy, which includes identifying and excluding vendor prices and broker quotations that the Company believes does not reflect fair value.  In addition, the Advisor’s valuation committee meets regularly and engages in ongoing reviews of the valuation processes and procedures including reviews of methodology, ongoing accuracy, source quality and independence. Such reviews include, but are not limited to, comparison of current vendor prices and broker quotations against ongoing daily trading activity, vendor due diligence, and back testing.


1617
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) -– Continued

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure.  Therefore, even when market assumptions are not readily available, the assumptions are set to reflect those that the Company believes market participants would use in pricing the asset or liability at the measurement date.
Foreign Currency Translation
Amounts denominated in foreign currencies are translated into USD on the following basis: (i) investments and other assets and liabilities denominated in foreign currencies are translated into USD 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 USD based upon currency exchange rates prevailing on the transaction dates.
The Company does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are included within net realized and unrealized gain (loss) on investments on the consolidated statement of operations. Unrealized gains and losses on foreign currency holdings and non-investment assets and liabilities attributable to the changes in foreign currency exchange rates are included in the net change in unrealized gain (loss) on foreign currency translation on the consolidated statements of operations. Net realized gains and losses on foreign currency holdings and non-investment assets and liabilities attributable to changes in foreign currency exchange rates are included in net realized gain (loss) on foreign currency transactions on the consolidated statements of operations.
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.
Foreign Currency Forward Contracts
The Company may enter into foreign currency forward contracts to reduce the Company’s exposure to foreign currency exchange rate fluctuations in the value of foreign currencies. In a foreign currency forward contract, the Company agrees to receive or deliver a fixed quantity of one currency for another, at a pre-determined price at a future date. Forward foreign currency contracts are marked-to-market at the applicable forward rate. Unrealized gain (loss) on foreign currency forward contracts are recorded on the consolidated statements of assets and liabilities by counterparty on a netgross basis, not taking into account collateral posted which is recorded separately, if applicable. Notional amounts of foreign currency forward contract assets and liabilities are presented separately on the consolidated schedules of investments. Purchases and settlements of foreign currency forward contracts having the same settlement date and counterparty are generally settled net and any realized gains or losses are recognized on the settlement date.
The Company does not utilize hedge accounting and as such, the Company recognizes its derivatives at fair value with changes in the net unrealized gain (loss) on foreign currency forward contracts recorded on the consolidated statements of operations.
Organizational Costs
Organizational costs to establish the Company are charged to expense as incurred.  These expenses consist primarily of legal fees and other costs of organizing the Company.


17
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) - Continued
Offering Costs
Offering costs in connection with the offering of common shares of the Company are capitalized as a deferred charge and amortized to expense on a straight-line basis over 12 months from the commencement of operations.  These expenses consist primarily of legal fees and other costs incurred with the Company’s share offerings, the preparation of the Company’s registration statement, and registration fees.

18
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) – Continued
.
Deferred Financing Costs
Deferred financing costs consist of financing costs incurred in connection with obtaining the Company’s subscription facility.  Such financing costs are capitalized and amortized over the life of the facility utilizing the straight-line method.  For the three and nine months ended March 31,September 30, 2021, the Company paid approximately $23,000 and amortized approximately $53,000$58,000 and $167,000 of financing costs, respectively, which have been included in “Interest” expense on the consolidated statements of operations. For the three and nine months ended March 31,September 30, 2020, the Company amortized approximately $27,000$40,000 and $94,000 of financing costs, respectively, which have been included in “Interest” expense on the consolidated statements of operations.
Deferred Income
Deferred income consists of annual administrative agent fees received in connection with the servicing of certain loan investments.  Such fees are deferred when received and recognized as earned over the applicable period.  For the three and nine months ended March 31,September 30, 2021, the Company received approximately $40,000$47,000 and $118,000 of agent fees.fees, respectively. During the three and nine months ended March 31,September 30, 2021, approximately $37,000$48,000 and $131,000 of agent fees have been recognized as earned and included in “Other” income on the consolidated statements of operations. For the three and nine months ended March 31,September 30, 2020, the Company received approximately $21,000$46,000 and $70,000 of agent fees, respectively. During the three and nine months ended September 30, 2020, approximately $23,000 and $61,000 of which approximately $18,000agent fees, respectively, have been amortizedrecognized as earned and included in “Other” income on the consolidated statements of operations.
Income Taxes
The Company has elected to be regulated as a BDC under the 1940 Act.  The Company also has elected to be treated as a Regulated Investment Company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended.  As a RIC, the Company generally will not have to pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes timely to its shareholders as dividends.  To the extent the Company continues to qualify as a RIC, any tax liability related to income earned and distributed by the Company represents obligations of the Company’s investors and will not be reflected in the consolidated financial statements of the Company.
To continue to qualify as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements. In addition, to continue to qualify for RIC tax treatment, the Company must distribute to its shareholders, for each taxable year, at least 90% of its “investment company taxable income” for that year, which is generally its ordinary income plus the excess of its realized net short-term capital gains over its realized net long-term capital losses. The Company will generally be subject to a 4% non-deductible U.S. federal excise tax on certain undistributed income or gains in respect of any calendar year, unless it distributes annually an amount at least equal to the sum of (i) 98% of its net ordinary income (taking into account certain deferrals and elections) for the calendar year, (ii) 98.2% of its capital gain net income (adjusted for certain ordinary losses) for the one-year period ending on October 31 in such calendar year and (iii) any net ordinary income and capital gain net income recognized, but not distributed, in preceding years. The Company, at its discretion, may carry forward taxable income for distribution in the following taxable year and pay the applicable U.S. federal excise
19
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) – Continued

tax.  For the threenine months ended March 31,September 30, 2021 and 2020, the Company did not accrue any U.S. federal excise tax.


18
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) - Continued
The Company conducts certain of its activities through its wholly-owned subsidiary, Twin Brook Equity XVIII Corp., a Delaware C corporation.  Twin Brook Equity XVIII Corp. is treated as a corporation for United States federal income tax purposes and is subject to U.S. federal, state or local income tax.  For the threenine months ended March 31,September 30, 2021 and 2020, the Company did not accrue any U.S. federal tax expense.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its 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.  There were no tax penalties, and no interest associated with income taxes was incurred through March 31,September 30, 2021.
Loan Syndications and Participations
The Company may originate certain loans and then syndicate all or a portion of those loans to a third party. For the three and nine months ended March 31,September 30, 2021, the Company earned approximately $17,000$46,000 and $170,000, respectively, of syndication and other origination fee income, which is included in “Other” income on the consolidated statement of operations. For the three and nine months ended March 31,September 30, 2020, the Company earned approximately $93,000$44,000 and $137,000, respectively, of syndication and other origination fee income, which is included in “Other” income on the consolidated statement of operations.
The Company follows the guidance in Accounting Standards Codification (“ASC”) Topic 860 Transfers and Servicing when accounting for loan participations and other partial loan sales. Such guidance requires a participation or other partial loan sale to meet the definition of a “participating interest,” as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales that do not meet the definition of a participating interest remain on the consolidated statement of assets and liabilities and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value. There were no participations that were accounted for as secured borrowings during the period.
Distributions
Distributions to common stockholders are recorded on the record date. The amount to be distributed, if any, is determined by the Board each quarter. The Company intends to distribute net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the assets legally available for such distributions. However, the Company may decide in the future to retain such capital gains for investment, incur a corporate-level tax on such capital gains, and elect to treat such capital gains as deemed distributions to stockholders.
Note 3.  Investments
Under the 1940 Act, the Company is required to separately identify non-controlled investments where it owns 5% or more of a portfolio company’s outstanding voting securities and/or had the power to exercise control over the management or policies of such portfolio company as investments in “affiliated” companies. In addition, under the 1940 Act, the Company is required to separately identify investments where it owns more than 25% of a portfolio company’s outstanding voting securities and/or had the power to exercise control over the management or policies of such portfolio company as investments in “controlled”

20
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) – Continued

“controlled” companies. Under the 1940 Act, "non-affiliated investments" are defined as investments that are neither controlled investments nor affiliated investments. Detailed information with respect to the Company’s non-controlled, non-affiliated; non-controlled, affiliated; and controlled affiliated investments is contained in the consolidated financial statements, including the consolidated schedule of investments.


19

AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) - Continued

The information in the tables below is presented on an aggregate portfolio basis, without regard to whether they are non-controlled, non-affiliated; non-controlled, affiliated; or controlled affiliated investments.

Investments at fair value and amortized cost consisted of the following as of March 31,September 30, 2021 and December 31, 2020:

  

September 30, 2021		  

   December 31, 2020		 
(Amounts in thousands) Amortized Cost  Fair Value  Amortized Cost  Fair Value 
First lien senior secured debt $105,693  $105,645  $76,415  $75,805 
Sponsor subordinated note  15   15   7   7 
Investment in affiliated fund  4,444   5,736   3,201   3,721 
Total investments $110,152  $111,396  $79,623  $79,533 

21
  

   March 31, 2021		  

   December 31, 2020		 
(Amounts in thousands) Amortized Cost  Fair Value  Amortized Cost  Fair Value 
First lien senior secured debt $80,966  $80,517  $76,415  $75,805 
Sponsor subordinated note  10   9   7   7 
Investment in affiliated fund  3,329   4,061   3,201   3,721 
Total investments $84,305  $84,587  $79,623  $79,533 
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) – Continued

The industry composition of investments based on fair value as of March 31,September 30, 2021 and December 31, 2020 was as follows:


 March 31, 2021  December 31, 2020 
Aerospace and defense 2.5% 2.7%
Auto components –
 1.5%
Chemicals 8.2% 8.4%
Commercial services and supplies 6.6% 7.0%
Containers and packaging 6.5% 7.0%
Diversified consumer services 10.5% 9.8%
Electronic equipment, instruments and components 1.8% 2.0%
Food and staples retailing 0.8% 0.9%
Food products 1.2% 1.3%
Gas utilities 1.6% 1.6%
Health care equipment and supplies 3.2
% 0.8%
Health care providers and services 20.1
% 24.0%
Health care technology 2.1% 1.6%
Internet and direct marketing retail 2.3% 2.5%
IT services 3.2% 3.4%
Machinery 1.1% 1.1%
Media 3.4% 3.4%
Metals and mining 2.4% 2.6%
Multisector holdings 4.8% 4.7%
Personal products 3.3% 3.5%
Real estate management and development
 1.9
% - 
Software 3.8% 2.9%
Specialty retail 1.5% – 
Textiles, apparel and luxury goods 2.0% 2.0%
Trading companies and distributors 5.2% 5.3%
Total 100.0% 100.0%


  September 30, 2021   December 31, 2020 
Aerospace and defense 1.9% 2.7%
Chemicals 6.2% 8.4%
Commercial services and supplies 2.6% 7.0%
Construction and engineering 0.5% – 
Containers and packaging 5.6% 7.0%
Distributors 0.5% 1.5%
Diversified consumer services 8.9% 9.8%
Electronic equipment, instruments and components 1.3% 2.0%
Food and staples retailing 1.3% 0.9%
Food products 1.3% 1.3%
Gas utilities 1.2% 1.6%
Health care equipment and supplies 2.8% 0.8%
Health care providers and services 23.8% 24.0%
Health care technology 1.6% 1.6%
Household durables 2.5% – 
Internet and direct marketing retail 2.7% 2.5%
IT services 3.0% 3.4%
Leisure equipment and products 1.7% – 
Life sciences tools and services 1.0% – 
Machinery 1.6% 1.1%
Media 2.4% 3.4%
Metals and mining 2.1% 2.6%
Multisector holdings 5.2% 4.7%
Personal products 2.5% 3.5%
Pharmaceuticals 2.0% – 
Real estate management and development 1.5% – 
Software 3.0% 2.9%
Specialty retail 1.1% – 
Textiles, apparel and luxury goods 1.5% 2.0%
Trading companies and distributors 5.9% 5.3%
Water utilities 0.8% – 
Total 100.0% 100.0%

As of March 31,September 30, 2021, 97.2%98.8% of investments held were based in the United States and 2.8%1.2% were based in Canada. InvestmentsAll investments held as of December 31, 2020 were based solely in the United States.


2022

AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) -– Continued

Note 4.  Fair Value of Investments

Fair Value Disclosures

The following tables present the fair value hierarchy of financial instruments as of March 31,September 30, 2021 and December 31, 2020:

  Assets at Fair Value as of September 30, 2021 
(Amounts in thousands) Level 1  Level 2  Level 3  Total 
First lien senior secured debt $–  $–  $105,645  $105,645 
Sponsor subordinated note  –   –   15   15 
Foreign currency forward contracts  –   8   –   8 
Total $–  $8  $105,660  $105,668 
Investments measured at net asset value(1)
              5,736 
Total financial instruments, at fair value             $111,404 
     
Assets at Fair Value as of March 31, 2021
(Amounts in thousands) Level 1  Level 2  Level 3  Total
First lien senior secured debt $-  $–  $80,517  $80,517
Sponsor subordinated note  -   –   9   9
Foreign currency forward contracts  -   16   –   16
Total $-  $16  $80,526  $80,542
Investments measured at net asset value(1)
              4,061
Total financial instruments, at fair value             $84,603
  ��             
(1) Certain investments that are measured at fair value using NAV have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.

(1) Certain investments that are measured at fair value using NAV have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.

  
 
   Assets at Fair Value as of December 31, 2020
(Amounts in thousands) Level 1  Level 2  Level 3  Total
First lien senior secured debt $–  $–  $75,805
  $75,805
Sponsor subordinated note  –   –   7
   7
Total $–  $–  $75,812  $75,812
Investments measured at net asset value(1)
              3,721
Total financial instruments, at fair value             $79,533

     
Assets at Fair Value as of December 31, 2020
(Amounts in thousands) Level 1  Level 2  Level 3  Total
First lien senior secured debt $–  $–  $75,805  $75,805
Sponsor subordinated note  –   –   7   7
Total $–  $–  $75,812  $75,812
Investments measured at net asset value(1)
              3,721
Total financial instruments, at fair value             $79,533
                
(1) Certain investments that are measured at fair value using NAV have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.
(1) Certain investments that are measured at fair value using NAV have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.

The following tables present changes in the fair value of investments for which Level 3 inputs were used to determine the fair value for the three and nine months ended March 31,September 30, 2021 and 2020:

       
Level 3 Assets at Fair Value for the Three Months Ended March 31, 2021*
 Level 3 Assets at Fair Value for the Three Months Ended September 30, 2021*         
(Amounts in thousands) 
Balance
1/1/2021
  Purchases and Drawdowns  Sales and Paydowns  Other**  Realized Gains/ (Losses)  Change in Unrealized Appreciation/(Depreciation)  
Balance
3/31/2021
  Change in Unrealized Appreciation/ (Depreciation) for Level 3 Assets Still Held as of 3/31/2021  
Balance
7/1/2021
  Purchases and Drawdowns  Sales and Paydowns  Other**  Realized Gains/ (Losses)  Change in Unrealized Appreciation/(Depreciation)  
Balance
9/30/2021
  Change in Unrealized Appreciation/ (Depreciation) for Level 3 Assets Still Held as of 9/30/2021 
First lien senior secured debt $75,805  $13,930  $(9,572) $175  $18  $161  $80,517  $161  $92,947  $19,865  $(7,449) $162  $35  $85  $105,645  $85 
Sponsor subordinated note  7   2   –   1   –   (1)  9   (1)  8   4   -   1   -   2   15   2 
Total $75,812  $13,932  $(9,572) $176  $18  $160  $80,526  $160  $92,955  $19,869  $(7,449) $163  $35  $87  $105,660  $87 
                        
       
* Gains and losses are included in their respective captions in the consolidated statement of operations.       
** Includes accretion, paydown gains/(losses) and interest received in-kind on debt instruments, where applicable.       

*   Gains and losses are included in their respective captions in the consolidated statement of operations.
** Includes accretion, paydown gains/(losses) and interest received in-kind on debt instruments, where applicable.

  Level 3 Assets at Fair Value for the Nine Months Ended September 30, 2021*         
 (Amounts in thousands) 
Balance
1/1/2021
  Purchases and Drawdowns  Sales and Paydowns  Other**  
Realized Gains/
(Losses)
  Change in Unrealized Appreciation/(Depreciation)  
Balance
9/30/2021
  Change in Unrealized Appreciation/ (Depreciation) for Level 3 Assets Still Held as of 9/30/2021 
First lien senior secured debt $75,805  $53,933  $(25,252) $475  $122  $562  $105,645  $562 
Sponsor subordinated note  7   6   -   2   -   -   15   - 
                                     Total $75,812  $53,939  $(25,252) $477  $122  $562  $105,660  $562 

*   Gains and losses are included in their respective captions in the consolidated statement of operations.
** Includes accretion, paydown gains/(losses) and interest received in-kind on debt instruments, where applicable.

2123
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) -– Continued

 

     Level 3 Assets at Fair Value for the Three Months Ended March 31, 2020*  		 Level 3 Assets at Fair Value for the Three Months Ended September 30, 2020*         
(Amounts in thousands) 
Balance
1/1/2020
  Purchases and Drawdowns  Sales and Paydowns  Other**  Realized Gains/ (Losses)  Change in Unrealized Appreciation/(Depreciation)  
Balance
3/31/2020
  Change in Unrealized Appreciation/ (Depreciation) for Level 3 Assets Still Held as of 3/31/2020  
Balance
7/1/2020
  Purchases and Drawdowns  Sales and Paydowns  Other**  Realized Gains/ (Losses)  Change in Unrealized Appreciation/(Depreciation)  
Balance
9/30/2020
  Change in Unrealized Appreciation/ (Depreciation) for Level 3 Assets Still Held as of 9/30/2020 
First lien senior secured debt $38,156  $22,155  $(922) $58  $–  $(1,590) $57,857  $(1,590) $59,010  $4,117  $(1,716) $65  $1  $489  $61,966  $489 
Sponsor subordinated note  –   6   –   –   –   (1)  5   (1)  6   -   -   -   -   1   7   1 
Total $38,156  $22,161  $(922) $58  $–  $(1,591) $57,862  $(1,591) $59,016  $4,117  $(1,716) $65  $1  $490  $61,973  $490 
                        
       
* Gains and losses are included in their respective captions in the consolidated statement of operations.       
** Includes accretion, paydown gains/(losses) and interest received in-kind on debt instruments, where applicable.       

*   Gains and losses are included in their respective captions in the consolidated statement of operations.
** Includes accretion, paydown gains/(losses) and interest received in-kind on debt instruments, where applicable.

  Level 3 Assets at Fair Value for the Nine Months Ended September 30, 2020*         
 (Amounts in thousands) 
Balance
1/1/2020
  Purchases and Drawdowns  Sales and Paydowns  Other**  Realized Gains/ (Losses)  Change in Unrealized Appreciation/(Depreciation)  
Balance
9/30/2020
  Change in Unrealized Appreciation/ (Depreciation) for Level 3 Assets Still Held as of 9/30/2020 
First lien senior secured debt $38,156  $34,119  $(9,550) $200
  $5  $(964)
 $61,966  $(964)
Sponsor subordinated note  –   6
   –   –   –   1   7   1 
                                     Total $38,156  $34,125  $(9,550) $200
  $5  $(963
)
 $61,973  $(963)

*   Gains and losses are included in their respective captions in the consolidated statement of operations.
** Includes accretion, paydown gains/(losses) and interest received in-kind on debt instruments, where applicable.

Debt Not Carried at Fair Value

The fair value of the Company’s subscription facility, which would have been categorized as Level 3 within the fair value hierarchy as of March 31,September 30, 2021 and December 31, 2020, approximates its carrying value.

Significant Unobservable Inputs

In accordance with ASC 820, the following tables provide quantitative information about the significant unobservable inputs of the Company’s Level 3 investments as of March 31,September 30, 2021 and December 31, 2020.  The table is not intended to be all-inclusive but instead capture the significant unobservable inputs relevant to the Company’s determination of fair value.

  Fair Value         Impact to Valuation
  as of ValuationSignificant    Weighted from an Increase
Asset Class 9/30/21 TechniquesUnobservable Inputs Input Ranges  Average in Input
  (Amounts in thousands)              
First lien senior secured debt $93,788 Discounted cash flowYield  6.5% - 11.8%  8.0%Decrease
Sponsor subordinated note  10 Market comparableLTM EBITDA multiple  7.0x    Increase
  $93,798                

 Fair Value        Impact to Valuation Fair Value        Impact to Valuation
 as of ValuationSignificant    Weighted from an Increase as of ValuationSignificant    Weighted from an Increase
Asset Class 3/31/2021 TechniquesUnobservable Inputs Input Ranges  Average in Input 12/31/2020
 TechniquesUnobservable Inputs Input Ranges  Average in Input
  (Amounts in thousands)
    
  
            (Amounts in thousands)           
First lien senior secured debt $69,745 Discounted cash flowYield 6.5% - 11.4%
 8.1%
Decrease $64,571 Discounted cash flowYield 6.3% - 11.4% 8.0%Decrease
Sponsor subordinated note  9 Market comparableLTM EBITDA multiple 7.0x
   Increase  7
 Market comparableLTM EBITDA multiple 7.0x   Increase
 $69,754              $64,578             

  Fair Value         Impact to Valuation
  as of ValuationSignificant    Weighted from an Increase
Asset Class 12/31/2020 TechniquesUnobservable Inputs Input Ranges  
Average(1)
 in Input
   (Amounts in thousands)
                
First lien senior secured debt $64,571 Discounted cash flowYield  6.3% - 11.4%
  8.0%
Decrease
Sponsor subordinated note  7 Market comparableLTM EBITDA multiple  7.0x
    Increase
  $64,578                

The Company’s other Level 3 investments have been valued primarily using recent transactions.  The significant unobservable input used in the discounted cash flow is the yield.  The yield is used to discount the estimated future cash flows expected to be received from the underlying investment.  The Company considers the portfolio company performance since close, the leverage used by the portfolio company relative to its total enterprise value and other risks associated with an investment in determining the yield.  The significant unobservable input used in the market comparable is the LTMlatest twelve month (“LTM”) EBITDA multiplemultiple.

24
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) – Continued

Note 5.  Subscription Facility

In accordance with the 1940 Act, the Company can borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 200% after such borrowings, subject to certain limitations.  There were no outstanding borrowings as of March 31,September 30, 2021 and  December 31, 2020.

On August 14, 2019,2019, the Company entered into a revolving credit facility (the “Subscription Facility”) with Wells Fargo Bank, National Association (the “Lender”).  The Subscription Facility enables the Company to request loans from the Lender up to a maximum commitment of $15 million.  The borrowings under the Subscription Facility are collateralized by the eligible unfunded capital commitments of investors in the Company.  The total amount available under the Subscription Facility may be reduced as a result of decreases in the unfunded capital


22
AG Twin Brook BDC, Inc. 
Notes to Consolidated Financial Statements (Unaudited) - Continued
commitments of investors in the Company as well as other provisions of the Subscription Facility.

Borrowings under the Subscription Facility bear interest at either (i) LIBOR plus the applicable margin of 1.50%, if the borrowing is a LIBOR Rate Loan or (ii) the Prime Rate plus the applicable margin of 0.50%, if the borrowing is a Reference Rate Loan.  As of March 31,September 30, 2021 and December 31, 2020, there were no outstanding borrowings.  In addition, the Company pays an unused commitment fee of 0.20% per annum on the daily unused commitments of the Lender.  The maturity date of the Subscription Facility is August 12, 2022.

2022.
The Subscription Facility contains representations, warranties, covenants, including financial covenants, events of default and indemnities that are customary for agreements of this type.  As of March 31,September 30, 2021 and December 31, 2020, the Company is in compliance in all material respects with such covenants.
Debt obligations consisted of the following as of September 30, 2021:

  As of September 30, 2021      
(Amounts in thousands) Maximum Principal Amount Committed  Principal Amount Outstanding  
Principal Amount Available(1)
  Carrying Value 
Subscription facility $15,000  $-  $10,098  $- 
Total debt $15,000  $-  $10,098  $- 

(1)  The amount available reflects any limitations related to the Subscription Facility’s borrowing base.
Debt obligations consisted of the following as of MarchDecember 31, 2021:2020
     As of December 31, 2020
(Amounts in thousands) Maximum Principal Amount Committed  
Principal
Amount Outstanding
  
Principal Amount Available(1)
  Carrying Value 
Subscription facility $15,000  $-

 $13,900  $-

Total debt $15,000  $-

 $13,900  $-


  

    As of March 31, 2021  
(Amounts in thousands) Maximum Principal Amount Committed  Principal Amount Outstanding  
Principal Amount Available(1)
  Carrying Value
Subscription facility $15,000  $-  $12,712  $–
Total debt $15,000  $-  $12,712  $–

(1)  The amount available reflects any limitations related to the Subscription Facility’s borrowing base.

Debt obligations consisted of the following as of December 31, 2020:
25
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) – Continued

  

    As of December 31, 2020  
(Amounts in thousands) Maximum Principal Amount Committed  Principal Amount Outstanding  
Principal Amount Available(1)
  Carrying Value
Subscription facility $15,000  $–  $13,900  $–
Total debt $15,000  $–  $13,900  $–

(1)  The amount available reflects any limitations related to the Subscription Facility’s borrowing base.

For the three and nine months ended March 31,September 30, 2021 and 2020, the components of interest expense were as follows:

 Three Months  Three Months  Three Months  Three Months       
 Ended  Ended  Ended  Ended  Nine Months Ended  Nine Months Ended 
(Amounts in thousands) March 31, 2021  March 31, 2020  September 30, 2021  September 30, 2020  September 30, 2021  September 30, 2020 
Interest expense $7  $98  $8  $27  $23  $189 
Amortization of deferred financing costs  53   27   58   40   167 
  94 
Total interest expense $60  $125  $66  $67  $190  $283 
Average interest rate 3.54% 3.04% 1.77% 2.08% 2.46% 2.88%
Average daily borrowings $56  $9,293  $105  $217  $54  $5,553 



23
AG Twin Brook BDC, Inc. 
Notes to Consolidated Financial Statements (Unaudited) - Continued
Note 6.  Agreements and Related Party Transactions

Administration Agreement

On June 26, 2019, the Company entered into an Administration Agreement (the “Administration Agreement”) with Angelo Gordon (the “Administrator”). Under the terms of the Administration Agreement, the Administrator performs, or oversees the performance of, required administrative services, which include providing office space, equipment and office services, maintaining financial records, preparing reports to shareholders and reports filed with the SEC, and managing the payment of expenses and the performance of administrative and professional services rendered by others.

The Company reimburses the Administrator for services performed for it pursuant to the terms of the Administration Agreement. In addition, pursuant to the terms of the Administration Agreement, the Administrator may delegate its obligations under the Administration Agreement to an affiliate or to a third party and the Company will reimburse the Administrator for any services performed for it by such affiliate or third party.

Unless earlier terminated as described below, the Administration Agreement will remain in effect until June 26, 20212022 and from year to year thereafter if approved annually by the vote of the Board of Directors of the Company and the vote of a majority of the Company’s Independent Directors.  The Administration Agreement may be terminated by either party without penalty upon not less than 60 days’ written notice to the other.

No person who is an officer, director, or employee of the Administrator or its affiliates and who serves as a director of the Company receives any compensation from the Company for his or her services as a director.  However, the Company reimburses the Administrator (or its affiliates) for an allocable portion of the compensation paid by the Administrator or its affiliates to the Company’s officers who provide operational and administrative services, as well as their respective staffs and other professionals who provide services to the Company, who assist with the preparation, coordination and administration of the foregoing or provide other “back office” or “middle office” financial or operational services to the Company (based on the percentage of time those individuals devote, on an estimated basis, to the business and affairs of the Company).  Directors who are not affiliated with the Administrator receive compensation for their services and reimbursement of expenses incurred to attend meetings.

For the three and nine months ended March 31,September 30, 2021, the Administrator charged approximately $0.1 and $0.3 million, respectively, for certain costs and expenses allocable to the Company under the terms of the Administration agreement.  For the three and nine months ended March 31,September 30, 2020, the Administrator had the option to charge approximately $0.2$0.1 million and $0.4 million, respectively, for certain costs and expenses allocable to the Company under the terms of the Administration Agreement, all of which were waived and borne by the Administrator for those periods.



26
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) – Continued

Investment Management Agreement

On June 26, 2019, the Company entered into an Investment Management Agreement (the “Investment Management Agreement”) with the Advisor.  Under the terms of the Investment Management Agreement, the Advisor 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 the Company’s investments and portfolio companies on an ongoing basis.

Unless earlier terminated as described below, the Investment Management Agreement will remain in effect until June 26, 20212022 and from year to year thereafter if approved annually by (a) the vote of the Board of Directors of the Company or by the vote of a majority of the outstanding voting securities of the Company and (b) the vote of a majority of the Company’s Independent Directors.  The Investment Management



24
AG Twin Brook BDC, Inc. 
Notes to Consolidated Financial Statements (Unaudited) - Continued
Agreement will automatically terminate in the event of assignment.  The Investment Management Agreement may be terminated without penalty upon not less than 60 days’ written notice by the vote of a majority of the outstanding voting securities of the Company, or by the vote of the Company’s Directors or by the Advisor.

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

The Investment Management Agreement also provides that the Company reimburses the Advisor for certain organizational costs incurred prior to the commencement of the Company’s operations, and for certain offering costs. The Company has agreed to repay the Advisor for initial organizational costs and offering costs up to a maximum of $1.25 million, with the Advisor bearing any organizational and offering costs in excess of such amount.

As of March 31,September 30, 2021, the Company had approximately $0.6$0.7 million payable to Angelo Gordon for operating costs which is included in “Accrued expenses and other liabilities payable to affiliate” on the consolidated statement of assets and liabilities.  As of December 31, 2020, the Company had approximately $0.5 million payable to Angelo Gordon for operating costs, which is included in "Accrued expenses and other liabilities payable to affiliate" on the consolidated statement of assets and liabilities.

Under the terms of the Investment Management Agreement, the Company will pay the Advisor a base management fee and may also pay to it certain incentive fees.  The cost of both the base management fee and the incentive fee will ultimately be borne by the Company’s shareholders.


The base management fee is calculated at an annual rate of 0.60% of the Company’s gross assets, excluding cash and cash equivalents.  For services rendered under the Investment Management Agreement, the base management fee is payable quarterly in arrears.  The base management fee is calculated based on the average value of the Company’s gross assets (excluding cash and cash equivalents) at the end of the two most recently completed calendar quarters, and appropriately adjusted for any share issuances or repurchases during the current calendar quarter.  Base management fees for any partial month or quarter will be appropriately pro-rated.  For purposes of the Investment Management Agreement, cash equivalents means U.S. government securities and commercial paper instruments maturing within one year of purchase.  Upon the occurrence of a Qualified IPO, the base management fee will be calculated at an annual rate of 1.25% of the Company’s gross assets, excluding cash and cash equivalents.


27
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) – Continued

For the three and nine months ended March 31,September 30, 2021, the Company accrued approximately $123,000$155,000 and $416,000, respectively, of base management fees payable to the Advisor.  For the three and nine months ended March 31,September 30, 2020, the Company accrued approximately $74,000$94,000 and $259,000 of base management fees payable to the advisor. As of March 31,September 30, 2021 and December 31, 2020, base management fees payable by the Company to the Advisor were approximately $123,000$155,000 and $105,000, respectively.

Pursuant to the Investment Management Agreement, the Advisor is entitled to an incentive fee (“Incentive Fee”), which consists of two components; an incentive fee based on income and an incentive fee based on capital gains.

The first part, the income incentive fee, is calculated and payable quarterly in arrears and equals (a) 100% of the excess of the Company’s pre-incentive fee net investment income for the immediately preceding calendar quarter, over a preferred return of 1.00% per quarter (4% annualized) (the “Hurdle”), until the


25
AG Twin Brook BDC, Inc. 
Notes to Consolidated Financial Statements (Unaudited) - Continued
Advisor has received a “catch-up” equal to 16.75% of the pre-incentive fee net investment income for the current quarter; and (b) 16.75% of all remaining pre-incentive fee net investment income above the “catch-up.”

The second part, the capital gains incentive fee, is determined and payable in arrears as of the end of each fiscal year (or upon termination of the Investment Management Agreement), and equals 16.75% of the Company’s realized capital gains, if any, on a cumulative basis from inception through the end of the fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees (the “Cumulative Capital Gains”).

For the three and nine months ended March 31,September 30, 2021, the Company accrued approximately $147,000$214,000 and $568,000, respectively, of income incentive fees payable to the Advisor, of which $147,000 were unpaid as of March 31, 2021.Advisor.  For the three and nine months ended March 31,September 30, 2020, the Company accrued approximately $39,000$38,000 and $114,000, respectively, of income incentive fees payable to the Advisor. As of September 30, 2021 and December 31, 2020, the Company had approximately $214,000 and $99,000, respectively, of income incentive fees payable to the Advisor.

Affiliated Transactions

The Company may be prohibited under the 1940 Act from participating in certain transactions with its affiliates without prior approval of the Company’s Independent Directors, and in some cases, the prior approval of the SEC.  The Company intends to rely on exemptive relief that has been granted by the SEC to the Company, the Advisor, and Angelo Gordon to permit the Company to co-invest with other funds managed by the Advisor or Angelo Gordon, in a manner consistent with the Company’s investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors.

Pursuant to such exemptive relief, the Company is generally permitted to co-invest with certain of its affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of the Board make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transaction, including the consideration to be paid, are reasonable and fair to the Company and its shareholders and do not involve overreaching of the Company or its shareholders on the part of any person concerned, (2) the transaction is consistent with the interests of the Company’s shareholders and is consistent with its investment objective and strategies, and (3) the investment by its affiliates would not disadvantage the Company, and the Company’s participation would not be on a basis different from or less advantageous than that on which its affiliates are investing. In certain situations where co-investment with one or more funds managed by Angelo Gordon is not permitted or appropriate, Angelo Gordon will need to decide

28
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) – Continued

which funds will proceed with the investment.  Angelo Gordon will make these determinations based on its policies and procedures, which are designed to reasonably ensure that investment opportunities are allocated fairly and equitably among affiliated funds over time and in a manner that is consistent with applicable laws, rules and regulations.

Investment in Affiliated Fund

Fair value as of March 31,September 30, 2021 and 2020 and transactions during the three and nine months ended March 31,September 30, 2021 and 2020 of the Company’s investments in affiliates were as follows:

  Investment in Affiliated Fund at Fair Value for the Three Months Ended March 31, 2021 Investment in Affiliated Fund at Fair Value for the Three Months Ended September 30, 2021   
(Amounts in thousands) 
Fair Value as of
January 1, 2021
  Gross Additions  Gross Reductions  Net Realized Gain (Loss)  Net Change in Unrealized Appreciation (Depreciation)  
Fair Value as of
March 31, 2021
  Dividend, Interest, PIK and Other Income 
Fair Value as of
July 1, 2021
 Gross Additions  Gross Reductions  
Net Realized
Gain (Loss)
  Net Change in Unrealized Appreciation (Depreciation)  
Fair Value as of
September 30, 2021
  Dividend, Interest, PIK and Other Income 
Non-controlled/affiliated investments                                        
Twin Brook Equity Holdings, LLC $3,721  $130  $(2) $–  $212  $4,061  $– $5,131 $398  $(13) $–  $220  $5,736  $– 
Total non-controlled/affiliated investments $3,721  $130  $(2) $–  $212  $4,061  $– $5,131 $398  $(13) $–  $220  $5,736  $– 


  Investment in Affiliated Fund at Fair Value for the Nine Months Ended September 30, 2021 
(Amounts in thousands) 
Fair Value as of
January 1, 2021
  Gross Additions  Gross Reductions  
Net Realized
Gain (Loss)
  Net Change in Unrealized Appreciation (Depreciation)  
Fair Value as of
September 30, 2021
  Dividend, Interest, PIK and Other Income 
Non-controlled/affiliated investments                     
Twin Brook Equity Holdings, LLC $3,721  $1,259  $(16) $–  $772  $5,736  $– 
Total non-controlled/affiliated investments $3,721  $1,259  $(16) $–  $772  $5,736  $– 

26
  Investment in Afilliated Fund at Fair Value for the Three Months Ended September 30, 2020 
(Amounts in thousands) 
Fair Value as of
July 1, 2020
  Gross Additions  Gross Reductions  
Net Realized
Gain (Loss)
  Net Change in Unrealized Appreciation (Depreciation)  
Fair Value as of
September 30, 2020
  Dividend, Interest, PIK and Other Income 
Non-controlled/affiliated investments                     
Twin Brook Equity Holdings, LLC $1,957  $25  $(23) $–  $270  $2,229  $– 
Total non-controlled/affiliated investments $1,957  $25  $(23) $–  $270  $2,229  $– 
AG Twin Brook BDC, Inc. 
Notes to Consolidated Financial Statements (Unaudited) - Continued
  Investment in Affiliated Fund at Fair Value for the Three Months Ended March 31, 2020
(Amounts in thousands) 
Fair Value as of
January 1, 2020
  Gross Additions  Gross Reductions  Net Realized Gain (Loss)  Net Change in Unrealized Appreciation (Depreciation)  
Fair Value as of
March 31, 2020
  Dividend, Interest, PIK and Other Income
Non-controlled/affiliated investments                    
Twin Brook Equity Holdings, LLC $1,641
  $479  $–  $–  $(361
) $1,759  $–
Total non-controlled/affiliated investments $1,641
  $479  $–  $–  $(361)
 $1,759  $–


  Investment in Affiliated Fund at Fair Value for the Nine Months Ended September 30, 2020 
(Amounts in thousands) 
Fair Value as of
January 1, 2020
  Gross Additions  Gross Reductions  
Net Realized
Gain (Loss)
  Net Change in Unrealized Appreciation (Depreciation)  
Fair Value as of
September 30, 2020
  Dividend, Interest, PIK and Other Income 
Non-controlled/affiliated investments                     
Twin Brook Equity Holdings, LLC $1,641  $690  $(82) $–  $(20) $2,229  $– 
Total non-controlled/affiliated investments $1,641  $690  $(82) $–  $(20) $2,229  $– 

Note 7.  Derivatives

The Company may enter into foreign currency forward contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies.

In order to better define its contractual rights and to secure rights that will help the Company mitigate its counterparty risk, the Company may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or a similar agreement with its derivative counterparties. An ISDA Master Agreement is a bilateral agreement between the Company and a counterparty that governs OTC derivatives, including foreign currency forward contracts, and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of a default (close-out netting) or similar event, including the bankruptcy or insolvency of the counterparty. The Company minimizes counterparty credit risk by only entering into agreements with counterparties that it believes to be of good standing and by monitoring the financial stability of those counterparties.





29
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) – Continued

For the three and nine months ended March 31, September 30, 2021, the Company’s average USD notional exposure to foreign currency forward contracts was $809,026.approximately $1,212,000 and $1,392,000, respectively.

The following table presents both gross and net information about derivative instruments eligible for offset in the consolidated statements of assets and liabilities as of March 31,September 30, 2021.

Counterparty 
Gross Amount of
Assets
  Gross Amount of Liabilities  Net Amount of Assets/(Liabilities)  
Collateral Received/Pledged(1)
  
Net Amounts(2)
 
Wells Fargo Bank, National Association $23  $15  $8  $-  $8 
Counterparty Gross Amount of Assets  Gross Amount of Liabilities  Net Amount of Assets/(Liabilities)  
Collateral Received/Pledged(1)
  
Net Amounts(2)
Wells Fargo Bank, National Association $16  $–  $16  $–  $16
                    
(1) Amount excludes excess cash collateral paid.                   
(2) Net amount represents the net amount due (to) from counterparty in the event of a default based on the contractual setoff rights under the agreement. Net amount excludes any over-collateralized amounts.
                    
                    

(1) Amount excludes excess cash collateral paid.
(2) Net amount represents the net amount due (to) from counterparty in the event of a default based on the contractual setoff rights under the agreement. Net amount excludes any over-collateralized amounts, if applicable.

The effect of transactions in derivative instruments on the consolidated statements of operations during the three and nine months ended March 31,September 30, 2021 was as follows:

  Three Months Ended September 30, 2021  Nine Months Ended September 30, 2021 
Net change in unrealized gain (loss) on foreign currency forward contracts $4  $8 
Realized (loss) on foreign currency forward contracts  12   (47)
  
Three Months Ended
March 31, 2021
 
Net change in unrealized gain (loss) on foreign currency forward contracts $16 

There were no derivative transactions entered in to or outstanding for the year ended December 31, 2020.

Note 8.  Commitments and Contingencies

Commitments

The Company’s investment portfolio may contain debt investments that are in the form of revolving lines of credit and unfunded delayed draw commitments, which require the Company to provide funding when requested by portfolio companies in accordance with the terms of the underlying loan agreements.


27
AG Twin Brook BDC, Inc. 
Notes to Consolidated Financial Statements (Unaudited) - Continued
Unfunded portfolio company commitments and funded debt investments are presented on the consolidated schedule of investments and are fair valued.  Unrealized appreciation or depreciation, if any, is included in the consolidated statement of assets and liabilities and consolidated statement of operations.


30
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) – Continued

As of March 31,September 30, 2021 and December 31, 2020, the Company had the following outstanding commitments to fund investments in current portfolio companies:

Portfolio Company March 31, 2021 December 31, 2020 
First lien senior secured debt(1)
 (Amounts in thousands) (Amounts in thousands) 
50Floor, LLC $199 $199 
Advanced Lighting Acquisition, LLC  162  162 
Affinitiv, Inc.  248  248 
ALM Media, LLC  776  971 
AM Buyer, LLC  111  108 
Anne Arundel Dermatology Management, LLC  634  780 
Apex Dental Partners, LLC  566  600 
Aquatic Sales Solutions, LLC  150  135 
ASP Global Acquisition, LLC  534  534 
Banner Buyer, LLC  1,269  1,343 
BBG Intermediate Holdings, Inc.  210  – 
Beacon Oral Specialists Management LLC  686  686 
BRTS Holdings, LLC  400  341 
Canadian Orthodontic Partners Corp.  600  – 
Copperweld Group, Inc.  400  400 
Cosmetic Solutions, LLC  710  710 
DealerOn Inc.  314  314 
Empire Equipment Company, LLC  1,379  1,254 
EMSAR Acquisition LLC  774  – 
Engelman Baking Co., LLC  157  157 
G2O Technologies, LLC  207  207 
Geriatric Medical and Surgical Supply, LLC  270  270 
Groundworks Operations, LLC  967  739 
Hydromax USA, LLC  216  330 
Industrial Dynamics Company, Ltd.  141  141 
Innovative FlexPak, LLC  627  627 
ISSA, LLC  131  – 
Jansy Packaging, LLC  706  676 
Kalkomey Enterprises, LLC  77  77 
Lakeshirts LLC  650  703 
Legility, LLC  123  123 
Leonard Group, Inc.  197  – 
Library Associates, LLC  211  211 
Mattco Forge, Inc.  506  506 
Millennia Patient Services, LLC  401  – 
Montway LLC  825  825 
 
Portfolio Company September 30, 2021 December 31, 2020 
First lien senior secured debt(1)
 (Amounts in thousands) (Amounts in thousands) 
50Floor, LLC $199 $199 
Abrasive Technology Intermediate, LLC  173  - 
Advanced Lighting Acquisition, LLC  324  162 
AFC Industries, Inc.  250  - 
Affinitiv, Inc.  248  248 
Agility Intermediate, Inc.  534  - 
ALM Media, LLC  873  971 
Altamira Material Solutions, LP  32  - 
AM Buyer, LLC  111  108 
Anne Arundel Dermatology Management, LLC  354  780 
Apex Dental Partners, LLC  236  600 
Aptitude Health Holdings, LLC  240  - 
Aquatic Sales Solutions, LLC  38  135 
ASP Global Acquisition, LLC  534  534 
Banner Buyer, LLC  813  1,343 
BBG Intermediate Holdings, Inc.  165  686 
Beacon Oral Specialists Management LLC  311  - 
Behavior Frontiers, LLC  19  - 
BRTS Holdings, LLC  -  341 
Bio Agri Mix Holdings Inc.  89  - 
Brightview, LLC  427  - 
Canadian Orthodontic Partners Corp.  380  - 
Community Care Partners, LLC  263  - 
Copperweld Group, Inc.  228  400 
Cosmetic Solutions, LLC  710  710 
Data Source Intermediate Holdings, LLC  123  - 
DealerOn Inc.  314  314 
Diamondback Buyer, LLC  68  - 
Domino Equipment Company, LLC  79  - 
Edko Acquisition, LLC  38  - 
EH Management Company, LLC  38  - 
Empire Equipment Company, LLC  1,379  1,254 
EMSAR Acquisition LLC  567  - 
Engelman Baking Co., LLC  157  157 
E-Phoenix Acquisition Co. Inc.  75  - 
Formulated Buyer, LLC  488  - 
G2O Technologies, LLC  207  207 
Geriatric Medical and Surgical Supply, LLC 
300 
270 
Groundworks Operations, LLC  867  739 
Guardian Dentistry Practice Management, LLC  218  - 
Hydromax USA, LLC  205  330 
Icelandirect, LLC  33  - 
Industrial Dynamics Company, Ltd.  141  141 
Innovative FlexPak, LLC  408  627 

2831
––
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) -– Continued

Portfolio Company March 31, 2021 December 31, 2020  September 30, 2021 December 31, 2020 
First lien senior secured debt(1)
 (Amounts in thousands) (Amounts in thousands) 
First lien senior secured debt (continued) (Amounts in thousands) (Amounts in thousands) 
ISSA, LLC  $131  $- 
Jansy Packaging, LLC 706  676 
Kalkomey Enterprises, LLC 77  77 
Lakeshirts LLC 663  703 
Legility, LLC 123  123 
Leonard Group, Inc. 197  - 
Library Associates, LLC 127  211 
MacNeill Pride Group Corp. 218  - 
Mad Rose Company, LLC 104  - 
Mattco Forge, Inc. 506  506 
Millennia Patient Services, LLC 401  - 
Montway LLC 825  825 
Motis Brands, Inc. 115  - 
MRC Keeler Acquisition, LLC $300 $300  300  300 
Nimlok Company, LLC 11 11  320  11 
NSG Buyer, Inc. 294 294  294  294 
NutriScience Innovations, LLC 131  - 
Peak Dental Services, LLC 636 636  337  636 
Peak Investment Holdings, LLC 809 809  908  809 
Perimeter Brands Intermediate Holdco LLC 210 210  -  210 
PPW Acquisition, LLC 38  - 
Reliable Medical Supply LLC 138 138  206  138 
Revival Animal Health, LLC 131  - 
Revolution Plastics Buyer, LLC 281 492  188  492 
RQM Buyer, Inc. 219  - 
RTP Acquisition, LLC 38  - 
SAMGI Buyer, Inc. 138 138  138  138 
SCA Buyer, LLC 484 –  459  - 
SCP ENT and Allergy Services, LLC 1,287 1,287  1,287  1,287 
SCP Eye Care Services, LLC – 469  -  469 
Shearer Supply, LLC 113  - 
ShiftKey, LLC 187 –  94  - 
Silver Falls MSO, LLC 178 178  117  178 
SimiTree Acquisition LLC 1,065  - 
Southeast Primary Care Partners, LLC 525 525  525  525 
Southern Orthodontic Partners Management, LLC 659 –  281  - 
Spear Education, LLC 888 474  888  474 
Spectrum Solutions, LLC 267 –  267  - 
Starwest Botanicals Acquisition, LLC 174  - 
Storm Smart Buyer LLC 131  - 
Teel Plastics, LLC 324 324  
324 
324 
Trademark Global, LLC 110  - 
Triad Technologies, LLC 314 282  314  282 
United Land Services Opco Parent, LLC 1,205 –  1,022  - 
Vanguard Packaging, LLC 535 535  356  535 
Varsity DuvaSawko Operating Corp. 474 474  474  474 
Vital Care Buyer, LLC  580  580   580  580 
Total unfunded portfolio company commitments $27,258 $22,533  $29,278 $22,533 

(1) Unfunded commitments denominated in currencies other than USD have been converted to USD using the exchange rate as of the applicable reporting date.
32
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) – Continued

As of March 31,September 30, 2021 and December 31, 2020, approximately $193,000$188,000 and $181,000, respectively, of the Company's unfunded revolver commitments are reserved for letters of credit issued to third party beneficiaries on behalf of the Company's investments.

Investor Commitments

As of March 31,September 30, 2021 and December 31, 2020, the Company had $216.0 million in total capital commitments from investors ($115.691.8 million and $126.4 million, respectively, undrawn).  These undrawn capital commitments will no longer remain in effect following the completion of a Qualified IPO.

Four investors in the Company have aggregate capital commitments representing 100% of the Company’s total capital commitments. Such concentration of investor commitments could have a material effect on the Company.

29


AG Twin Brook BDC, Inc. 
Notes to Consolidated Financial Statements (Unaudited) - Continued
Other Commitments and Contingencies

From time to time, the Company may become a party to certain legal proceedings during the normal course of business.  As of March 31,September 30, 2021, management was not aware of any material pending or threatened litigation.

Note 9.  Net Assets

Subscriptions and Drawdowns

TheAs of September 30, 2021, the Company has the authority to issue 100,000,000had 6,199,809 shares of its common stockissued and outstanding with a par value of $0.001 per share.

The Company has entered into subscription agreements with investors providing for the private placement of the Company’s common shares. Under the terms of the subscription agreements, investors are required to fund drawdowns to purchase the Company’s common shares up to the amount of their respective capital commitment on an as-needed basis each time the Advisor delivers a drawdown notice to such investors.

During the threenine months ended March 31,September 30, 2021 and 2020, the Advisor delivered the following capital call notices to investors:

        Three Months Ended March 31, 2021
     
Number of
Common Shares
Issued
  
Aggregate Offering
Price
($ in millions)

    
Capital Drawdown Notice Date Common Share Issuance Date   
March 16, 2021
 March 30, 2021  540,000  $10.80
Total    540,000  $10.80


Nine Months Ended September 30, 2021 
    Number of Aggregate Offering 
                                                                                Common Share Common Shares Price 
Capital Drawdown Notice DateIssuance Date Issued ($ in millions) 
March 16, 2021March 30, 2021  540,000 $10.80 
June 30, 2021July 15, 2021  802,493  16.20 
August 30, 2021September 15, 2021  375,316  7.56 
Total   1,717,809 $34.56 

Three Months Ended March 31, 2020
Nine Months Ended September 30, 2020Nine Months Ended September 30, 2020
    
Number of
Common Shares
Issued
  
Aggregate Offering
Price
($ in millions)
   Number of Aggregate Offering 

    
Common Share Common Share Common Shares Price 
Capital Drawdown Notice Date Common Share Issuance Date 
Number of
Common Shares
Issued
  
Aggregate Offering
Price
($ in millions)
Issuance Date Issued ($ in millions) 
February 28, 2020 March 13, 2020   March 13, 2020 810,000 $16.20 
June 11, 2020June 25, 2020  432,000  8.64 
Total    810,000  $16.20   1,242,000 $24.84 

Dividends
33
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) – Continued

There were no dividends
Dividends
The following table reflects dividend declared on shares of the Company’s common stock during the threenine months ended March 31,September 30, 2021 or 2020.and 2020:

For the Nine Months Ended September 30, 2021 
Date Declared 
Record
Date
 
Payment
Date
 
Dividend
per Share
 
April 22, 2021 April 26, 2021 April 30, 2021 $0.20 
July 22, 2021 July 26, 2021 July 30, 2021 $0.20 

For the Nine Months Ended September 30, 2020 
Date Declared 
Record
Date
 
Payment
Date
 Dividend
per Share		 
July 16, 2020 July 27, 2020 July 31, 2020 $0.20 

Note 10. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings (loss) per common share for the three and nine months ended March 31,September 30, 2021 and 2020:

  Three Months Ended  Three Months Ended  Nine Months Ended  Nine Months Ended 
(Amounts in thousands, except share and per share amounts) September 30, 2021  September 30, 2020  September 30, 2021  September 30, 2020 
Net increase (decrease) in net assets resulting from operations $1,518  $1,351  $4,520  $328 
Weighted average shares of common stock  5,754,844   3,402,000   5,092,922   2,907,131 
 outstanding - basic and diluted                
 Earnings (loss) per common share - basic and diluted $0.26  $0.40  $0.89  $0.11 
  Three Months  Three Months 
  Ended  Ended 
(Amounts in thousands, except share and per share amounts) March 31, 2021  March 31, 2020 
Net increase (decrease) in net assets resulting from operations $1,303  $(1,656)
Weighted average shares of common stock outstanding - basic and diluted  4,488,000   2,320,220 
Earnings (loss) per common share - basic and diluted $0.29  $(0.71)

30
AG Twin Brook BDC, Inc. 
Notes to Consolidated Financial Statements (Unaudited) - Continued
Note 11. Income Taxes

Taxable income generally differs from net increase (decrease) in net assets resulting from operations due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized gains or losses, as unrealized gains or losses are generally not included in taxable income until they are realized.

The Company makes certain adjustments to the classification of net assets as a result of permanent book-to-tax differences, which include differences in the book and tax basis of certain assets and liabilities, and nondeductible federal taxes or losses among other items. To the extent these differences are permanent, they are charged or credited to additional paid in capital or total distributable earnings (losses), as appropriate. There were no permanent differences for the threenine months ended March 31,September 30, 2021. For the three and nine months ended March 31,September 30, 2020, permanent differences were approximately $170,000,$73,000 and $409,000, respectively, consisting of nondeductible offering costs.





34
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) – Continued

Note 12.  Financial Highlights

The following are financial highlights for a common share outstanding during the threenine months ended March 31,September 30, 2021 and 2020:

 Three Months  Three Months  Nine Months  Nine Months 
 Ended  Ended  Ended  Ended 
 March 31,  March 31,  September 30,  September 30, 
(Amounts in thousands, except share and per share amounts) 2021  2020  2021  2020 
Per share data:            
Net asset value, beginning of period $19.75  $19.77  $19.75  $19.77 
Net investment income (loss)(1)
 0.20  0.13  0.61  0.45 
Net realized and unrealized gain (loss) on investment transactions(1)
  0.09   (0.84)  0.28   (0.34)
Total from operations 0.29  (0.71) 0.89  0.11 
Impact of issuance of common stock  (0.01)  0.22  (0.01) 0.07 
Dividends declared from earnings  (0.40)  (0.20)
Total increase (decrease) in net assets  0.28   (0.50)  0.48   (0.02)
Net asset value, end of period $20.03  $19.27  $20.23  $19.75 
Shares outstanding, end of period 5,022,000  2,970,000  6,199,809  3,402,000 
Total return(2)
 1.4% (2.5)% 4.4% 0.9%
Ratios / supplemental data            
Ratio of gross expenses to average net assets(3)(4)(5)
 0.9% 2.2% 2.6% 4.8%
Ratio of net expenses to average net assets(3)(4)(6)
 0.9% 1.8% 2.6% 4.1%
Ratio of net investment income (loss) to average net assets(3)(4)
 1.0% 0.7% 3.1% 2.4%
Net assets, end of period $100,604  $57,245  $125,412  $67,189 
Weighted average shares outstanding 4,488,000  2,320,220  5,092,922  2,907,131 
Total capital commitments, end of period $216,000  $216,000  $216,000  $216,000 
Ratio of total contributed capital to total committed capital, end of period 46.5% 27.5% 57.5% 31.5%
Portfolio turnover rate(7)
 11.7% 1.9% 26.5% 18.5%
Asset coverage ratio(8)
 N/A  873.6% N/A  6,818.9%

(1)The per share data was derived using the weighted average shares outstanding during the period.
(2)Total return is calculated as the change in net asset value ("NAV") per share during the period, plus distributions per share, if any, divided by the NAV per share at the beginning of the period. The total return for the period from May 6, 2019 (inception) to December 31, 2019 is calculated using the denominator of the offering price of $20.00 per share on the initial capital call from investors on July 29, 2019.
(3)Not annualized.
(4)Average net assets are computed using the average balance of net assets at the end of each month of the reporting period.
(5)Ratio of gross expenses to average net assets is computed using expenses before waivers from the Administrator.Adviser and Administrator
(6)Ratio of net expensesnetexpenses to average net assets is computed using total expenses net of waivers from the Administrator.Adviser and Administrator
(7)Portfolio turnover rate is calculated using the lesser of total sales or total purchases over the average of the investments at fair value for the periods reported.
(8)
Asset coverage ratio is equal to (i) the sum of (A) net assets at the end of the period and (B) total debt outstanding at the end of the period, divided by (ii) total debt outstanding at the end of the period. The ratio is not applicable as of September 30, 2021 as there was no debt outstanding at the end of the period.


31
AG Twin Brook BDC, Inc. 
Notes to Consolidated Financial Statements (Unaudited) - Continued
Note 13.  Subsequent Events

The Company’s management evaluated subsequent events through the date of issuance of these consolidated financial statements.  There have been no subsequent events that occurred that would require disclosure in, or would be required to be recognized in, these consolidated financial statements, except as discussed below.

below.
On April 14,October 13, 2021, the Advisor issued a capital call notice to investors relating to the sale of 805,806 shares of the Company’s common stock for an aggregate offering price of $16.2 million. The sale closed on October 27, 2021.
On October 15, 2021, the Board declared a dividend of $0.20 per share on the Company’s common stock, which is payablewas paid on April 30,October 29, 2021 to stockholders of record at the close of business on April 26,October 18, 2021.

3235

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

In this quarterly report on Form 10-Q, or this "report," we refer to AG Twin Brook BDC, Inc.Inc and it’s consolidated subsidiaries. as "we," "us," the "Company," or "our," unless we specifically state otherwise or the context indicates otherwise. We refer to our investment adviser, AG Twin Brook Manager, LLC, as our "Advisor," and we refer to the direct parent company of our Advisor, Angelo, Gordon & Co., L.P., as "Angelo Gordon." Angelo Gordon serves as the Company’s Administrator and may also be referred to herein as “Administrator”.

Forward-Looking Statements

This report includes estimates, projections, statements relating to our business plans, objectives, and expected operating results that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this report, including the following sections: “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” (Part II, Item 1A of this Form 10-Q). These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, returns, results of operations, plans, yields, objectives, the composition of our portfolio, actions by governmental entities, including the U.S. Department of the Treasury and the Federal Reserve, and the potential effects of actual and proposed legislation on us, our views on certain macroeconomic trends, and the impact of COVID-19. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by the forward-looking statements. We caution investors not to rely unduly on any forward-looking statements, which speak only as of the date made, and urge you to carefully consider the risks identified under the captions “Risk Factors,”Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020 (our “2020 10-K”). Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the results of operations and financial condition of AG Twin Brook BDC, Inc. This MD&A is provided as a supplement to, and should be read in conjunction with our 2020 10-K, our consolidated financial statements and the accompanying Notesnotes to Consolidated Financial Statementsconsolidated financial statements (Part I, Item 1 of this Form 10-Q)report).

Overview

AG Twin Brook BDC, Inc. is a Delaware corporation formed on February 4, 2016.  We have elected to be regulated as a Business Development Company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”).  In addition, for tax purposes, we have elected to be treated as a Regulated Investment Company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).  We were formed to provide risk-adjusted returns and current income to investors by investing primarily in middle market companies.

We are managed by our Advisor, a wholly-owned subsidiary of Angelo Gordon.  The Advisor is registered as an investment adviser with the U.S. Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940.  Subject to the overall supervision of our board of directors (the “Board”), our Advisor manages our day-to-day operations, and provides investment advisory and management services to us.  Our Advisor will be responsible for originating prospective investments,




3336

conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring our investments, and monitoring our investments and portfolio companies on an ongoing basis.

We conduct private offerings (each, a “Private Offering”), where investors make a capital commitment to purchase shares of our common stock pursuant to a subscription agreement entered into with us.  Investors will be required to make capital contributions to purchase shares of our common stock each time the Company delivers a drawdown notice. The initial closing of the Private Offering occurred on July 19, 2019 (the “Initial Closing”).  As of March 31,September 30, 2021, we had $216 million in total capital commitments from investors.  Upon the earlier to occur of (i) a Qualified IPO (as defined below), and (ii) the five year anniversary of the Initial Closing, investors will be released from any further obligation to purchase additional shares, subject to certain exceptions. A “Qualified IPO” is an initial public offering (“IPO”) of our common stock that results in an unaffiliated public float of at least the lower of (A) $60 million and (B) 17.5% of the aggregate capital commitments received prior to the date of such initial public offering.

As a BDC, we must invest at least 70% of our assets in “eligible portfolio companies,” generally, U.S. private operating companies (or small U.S. public operating companies with a market capitalization of less than $250 million). As a BDC, we may also invest up to 30% of our portfolio in non-eligible portfolio company investments, such as investments in non-U.S. companies, which may include investments in a “passive foreign investment company” (a “PFIC”).  Because we have elected to be regulated as a BDC, and we intend to continue to qualify as a RIC under the Code, our portfolio will also be subject to the diversification and other requirements under the Code.

Investments

We invest principally in privately originated senior secured loans to U.S. middle market companies, which we believe have consistent capital needs and have not only been underserved in recent years by traditional providers of capital such as banks and the public debt markets, but also for a variety of reasons may prefer working with experienced non-bank lenders. Our origination strategy focuses on the middle market private equity community. This financing is utilized for a variety of purposes, including to fund organic growth, acquisitions, recapitalizations, management buyouts and leveraged buyouts for companies with revenue generally under $500 million. In describing our business, we generally use the term “middle market” to refer to companies with EBITDA of between $3 million and $50 million annually; however, we typically invest in companies with EBITDA of less than $25 million. Notwithstanding the foregoing, the Advisor may determine whether companies qualify as “middle market” in its sole discretion, and we may from time to time invest in larger or smaller companies.

By investing predominantly in senior secured debt, we expect to reduce our risk of principal loss and deliver more stable returns over time as compared with investments in bonds, unsecured loans, mezzanine investments and public, private and project equity. However, we may also invest opportunistically in other parts of the capital structure, including senior secured stretch and unitranche facilities, second lien loans, mezzanine and mezzanine-related loans, and equity investments, as well as select other subordinated instruments either directly or through acquisitions in the secondary market.

The level of our investment activity depends on many factors, including the amount of debt and equity capital available to prospective portfolio companies, the level of merger, acquisition and refinancing activity for such companies, the availability of credit to finance transactions, the general economic environment and the competitive environment for the types of investments we make, all of which have been, and may continue to be, impacted by COVID-19.


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Revenues

We generate revenues primarily through the receipt of interest income from the investments we hold. In addition, we generate income from various loan origination and other fees and from dividends on direct equity investments. In addition, we may generate revenue in the form of commitment, origination, administration, amendment, and loan servicing fees.  Loan origination fees, original issue discount and market discount or premium are capitalized as part of the underlying cost of the investments and accreted or amortized over the life of the investment as interest income. We record contractual prepayment premiums on loans and debt securities as interest income.

Our debt investment portfolio consists of primarily floating rate loans. As of March 31,September 30, 2021, 100% of our debt investments, based on fair value, bore interest at floating rates, which may be subject to interest rate floors.  Variable-rate investments subject to a floor generally reset periodically to the applicable floor, only if the floor exceeds the index.  Trends in base interest rates, such as LIBOR, may affect our net investment income over the long term. In addition, our results may vary from period to period depending on the interest rates of new investments made during the period compared to investments that were sold or repaid during the period; these results reflect the characteristics of the particular portfolio companies that we invested in or exited during the period and not necessarily any trends in our business or macroeconomic trends.

Dividend income that we receive from our ownership of private securities is recorded pursuant to the terms of the respective investments.

Expenses

Our primary operating expenses will include the payment of fees to the Advisor under the Investment Management Agreement, our allocable portion of overhead expenses under the Administration Agreement and other operating costs described below.

We are responsible for all costs and expenses incurred in connection with the operations of the Company and locating, structuring, evaluating, consummating, maintaining and disposing of investments and potential investments (whether or not the acquisition is consummated), including but not limited to legal, regulatory, accounting and other professional or third-party costs or disbursements including travel, rent or lodging, out-of-pocket expenses of the Advisor, the fees and expenses of any independent counsel engaged by the Advisor and out-of-pocket expenses related to third-party service providers (including loan servicer fees), placement agent fees and expenses, advertising expenses, litigation expenses, brokerage commissions, clearing and settlement charges and other transaction costs, custody fees, interest expenses, financing charges, initial and variation margin, broken deal expenses, compensation (which may include fees or performance-based compensation) of advisors, consultants and finders, joint venture partners, or other professionals relating to the Company’s operations and investments or potential investments (whether or not completed), which may include costs incurred to attend or sponsor networking and other similar events hosted by both for-profit and not-for-profit organizations (which may include organizations affiliated with current or prospective investors), specific expenses incurred in obtaining, developing or maintaining market data technology systems, research and other information and information service subscriptions utilized with respect to the Company’s investment program including fees to third party providers of research, portfolio risk management services (including the costs of risk management software or database packages), fees of pricing and valuation services, appraisal costs and brokerage expenses. We will also bear all commitment fees and any transfer or recording taxes, registration fees and other expenses in connection with acquisitions and dispositions of investments, and all expenses relating to the ownership and operation of investments, including taxes, interest, insurance, and other fees and expenses. Travel expenses may include first-class airfare and limited use of private or charter aircraft, as well as premium accommodations, in accordance with our Advisor’s policies related thereto.




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In addition, we will bear all costs of the administration of the Company, including but not limited to accounting expenses (including accounting systems) and expenses relating to audit, legal and regulatory expenses (including filings with U.S. and non-U.S. regulators and compliance obligations), costs associated with our reporting and compliance obligations under the 1940 Act and other applicable U.S. federal and state securities laws, fees and expenses of any administrators in connection with the administration of the Company, expenses relating to the maintenance of registered offices of the Company to the extent provided by unaffiliated service providers, temporary office space of non-employee consultants or auditors, blue sky and corporate filing fees and expenses, corporate licensing expenses, indemnification expenses, costs of holding any meetings or conferences of investors or their delegates or advisors (including meetings of the Advisor and related activities), Independent Directors’ fees and expenses, costs of any litigation or threatened litigation or costs of any investigation or legal inquiries involving Company activities (including regulatory sweeps), the cost of any liability insurance or fidelity coverage for the Company, including any directors’ and officers’ liability insurance and key-person life insurance policies, maintained with respect to liabilities arising in connection with the activities of our directors and officers conducted on behalf of the Company, costs associated with reporting and providing information to existing and prospective investors, including printing and mailing costs, wind-up and liquidation expenses, and any extraordinary expenses arising in connection with the operations of the Company.

We have agreed to repay the Advisor for initial organization and offering costs up to a maximum of $1.25 million, of which the Advisor has incurred approximately $1.1 million as of March 31,September 30, 2021.

From time to time, the Administrator or its affiliates may pay third-party providers of goods or services. We will reimburse the Administrator or such affiliates thereof for any such amounts paid on our behalf.

Leverage

We have obtained a subscription facility to meet our capital needs.  We may borrow money from time to time within the levels permitted by the 1940 Act. Currently, we do not intend to utilize leverage outside of the subscription facility.

Impact of COVID-19

In late 2019 and early 2020, a novel coronavirus (SARS-CoV-2) and related respiratory disease ("COVID-19") emerged in China and spread rapidly across the world, including to the U.S. This outbreak has led and for an unknown period of time will continue to lead to disruptions in local, regional, national and global markets and economies affected thereby. The extent to which the COVID-19 pandemic will adversely impact our business, financial condition, liquidity and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of this outbreak, and any future outbreaks.

It is clear that these types of events are negatively impacting and will, for at least some time, continue to negatively impact our business and portfolio companies and in many instances the impact will be profound. For example, smaller and middle market companies in which we may invest are being significantly impacted by these events and the uncertainty caused by these events. With respect to loans to such companies, we have been, and may continue to be impacted if, among other things, (i) amendments and waivers are granted (or are required to be granted) to borrowers permitting deferral of loan payments or allowing for payment-in-kind (“PIK”) interest payments, (ii) borrowers default on their loans, are unable to refinance their loans at maturity, or go out of business permanently, and/or (iii) the value of loans we hold decreases as a result of such events and the uncertainty they cause. Such events have caused us, and may continue to cause us, to suffer losses. We will also be negatively affected if the operations and effectiveness of our Adviser or a portfolio company (or any of the key personnel or service




39

providers of the foregoing) is compromised or if necessary or beneficial systems and processes are disrupted as a result of the interruptions to regular business operations caused by COVID-19.


36

With respect to our investments, we have taken, and will continue to take, steps to actively oversee all of our individual portfolio companies. These measures include, among other things, frequent communication with our portfolio company management teams and related private equity sponsors to understand the expected financial performance impact of the COVID-19 pandemic.

The effects of the COVID-19 pandemic on economic and market conditions have increased the  demands to provide capital to our existing portfolio companies. We maintain adequate cash, capital commitments and additional borrowing capacity in reserve to meet any further such draw requests.

During the threenine months ended March 31,September 30, 2021, we continued to experience an increase in our net assets resulting from operations due to an increase in investment income and unrealized gains from a recovery in investment valuations, after experiencing unrealized losses across the fair value of our investments resulting from the COVID-19 pandemic during the first halfnine months of 2020. We experienced a decrease in our net assets resulting from operations for the first six months of 2020 and an increase for the six months ended December 31, 2020.

It is impossible to determine the scope of this outbreak, or any future outbreaks, how long any such outbreak, market disruption or uncertainties may last, the effect any governmental actions will have or the full potential impact on our business, the Advisor and portfolio companies. The impact of this outbreak, or any future outbreaks, while uncertain, could materially adversely affect our and our portfolio companies’ operating results.

Portfolio and Investment Activity

As of March 31,September 30, 2021, based on fair value, our portfolio consisted of 95.19%94.84% first lien senior secured debt investments, a 0.01% sponsor subordinated note investment,investments, and a 4.80%5.15% investment in an affiliated fund.

As of March 31,September 30, 2021, we had investments in sixtyeighty-eight portfolio companies with an aggregate fair value of $84.6$111.4 million.  As of December 31, 2020, we had investments in fifty-one portfolio companies with an aggregate fair value of $79.5 million.



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Our investment activity for the three months ended March 31,September 30, 2021 and 2020 is presented below (information presented herein is at par value unless otherwise indicated).

 Three Months  Three Months  Three Months  Three Months 
 Ended  Ended  Ended  Ended 
 March 31,  March 31,  September 30,  September 30, 
(Amounts in thousands) 2021  2020  2021  2020 
Principal amount of investments committed (including add-ons):            
First lien senior secured debt investments $19,615  $21,945  $19,499  $5,038 
Sponsor subordinated note 2  6  5  - 
Investment in affiliated fund  130   479   138   25 
Total principal amount of investments committed $19,747  $22,430  $19,642  $5,063 
Principal amount of investments sold or repaid:            
First lien senior secured debt investments $(10,211) $(666) $(6,532) $(331)
Investment in affiliated fund  (2)  –   1   (23)
Total principal amount of investments sold or repaid $(10,213) $(666) $(6,531) $(354)
New debt investments(1):
            
New commitments $18,409  $21,945  $17,550  $3,637 
Number of new commitments in new portfolio companies(2)
 11  12  14  2 
Average new commitment amount $1,674  $1,829  $1,254  $1,819 
Weighted average term for new commitments (in years) 4.9  5.1  4.8  4.3 
Percentage of new commitments at floating rates 100.0% 100.0% 100.0% 100.0%
Percentage of new commitments at fixed rates 0.0% 0.0% 0.0% 0.0%

(1)
(1) Amounts shown exclude add-on transactions to existing portfolio companies during the period.
(2)Number of new debt investment commitments represent commitments to a particular portfolio company.
(2) Number of new debt investment commitments represent commitments to a particular portfolio company.

As of March 31,September 30, 2021 and December 31, 2020, our investments consisted of the following:

   
September 30, 2021
  

   December 31, 2020		 
(Amounts in thousands) Amortized Cost  Fair Value  Amortized Cost  Fair Value 
First lien senior secured debt $105,693  $105,645  $76,415  $75,805 
Sponsor subordinated note  15   15   7   7 
Investment in affiliated fund  4,444   5,736   3,201   3,721 
Total investments $110,152  $111,396  $79,623  $79,533 


  

   March 31, 2021		  

December 31, 2020  
 
(Amounts in thousands) Amortized Cost  Fair Value  Amortized Cost  Fair Value 
First lien senior secured debt $80,966  $80,517  $76,415  $75,805 
Sponsor subordinated note  10   9   7   7 
Investment in affiliated fund  3,329   4,061   3,201   3,721 
Total investments $84,305  $84,587  $79,623  $79,533 





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The table below describes investments by industry composition based on fair value as of March 31,September 30, 2021 and December 31, 2020:


 March 31, 2021  December 31, 2020   September 30, 2021   December 31, 2020 
Aerospace and defense 2.5% 2.7% 1.9% 2.7%
Auto components -

 1.5%
Chemicals 8.2% 8.4% 6.2% 8.4%
Commercial services and supplies 6.6% 7.0% 2.6% 7.0%
Construction and engineering 0.5% – 
Containers and packaging 6.5% 7.0% 5.6% 7.0%
Distributors 0.5% 1.5%
Diversified consumer services 10.5% 9.8% 8.9% 9.8%
Electronic equipment, instruments and components 1.8% 2.0% 1.3% 2.0%
Food and staples retailing 0.8% 0.9% 1.3% 0.9%
Food products 1.2% 1.3% 1.3% 1.3%
Gas utilities 1.6% 1.6% 1.2% 1.6%
Health care equipment and supplies 3.2
% 0.8% 2.8% 0.8%
Health care providers and services 20.1
% 24.0% 23.8% 24.0%
Health care technology 2.1% 1.6% 1.6% 1.6%
Household durables 2.5% – 
Internet and direct marketing retail 2.3% 2.5% 2.7% 2.5%
IT services 3.2% 3.4% 3.0% 3.4%
Leisure equipment and products 1.7% – 
Life sciences tools and services 1.0% – 
Machinery 1.1% 1.1% 1.6% 1.1%
Media 3.4% 3.4% 2.4% 3.4%
Metals and mining 2.4% 2.6% 2.1% 2.6%
Multisector holdings 4.8% 4.7% 5.2% 4.7%
Personal products 3.3% 3.5% 2.5% 3.5%
Pharmaceuticals 2.0% – 
Real estate management and development
 1.9
% –  1.5% – 
Software 3.8% 2.9% 3.0% 2.9%
Specialty retail 1.5% –  1.1% – 
Textiles, apparel and luxury goods 2.0% 2.0% 1.5% 2.0%
Trading companies and distributors 5.2% 5.3% 5.9% 5.3%
Water utilities 0.8% – 
Total 100.0% 100.0% 100.0% 100.0%

As of March 31September 30, 2021, 97.2%98.8% of investments held were based in the United States and 2.8%1.2% were based in Canada. Investments held as of December 31, 2020 were based solely in the United States.

The weighted average yields and interest rates of our funded debt investments as of March 31,September 30, 2021 and December 31, 2020 were as follows:

  September 30, 2021  December 31, 2020 
Weighted average total yield of funded debt investments at cost  7.9%  7.7%
Weighted average total yield of funded debt investments at fair value  7.9%  7.9%
Weighted average interest rate of funded debt investments (1)
  6.9%  7.0%
Weighted average spread over LIBOR/CDOR of all floating rate funded debt investments  5.9%  5.9%


  March 31, 2021  December 31, 2020 
Weighted average total yield of funded debt investments at cost  8.0%  7.7%
Weighted average total yield of funded debt investments at fair value  8.1%  7.9%
Weighted average interest rate of funded debt investments (1)
  7.0%  7.0%
Weighted average spread over LIBOR/CDOR of all floating rate funded debt investments  5.9%  5.9%

(1) Calculated using actual interest rates in effect as of March 31,September 30, 2021 and December 31, 2020 based on borrower elections.



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The weighted average yield of our funded debt investments is not the same as a return on investment for our shareholders but, rather, relates to a portion of our investment portfolio and is calculated before the payment of all of our and our subsidiaries’ fees and expenses. The weighted average yield was computed


39

using the effective interest rates of each investment as of each respective date, including accretion of original issue discount, but excluding investments on non-accrual status, if any. There can be no assurance that the weighted average yield will remain at its current level.

Our Advisor monitors our portfolio companies on an ongoing basis. It monitors the financial trends of each portfolio company to determine if they are meeting their respective business plans and to assess the appropriate course of action with respect to each portfolio company. Our Advisor has several methods of evaluating and monitoring the performance and fair value of our investments, which may include the following:

•assessment of success of the portfolio company in adhering to its business plan and compliance with covenants;
•periodic and regular contact with portfolio company management and, if appropriate, the financial or strategic sponsor, to discuss financial position, requirements and accomplishments;
•comparisons to other companies in the portfolio company’s industry; and
••  assessment of success of the portfolio company in adhering to its business plan and compliance with covenants;
•  periodic and regular contact with portfolio company management and, if appropriate, the financial or strategic sponsor, to discuss financial position, requirements and accomplishments;
•  comparisons to other companies in the portfolio company’s industry; and
•  review of monthly or quarterly financial statements and financial projections for portfolio companies.

As part of the monitoring process, our Advisor employs an investment rating system to categorize our investments. In addition to various risk management and monitoring tools, our Advisor rates the credit risk of all debt investments on a scale of A to F. This system is intended primarily to reflect the underlying risk of a portfolio investment relative to our initial cost basis in respect of such portfolio investment (i.e., at the time of origination or acquisition), although it may also take into account the performance of the portfolio company’s business, the collateral coverage of the investment and other relevant factors. The rating system is as follows:

Investment Ratings
 Description
A
 A loan supported by exceptional financial strength, stability and liquidity;
B
 As a general rule, a new transaction will be risk rated a “B” loan. Overtime, a “B” loan is supported by good financial strength, stability and liquidity;
C
 A loan that is exhibiting deteriorating trends, which if not corrected could jeopardize repayment of the debt. In general, a default by the borrower of one of its financial performance covenants (leverage or coverage ratios) would warrant downgrade of a loan to a risk rating of “C”;
D A loan that has a well-defined weakness that jeopardizes the repayment of the debt or the ongoing enterprise value of the borrower;
E
 A loan that has an uncured payment default; and
F An asset that is considered uncollectible or of such little value that its continuance as a booked asset is unwarranted.

Our Advisor rates the investments in our portfolio at least quarterly and it is possible that the rating of a portfolio investment may be reduced or increased over time. For investments rated C through F, our Advisor enhances its level of scrutiny over the monitoring of such portfolio company.




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The following table shows the composition of our debt investments on the A to F rating scale as of March 31,September 30, 2021 and December 31, 2020:

    March 31, 2021
    December 31, 2020
  
 
   September 30, 2021		 December 31, 2020  
 
   Percentage of   Percentage of    Percentage of   Percentage of 
 Investments Total Investments Total  Investments Total Investments Total 
Investment Rating at Fair Value Debt Investments at Fair Value Debt Investments  at Fair Value Debt Investments at Fair Value Debt Investments 
(Amounts in thousands)                  
A $–  – $–  –  $– 
–
 $
–
 
–
 
B 70,891  88.0% 68,960  91.0%  97,172 92.0% 68,960 91.0%
C 9,626  12.0% 6,845  9.0%  8,473 8.0
% 6,845 9.0%
D –  –  –  –   – 
–
  
–
 
–
 
E
 –  –  –  – 
 – 
–
  
–
 
–
 
F
  –  –  –  –    –  –
 –  –
Total $80,517  100.0%$75,805  100.0% $105,645  100.0%$75,805  100.0%

The following table shows the amortized cost of our performing and non-accrual debt investments as of March 31,September 30, 2021 and December 31, 2020:

 

March 31, 2021  
  
  
December 31, 2020
  

September 30, 2021  
  

   December 31, 2020		 
(Amounts in thousands) Amortized Cost Percentage  Amortized Cost Percentage  Amortized Cost  Percentage  Amortized Cost  Percentage 
Performing $80,966  100.0% $76,415  100.0% $105,693  100.0% $76,415  100.0%
Non-accrual  –  –   –  –   -   -   -   - 
Total $80,966  100.0% $76,415  100.0% $105,693   100.0% $76,415   100.0%


Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full.  Accrued interest is generally reversed when a 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 the Advisor’s judgment regarding collectability.  Non-accrual loans are restored to accrual status when past due principal and interest is paid current and, in the Advisor’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.

Results of Operations

The following table represents the operating results for the threenine months ended March 31,September 30, 2021 and 2020:


   Three Months  Three Months 
   Ended  Ended 
(Amounts in thousands) March 31, 2021  March 31, 2020 
Total investment income $1,676  $1,114 
Less: expenses  (771)  (818)
Net investment income (loss)  905   296 
Net change in unrealized gain (loss)  388   (1,952)
Net realized gain (loss)  10   – 
Net increase (decrease) in net assets resulting from operations
 $1,303  $(1,656)

Net increase (decrease) in net assets resulting from operations can vary from period to period as a result of various factors, including the level of new investment commitments, expenses, the recognition of realized gains and losses and changes in unrealized appreciation and depreciation on the investment portfolio.

   
  
       
   Three Months Ended  Three Months Ended  Nine Months Ended  Nine Months Ended 
(Amounts in thousands) September 30, 2021  September 30, 2020  September 30, 2021  September 30, 2020 
Total investment income $2,107  $1,268  $5,725  $3,597 
Less: expenses  (942)  (678)  (2,624)  (2,291)
Net investment income (loss)  1,165   590   3,101   1,306 
Net change in unrealized gain (loss)  311   760   1,342   (983)
Net realized gain (loss)  42   1   77   5 
Net increase (decrease) in net assets resulting from operations $1,518  $1,351  $4,520  $328 





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Investment Income

Investment income for the three and nine months ended March 31,September 30, 2021 and 2020 were as follows:

 Three Months  Three Months  
  
       
 Ended  Ended  Three Months Ended  Three Months Ended  Nine Months Ended  Nine Months Ended 
(Amounts in thousands) March 31, 2021  March 31, 2020  September 30, 2021  September 30, 2020  September 30, 2021  September 30, 2020 
Interest income $1,622  $1,003  $2,013  $1,201  $5,424  $3,399 
Other income  54   111   94   67   301   198 
Total investment income $1,676  $1,114  $2,107  $1,268  $5,725  $3,597 

Total investment income increased to $1.7$2.1 million for the three months ended March 31,September 30, 2021 from $1.1$1.3 million for the same period in the prior year primarily driven by our deployment of capital and the increased balance of our investments. Total investment income increased to $5.7 million for the nine months ended September 30, 2021 from $3.6 million for the same period in the prior year primarily driven by our deployment of capital and the increased balance of our investments. The size of our investment portfolio at fair value increased to $84.6$111.4 million at March 31,September 30, 2021 from $59.6$64.2 million at March 31,September 30, 2020.

Expenses

Expenses for the three and nine months ended March 31,September 30, 2021 and 2020 were as follows:

 Three Months  Three Months  
  
       
 Ended  Ended  Three Months Ended  Three Months Ended  Nine Months Ended  Nine Months Ended 
(Amounts in thousands) March 31, 2021  March 31, 2020  September 30, 2021  September 30, 2020  September 30, 2021  September 30, 2020 
Income incentive fees $147  $39  $214  $38  $568  $114 
Management fees 123  74  155  94  416  259 
Accounting fees 107  98  317  323 
Insurance fees 122  121  90  125  312  368 
Accounting fees 104  93 
Professional fees 143  103  309  274 
Administrative fees 88  164  97  85  267  358 
Interest 60  125  66  67  190  283 
Directors' fees 45  45  45  45  135  135 
Professional fees 44  101 
Other 38  50  25  35  110  126 
Offering costs  –   170   -   73   -   409 
Total gross expenses $771  $982  $942  $763  $2,624  $2,649 
Less waivers:                  
Administrative fees waived  –   (164)  -   (85)  -   (358)
Total net expenses $771  $818  $942  $678  $2,624  $2,291 

Under the terms of the Administration Agreement and Investment Management Agreement, we reimburse the Administrator and Advisor, respectively, for services performed for us. In addition, pursuant to the terms of these agreements, the Administrator and Advisor may delegate its obligations under these agreements to an affiliate or to a third party and we reimburse the Administrator and Advisor for any services performed for us by such affiliate or third party.

For the three and nine months ended March 31,September 30, 2021, the Administrator charged approximately $0.1 and $0.3 million, respectively, for certain costs and expenses allocable to the Company under the terms of the Administration Agreement.  For the three and nine months ended March 31,September 30, 2020, the Administrator had the option to charge approximately $0.2$0.1 million and $0.4 million, respectively, for certain costs and expenses allocable to the Company under the terms of the Administration Agreement, all of which were waived and borne by the Administrator for those periods.

Total net expenses increased to approximately $0.9 million from 0.7 million, for the three months ended September 30, 2021 and 2020, respectively, primarily due to increases in income incentive fees and management fees, and partially offset by decreases in offering costs. These increases in fees were largely driven by our deployment of capital and increased balance of our investments.


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Total net expenses remained relatively consistent at approximately $0.8$2.6 million and 2.3 million, respectively, for the threenine months ended March 31,September 30, 2021 and 2020, primarily due to decreases in offering costs, interest expense, and professional fees, offset by increases in income incentive fees administrativeand management fees, and management fees.partially offset by decreases in offering costs and interest expense. These increases in fees were largely driven by our deployment of capital and increased balance of our investments.

Income Taxes, including Excise Taxes

We have elected to be treated as a RIC under Subchapter M of the Code, and we intend to operate in a manner so as to continue to qualify for the tax treatment applicable to RICs. To qualify for tax treatment as a RIC, we must, among other things, distribute to our shareholders in each taxable year generally at least 90% of our investment company taxable income, as defined by the Code, and net tax-exempt income for that taxable year. To maintain our tax treatment as a RIC, we, among other things, intend to make the requisite distributions to our shareholders, which generally relieves us from corporate-level U.S. federal income taxes.

Depending on the level of taxable income earned in a tax year, we can be expected to carry forward taxable income (including net capital gains, if any) in excess of current year dividend distributions from the current tax year into the next tax year and pay a nondeductible 4% U.S. federal excise tax on such taxable income, as required. To the extent that we determine that our estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such income, we will accrue excise tax on estimated excess taxable income. For the threenine months ended March 31,September 30, 2021 and 2020, we did not accrue any U.S. federal excise tax.

We conduct certain activities through our wholly-owned subsidiary, Twin Brook Equity XVIII Corp., a Delaware C corporation. Twin Brook Equity XVIII Corp. is treated as a corporation for United States federal income tax purposes and is subject to U.S. federal, state or local income tax. For the threenine months ended March 31,September 30, 2021 and 2020, we did not accrue any U.S. federal tax expense.

Net Change in Unrealized Gains (Losses) on Investment Transactions

We fair value our portfolio investments quarterly and any changes in fair value are recorded as unrealized gains or losses.  During the three and nine months ended March 31,September 30, 2021 and 2020, net unrealized gains (losses) on our investment transactions were as follows:

 Three Months  Three Months Three Months Three Months     
 Ended  Ended Ended Ended Nine Months Ended Nine Months Ended 
(Amounts in thousands) March 31, 2021  March 31, 2020 September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 
Net change in unrealized gain (loss) on investments
 $372  $(1,952)$307 $760 $1,334 $(983)
Net change in unrealized gain (loss) on foreign currency forward contracts  16   –  4  -  8  - 
Net change in unrealized gain (loss) on investment transactions $388  $(1,952)$311 $760 $1,342 $(983)


For the three and nine months ended March 31,September 30, 2021, the net unrealized gain was primarily driven by an increase in the fair value of our investments as compared to December 31, 2020. The primary drivers of our portfolio's unrealized gains from debt investments were improved market conditions and credit spreads tightening during the threenine months ended March 31,September 30, 2021. The unrealized gains were also driven by improved performance of equity investments held by Twin Brook Equity Holdings, LLC, that increased our net asset value in the affiliated fund during the nine months ended September 30, 2021.

For the threenine months ended March 31,September 30, 2020, the net unrealized loss was primarily driven by a decrease in the fair value of our investments as compared to December 31, 2019.  A majority of the decrease occurred particularly during the three months ended March 31, 2020, and fair value increased recovered slightly from then by September 30, 2020.  The primary drivers of our portfolio's unrealized losses were increased market volatility and credit spreads widening during the threenine months ended March 31,September 30, 2020.





4346
Net Realized Gains (Losses) on Investment Transactions
The realized gains and losses on fully and partially exited portfolio companies and foreign currency transactions during the three and nine months ended March 31,September 30, 2021 and 2020, were as follows:

 Three Months  Three Months 


     
 Ended  Ended Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended 
(Amounts in thousands) March 31, 2021  March 31, 2020 September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 
Net realized gain (loss) on investments
 $18  $– $35  $1 $122 $5 
Net realized gain (loss) on foreign currency transactions  (8)  –  7   –  (45) – 
Net realized gain (loss) on investment transactions $10  $– $42  $1 $77 $5 

There were no significant changes
The increase in net realized gain (loss) on investment transactions forgains during the three and nine months ended March 31,September 30, 2021 as compared to the same period inthree and nine months ended September 30, 2020 was due to increased paydown activity given the prior year.increased size of our portfolio.

Financial Condition, Liquidity, and Capital Resources
Our liquidity and capital resources are generated primarily from the proceeds of capital drawdowns of our privately placed capital commitments, cash flows from interest, dividends and fees earned from our investments and principal repayments, and our subscription facility. The primary uses of our cash are (1) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (2) the cost of operations (including paying our Advisor)Advisor and Administrator), (3) debt service of any borrowings and (4) cash distributions to the holders of our stock.

We may from time to time increase the size of our existing subscription facility. Any such incurrence would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to incur borrowings, issue debt securities or issue preferred stock, if immediately after the borrowing or issuance, the ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock, is at least 200%. There were no outstanding borrowings as of March 31,September 30, 2021 and December 31, 2020. We seek to carefully consider our unfunded commitments for the purpose of planning our ongoing financial leverage. Further, we maintain sufficient borrowing capacity within the 200% asset coverage limitation to cover any outstanding unfunded commitments we are required to fund.

Cash as of March 31,September 30, 2021, taken together with our uncalled capital commitments of $115.6$91.8 million and available debt capacity of $12.7$10.1 million, is expected to be sufficient for our investing activities and to conduct our operations.

As of March 31,September 30, 2021, we had $16.6$14.6 million in cash.  During the threenine months ended March 31,September 30, 2021, we used $3.4$27.0 million in cash for operating activities, primarily as a result of funding portfolio investments of $14.1$55.7 million, partially offset by sales and paydowns of portfolio investments of $9.6$25.7 million, and other operating activities of $1.1$3.0 million.  Cash provided by financing activities was $9.6$31.2 million during the period, which was primarily the result of proceeds from the issuance of shares of $10.8$34.6 million, partially offset by dividend payments of $1.2$3.3 million.

As of March 31,September 30, 2020, we had $5.1$3.9 million in cash. During the threenine months ended March 31,September 30, 2020, we used $21.1$23.7 million in cash for operating activities, primarily as a result of funding portfolio investments of $22.7$34.8 million, partially offset by sales of portfolio investments of $1.0$9.6 million, and other operating activities of $0.6$1.5 million. Cash provided by financing activities was $17.1$18.5 million during the period, which was primarily the result of proceeds from the issuance of shares of $16.2$24.8 million, partially offset by net payments on our subscription facility of $5.5 million, dividend payments of $0.7 million, and proceeds from net borrowings on our credit facilitypayments for deferred financing and offering costs of $0.9$0.1 million.


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Equity

Subscriptions and Drawdowns

We have the authority to issue 100,000,000As of September 30, 2021, we had 6,199,809 shares of common stockissued and outstanding with a par value of $0.001 per share. On October 13, 2021, we issued a capital call notice to investors relating to the sale of 805,806 shares of the common stock for an aggregate offering price of $16.2 million. The sale closed on October 27, 2021.

We have entered into subscription agreements with investors providing for the private placement of our common shares. Under the terms of the subscription agreements, investors are required to fund drawdowns to purchase our common shares up to the amount of their respective Capital Commitment on an as-needed basis each time our Advisor delivers a capital call notice to such investors.

During the threenine months ended March 31,September 30, 2021 and 2020, our Advisor delivered the following capital call notices to investors:

Three Months Ended March 31, 2021
Nine Months Ended September 30, 2021Nine Months Ended September 30, 2021 
    
Number of
Common Shares
Issued
  
Aggregate Offering
Price
($ in millions)
   Number of Aggregate Offering 

    
Common Share Common Share Common Shares Price 
Capital Drawdown Notice Date Common Share Issuance Date 
Number of
Common Shares
Issued
  
Aggregate Offering
Price
($ in millions)
Issuance Date Issued ($ in millions) 
March 16, 2021
 March 30, 2021   March 30, 2021 540,000 $10.80 
June 30, 2021July 15, 2021 802,493  16.20 
August 30, 2021September 15, 2021  375,316  7.56 
Total    540,000  $10.80   1,717,809 $34.56 

Three Months Ended March 31, 2020
Nine Months Ended September 30, 2020Nine Months Ended September 30, 2020
    
Number of
Common Shares
Issued
  
Aggregate Offering
Price
($ in millions)
   Number of Aggregate Offering 

    
Common Share Common Share Common Shares Price 
Capital Drawdown Notice Date Common Share Issuance Date 
Number of
Common Shares
Issued
  
Aggregate Offering
Price
($ in millions)
Issuance Date Issued ($ in millions) 
February 28, 2020 March 13, 2020   March 13, 2020 810,000 $16.20 
June 11, 2020June 25, 2020  432,000  8.64 
Total    810,000  $16.20   1,242,000 $24.84 

Dividends

There were no dividendsThe following table reflects dividend declared for the three months ended March 31, 2021 and 2020.

On April 14, 2021, the Board declared a dividendon shares of $0.20 per share on the Company’s common stock which is payable on Aprilduring the nine months ended September 30, 2021 to stockholders of record at the close of business on April 26, 2021.and 2020:

For the Nine Months Ended September 30, 2021 
Date Declared 
Record
Date
 Payment
 Date		 
Dividend
per Share
 
April 22, 2021 April 26, 2021 April 30, 2021 $0.20 
July 22, 2021 July 26, 2021 July 30, 2021 $0.20 

For the Nine Months Ended September 30, 2020 
Date Declared Record
Date		 
Payment
Date
 
Dividend
per Share
 
July 16, 2020 July 27, 2020 July 31, 2020 $0.20 

Debt

Subscription Facility

In accordance with the 1940 Act, we can borrow amounts such that our asset coverage, as defined in the 1940 Act, is at least 200% after such borrowings, subject to certain limitations. There were no outstanding borrowings as of March 31,September 30, 2021 and December 31, 2020.


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On August 14, 2019, we entered into a revolving credit facility (the “Subscription Facility”), pursuant to a Revolving Credit Agreement, as amended, with Wells Fargo Bank, National Association (the “Lender”).  The Subscription Facility enables us to request loans from the Subscription Facility Lender up to a maximum commitment of $15 million.  The borrowings under the Subscription Facility are collateralized by the eligible unfunded capital commitments of our investors.  The total amount available under the Subscription Facility may be reduced as a result of decreases in the unfunded capital commitments of our investors as well as other provisions of the Subscription Facility agreement.

Borrowings under the Subscription Facility bear interest at either (i) LIBOR plus the applicable margin of 1.50%, if the borrowing is a LIBOR Rate Loan or (ii) the Prime Rate plus the applicable margin of 0.50%, if the borrowing is a Reference Rate Loan.Loan . As of March 31,September 30, 2021 and December 31, 2020, there were no outstanding borrowings.  In addition, we pay an unused commitment fee of 0.20% per annum on


45

the daily unused commitments of the Lender.  The maturity date of the Subscription Facility is August 12, 2022.

2022.
The Subscription Facility agreement subjects us to certain covenants including, but not limited to, providing financial information and requirements concerning compliance with certain financial tests and investor attributes.  As of March 31,September 30, 2021, we are in compliance with such covenants.

Debt obligations consisted of the following as of March 31,September 30, 2021 and December 31, 2020:
  As of September 30, 2021      
(Amounts in thousands) Maximum Principal Amount Committed  
Principal
Amount Outstanding
  
Principal Amount Available(1)
  Carrying Value 
Subscription facility $15,000  $–  $10,098  $– 
Total debt $15,000  $–  $10,098  $– 

  

    As of March 31, 2021  
(Amounts in thousands) Maximum Principal Amount Committed  Principal Amount Outstanding  
Principal Amount Available(1)
  Carrying Value
Subscription facility $15,000  $–  $12,712  $-
Total debt $15,000  $–  $12,712  $-

(1)  The amount available reflects any limitations related to the Subscription Facility’s borrowing base.

 

    As of December 31, 2020  
    As of December 31, 2020
(Amounts in thousands) Maximum Principal Amount Committed  Principal Amount Outstanding  
Principal Amount Available(1)
  Carrying Value Maximum Principal Amount Committed  
Principal
Amount Outstanding
  
Principal Amount Available(1)
  Carrying Value 
Subscription facility $15,000  $-  $13,900  $– $15,000  $–
 $13,900  $–
Total debt $15,000  $-  $13,900  $– $15,000  $–
 $13,900  $–

(1)  The amount available reflects any limitations related to the Subscription Facility’s borrowing base.

For the three and nine months ended March 31,September 30, 2021 and 2020, the components of interest expense were as follows:

  Three Months  Three Months       
  Ended  Ended  Nine Months Ended  Nine Months Ended 
(Amounts in thousands) September 30, 2021  September 30, 2020  September 30, 2021  September 30, 2020 
Interest expense $8  $27  $24  $189 
Amortization of deferred financing costs  58   40   166   94 
Total interest expense $66  $67  $190  $283 
Average interest rate  1.77%  2.08%  2.46%  2.88%
Average daily borrowings $105  $217  $54  $5,553 
 
  Three Months  Three Months 
  Ended  Ended 
(Amounts in thousands) March 31, 2021  March 31, 2020 
Interest expense $7  $98 
Amortization of deferred financing costs  53   27 
Total interest expense $60  $125 
Average interest rate  3.54%  3.04%
Average daily borrowings $56  $9,293 

49
Off-Balance Sheet Arrangements

Portfolio Company Commitments

Our investment portfolio may contain debt investments that are in the form of revolving lines of credit and unfunded delayed draw commitments, which require us to provide funding when requested by portfolio companies in accordance with the terms of the underlying loan agreements.  Unfunded portfolio company commitments and funded debt investments are presented on the consolidated schedule of investments at fair value.  Unrealized appreciation or depreciation, if any, is included in the consolidated statement of assets and liabilities and consolidated statement of operations.



46

As of March 31,September 30, 2021 and December 31, 2020, the Company had the following outstanding commitments to fund investments in current portfolio companies:

Portfolio Company March 31, 2021 December 31, 2020 
First lien senior secured debt(1)
 (Amounts in thousands) (Amounts in thousands) 
50Floor, LLC $199 $199 
Advanced Lighting Acquisition, LLC  162  162 
Affinitiv, Inc.  248  248 
ALM Media, LLC  776  971 
AM Buyer, LLC  111  108 
Anne Arundel Dermatology Management, LLC  634  780 
Apex Dental Partners, LLC  566  600 
Aquatic Sales Solutions, LLC  150  135 
ASP Global Acquisition, LLC  534  534 
Banner Buyer, LLC  1,269  1,343 
BBG Intermediate Holdings, Inc.  210  – 
Beacon Oral Specialists Management LLC  686  686 
BRTS Holdings, LLC  400  341 
Canadian Orthodontic Partners Corp.  600  – 
Copperweld Group, Inc.  400  400 
Cosmetic Solutions, LLC  710  710 
DealerOn Inc.  314  314 
Empire Equipment Company, LLC  1,379  1,254 
EMSAR Acquisition LLC  774  – 
Engelman Baking Co., LLC  157  157 
G2O Technologies, LLC  207  207 
Geriatric Medical and Surgical Supply, LLC  270  270 
Groundworks Operations, LLC  967  739 
Hydromax USA, LLC  216  330 
Industrial Dynamics Company, Ltd.  141  141 
Innovative FlexPak, LLC  627  627 
ISSA, LLC  131  – 
Jansy Packaging, LLC  706  676 
Kalkomey Enterprises, LLC  77  77 
Lakeshirts LLC  650  703 
Legility, LLC  123  123 
Leonard Group, Inc.  197  – 
Library Associates, LLC  211  211 
Mattco Forge, Inc.  506  506 
Millennia Patient Services, LLC  401  – 
Montway LLC  825  825 
 
Portfolio Company September 30, 2021 December 31, 2020 
First lien senior secured debt(1)
 (Amounts in thousands) (Amounts in thousands) 
50Floor, LLC $199 $199 
Abrasive Technology Intermediate, LLC  173  - 
Advanced Lighting Acquisition, LLC  324  162 
AFC Industries, Inc.  250  - 
Affinitiv, Inc.  248  248 
Agility Intermediate, Inc.  534  - 
ALM Media, LLC  873  971 
Altamira Material Solutions, LP  32  - 
AM Buyer, LLC  111  108 
Anne Arundel Dermatology Management, LLC  354  780 
Apex Dental Partners, LLC  236  600 
Aptitude Health Holdings, LLC  240  - 
Aquatic Sales Solutions, LLC  38  135 
ASP Global Acquisition, LLC  534  534 
Banner Buyer, LLC  813  1,343 
BBG Intermediate Holdings, Inc.  165  686 
Beacon Oral Specialists Management LLC  311  - 
Behavior Frontiers, LLC  19  - 
BRTS Holdings, LLC  -  341 
Bio Agri Mix Holdings Inc.  89  - 
Brightview, LLC  427  - 
Canadian Orthodontic Partners Corp.  380  - 
Community Care Partners, LLC  263  - 
Copperweld Group, Inc.  228  400 
Cosmetic Solutions, LLC  710  710 
Data Source Intermediate Holdings, LLC  123  - 
DealerOn Inc.  314  314 
Diamondback Buyer, LLC  68  - 
Domino Equipment Company, LLC  79  - 
Edko Acquisition, LLC  38  - 
EH Management Company, LLC  38  - 
Empire Equipment Company, LLC  1,379  1,254 
EMSAR Acquisition LLC  567  - 
Engelman Baking Co., LLC  157  157 
E-Phoenix Acquisition Co. Inc.  75  - 

4750
AG Twin Brook BDC, Inc.
Notes to Consolidated Financial Statements (Unaudited) – Continued

Portfolio Company March 31, 2021 December 31, 2020 
First lien senior secured debt(1)
 (Amounts in thousands) (Amounts in thousands) 
MRC Keeler Acquisition, LLC $300 $300 
Nimlok Company, LLC  11  11 
NSG Buyer, Inc.  294  294 
Peak Dental Services, LLC  636  636 
Peak Investment Holdings, LLC  809  809 
Perimeter Brands Intermediate Holdco LLC  210  210 
Reliable Medical Supply LLC  138  138 
Revolution Plastics Buyer, LLC  281  492 
SAMGI Buyer, Inc.  138  138 
SCA Buyer, LLC  484  – 
SCP ENT and Allergy Services, LLC  1,287  1,287 
SCP Eye Care Services, LLC  –  469 
ShiftKey, LLC  187  – 
Silver Falls MSO, LLC  178  178 
Southeast Primary Care Partners, LLC  525  525 
Southern Orthodontic Partners Management, LLC  659  – 
Spear Education, LLC  888  474 
Spectrum Solutions, LLC  267  – 
Teel Plastics, LLC  324  324 
Triad Technologies, LLC  314  282 
United Land Services Opco Parent, LLC  1,205  – 
Vanguard Packaging, LLC  535  535 
Varsity DuvaSawko Operating Corp.  474  474 
Vital Care Buyer, LLC  580  580 
Total unfunded portfolio company commitments $27,258 $22,533 
Portfolio Company September 30, 2021 December 31, 2020 
First lien senior secured debt(1)
 (Amounts in thousands) (Amounts in thousands) 
Formulated Buyer, LLC  $488  $- 
G2O Technologies, LLC  207  207 
Geriatric Medical and Surgical Supply, LLC 
300 
270 
Groundworks Operations, LLC  867  739 
Guardian Dentistry Practice Management, LLC  218  - 
Hydromax USA, LLC  205  330 
Icelandirect, LLC  33  - 
Industrial Dynamics Company, Ltd.  141  141 
Innovative FlexPak, LLC  408  627 
ISSA, LLC  131  - 
Jansy Packaging, LLC  706  676 
Kalkomey Enterprises, LLC  77  77 
Lakeshirts LLC  663  703 
Legility, LLC  123  123 
Leonard Group, Inc.  197  - 
Library Associates, LLC  127  211 
MacNeill Pride Group Corp.  218  - 
Mad Rose Company, LLC  104  - 
Mattco Forge, Inc.  506  506 
Millennia Patient Services, LLC  401  - 
Montway LLC  825  825 
Motis Brands, Inc.  115  - 
MRC Keeler Acquisition, LLC  300  300 
Nimlok Company, LLC  320  11 
NSG Buyer, Inc.  294  294 
NutriScience Innovations, LLC  131  - 
Peak Dental Services, LLC  337  636 
Peak Investment Holdings, LLC  908  809 
Perimeter Brands Intermediate Holdco LLC  -  210 
PPW Acquisition, LLC  38  - 
Reliable Medical Supply LLC  206  138 
Revival Animal Health, LLC  131  - 
Revolution Plastics Buyer, LLC  188  492 
RQM Buyer, Inc.  219  - 
RTP Acquisition, LLC  38  - 
SAMGI Buyer, Inc.  138  138 
SCA Buyer, LLC  459  - 
SCP ENT and Allergy Services, LLC  1,287  1,287 
SCP Eye Care Services, LLC  -  469 
Shearer Supply, LLC  113  - 
ShiftKey, LLC  94  - 
Silver Falls MSO, LLC  117  178 
SimiTree Acquisition LLC  1,065  - 
Southeast Primary Care Partners, LLC  525  525 
Southern Orthodontic Partners Management, LLC  281  - 
Spear Education, LLC  888  474 
Spectrum Solutions, LLC  267  - 


51

Portfolio CompanySeptember 30, 2021December 31, 2020
First lien senior secured debt(1)
(Amounts in thousands)(Amounts in thousands)








Starwest Botanicals Acquisition, LLC  $174  $- 
Storm Smart Buyer LLC  131  - 
Teel Plastics, LLC 
324 
324 
Trademark Global, LLC  110  - 
Triad Technologies, LLC  314  282 
United Land Services Opco Parent, LLC  1,022  - 
Vanguard Packaging, LLC  356  535 
Varsity DuvaSawko Operating Corp.  474  474 
Vital Care Buyer, LLC  580  580 
Total unfunded portfolio company commitments $29,278 $22,533 

(1) Unfunded commitments denominated in currencies other than USD have been converted to USD using the exchange rate as of the applicable reporting date.

As of March 31,September 30, 2021 and December 31, 2020, approximately $193,000$188,000 and $181,000, respectively, of the Company's unfunded revolver commitments are reserved for letters of credit issued to third party beneficiaries on behalf of the Company's investments.

We maintain sufficient borrowing capacity along with undrawn capital commitments of our investors to cover outstanding unfunded portfolio company commitments that we may be required to fund. We seek to carefully manage our unfunded portfolio company commitments for purposes of planning our ongoing financial leverage. Further, we maintain sufficient borrowing capacity within the 200% asset coverage ratio, along with undrawn capital commitments of our investors, to cover any outstanding portfolio company unfunded commitments we are required to fund.

Investor Commitments

As of March 31,September 30, 2021 and December 31, 2020, the Company had $216.0 million in total capital commitments from investors ($115.691.8 million and $126.4 million, respectively, undrawn).  These undrawn capital commitments will no longer remain in effect following the completion of a Qualified IPO.

48

Contractual Obligations

We have no contractual payment obligations under our subscription facility as there were no borrowings outstanding as of March 31,September 30, 2021.

Related Party Transactions

We have entered into a number of business relationships with affiliated or related parties, including the Investment Management Agreement, the Administration Agreement, and the Resource Sharing Agreement.

In addition to the aforementioned agreements, we intend to rely on exemptive relief that has been granted to us, our Advisor, and Angelo Gordon to permit us to co-invest with other funds managed by Angelo Gordon in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as any regulatory requirements and other pertinent factors.  See “Item“Item 1. – Notes to Consolidated Financial Statements – Note 6. Agreements and Related Party Transactions”Transactions” for further description of our related party transactions.

Critical Accounting Policies

The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic


52
environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies, including those relating to the valuation of our investment portfolio, are described in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 11, 2021, and elsewhere in our filings with the SEC. There have been no significant changes this quarter in our critical accounting policies and practices.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Uncertainty with respect to the economic effects of the COVID-19 outbreak has introduced significant volatility in the financial markets, and the effect of the volatility could materially impact our market risks, including those listed below. We are subject to financial market risks, including valuation risk and interest rate 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 our Advisor 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

Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. We may fund portions of our investments with borrowings on a short term basis, and at such time, our net investment income will be affected by the difference between the rate at which we invest and the rate at which we borrow. Accordingly, we cannot assure you that a significant change in market interest rates will not have a material adverse effect on our net investment income.


49

As of March 31,September 30, 2021, 100% of our debt investments based on fair value in our portfolio were at floating rates.

Based on our Consolidated Statement of Assets and Liabilities as of March 31,September 30, 2021, the following table shows the annualized impact on net income of hypothetical base rate changes in interest rates on our debt investments and leverage (considering interest rate floors for floating rate instruments) assuming each floating rate investment is subject to 3-month LIBOR and there are no changes in our investment and borrowing structure:

(Amounts in millions) Interest Income  Interest Expense  Net Income  Interest Income  Interest Expense  Net Income 
Up 200 basis points $1.0  $–  $1.0  $1.2  $-  $1.2 
Up 100 basis points $0.2  $–  $0.2  $0.2  $-  $0.2 
Down 100 basis points $–  $–  $–  $-  $-  $- 
Down 200 basis points $–  $–  $–  $-  $-  $- 

To a limited extent, we may in the future hedge against interest rate fluctuations by using hedging instruments such as futures, options, swaps and forward contracts, and credit hedging contracts, such as credit default swaps. However, no assurance can be given that such hedging transactions will be entered into or, if they are, that they will be effective.

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Item 4. Controls and Procedures.

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.

Changes in Internal Controls over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the period ended March 31,September 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

We are not currently subject to any material legal proceedings, nor, to our knowledge, are any material legal proceedings threatened against us. From time to time, we 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 any such future legal or regulatory proceedings cannot be predicted with certainty, we do not expect that any such future 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 factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties are not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. During the threenine months ended March 31,September 30, 2021, there have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2020.

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

Except as previously reported by the Company on its current reports on Form 8-K, we did not sell any securities during the period covered by this Quarterly Report on Form 10-Q that were not registered under the Securities Act.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.
On November 10, 2021, the Company's Board of Directors appointed Jenny B. Neslin as the Company's General Counsel and Secretary, effective as of November 15, 2021. Ms. Neslin is a Managing Director at Angelo Gordon, and also serves as General Counsel and Secretary of AG Mortgage Investment Trust, Inc. (NYSE: MITT), positions she has held since April 2021.

To facilitate Ms. Neslin's appointment, on November 10, 2021, Christopher D. Moore resigned from his position as the Company's Interim General Counsel and Secretary, effective as of November 15, 2021. This resignation was not the result of any dispute or disagreement between Mr. Moore and the Company. Mr. Moore will continue to serve as the General Counsel and Secretary of Angelo Gordon.


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Item 6. Exhibits.

Exhibit No.
Description











51
Exhibit No.
Description
10.5

10.6

Revolving Credit Agreement, dated as of August 14, 2019, between AG Twin Brook BDC, Inc., as the Initial Borrower and Wells Fargo Bank National Association, as the Administrative Agent, Letter of Credit Issuer, a Lender and the Lead Arranger (incorporated by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K filed on March 11, 2021)
31.1*

Certification of Trevor Clark pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002



* Filed herewith

 




5256

SIGNATURES


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


   AG TWIN BROOK BDC, INC. 
   
MayNovember 12, 2021
By:
/s/ Trevor Clark


 Trevor Clark


 Chief Executive Officer
   (Principal Executive Officer)


May 12,November12, 2021
By:
/s/ Terrence Walters


 Terrence Walters


 
Chief Financial Officer and Treasurer
   
(Principal Financial Officer and Principal Accounting Officer)




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