UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2018March 31, 2021
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number:814-01269
BC Partners Lending Corporation
(Exact Name of Registrant as Specified in its Charter)
Maryland | 82-4654271 | |
(State or Other Jurisdiction of | (I.R.S. Employer | |
650 Madison Avenue New York, New York | 10022 | |
(Address of Principal Executive Office) | (Zip Code) |
(212)891-2880
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
None | N/A | N/A |
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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of RegulationS-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-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” inRule 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 inRule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of August 9, 2018,May 4, 2021, the registrant had 4,0001,726,867 shares of common stock $0.001 par value, outstanding.
TABLE OF CONTENTS
Page | |||||
PART I | 3 | ||||
Item 1. | 3 | ||||
3 | |||||
Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020 (Unaudited) | 4 | ||||
5 | |||||
Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (Unaudited) | 6 | ||||
Consolidated Schedules of Investments as of March 31, 2021 (Unaudited) and December 31, 2020 | 7 | ||||
Notes to Consolidated Financial | 11 | ||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 27 | |||
Item 3. | 39 | ||||
Item 4. | 40 | ||||
PART II | 41 | ||||
Item 1. | 41 | ||||
Item 1A. | 41 | ||||
Item 2. | 41 | ||||
Item 3. | 41 | ||||
Item 4. | 41 | ||||
Item 5. | 41 | ||||
Item 6. | 42 | ||||
43 |
1
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report on Form10-Q (the “quarterly report”“Quarterly Report”) contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about BC Partners Lending Corporation (the “Company,” “we,” “us,” or “our”), our current and prospective portfolio investments, our industry, our beliefs and opinions, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “outlook,”��� “potential,” “predicts” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:
an economic downturn could impair our portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies;
such an economic downturn could disproportionately impact the companies which we intend to target for investment, potentially causing us to experience a decrease in investment opportunities and diminished demand for capital from these companies;
such an economic downturn could also impact availability and pricing of our financing;
economic and political instability in the United States and international markets;
a contraction of available credit and/or an inability to access the equity markets could impair our lending and investment activities;
interest rate volatility could adversely affect our results, particularly if we elect to use leverage as part of our investment strategy;
currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;
the extent to which the novel coronavirus (COVID-19) pandemic and measures taken in response thereto impact our business, portfolio companies, results of operations and financial condition;
an economic downturn, including, as a result of the impact of COVID-19, could have a material adverse effect on our portfolio companies’ results of operations and financial condition, which could lead to a loss on some or all of our investments in such portfolio companies and have a material effect on our results of operations and financial condition;
our future operating results;
our business prospects and the prospects of our portfolio companies;
our contractual arrangements and relationships with third parties;
the ability of our portfolio companies to achieve their objectives;
competition with other entities and our affiliates for investment opportunities;
the speculative and illiquid nature of our investments;
the use of borrowed money to finance a portion of our investments as well as any estimates regarding potential use of leverage;
the adequacy of our available liquidity, financing sources and working capital;
the loss of key personnel;
the timing of cash flows, if any, from the operations of our portfolio companies;
the ability of BC Partners Advisors L.P. (the “Adviser”) to locate suitable investments for us and to monitor and administer our investments;
the ability of the Adviser to attract and retain highly talented professionals;
actual and potential conflicts of interest with the Adviser and its affiliates;
our ability to qualify and maintain our qualification as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), and as a business development company (“BDC”);
the effect of legal, tax and regulatory changes;changes on us and our portfolio companies; and
other risks, uncertainties and other factors we identify elsewhere in this quarterly reportQuarterly Report and under “Item 1A. Risk Factors” in our registration statementAnnual Report on Form 1010-K filed with the Securities and Exchange Commission (“SEC”) on February 22, 2018, as amended, as updated by our subsequent periodic filings with the SEC.March 11, 2021.
Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this quarterly reportQuarterly Report should not be regarded as a representation by us that our plans and objectives will be achieved. These forward-looking statements apply only as of the date of this quarterly report.Quarterly Report. Moreover, we assume no duty and do not undertake to update the forward-looking statements. Because we are an investment company, the forward-looking statements and projections contained in this quarterly reportQuarterly Report are excluded from the safe harbor protection provided by Section 21E of the Securities Exchange Act of 1934 (the “1934 Act”).
2
PART I – FINANCIAL INFORMATION
Item 1. Consolidated Financial Statement.Statements.
BC Partners Lending Corporation
StatementConsolidated Statements of Assets and Liabilities
|
| March 31, 2021 |
|
| December 31, 2020 |
| ||
|
| (Unaudited) |
|
|
|
|
| |
Assets |
|
|
|
|
|
|
|
|
Investments, at fair value: |
|
|
|
|
|
|
|
|
Non-control/non-affiliate investments (amortized cost of $95,457,122 and $79,607,889, respectively) |
| $ | 97,059,863 |
|
| $ | 80,150,842 |
|
Forward contracts, at fair value (cost of $0 and $0, respectively) |
|
| 93,433 |
|
|
| 119,317 |
|
Cash |
|
| 454,149 |
|
|
| 599,344 |
|
Restricted cash |
|
| 5,787,059 |
|
|
| 14,103,379 |
|
Receivable for unsettled trades |
|
| 2,988,750 |
|
|
| 4,975,000 |
|
Interest and dividends receivable |
|
| 419,040 |
|
|
| 298,569 |
|
Prepaid expenses |
|
| — |
|
|
| 75,220 |
|
Total assets |
| $ | 106,802,294 |
|
| $ | 100,321,671 |
|
Liabilities |
|
|
|
|
|
|
|
|
Credit facility (net of deferred financing costs of $789,191 and $729,942, respectively) |
| $ | 49,210,809 |
|
| $ | 49,270,058 |
|
Payable for unsettled trades |
|
| 12,203,270 |
|
|
| 7,397,500 |
|
Due to affiliate |
|
| 390,714 |
|
|
| 445,585 |
|
Management fees payable |
|
| 232,726 |
|
|
| 189,490 |
|
Incentive fees payable |
|
| 441,123 |
|
|
| 261,513 |
|
Interest expense payable |
|
| 319,417 |
|
|
| 227,376 |
|
Accounts payable and accrued expenses |
|
| 788,707 |
|
|
| 802,078 |
|
Distributions payable |
|
| — |
|
|
| 609,508 |
|
Total liabilities |
| $ | 63,586,766 |
|
| $ | 59,203,108 |
|
Commitments and contingencies (Note 9) |
|
|
|
|
|
|
|
|
Net Assets |
|
|
|
|
|
|
|
|
Common stock, $0.001 par value, 1,000,000,000 shares authorized; 1,665,129 and 1,652,799 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively |
| $ | 1,665 |
|
| $ | 1,653 |
|
Additional paid-in capital |
|
| 40,914,687 |
|
|
| 40,607,337 |
|
Total distributable earnings |
|
| 2,299,176 |
|
|
| 509,573 |
|
Total net assets |
|
| 43,215,528 |
|
|
| 41,118,563 |
|
Total liabilities and net assets |
| $ | 106,802,294 |
|
| $ | 100,321,671 |
|
Net asset value per share |
| $ | 25.95 |
|
| $ | 24.88 |
|
See notes to unaudited consolidated financial statements.
BC Partners Lending Corporation
Consolidated Statements of Operations
(Unaudited)
June 30, 2018 | ||||
Assets | ||||
Cash and cash equivalents | $ | 100,000 | ||
|
| |||
Total assets | $ | 100,000 | ||
|
| |||
Commitments and contingencies (Note 5) | ||||
Net Assets | ||||
Common stock, $0.001 par value; 1,000,000,000 shares authorized, 4,000 shares | $ | 4 | ||
Additional paid-in capital | 99,996 | |||
|
| |||
Total net assets | $ | 100,000 | ||
|
| |||
Net asset value per share | $ | 25.00 |
|
| Three Months Ended March 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Investment income: |
|
|
|
|
|
|
|
|
Interest income: |
|
|
|
|
|
|
|
|
Non-control/non-affiliate investments |
| $ | 1,619,156 |
|
| $ | 630,659 |
|
Fee and other income |
|
| 43,591 |
|
|
| 70,076 |
|
Total investment income |
|
| 1,662,747 |
|
|
| 700,735 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Organization and offering costs |
|
| — |
|
|
| 10,875 |
|
Management fees |
|
| 232,725 |
|
|
| 101,380 |
|
Incentive fees |
|
| 282,358 |
|
|
| (13,428 | ) |
Administrative fees |
|
| 117,107 |
|
|
| 171,090 |
|
Interest and debt expenses |
|
| 380,086 |
|
|
| 250,235 |
|
Audit fees |
|
| 49,000 |
|
|
| — |
|
Legal fees |
|
| 74,930 |
|
|
| 156,920 |
|
Professional fees |
|
| 13,283 |
|
|
| 28,333 |
|
Directors' fees |
|
| 37,500 |
|
|
| — |
|
Insurance fees |
|
| 75,220 |
|
|
| — |
|
Other expenses |
|
| 102,838 |
|
|
| 78,376 |
|
Total expenses before expense support |
|
| 1,365,047 |
|
|
| 783,781 |
|
Expense support from related parties |
|
| (216,726 | ) |
|
| (345,503 | ) |
Net expenses |
|
| 1,148,321 |
|
|
| 438,278 |
|
Net investment income |
|
| 514,426 |
|
|
| 262,457 |
|
Realized and unrealized gain (loss): |
|
|
|
|
|
|
|
|
Net realized gain on investments |
|
| 757,730 |
|
|
| 135,866 |
|
Net change in unrealized appreciation (depreciation) on investments |
|
| 1,059,788 |
|
|
| (1,356,493 | ) |
Net change in unrealized depreciation on derivatives |
|
| (25,884 | ) |
|
| — |
|
Net realized and unrealized gain (loss) |
|
| 1,791,634 |
|
|
| (1,220,627 | ) |
Net increase (decrease) in net assets resulting from operations |
| $ | 2,306,060 |
|
| $ | (958,170 | ) |
Net investment income per share — basic and diluted |
| $ | 0.32 |
|
| $ | 0.31 |
|
Net increase (decrease) in net assets resulting from operations per share - basic and diluted |
| $ | 1.39 |
|
| $ | (1.11 | ) |
Weighted average shares outstanding — basic and diluted |
|
| 1,657,956 |
|
|
| 862,824 |
|
See notes to unaudited consolidated financial statement.statements.
3
BC Partners Lending Corporation
Consolidated Statements of Changes in Net Assets
(Unaudited)
|
| Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Three Months Ended March 31, 2021 |
| Number of shares |
|
| Par Value |
|
| Additional paid in capital |
|
| Total distributable earnings |
|
| Total net assets |
| |||||
Balance as of December 31, 2020 |
|
| 1,652,799 |
|
| $ | 1,653 |
|
| $ | 40,607,337 |
|
| $ | 509,573 |
|
| $ | 41,118,563 |
|
Net investment income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 514,426 |
|
|
| 514,426 |
|
Net realized gain on investments |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 757,730 |
|
|
| 757,730 |
|
Net change in unrealized appreciation on investments |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,033,904 |
|
|
| 1,033,904 |
|
Issuance of common shares |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Distributions declared and payable to stockholders |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (516,457 | ) |
|
| (516,457 | ) |
Stock issued in connection with dividend reinvestment plan |
|
| 12,330 |
|
|
| 12 |
|
|
| 307,350 |
|
|
| — |
|
|
| 307,362 |
|
Balance as of March 31, 2021 |
|
| 1,665,129 |
|
| $ | 1,665 |
|
| $ | 40,914,687 |
|
| $ | 2,299,176 |
|
| $ | 43,215,528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Three Months Ended March 31, 2020 |
| Number of shares |
|
| Par Value |
|
| Additional paid in capital |
|
| Total distributable earnings (loss) |
|
| Total net assets |
| |||||
Balance as of December 31, 2019 |
|
| 846,633 |
|
| $ | 847 |
|
| $ | 21,165,041 |
|
| $ | 89,518 |
|
| $ | 21,255,406 |
|
Net investment income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 262,457 |
|
|
| 262,457 |
|
Net realized gain on investments |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 135,866 |
|
|
| 135,866 |
|
Net change in unrealized depreciation on investments |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,356,493 | ) |
|
| (1,356,493 | ) |
Issuance of common stock |
|
| 291,400 |
|
|
| 291 |
|
|
| 6,774,709 |
|
|
| — |
|
|
| 6,775,000 |
|
Distributions to stockholders |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (262,457 | ) |
|
| (262,457 | ) |
Stock issued in connection with dividend reinvestment plan |
|
| 2,507 |
|
|
| 3 |
|
|
| 62,936 |
|
|
| — |
|
|
| 62,939 |
|
Balance as of March 31, 2020 |
|
| 1,140,540 |
|
| $ | 1,141 |
|
| $ | 28,002,686 |
|
| $ | (1,131,109 | ) |
| $ | 26,872,718 |
|
See notes to unaudited consolidated financial statements.
BC Partners Lending Corporation
Consolidated Statements of Cash Flows
(Unaudited)
|
| Three Months Ended March 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Operating activities: |
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets resulting from operations |
| $ | 2,306,060 |
|
| $ | (958,170 | ) |
Adjustments to reconcile net decrease in net assets from operations |
|
|
|
|
|
|
|
|
to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Net realized gain from investments |
|
| (757,730 | ) |
|
| (135,866 | ) |
Net change in unrealized (appreciation) depreciation on investments |
|
| (1,059,788 | ) |
|
| 1,356,493 |
|
Net change in unrealized depreciation on derivatives |
|
| 25,884 |
|
|
| — |
|
Net accretion of discount on investments |
|
| (157,192 | ) |
|
| (14,139 | ) |
Amortization of deferred financing costs |
|
| 20,751 |
|
|
| 20,980 |
|
Payment-in-kind interest income |
|
| (70,277 | ) |
|
| — |
|
Purchases of investments |
|
| (50,812,368 | ) |
|
| (20,897,973 | ) |
Sales and repayments of investments |
|
| 35,948,334 |
|
|
| 12,716,953 |
|
(Increase) decrease in operating assets: |
|
|
|
|
|
|
|
|
Receivable for unsettled trades |
|
| 1,986,250 |
|
|
| (5,008,584 | ) |
Interest and dividends receivable |
|
| (120,471 | ) |
|
| (56,460 | ) |
Due from affiliate |
|
| — |
|
|
| 581,560 |
|
Prepaid expenses |
|
| 75,220 |
|
|
| 37,345 |
|
Increase (decrease) in operating liabilities: |
|
|
|
|
|
|
|
|
Payable for unsettled trades |
|
| 4,805,770 |
|
|
| (5,783,953 | ) |
Due to affiliate |
|
| (54,871 | ) |
|
| (52,729 | ) |
Management fees payable |
|
| 43,236 |
|
|
| (21,751 | ) |
Incentive fees payable |
|
| 179,610 |
|
|
| (13,428 | ) |
Interest expense payable |
|
| 92,041 |
|
|
| 229,256 |
|
Accounts payable and accrued expenses |
|
| (13,371 | ) |
|
| 124,388 |
|
Net cash used in operating activities |
|
| (7,562,912 | ) |
|
| (17,876,078 | ) |
Financing activities: |
|
|
|
|
|
|
|
|
Proceeds from issuance of shares of common stock |
|
| — |
|
|
| 6,775,000 |
|
Stockholder distributions paid |
|
| (818,603 | ) |
|
| (199,518 | ) |
Proceeds from debt |
|
| — |
|
|
| 1,000,000 |
|
Payments of financing costs |
|
| (80,000 | ) |
|
| (465,401 | ) |
Net cash (used in) provided by financing activities |
|
| (898,603 | ) |
|
| 7,110,081 |
|
Net decrease in cash and restricted cash |
|
| (8,461,515 | ) |
|
| (10,765,997 | ) |
Cash and restricted cash at beginning of period |
|
| 14,702,723 |
|
|
| 24,499,445 |
|
Cash and restricted cash at end of period |
| $ | 6,241,208 |
|
| $ | 13,733,448 |
|
Reconciliation of cash and restricted cash |
|
|
|
|
|
|
|
|
Cash |
|
| 454,149 |
|
|
| 5,366,633 |
|
Restricted cash |
|
| 5,787,059 |
|
|
| 8,366,815 |
|
Total cash and restricted cash |
| $ | 6,241,208 |
|
| $ | 13,733,448 |
|
Supplemental information: |
|
|
|
|
|
|
|
|
Interest paid during the period |
| $ | 267,294 |
|
| $ | — |
|
Supplemental disclosure of non-cash information: |
|
|
|
|
|
|
|
|
Reinvestment of dividends |
| $ | 305,335 |
|
| $ | 62,939 |
|
Financing costs payable |
| $ | — |
|
| $ | 274,476 |
|
See notes to unaudited consolidated financial statements.
BC Partners Lending Corporation
Consolidated Schedule of Investments
March 31, 2021
(Unaudited)
Portfolio Company (1) (2) (3) |
| Investment Type |
| Initial Acquisition Date |
| Maturity Date |
| Spread Above Index (4) |
| Interest Rate |
|
| Par / Units |
|
| Amortized Cost (11) (12) |
|
| Fair Value |
|
| % of Net Assets |
| |||||
Non-control/Non-affiliate Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Debt Investments |
|
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|
Collateralized Loan Obligation - Debt Class |
|
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|
|
|
|
|
|
|
Churchill Middle Market CLO IV Ltd., Class E-2 Notes (13) (18) |
| Structured Note |
| 12/12/2019 |
| 1/23/2032 |
| 3M L+9.00% |
|
| 9.48 | % |
|
| 3,900,000 |
|
|
| 3,840,000 |
|
|
| 3,914,820 |
|
|
| 9.1 | % |
Halsey Point CLO II Ltd., Class E (8) (13) |
| Structured Note |
| 7/7/2020 |
| 7/20/2031 |
| 3M L+3.00% |
|
| 3.22 | % |
|
| 333,333 |
|
|
| 232,533 |
|
|
| 316,666 |
|
|
| 0.7 | % |
Collateralized Loan Obligation - Debt Class Total |
|
|
| 4,072,533 |
|
|
| 4,231,486 |
|
|
| 9.8 | % | |||||||||||||||
Communication Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wonder Love Inc (8) (18) |
| Senior Secured Loan |
| 11/18/2019 |
| 11/18/2024 |
| 3M L+5.00% |
|
| 6.00 | % |
|
| 875,000 |
|
|
| 861,934 |
|
|
| 876,138 |
|
|
| 2.0 | % |
Communication Services Total |
|
|
| 861,934 |
|
|
| 876,138 |
|
|
| 2.0 | % | |||||||||||||||
Consumer Discretionary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALCV Purchaser, Inc. (18) |
| Senior Secured Loan |
| 2/19/2021 |
| 2/26/2026 |
| 1M L+6.75% |
|
| 7.75 | % |
|
| 3,333,333 |
|
|
| 3,283,333 |
|
|
| 3,283,333 |
|
|
| 7.6 | % |
Colibri Group, LLC (8) (14) (18) |
| Senior Secured Loan |
| 3/31/2020 |
| 5/1/2025 |
| 3M L+8.04% |
|
| 9.04 | % |
|
| 172,166 |
|
|
| 170,875 |
|
|
| 172,596 |
|
|
| 0.4 | % |
Colibri Group, LLC, Second Amendment Term Loan (8) (14) (18) |
| Senior Secured Loan |
| 3/31/2020 |
| 5/1/2026 |
| 3M L+8.04% |
|
| 9.04 | % |
|
| 233,246 |
|
|
| 231,497 |
|
|
| 233,829 |
|
|
| 0.5 | % |
Colibri Group, LLC (Delayed Draw) (8) (14) (18) |
| Senior Secured Loan |
| 3/31/2020 |
| 5/1/2026 |
| 3M L+8.04% |
|
| 9.04 | % |
|
| 1,504,669 |
|
|
| 1,493,384 |
|
|
| 1,508,431 |
|
|
| 3.5 | % |
Franchise Group, Inc. (13) (18) |
| Senior Secured Loan |
| 2/24/2021 |
| 3/31/2026 |
| 3M L+4.75% |
|
| 5.50 | % |
|
| 3,500,000 |
|
|
| 3,465,188 |
|
|
| 3,465,000 |
|
|
| 8.0 | % |
Jo-Ann Stores, LLC (13) (18) |
| Senior Secured Loan |
| 3/17/2021 |
| 10/20/2023 |
| 3M L+5.00% |
|
| 6.00 | % |
|
| 4,000,000 |
|
|
| 3,970,000 |
|
|
| 3,992,500 |
|
|
| 9.2 | % |
Location Services LLC (Revolver) (7) (8) (18) |
| Senior Secured Loan |
| 11/7/2019 |
| 11/7/2022 |
| 1M L+6.75% |
|
| 7.75 | % |
|
| 916,667 |
|
|
| 896,651 |
|
|
| 881,117 |
|
|
| 2.0 | % |
Nasco Healthcare Inc. (8) (18) |
| Senior Secured Loan |
| 5/22/2020 |
| 6/30/2021 |
| 3M L+5.50% |
|
| 6.50 | % |
|
| 1,892,204 |
|
|
| 1,826,071 |
|
|
| 1,802,324 |
|
|
| 4.2 | % |
NMG Hldco/Neiman Marcus (18) |
| Senior Secured Loan |
| 3/19/2021 |
| 4/1/2026 |
| N/A |
|
| 7.13 | % |
|
| 2,000,000 |
|
|
| 2,000,000 |
|
|
| 2,000,000 |
|
|
| 4.6 | % |
TLE Holdings, LLC (8) (18) |
| Senior Secured Loan |
| 10/22/2019 |
| 6/28/2024 |
| 6M L+6.00% |
|
| 7.00 | % |
|
| 984,810 |
|
|
| 981,284 |
|
|
| 971,318 |
|
|
| 2.3 | % |
Consumer Discretionary Total |
|
|
| 18,318,283 |
|
|
| 18,310,448 |
|
|
| 42.3 | % | |||||||||||||||
Consumer Staples |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMCP PET HOLDINGS, INC. (7) (8) |
| Senior Secured Loan |
| 12/9/2020 |
| 10/5/2026 |
| 6M L+6.25% |
|
| 7.25 | % |
|
| — |
|
|
| (18,998 | ) |
|
| — |
|
|
| 0.0 | % |
AMCP PET HOLDINGS, INC. (7) (8) (18) |
| Senior Secured Loan |
| 12/9/2020 |
| 10/5/2026 |
| 6M L+6.25% |
|
| 7.25 | % |
|
| 25,000 |
|
|
| 15,500 |
|
|
| 25,000 |
|
|
| 0.1 | % |
AMCP PET HOLDINGS, INC. (8) (18) |
| Senior Secured Loan |
| 12/9/2020 |
| 10/5/2026 |
| 6M L+6.25% |
|
| 7.25 | % |
|
| 1,995,000 |
|
|
| 1,957,281 |
|
|
| 1,995,000 |
|
|
| 4.6 | % |
C. J. FOODS, INC. (18) |
| Senior Secured Loan |
| 9/17/2020 |
| 3/16/2027 |
| 3M L+6.00% |
|
| 7.00 | % |
|
| 2,745,025 |
|
|
| 2,623,140 |
|
|
| 2,690,399 |
|
|
| 6.2 | % |
Florida Food Products, LLC (8) (18) |
| Senior Secured Loan |
| 8/7/2020 |
| 9/8/2025 |
| 3M L+7.25% |
|
| 8.25 | % |
|
| 992,500 |
|
|
| 930,668 |
|
|
| 982,972 |
|
|
| 2.3 | % |
Consumer Staples Total |
|
|
| 5,507,591 |
|
|
| 5,693,371 |
|
|
| 13.2 | % | |||||||||||||||
Financials |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advantage Capital Holdings LLC (8) (16) (18) |
| Senior Secured Loan |
| 1/29/2020 |
| 1/9/2025 |
| 8.00% PIK, 5.00% Cash |
|
| 13.00 | % |
|
| 1,807,908 |
|
|
| 1,807,908 |
|
|
| 1,828,338 |
|
|
| 4.2 | % |
Advantage Capital Holdings LLC (Delayed Draw) (8) (16) (18) |
| Senior Secured Loan |
| 1/29/2020 |
| 1/9/2025 |
| 8.00% PIK, 5.00% Cash |
|
| 13.00 | % |
|
| 2,036,949 |
|
|
| 2,036,950 |
|
|
| 2,059,968 |
|
|
| 4.8 | % |
H-CA II T/L |
| Senior Secured Loan |
| 2/16/2021 |
| 2/16/2024 |
| N/A |
|
| 19.00 | % |
|
| 2,000,000 |
|
|
| 2,000,000 |
|
|
| 2,000,000 |
|
|
| 4.6 | % |
TA/WEG HOLDINGS, LLC (7) |
| Senior Secured Loan |
| 12/11/2020 |
| 10/2/2025 |
| 3M L+5.75% |
|
| 6.75 | % |
|
| 621,490 |
|
|
| 596,830 |
|
|
| 621,490 |
|
|
| 1.4 | % |
Financials Total |
|
|
| 6,441,688 |
|
|
| 6,509,796 |
|
|
| 15.0 | % | |||||||||||||||
Healthcare |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Datalink, LLC (Delayed Draw) (7) (8) |
| Senior Secured Loan |
| 11/23/2020 |
| 11/23/2026 |
| N/A |
|
| 1.00 | % |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0.0 | % |
Datalink, LLC (8) (18) |
| Senior Secured Loan |
| 11/23/2020 |
| 11/23/2026 |
| 1M L+6.25% |
|
| 7.25 | % |
|
| 3,357,500 |
|
|
| 3,269,558 |
|
|
| 3,357,500 |
|
|
| 7.8 | % |
Gastro Health Holdco, LLC (18) |
| Senior Secured Loan |
| 3/1/2021 |
| 9/4/2024 |
| 1M L+7.00% |
|
| 8.00 | % |
|
| 3,031,306 |
|
|
| 2,971,732 |
|
|
| 2,970,680 |
|
|
| 6.9 | % |
Premier Imaging, LLC |
| Senior Secured Loan |
| 3/25/2021 |
| 1/2/2025 |
| 1M L+5.75% |
|
| 6.75 | % |
|
| 1,803,390 |
|
|
| 1,785,457 |
|
|
| 1,787,700 |
|
|
| 4.1 | % |
Premier Imaging, LLC |
| Senior Secured Loan |
| 10/22/2019 |
| 1/2/2025 |
| 1M L+5.75% |
|
| 6.75 | % |
|
| 984,887 |
|
|
| 978,964 |
|
|
| 976,318 |
|
|
| 2.3 | % |
Premier Imaging, LLC |
| Senior Secured Loan |
| 11/25/2019 |
| 1/2/2025 |
| 1M L+5.75% |
|
| 6.75 | % |
|
| 985,000 |
|
|
| 977,562 |
|
|
| 976,431 |
|
|
| 2.3 | % |
The PromptCare Companies Inc. (Delayed Draw) (8) (18) |
| Senior Secured Loan |
| 2/20/2020 |
| 12/31/2026 |
| 1M L+5.25% |
|
| 6.25 | % |
|
| 215,455 |
|
|
| 213,615 |
|
|
| 215,455 |
|
|
| 0.5 | % |
The PromptCare Companies Inc. (Delayed Draw) (7) (8) (10) |
| Senior Secured Loan |
| 2/20/2020 |
| 12/31/2026 |
| 1M L+5.25% |
|
| 6.25 | % |
|
| 178,036 |
|
|
| 177,126 |
|
|
| 178,036 |
|
|
| 0.4 | % |
The PromptCare Companies Inc. (8) (18) |
| Senior Secured Loan |
| 2/28/2020 |
| 12/31/2026 |
| 1M L+5.25% |
|
| 6.25 | % |
|
| 1,544,091 |
|
|
| 1,530,742 |
|
|
| 1,544,091 |
|
|
| 3.6 | % |
Radiology Partners, Inc., Term B Loan (5) (8) |
| Senior Secured Loan |
| 10/18/2019 |
| 7/9/2025 |
| 12ML+4.25% |
| N/A |
|
|
| — |
|
|
| 16,778 |
|
|
| — |
|
|
| 0.0 | % | |
Healthcare Total |
|
|
| 11,921,534 |
|
|
| 12,006,211 |
|
|
| 27.9 | % | |||||||||||||||
Industrials |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C.P. Converters, Inc., Seventh Amendment Acquisition Loan (8) (18) |
| Senior Secured Loan |
| 6/24/2020 |
| 6/18/2023 |
| 3M L+6.50% |
|
| 7.50 | % |
|
| 1,962,500 |
|
|
| 1,925,411 |
|
|
| 1,952,688 |
|
|
| 4.5 | % |
Deliver Buyer, Inc. (8) (18) |
| Senior Secured Loan |
| 7/1/2020 |
| 5/1/2024 |
| 3M L+6.25% |
|
| 7.25 | % |
|
| 2,738,120 |
|
|
| 2,692,306 |
|
|
| 2,738,120 |
|
|
| 6.3 | % |
GI Revelation Acquisition LLC (8) (18) |
| Senior Secured Loan |
| 10/7/2020 |
| 4/16/2025 |
| 1M L+5.00% |
|
| 5.11 | % |
|
| 2,984,655 |
|
|
| 2,909,673 |
|
|
| 2,994,609 |
|
|
| 6.9 | % |
MAG DS CORP. (8) (18) |
| Senior Secured Loan |
| 9/21/2020 |
| 4/1/2027 |
| 3M L+5.50% |
|
| 6.50 | % |
|
| 2,985,000 |
|
|
| 2,847,056 |
|
|
| 2,924,106 |
|
|
| 6.9 | % |
Mileage Plus Holdings LLC (5) (18) |
| Bond |
| 6/25/2020 |
| 6/20/2027 |
| N/A |
|
| 6.50 | % |
|
| 4,000,000 |
|
|
| 3,955,366 |
|
|
| 4,378,560 |
|
|
| 10.1 | % |
Mileage Plus Holdings LLC (5) (18) |
| Senior Secured Loan |
| 6/25/2020 |
| 6/25/2027 |
| 3M L+5.25% |
|
| 6.25 | % |
|
| 1,000,000 |
|
|
| 981,933 |
|
|
| 1,064,145 |
|
|
| 2.5 | % |
Teneo Holdings LLC (18) |
| Senior Secured Loan |
| 10/18/2019 |
| 7/11/2025 |
| 1M L+5.25% |
|
| 6.25 | % |
|
| 1,994,937 |
|
|
| 1,979,975 |
|
|
| 1,996,682 |
|
|
| 4.6 | % |
Industrials Total |
|
|
| 17,291,720 |
|
|
| 18,048,910 |
|
|
| 41.8 | % | |||||||||||||||
Information Technology |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dcert Buyer, Inc. (18) |
| Senior Secured Loan |
| 2/16/2021 |
| 2/16/2029 |
| 1M L+7.00% |
|
| 7.11 | % |
|
| 3,000,000 |
|
|
| 2,992,842 |
|
|
| 3,028,140 |
|
|
| 7.0 | % |
Drilling Info Holdings, Inc., 2020 Term Loan (8) (18) |
| Senior Secured Loan |
| 2/10/2020 |
| 7/30/2025 |
| 1M L+4.25% |
|
| 7.36 | % |
|
| 1,980,000 |
|
|
| 1,972,284 |
|
|
| 1,980,000 |
|
|
| 4.6 | % |
Drilling Info Holdings, Inc., Initial Term Loan (5) (8) (18) |
| Senior Secured Loan |
| 10/22/2019 |
| 7/30/2025 |
| 1M L+4.25% |
|
| 4.36 | % |
|
| 984,853 |
|
|
| 983,141 |
|
|
| 975,694 |
|
|
| 2.3 | % |
Help/Systems Holdings, Inc. (5) (18) |
| Senior Secured Loan |
| 12/18/2019 |
| 11/13/2026 |
| 3M L+4.75% |
|
| 5.75 | % |
|
| 2,970,000 |
|
|
| 2,963,844 |
|
|
| 2,990,419 |
|
|
| 6.9 | % |
Idera, Inc. (18) |
| Senior Secured Loan |
| 2/4/2021 |
| 2/5/2029 |
| 6M L+6.75% |
|
| 7.50 | % |
|
| 2,000,000 |
|
|
| 1,985,157 |
|
|
| 2,005,000 |
|
|
| 4.6 | % |
Ivanti Software, Inc. (18) |
| Senior Secured Loan |
| 10/30/2020 |
| 12/1/2028 |
| 1M L+8.50% |
|
| 9.50 | % |
|
| 4,000,000 |
|
|
| 3,883,752 |
|
|
| 3,977,600 |
|
|
| 9.2 | % |
Monotype Imaging Holdings Corp., Incremental Tranche A-3 Term Loan (5) (8) (18) |
| Senior Secured Loan |
| 11/12/2019 |
| 10/9/2026 |
| 1M L+5.50% |
|
| 6.50 | % |
|
| 3,955,892 |
|
|
| 3,876,571 |
|
|
| 3,947,663 |
|
|
| 9.1 | % |
MSM Acquisitions, Inc. (7) (8) (18) |
| Senior Secured Loan |
| 12/31/2020 |
| 12/9/2026 |
| 3M L+6.00% |
|
| 7.00 | % |
|
| 593,806 |
|
|
| 596,608 |
|
|
| 592,631 |
|
|
| 1.4 | % |
MSM Acquisitions, Inc. (8) (18) |
| Senior Secured Loan |
| 12/31/2020 |
| 12/9/2026 |
| 3M L+6.00% |
|
| 7.00 | % |
|
| 2,816,471 |
|
|
| 2,782,226 |
|
|
| 2,813,654 |
|
|
| 6.5 | % |
NAVIGA INC. (7) (18) |
| Senior Secured Loan |
| 3/1/2021 |
| 12/29/2022 |
| 3M L+7.00% |
|
| 8.00 | % |
|
| — |
|
|
| (24,141 | ) |
|
| (25,325 | ) |
|
| -0.1 | % |
NAVIGA INC. (18) |
| Senior Secured Loan |
| 3/1/2021 |
| 12/29/2022 |
| 1M L+7.00% |
|
| 8.00 | % |
|
| 1,908,659 |
|
|
| 1,867,007 |
|
|
| 1,860,942 |
|
|
| 4.3 | % |
BC Partners Lending Corporation
Consolidated Schedule of Investments
March 31, 2021
(Unaudited)
San Vicente Capital LLC (8) (18) |
| Senior Secured Loan |
| 6/10/2020 |
| 6/10/2025 |
| 3M L+8.00% |
|
| 9.50 | % |
|
| 1,990,000 |
|
|
| 1,964,945 |
|
|
| 2,039,750 |
|
|
| 4.7 | % |
Smartronix, Inc, (8) (18) |
| Senior Secured Loan |
| 5/1/2020 |
| 12/19/2025 |
| 3M L+6.00% |
|
| 7.50 | % |
|
| 1,979,950 |
|
|
| 1,894,269 |
|
|
| 1,950,251 |
|
|
| 4.5 | % |
Virgin Pulse, Inc. (18) |
| Senior Secured Loan |
| 3/30/2021 |
| 3/30/2029 |
| 3M L+7.25% |
|
| 8.00 | % |
|
| 3,000,000 |
|
|
| 2,970,000 |
|
|
| 2,970,000 |
|
|
| 7.0 | % |
Information Technology Total |
|
|
| 30,708,505 |
|
|
| 31,106,419 |
|
|
| 72.0 | % | |||||||||||||||
Total Debt Investments |
|
|
| 95,123,788 |
|
|
| 96,782,779 |
|
|
| 224.0 | % | |||||||||||||||
Collateralized Loan Obligation - Equity Class |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Halsey Point CLO II Ltd., Class Subordinated Notes (8) (13) (15) |
| Subordinated Structured Note |
| 7/7/2020 |
| 7/20/2031 |
| N/A |
|
|
|
|
|
| 333,334 |
|
|
| 333,334 |
|
|
| 277,084 |
|
|
| 0.6 | % |
Collateralized Loan Obligation - Equity Class Investments Total |
|
|
| 333,334 |
|
|
| 277,084 |
|
|
| 0.6 | % | |||||||||||||||
Equity Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advantage Capital Holdings LLC (6) (8) (9) |
| Equity/Other |
| 3/31/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| — |
|
|
| 0.0 | % |
Total Equity Investments |
|
|
| — |
|
|
| — |
|
|
| 0.0 | % | |||||||||||||||
Total Investments (12) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 95,457,122 |
|
| $ | 97,059,863 |
|
|
| 224.6 | % |
Forward contracts (17):
Security |
| Counterparty |
| Settlement Date |
| Par |
| Unrealized Appreciation (Depreciation) |
| |
Halsey Point CLO II, Ltd. Class E |
| Advantage Capital Holdings, LLC |
| 7/1/2022 |
| — |
|
| 26,767 |
|
Halsey Point CLO II, Ltd. Class Subordinated Notes |
| Advantage Capital Holdings, LLC |
| 7/1/2022 |
| — |
|
| 66,666 |
|
|
|
|
|
|
|
|
| $ | 93,433 |
|
(1) | All of the Company's investments are issued by eligible portfolio companies, as defined in the Investment Company Act of 1940 (the “1940 Act”), unless otherwise noted. All of the Company's investments are issued by U.S. portfolio companies unless otherwise noted. |
(2) | All investments are non-controlled/non-affiliated investments as defined by the 1940 Act. The provisions of the 1940 Act classify investments based on the level of control that the Company maintains in a particular portfolio company. |
(3) | Except as otherwise noted, certain of the Company’s portfolio company investments are subject to legal restrictions on sales. |
(4) | Variable rate loans bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”) or Prime Rate (“P”), which resets monthly, quarterly, or semiannually. For each such investment, the Company has provided the spread and the current contractual interest rate in effect at March 31, 2021. Certain investments may be subject to an interest rate floor, or rate cap. |
(5) | Other than the investments noted by this footnote, the fair value of these investments is determined in good faith using significant unobservable inputs by the Company’s board of directors. (See Note 4 in the accompanying notes to the unaudited consolidated financial statements). |
(6) | Ownership of equity investments may occur through a holding company. |
(7) | All or a portion of this commitment was unfunded at March 31, 2021. |
(8) | Represents co-investment 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. (See Note 3 in the accompanying unaudited consolidated financial statements). |
(9) | Non-income producing investment. |
(10) | The date disclosed represents the commitment period of the unfunded term loan. |
(11) | The amortized cost represents the initial cost adjusted for the accretion of discount or amortization of premium, as applicable, on debt investments using the effective interest method. |
(13) | Investments the Company has determined are not qualifying assets under Section 55(a) of the 1940 Act. 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. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of total assets. Non-qualifying assets represented 11.2% of total assets as of March 31, 2021. |
(15) | This investment is in the subordinated note of the collateralized loan obligation security, which is entitled to recurring distributions that are generally equal to the excess cash flow generated from the underlying investments after payment of the contractual payments in debt holders and fund expenses. The current estimated yield, calculated using amortized cost, is based on the current projections of this excess cash flow taking into account assumptions made regarding expected prepayments, losses and future reinvestment rates. These assumptions are periodically reviewed and adjusted. Ultimately, the actual yield may be higher or lower than the estimated yield if actual results differ from those used for the assumptions. |
(16) | Investment bears interest at 12% per year with such interest to be paid, at the election of the borrower in cash or paid-in kind (“PIK”) interest. To the extent that any portion of interest is in the form of PIK interest, the interest rate is increased to 13% with a minimum of 5% of the total interest in the form of cash interest (i.e., 5% cash interest and 8% PIK interest). |
(18) | Security, or a portion thereof, is held through Great Lakes BCPL Funding Ltd., a wholly-owned subsidiary and a bankruptcy remote special purpose entity, and is pledged as collateral supporting the amounts outstanding under the debt financing facility at Great Lakes BCPL Funding Ltd. (See Note 5 in the accompanying consolidated financial statements). |
See notes to unaudited consolidated financial statements.
BC Partners Lending Corporation
Consolidated Schedule of Investments
December 31, 2020
Portfolio Company (1) (2) (3) |
| Investment Type |
| Initial Acquisition Date |
| Maturity Date |
| Spread Above Index (4) |
| Interest Rate |
|
| Par / Units |
|
| Amortized Cost (12) (13) |
|
| Fair Value |
|
| % of Net Assets |
| |||||
Non-control/Non-affiliate Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collateralized Loan Obligation - Debt Class |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Churchill Middle Market CLO IV Ltd., Class E-2 Notes (14) |
| Structured Note |
| 12/12/2019 |
| 1/23/2032 |
| 3M L+9.25% |
|
| 9.48 | % |
|
| 1,400,000 |
|
|
| 1,330,000 |
|
|
| 1,311,519 |
|
|
| 3.2 | % |
Halsey Point CLO II Ltd., Class D (9) (14) |
| Structured Note |
| 7/7/2020 |
| 7/1/2031 |
| 3M L+3.00% |
|
| 3.22 | % |
|
| 333,333 |
|
|
| 279,800 |
|
|
| 325,000 |
|
|
| 0.8 | % |
Halsey Point CLO II Ltd., Class E (9) (14) |
| Structured Note |
| 7/7/2020 |
| 7/1/2031 |
| 3M L+3.00% |
|
| 3.22 | % |
|
| 333,333 |
|
|
| 232,532 |
|
|
| 311,250 |
|
|
| 0.8 | % |
Collateralized Loan Obligation - Debt Class Total |
|
|
| 1,842,332 |
|
|
| 1,947,769 |
|
|
| 4.8 | % | |||||||||||||||
Communication Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asurion, LLC (5) (9) |
| Senior Secured Loan |
| 12/18/2020 |
| 12/23/2026 |
| 1M L+3.25% |
|
| 3.40 | % |
|
| 1,000,000 |
|
|
| 987,499 |
|
|
| 991,250 |
|
|
| 2.4 | % |
Wonder Love Inc (7) (9) |
| Senior Secured Loan |
| 11/18/2019 |
| 11/18/2024 |
| 3M L+5.00% |
|
| 6.00 | % |
|
| 900,000 |
|
|
| 885,596 |
|
|
| 870,750 |
|
|
| 2.1 | % |
Communication Services Total |
|
|
| 1,873,095 |
|
|
| 1,862,000 |
|
|
| 4.5 | % | |||||||||||||||
Consumer Discretionary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colibri Group, LLC (7) (9) (15) |
| Senior Secured Loan |
| 3/31/2020 |
| 5/1/2025 |
| 3M L+8.05% |
|
| 9.04 | % |
|
| 1,508,498 |
|
|
| 1,497,184 |
|
|
| 1,508,498 |
|
|
| 3.7 | % |
Colibri Group, LLC, Second Amendment Term Loan (7) (9) (15) |
| Senior Secured Loan |
| 3/31/2020 |
| 5/1/2025 |
| 3M L+8.05% |
|
| 9.04 | % |
|
| 172,602 |
|
|
| 171,307 |
|
|
| 172,601 |
|
|
| 0.4 | % |
Colibri Group, LLC (Delayed Draw) (7) (9) (15) |
| Senior Secured Loan |
| 3/31/2020 |
| 5/1/2025 |
| 3M L+8.05% |
|
| 9.04 | % |
|
| 233,246 |
|
|
| 231,496 |
|
|
| 233,246 |
|
|
| 0.6 | % |
Location Services LLC (Revolver) (7) (8) (9) |
| Senior Secured Loan |
| 11/7/2019 |
| 5/6/2021 |
| 1M L+6.75% |
|
| 7.75 | % |
|
| 916,667 |
|
|
| 893,571 |
|
|
| 879,167 |
|
|
| 2.1 | % |
Nasco Healthcare Inc. (7) (9) |
| Senior Secured Loan |
| 5/22/2020 |
| 6/30/2021 |
| 3M L+4.50% |
|
| 5.50 | % |
|
| 1,984,252 |
|
|
| 1,847,318 |
|
|
| 1,885,634 |
|
|
| 4.6 | % |
TLE Holdings, LLC (7) (9) |
| Senior Secured Loan |
| 10/22/2019 |
| 6/28/2024 |
| 6M L+6.00% |
|
| 7.00 | % |
|
| 987,342 |
|
|
| 983,280 |
|
|
| 983,589 |
|
|
| 2.4 | % |
Consumer Discretionary Total |
|
|
| 5,624,156 |
|
|
| 5,662,735 |
|
|
| 13.8 | % | |||||||||||||||
Consumer Staples |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMCP PET HOLDINGS, INC. (8) (9) |
| Senior Secured Loan |
| 12/9/2020 |
| 10/6/2026 |
| N/A |
|
| 1.00 | % |
|
| — |
|
|
| (19,857 | ) |
|
| (20,000 | ) |
|
| 0.0 | % |
AMCP PET HOLDINGS, INC. (8) (9) |
| Senior Secured Loan |
| 12/9/2020 |
| 10/6/2026 |
| N/A |
|
| 0.50 | % |
|
| — |
|
|
| (9,924 | ) |
|
| (10,000 | ) |
|
| 0.0 | % |
AMCP PET HOLDINGS, INC. (9) |
| Senior Secured Loan |
| 12/9/2020 |
| 10/6/2026 |
| 3M L+6.25% |
|
| 7.25 | % |
|
| 2,000,000 |
|
|
| 1,960,261 |
|
|
| 1,960,000 |
|
|
| 4.8 | % |
C. J. FOODS, INC. (7) |
| Senior Secured Loan |
| 9/17/2020 |
| 3/16/2026 |
| 1M L+6.00% |
|
| 7.00 | % |
|
| 2,751,957 |
|
|
| 2,625,781 |
|
|
| 2,683,158 |
|
|
| 6.5 | % |
Florida Food Products, LLC (7) (9) |
| Senior Secured Loan |
| 8/7/2020 |
| 9/6/2025 |
| 3M L+7.25% |
|
| 8.25 | % |
|
| 995,000 |
|
|
| 929,763 |
|
|
| 961,469 |
|
|
| 2.3 | % |
Consumer Staples Total |
|
|
| 5,486,024 |
|
|
| 5,574,627 |
|
|
| 13.6 | % | |||||||||||||||
Financials |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advantage Capital Holdings LLC (9) (17) |
| Senior Secured Loan |
| 1/29/2020 |
| 1/9/2025 |
| 8.00% PIK, 5.00% Cash |
|
| 13.00 | % |
|
| 1,737,631 |
|
|
| 1,737,631 |
|
|
| 1,739,890 |
|
|
| 4.2 | % |
Advantage Capital Holdings LLC (Delayed Draw) (8) (9) (17) |
| Senior Secured Loan |
| 1/29/2020 |
| 1/9/2025 |
| 8.00% PIK, 5.00% Cash |
|
| 13.00 | % |
|
| 1,239,556 |
|
|
| 1,239,556 |
|
|
| 1,242,133 |
|
|
| 3.0 | % |
Alera Group Intermediate Holdings, Inc. (7) (9) |
| Senior Secured Loan |
| 12/18/2019 |
| 8/1/2025 |
| 1M L+4.00% |
|
| 4.50 | % |
|
| 1,974,836 |
|
|
| 1,995,616 |
|
|
| 1,969,899 |
|
|
| 4.8 | % |
RIVERSIDE FUND V, L.P. (9) |
| Senior Secured Loan |
| 12/2/2020 |
| 3/2/2021 |
| 9.45% |
|
| 9.45 | % |
|
| 2,500,000 |
|
|
| 2,482,516 |
|
|
| 2,475,000 |
|
|
| 6.0 | % |
TA/WEG HOLDINGS, LLC (8) |
| Senior Secured Loan |
| 12/11/2020 |
| 12/11/2025 |
| 6M L+5.75% |
|
| 6.75 | % |
|
| 365,833 |
|
|
| 339,892 |
|
|
| 352,708 |
|
|
| 0.9 | % |
Financials Total |
|
|
| 7,795,211 |
|
|
| 7,779,630 |
|
|
| 18.9 | % | |||||||||||||||
Healthcare |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Datalink, LLC (Delayed Draw) (8) (9) |
| Senior Secured Loan |
| 11/23/2020 |
| 11/23/2026 |
| N/A |
|
| 1.00 | % |
|
| — |
|
|
| — |
|
|
| (16,500 | ) |
|
| 0.0 | % |
Datalink, LLC (9) |
| Senior Secured Loan |
| 11/23/2020 |
| 11/23/2026 |
| 3M L+6.25% |
|
| 7.25 | % |
|
| 3,400,000 |
|
|
| 3,307,691 |
|
|
| 3,307,183 |
|
|
| 8.0 | % |
Pharmalogic Holdings Corp. (7) |
| Senior Secured Loan |
| 10/22/2019 |
| 6/12/2023 |
| P+3.00% |
|
| 6.25 | % |
|
| 987,342 |
|
|
| 986,530 |
|
|
| 945,380 |
|
|
| 2.3 | % |
Premier Imaging, LLC (7) |
| Senior Secured Loan |
| 10/22/2019 |
| 1/2/2025 |
| 1M L+5.50% |
|
| 6.50 | % |
|
| 987,406 |
|
|
| 980,850 |
|
|
| 986,023 |
|
|
| 2.4 | % |
Premier Imaging, LLC (7) |
| Senior Secured Loan |
| 11/25/2019 |
| 1/2/2025 |
| 1M L+5.50% |
|
| 6.50 | % |
|
| 987,500 |
|
|
| 979,337 |
|
|
| 986,118 |
|
|
| 2.4 | % |
The PromptCare Companies Inc. (Delayed Draw) (7) (9) |
| Senior Secured Loan |
| 2/20/2020 |
| 12/30/2025 |
| 1M L+5.25% |
|
| 6.25 | % |
|
| 216,000 |
|
|
| 214,065 |
|
|
| 214,380 |
|
|
| 0.5 | % |
The PromptCare Companies Inc. (Delayed Draw) (8) (9) (11) |
| Senior Secured Loan |
| 2/20/2020 |
| 12/30/2025 |
| N/A |
|
| 1.00 | % |
|
| — |
|
|
| (958 | ) |
|
| (1,091 | ) |
|
| 0.0 | % |
The PromptCare Companies Inc. (7) (9) |
| Senior Secured Loan |
| 2/28/2020 |
| 12/30/2025 |
| 1M L+5.25% |
|
| 6.25 | % |
|
| 1,548,000 |
|
|
| 1,533,955 |
|
|
| 1,536,390 |
|
|
| 3.7 | % |
Radiology Partners, Inc., Term B Loan (5) (7) (9) |
| Senior Secured Loan |
| 10/18/2019 |
| 7/9/2025 |
| 12M L+4.25% |
|
| 4.81 | % |
|
| 4,250,000 |
|
|
| 4,081,499 |
|
|
| 4,189,799 |
|
|
| 10.2 | % |
Healthcare Total |
|
|
| 12,082,969 |
|
|
| 12,147,682 |
|
|
| 29.5 | % | |||||||||||||||
Industrials |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C.P. Converters, Inc., Seventh Amendment Acquisition Loan (7) (9) |
| Senior Secured Loan |
| 6/24/2020 |
| 6/18/2023 |
| 1M L+6.50% |
|
| 7.50 | % |
|
| 1,975,000 |
|
|
| 1,933,132 |
|
|
| 1,945,375 |
|
|
| 4.7 | % |
Deliver Buyer, Inc. (7) (9) |
| Senior Secured Loan |
| 7/1/2020 |
| 5/1/2024 |
| 3M L+6.25% |
|
| 7.25 | % |
|
| 1,995,000 |
|
|
| 1,941,242 |
|
|
| 1,981,235 |
|
|
| 4.8 | % |
GI Revelation Acquisition LLC (9) |
| Senior Secured Loan |
| 10/7/2020 |
| 4/16/2025 |
| 1M L+5.00% |
|
| 5.15 | % |
|
| 2,992,327 |
|
|
| 2,912,694 |
|
|
| 2,783,164 |
|
|
| 6.8 | % |
MAG DS CORP. (7) (9) |
| Senior Secured Loan |
| 9/21/2020 |
| 4/1/2027 |
| 3M L+5.50% |
|
| 6.50 | % |
|
| 2,992,500 |
|
|
| 2,848,902 |
|
|
| 2,852,451 |
|
|
| 6.9 | % |
META SPECIAL AEROSPACE LLC |
| Senior Secured Loan |
| 11/3/2020 |
| 11/16/2022 |
| P+4.00% |
|
| 7.25 | % |
|
| 1,500,000 |
|
|
| 1,485,000 |
|
|
| 1,485,000 |
|
|
| 3.6 | % |
Mileage Plus Holdings LLC (5) (7) |
| Bond |
| 6/25/2020 |
| 6/20/2027 |
| N/A |
|
| 6.50 | % |
|
| 4,000,000 |
|
|
| 3,953,597 |
|
|
| 4,175,000 |
|
|
| 10.2 | % |
Mileage Plus Holdings LLC (5) (7) |
| Senior Secured Loan |
| 6/25/2020 |
| 6/21/2027 |
| 3M L+5.25% |
|
| 6.25 | % |
|
| 1,000,000 |
|
|
| 981,140 |
|
|
| 1,043,565 |
|
|
| 2.5 | % |
Industrials Total |
|
|
| 16,055,707 |
|
|
| 16,265,790 |
|
|
| 39.5 | % | |||||||||||||||
Information Technology |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allied Universal Holdco LLC (5) (7) (9) |
| Senior Secured Loan |
| 12/20/2019 |
| 7/10/2026 |
| 1M L+4.25% |
|
| 4.40 | % |
|
| 2,177,866 |
|
|
| 2,104,266 |
|
|
| 2,171,866 |
|
|
| 5.3 | % |
Barracuda Networks, Inc. |
| Junior Secured Loan |
| 10/22/2020 |
| 10/30/2028 |
| 3M L+6.75% |
|
| 7.50 | % |
|
| 1,000,000 |
|
|
| 990,132 |
|
|
| 990,000 |
|
|
| 2.4 | % |
Barracuda Networks, Inc. (5) |
| Senior Secured Loan |
| 10/22/2020 |
| 2/12/2025 |
| 3M L+3.75% |
|
| 4.50 | % |
|
| 997,500 |
|
|
| 991,206 |
|
|
| 987,525 |
|
|
| 2.4 | % |
Drilling Info Holdings, Inc., 2020 Term Loan (7) (9) |
| Senior Secured Loan |
| 2/10/2020 |
| 7/30/2025 |
| 1M L+4.50% |
|
| 4.65 | % |
|
| 1,985,000 |
|
|
| 1,976,637 |
|
|
| 1,895,675 |
|
|
| 4.6 | % |
Drilling Info Holdings, Inc., Initial Term Loan (5) (7) (9) |
| Senior Secured Loan |
| 10/22/2019 |
| 7/30/2025 |
| 1M L+4.25% |
|
| 4.40 | % |
|
| 987,378 |
|
|
| 985,431 |
|
|
| 958,581 |
|
|
| 2.3 | % |
Help/Systems Holdings, Inc. (5) (7) |
| Senior Secured Loan |
| 12/18/2019 |
| 11/19/2026 |
| 3M L+4.75% |
|
| 5.75 | % |
|
| 2,977,500 |
|
|
| 2,970,592 |
|
|
| 2,972,542 |
|
|
| 7.2 | % |
Idera, Inc. (7) (9) |
| Senior Secured Loan |
| 12/18/2019 |
| 6/28/2024 |
| 6M L+4.00% |
|
| 5.00 | % |
|
| 2,831,147 |
|
|
| 2,762,395 |
|
|
| 2,758,103 |
|
|
| 6.7 | % |
Ivanti Software, Inc. |
| Senior Secured Loan |
| 10/30/2020 |
| 12/1/2028 |
| 3M L+8.50% |
|
| 9.50 | % |
|
| 4,000,000 |
|
|
| 3,880,333 |
|
|
| 3,880,000 |
|
|
| 9.4 | % |
Monotype Imaging Holdings Corp., Incremental Tranche A-3 Term Loan (5) (7) (9) |
| Senior Secured Loan |
| 11/12/2019 |
| 10/9/2026 |
| 3M L+5.50% |
|
| 6.50 | % |
|
| 981,250 |
|
|
| 928,630 |
|
|
| 930,554 |
|
|
| 2.3 | % |
MSM Acquisitions, Inc. (8) (9) |
| Senior Secured Loan |
| 12/31/2020 |
| 6/9/2022 |
| N/A |
| N/A |
|
|
| — |
|
|
| 2,940 |
|
|
| 2,941 |
|
|
| 0.0 | % | |
MSM Acquisitions, Inc. (9) |
| Senior Secured Loan |
| 12/31/2020 |
| 12/9/2026 |
| 1M L+6.00% |
|
| 7.00 | % |
|
| 2,823,529 |
|
|
| 2,788,240 |
|
|
| 2,788,235 |
|
|
| 6.7 | % |
San Vicente Capital LLC (7) (9) |
| Senior Secured Loan |
| 6/10/2020 |
| 6/10/2025 |
| 3M L+8.00% |
|
| 9.50 | % |
|
| 2,000,000 |
|
|
| 1,973,008 |
|
|
| 2,002,599 |
|
|
| 4.9 | % |
1A Smart Start LLC (5) (7) (9) |
| Senior Secured Loan |
| 8/14/2020 |
| 8/19/2027 |
| 3M L+4.75% |
|
| 5.75 | % |
|
| 2,992,500 |
|
|
| 2,964,287 |
|
|
| 3,003,108 |
|
|
| 7.3 | % |
Smartronix, Inc, (7) (9) |
| Senior Secured Loan |
| 5/1/2020 |
| 12/19/2025 |
| 3M L+6.00% |
|
| 7.50 | % |
|
| 1,984,962 |
|
|
| 1,894,882 |
|
|
| 1,926,208 |
|
|
| 4.7 | % |
Information Technology Total |
|
|
| 27,212,979 |
|
|
| 27,267,937 |
|
|
| 66.2 | % | |||||||||||||||
Total Debt Investments |
|
|
| 77,972,473 |
|
|
| 78,508,170 |
|
|
| 190.8 | % |
Collateralized Loan Obligation - Equity Class |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Halsey Point CLO II Ltd., Class Subordinated Notes (9) (14) (16) |
| Subordinated Structured Note |
| 7/7/2020 |
| 7/20/2031 |
| N/A |
|
| 0.00 | % |
|
| 333,334 |
|
|
| 333,334 |
|
|
| 270,834 |
|
|
| 0.7 | % |
Collateralized Loan Obligation - Equity Class Investments Total |
|
|
| 333,334 |
|
|
| 270,834 |
|
|
| 0.7 | % | |||||||||||||||
Equity Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advantage Capital Holdings LLC (6) (9) (10) |
| Common Equity - Class A Units |
| 3/31/2020 |
|
|
|
|
|
|
|
|
| 449 |
|
|
| — |
|
|
| — |
|
|
| 0.0 | % | |
Total Equity Investments |
|
|
| — |
|
|
| — |
|
|
| 0.0 | % | |||||||||||||||
Repurchase Agreements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advantage Capital Holdings LLC, 12%, dated 9/17/2020, repurchase price at 12% IRR, collateralized by STX Financing, LLC 3.19% due 10/7/2021, par $1,371,838 and value $1,371,838 (19) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,302,082 |
|
|
| 1,371,838 |
|
|
| 3.3 | % |
Total Repurchase Agreements |
|
|
| 1,302,082 |
|
|
| 1,371,838 |
|
|
| 3.3 | % | |||||||||||||||
Total Investments (13) |
|
|
|
|
|
|
|
|
|
|
|
| $ | 79,607,889 |
|
| $ | 80,150,842 |
|
|
| 194.8 | % |
Forward contracts (18):
Security |
| Counterparty |
| Settlement Date |
| Par |
|
| Unrealized Appreciation (Depreciation) |
| ||
Halsey Point CLO II, Ltd. Class D |
| Advantage Capital Holdings, LLC |
| 7/1/2022 |
|
| 333,333 |
|
| $ | 19,800 |
|
Halsey Point CLO II, Ltd. Class E |
| Advantage Capital Holdings, LLC |
| 7/1/2022 |
|
| 333,333 |
|
|
| 27,850 |
|
Halsey Point CLO II, Ltd. Class Subordinated Notes |
| Advantage Capital Holdings, LLC |
| 7/1/2022 |
|
| 333,333 |
|
|
| 71,667 |
|
|
|
|
|
|
|
|
|
|
| $ | 119,317 |
|
(1) | All of the Company's investments are issued by eligible portfolio companies, as defined in the Investment Company Act of 1940 (the “1940 Act”), unless otherwise noted. All of the Company's investments are issued by U.S. portfolio companies unless otherwise noted. |
(2) | All investments are non-controlled/non-affiliated investments as defined by the 1940 Act. The provisions of the 1940 Act classify investments based on the level of control that the Company maintains in a particular portfolio company. |
(3) | Except as otherwise noted, certain of the Company’s portfolio company investments are subject to legal restrictions on sales. |
(4) | Variable rate loans bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”) or Prime Rate (“P”), which resets monthly, quarterly, or semiannually. For each such investment, the Company has provided the spread and the current contractual interest rate in effect at December 31, 2020. Certain investments may be subject to an interest rate floor, or rate cap. |
(5) | Other than the investments noted by this footnote, the fair value of these investments is determined in good faith using significant unobservable inputs by the Company’s board of directors. (See Note 4 in the accompanying notes to the consolidated financial statements). |
(6) | Ownership of equity investments may occur through a holding company. |
(7) | Security, or a portion thereof, is held through Great Lakes BCPL Funding Ltd., a wholly-owned subsidiary and a bankruptcy remote special purpose entity, and is pledged as collateral supporting the amounts outstanding under the debt financing facility at Great Lakes BCPL Funding Ltd. (See Note 5 in the accompanying consolidated financial statements). |
(8) | All or a portion of this commitment was unfunded at December 31, 2020. |
(9) | Represents co-investment 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. (See Note 3 in the accompanying consolidated financial statements). |
(10) | Non-income producing investment. |
(11) | The date disclosed represents the commitment period of the unfunded term loan. |
(12) | The amortized cost represents the initial cost adjusted for the accretion of discount or amortization of premium, as applicable, on debt investments using the effective interest method. |
(13) | As of December 31, 2020, the estimated cost basis of investments for U.S. federal tax purposes was $79,607,889, resulting in estimated gross unrealized appreciation and depreciation of $1,040,535 and $(477,105), respectively. |
(14) | Investments the Company has determined are not qualifying assets under Section 55(a) of the 1940 Act. 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. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of total assets. Non-qualifying assets represented 4.7% of total assets as of December 31, 2020. |
(15) | The Company is entitled to receive additional interest, in addition to the interest earned based on the stated interest rate of this security, as a result of an arrangement with other lenders in the syndication, whereby the “first out” tranche will have priority over the Company’s “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder from the borrower. |
(16) | This investment is in the subordinated note of the collateralized loan obligation security, which is entitled to recurring distributions that are generally equal to the excess cash flow generated from the underlying investments after payment of the contractual payments in debt holders and fund expenses. The current estimated yield, calculated using amortized cost, is based on the current projections of this excess cash flow taking into account assumptions made regarding expected prepayments, losses and future reinvestment rates. These assumptions are periodically reviewed and adjusted. Ultimately, the actual yield may be higher or lower than the estimated yield if actual results differ from those used for the assumptions. |
(17) | Investment bears interest at 12% per year with such interest to be paid, at the election of the borrower in cash or paid-in kind (“PIK”) interest. To the extent that any portion of interest is in the form of PIK interest, the interest rate is increased to 13% with a minimum of 5% of the total interest in the form of cash interest (i.e., 5% cash interest and 8% PIK interest). |
(18) | The Company may sell any of the referenced securities in whole or in part to any third-party prior to the settlement date of the forward contracts without consent of the counterparty. Upon such sale to a third-party, the Company and counterparty shall have no further obligations in respect of that specific amount of referenced security sold. |
(19) | The Company may elect to early terminate the agreement at par. |
See notes to unaudited consolidated financial statements.
BC Partners Lending Corporation
Notes to Consolidated Financial StatementStatements
(Unaudited)(unaudited)
Note 1. Organization
BC Partners Lending Corporation (“BCPL” or the “Company”) is a Maryland corporation formed on December 22, 2017. The Company was formed primarily to invest in the U.S. middle-market credit sector. The Company’s investment objective is to make investments that generate current income and, to a lesser extent, capital appreciation. The Company intends to invest primarily in private middle-market companies in the form of secured debt, unsecured debt, other debt and/or equity securities. In addition, to a lesser extent, the Company may invest in securities of public companies and in structured products. 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, the Company intends to electhas elected to be treated for U.S. federal income tax purposes, and to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and the Company will take advantage of the extended transition period for complying with certain new or revised accounting standards provided for emerging growth companies in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”). As of June 30, 2018,
The Company commenced operations on October 2, 2019.
On October 25, 2019, the Company formed a wholly-owned, special-purpose, bankruptcy-remote subsidiary, Great Lakes BCPL Funding Ltd. (“BCPL Funding”), a Cayman Islands exempted company, which holds certain of the Company’s portfolio loan investments that are used as collateral for the debt financing facility at BCPL Funding. On January 28, 2020, the Company formed a wholly-owned, bankruptcy-remote subsidiary, BCPL Sub Holdings LLC, a Delaware limited liability company, which holds the Company’s equity investment.
The Company is still devoting substantially all of its efforts to establishing the business and its planned principal operations have not commenced.
As of June 30, 2018, no investment or other operations other than the sale and issuance of 4,000 shares of common stock on April 10, 2018, at an aggregate purchase price of $100,000 ($25 per share) to BC Partners Investment Holdings Limited, an affiliate ofmanaged by BC Partners Advisors L.P. (the “Adviser”), have occurred.
The Company is managed by the Adviser, an affiliate of BC Partners LLP. No management feesLLP (“BC Partners”). BC Partners Management LLC (the “Administrator”), also an affiliate of BC Partners, provides administrative services necessary for the Company to operate.
The Company conducts private offerings (each, a “Private Offering”) of its common stock to accredited investors in reliance on exemptions from the registration requirements of the Securities Act. At the closing of each Private Offering, each investor makes a capital commitment (a “Capital Commitment”) to purchase shares of the Company’s common stock pursuant to a subscription agreement entered into with the Company. Investors are required to fund drawdowns to purchase shares of the Company’s common stock up to the amount of their respective Capital Commitment on an as-needed basis each time the Company delivers a drawdown notice to its investors. The Company’s initial Private Offering closed on September 26, 2019 (the “Initial Closing”).
On April 20, 2020, the Company submitted to the SEC an application for exemptive relief to initiate one or more transactions intended to provide investors with liquidity options with respect to their investments in shares of the Company’s common stock (each, a “Reorganization”), pursuant to which an investor would have the option to exchange their shares and any remaining commitment, or a portion of their shares and any remaining commitment, in the Company for an interest in an entity (a “Liquidating Company”) that generally would seek to liquidate and distribute the proceeds of its investments, as they are received, to its equity holders over time, such that it would likely substantially complete its liquidation within a reasonable period of time following the date of the Reorganization. It is anticipated that, if initiated, the first Reorganization would occur as soon as reasonably practicable following the end of the fiscal year during which the third anniversary of the initial closing date occurs (the “Initial Reorganization”). Immediately following a Reorganization, the applicable Liquidating Company would hold a proportionate share of the assets and liabilities held by the Company immediately prior to the Reorganization based on investor participation levels. The costs of a Reorganization will be paidborne by the applicable Liquidating Company. There can be no assurance that the Company will be able to obtain any required exemptive and/or no-action relief from the Adviser until commencementSEC or that the Company’s board of commercial activities.directors (the “Board”) will authorize the Reorganization. If the Company does not obtain any required exemptive and/or no-action relief, or if the Company does receive the required relief but the Board determines not to proceed with a Reorganization, then the Company will wind down its operations within ten years after the Initial Closing unless the Board and/or stockholders determine to take different action, including listing our common stock on a national securities exchange or periodic repurchases or tender offers.
The Company’s fiscal year ends on December 31.
Note 2. Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statement hasstatements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The Company’s financial statement and related financial information have been prepared pursuant to the requirements for reporting onForm 10-Q and Articles 6 and 10 of RegulationS-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete S-X, as appropriate. The unaudited consolidated financial statements. Thisstatements (“consolidated financial statement reflectsstatements”) reflect adjustments that in the opinion of the Company are necessary for the fair statementpresentation of the financial position and results of operations as of and for the periodperiods presented herein.herein and notes thereto should be read in conjunction with the financial statements and notes thereto in the Company’s Form 10-K for the year ended December 31, 2020, as filed with the U.S. Securities and Exchange Commission (the “Commission” or the “SEC”).”. The Company is an investment company under U.S. GAAP and therefore applies the accounting and reporting guidance applicable to investment companies. The Company has evaluated subsequent events through the date of issuance of the consolidated financial statements.
Use of Estimates
The preparation of the statement of assets and liabilitiesconsolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the statement of assets and liabilities.consolidated financial statements. Actual results could differ from those estimates, and such differences could be material.
Consolidation
In accordance with U.S. GAAP guidance on consolidation, the Company will generally not consolidate its investment in a portfolio company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the accounts of the Company’s wholly-owned subsidiaries in its consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation.
Segments
In accordance with U.S. GAAP guidance on segment reporting, the Company has determined that its operations comprise only a single reporting segment.
Cash and Restricted Cash Equivalents
Cash equivalents include short-term highly liquid investments with original maturitiesconsists of three months or less.deposits held at a custodian bank. Restricted cash consists of deposits pledged as collateral. Cash and restricted cash equivalents are held at major financial institutions and, at times, may exceed the insured limits under applicable law.
Investments
Investment transactions are recorded on the trade date. Realized gains or losses on investments are calculated using the specific identification method as the difference between the net proceeds received (excluding prepayment fees, if any) and the amortized cost basis of the investment without regard to unrealized appreciation or depreciation previously recognized, and include investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation when gains or losses are recognized.
Investments for which market quotations are available are typically valued at those market quotations. To validate market quotations, the Company will utilize a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations.
Debt that is not publicly traded but for which there are external pricing sources available as of the valuation date is valued using independent broker-dealer, market maker quotations or independent pricing services. The valuation committee, comprised of members of the Adviser, (the “Valuation Committee”) subjects these quotes to various criteria including, but not limited to, the number and quality of quotes, the deviation among the quotes and information derived from analyzing the Company’s own transactions in such investments throughout the reporting period. Generally, such investments are categorized in level 2 of the fair value hierarchy, unless the Valuation Committee determines that the quality, quantity or deviation among quotes warrants significant adjustment to the inputs utilized.
Investments that are not publicly traded or whose market prices are not readily available, as is expected to be the case for substantially all of the Company’s investments, are valued at fair value as determined in good faith by the Board, based on, among other things, input of the Adviser, the Audit Committee and independent third-party valuation firm(s) engaged at the direction of the Board.
The Board undertakes a multi-step valuation process, which includes, among other procedures, the following:
The Company’s quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals responsible for the portfolio investment in conjunction with the Company’s portfolio management team. The Company utilizes an independent valuation firm to provide valuation on each material illiquid security at least once every trailing 12-month period;
Preliminary valuations are reviewed and discussed with management of the Adviser and investment professionals. Agreed upon valuation recommendations will be presented to the Audit Committee;
The Audit Committee will review the valuations presented and recommend values for each investment to the Board; and
The Board will review the recommended valuations and determine the fair value of each investment. Valuations that are not based on readily available market quotations will be valued in good faith based on, among other things, the input of the Adviser, the Audit Committee and, where applicable, other third parties.
As part of the valuation process, the Company may consider other information and may use valuation methods including but not limited to (i) market quotes for similar investments, (ii) recent trading activity, (iii) discounting forecasted cash flows of the investment, (iv) models that consider the implied yields from comparable debt, (v) third party appraisal, (vi) sale negotiations and purchase offers received from independent parties and (vii) estimated value of underlying assets to be received in liquidation or restructuring.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of such investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be realized. Further, such investments are generally less liquid than publicly traded securities and may be subject to contractual and other restrictions on resale. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, it could realize amounts that are different from the amounts presented and such differences could be material.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected herein.
Under existing accounting guidance, fair value is defined as the price that the Company would receive upon selling an investment or pay to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment. This accounting guidance emphasizes valuation techniques that maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances.
The Company classifies the inputs used to measure these fair values into the following hierarchy as defined by current accounting guidance:
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible to the Company.
Level 2: Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.
Level 3: Significant inputs that are unobservable for an asset or liability.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Investments for which no external pricing sources are available as of the valuation date are included in level 3 of the fair value hierarchy.
Forward Contracts
The Company may enter into forward purchase contracts primarily to manage credit risk. When entering into a forward purchase contract, the Company agrees to deliver a fixed quantity of securities for an agreed-upon price on an agreed future date. Forward contracts entered into by the Company are not designated as hedging instruments, and as a result, the Company presents changes in fair value through net change in unrealized appreciation (depreciation) on derivative instruments in the consolidated statements of operations. Realized and unrealized gains and losses of derivative instruments are included in the consolidated statements of operations. These instruments involve market risk, credit risk, or both kinds of risks. Risks arise from the possible inability of counterparties to meet the terms of their contracts and movements in fair value. The Company attempts to limit counterparty risk by only dealing with well-known counterparties.
Revenue Recognition
Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any.
Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full. The Company considers many factors relevant to an investment when placing it on or removing it from non-accrual status including, but not limited to, the delinquency status of the investment, economic and business conditions, the overall financial condition of the underlying investment, the value of the underlying collateral, bankruptcy status, if any, and any other facts or circumstances relevant to the investment. Accrued interest is generally reversed when a loan is placed on non-accrual status. Payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability of the outstanding principal and interest. Non-accrual loans may be restored to accrual status when past due principal and interest is paid current and are likely to remain current based on management’s judgment.
Dividend income on preferred equity securities is recorded on the accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies.
Loan origination fees, original issue discount and market discount are capitalized, and the Company amortizes such amounts as interest income over the respective term of the loan or security. Upon the prepayment of a loan or security, any unamortized loan origination fees and original issue discount are recorded as interest income. The Company records prepayment premiums on loans and securities as fee income when it receives such amounts.
Payment-in-Kind Interest
Payment-in-kind (“PIK”) interest, computed at the contractual rate specified in each loan agreement, is added to the principal balance of the loan and recorded as interest income and generally becomes due at maturity. To maintain the Company’s status as a RIC, this non-cash source of income must be paid out to stockholders in the form of dividends, even though the Company has not yet collected the cash.
Deferred Financing Costs
Origination and other expenses related to the Company’s borrowings are recorded as deferred financing costs and amortized as part of interest expense using the straight-line method over the stated life of the debt instrument. Unamortized deferred financing costs are presented as a direct deduction to the respective debt instrument.
Organization and Offering Costs
Organization costs include, among other things, the cost of incorporating, including the cost of legal services and other fees pertaining to the Company’s organization. Costs associated with the organization of the Company are expensed as incurred. Offering costs include, among other things, marketing expenses and printing, legal fees, due diligence fees, and other costs in connection with the Company’s offering of shares of its common stock, including the preparation of the Company’s registration statement, on Form 10 filed with the Securities and Exchange Commission (“SEC”) on February 22, 2018, as amended, and salaries and direct expenses of the Adviser’s personnel, employees of its affiliates and others while engaged in such activities. Offering costs are capitalized as deferred offering expenses and are amortized over twelve months from incurrence.
Earnings per Share
4
BC Partners Lending Corporation
Notes to Financial Statement
(Unaudited)
Income Taxes
The Company has elected to be regulated as a BDC under the 1940 Act. The Company also intends to elect to be treated for U.S. federal income tax purposes, and to qualify annually, as a RIC under the Code. So long as the Company maintains its status as a RIC, it will generally not pay corporate-level U.S. federal income or excise taxes on any ordinary income or capital gains that it distributes at least annually to its stockholders as dividends. Any tax liability related to income earned and distributed by the Company represents obligations of the Company’s stockholders and will not be reflected in the consolidated financial statements of the Company.
To qualify for and maintain qualification as a RIC, the Company must, among other things, meet certainsource-of-income and asset diversification requirements. In addition, to qualify for RIC tax treatment, the Company must distribute to its stockholders, 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, if any, of its realized net short-term capital gains over its realized net long-term capital losses. In order for the Company not to be subject to U.S. federal excise taxes, it must distribute 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 gains in excess of capital losses for theone-year period ending on October 31 of the calendar year, and (iii) any net ordinary income and capital gains in excess of capital losses for preceding years that were not distributed during such years. The Company, at its discretion, may carry forward taxable income in excess of calendar year dividends and pay a 4% nondeductible U.S. federal excise tax on this income.
The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are“more-likely-than-not” “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the“more-likely-than-not” “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.
NewDividends to Common Stockholders
Distributions to the Company’s stockholders are recorded on the record date. The amount to be paid out as a dividend is determined by the Board and is generally based upon earnings estimated by the Adviser. Net realized capital gains, if any, would generally be distributed at least annually, although the Company may decide to retain such capital gains.
The Company has adopted an “opt out” distribution reinvestment plan (“DRP”) for its stockholders. As a result, if the Company makes a cash dividend, its stockholders will have their cash dividends reinvested in additional shares of the Company’s common stock, including fractional shares as necessary, unless they specifically “opt out” of the DRP to receive the distribution in cash. Under the DRP, cash distributions to participating stockholders will be reinvested in additional shares of the Company’s common stock at a purchase price equal to the net asset value per share as of the last day of the calendar quarter immediately preceding the date such distribution was declared.
The Company may distribute taxable dividends that are payable in cash or shares of its common stock at the election of each stockholder. Under certain applicable provisions of the Code and the Treasury regulations, distributions payable in cash or in shares of stock at the election of stockholders are treated as taxable dividends. The Internal Revenue Service has published guidance indicating that this rule will apply even where the total amount of cash that may be distributed is limited to no more than 20% of the total distribution. Under this guidance, if too many stockholders elect to receive their distributions in cash, the cash available for distribution must be allocated among the stockholders electing to receive cash (with the balance of the distribution paid in stock). If the Company decides to make any distributions consistent with this guidance that are payable in part in its stock, taxable stockholders receiving such dividends will be required to include the full amount of the dividend (whether received in cash, shares of the Company’s stock, or a combination thereof) as ordinary income (or as long-term capital gain to the extent such distribution is properly reported as a capital gain dividend) to the extent of the Company’s current and accumulated earnings and profits for U.S. federal income tax purposes. As a result, a U.S. stockholder may be required to pay tax with respect to such dividends in excess of any cash received. If a U.S. stockholder sells the stock it receives in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of the Company’s stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, the Company may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in stock.
Recent Accounting Pronouncements
Management doesIn March 2020, the Financial Accounting Standards Board issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transaction, subject to meeting certain criteria, that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company expects that the adoption of this guidance will not believe any recently issued, but not yet effective, accounting standards, if adopted, would have a material effectimpact on the accompanyingCompany’s financial statement.position, results of operations or cash flows.
Note 3. Related Party Transactions
On April 23, 2018, the Company entered into an Administration Agreement (the “Administration Agreement”) with BC Partners Management LLC (the “Administrator”), an affiliate of BC Partners LLP.the Administrator. Under the terms of the Administration Agreement, the Administrator will perform (or oversee, or arrange for, the performance of) the administrative services necessary for the operation of the Company, which includes office facilities, equipment, bookkeeping and recordkeeping services and such other services as the Administrator, subject to review by the board of directors (the “Board”),Board, shall from time to time determine to be necessary or useful to perform its obligations under this Administration Agreement.
The Company will reimburse the Administrator for services performed under the terms of the Administration Agreement. In addition, pursuant to the Administration Agreement, the Administrator may delegate its obligations under the Administration Agreement to affiliates or third-parties and the Company pays or reimburses the Administrator for certain expenses incurred by any such affiliates or third-parties for work done on its behalf.
The Administration Agreement will be in effect for a periodhad an initial term of two years from theits effective date it first becomes effective and will remain in effect fromyear-to-year thereafter if approved annually by (i) the vote of the Board, or by the vote of a majority of the outstanding voting securities of the Company, and (ii) the vote of a majority of the Company’s Board who are not parties to the Administration Agreement or “interested persons” of the Company, of the Adviser or of any of their respective affiliates, as defined in the 1940 Act. The Administration Agreement may be terminated at any time, without the payment of any penalty, upon 60 days’ written notice, by the vote of a majority of the outstanding voting shares of the Company or by the vote of the Board or by the Administrator.
No person who is an officer, director or employee of the Adviser 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 Chief Compliance Officer and Chief Financial Officer and their respective staffs (based on a percentage of time such individuals devote, on an estimated basis, to the business affairs of the Company).
For the three months ended March 31, 2021 and 2020, the Company incurred administrative fees of $0.1 million and $0.2 million, respectively. As of June 30, 2018, no administrative fee has been incurred.March 31, 2021, such amounts were partially offset against amounts due from the Adviser in connection with the Expense Support and Conditional Reimbursement Agreement (the “Expense Support Agreement”), as described below.
Investment Advisory Agreement
5
BC Partners Lending Corporation
Notes to Financial Statement
(Unaudited)
On April 23, 2018, the Company entered into an Investment Advisory Agreement (thewith the Adviser which was amended and restated on November 7, 2018 and further amended on July 9, 2019 (as amended, the “Investment Advisory Agreement”) with. The amendments were each approved at the Adviser.time by the Company’s sole stockholder. Under the terms of the Investment Advisory Agreement, the Adviser will be responsible for managing the Company’s business and activities, including sourcing investment opportunities, conducting research, performing due diligence on potential investments, structuring its investments, monitoring its portfolio companies and provideproviding managerial assistance to portfolio companies.
Under the terms of the Investment Advisory Agreement, the Company will pay the Adviser a base management fee and may also pay to it certain incentive fees.
The base management fee is payable quarterly in arrears at an annual rate of 1.00% (1.50% if an exchange listing occurs) of the Company’s average gross assets, excluding cash and cash equivalents but including assets purchased with borrowed amounts, at the end of the two most recently completed calendar quarters. The management fee for any partial month or quarter will be appropriately prorated and adjusted for any share issuances or repurchases during the relevant month or quarter. As
For the three months ended March 31, 2021 and 2020, the Company incurred management fees of June 30, 2018, no management fee has been incurred.$0.2 million and $0.1 million, respectively.
The incentive fee consists of two parts, as follows:
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