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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 September 30, 2021March 31, 2024

OR

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

Commission file number: 000-56279814-01387

COMMONWEALTH CREDIT PARTNERSCommonwealth Credit Partners BDC I, INC.Inc.

(Exact Namename of Registrantregistrant as Specifiedspecified in its Charter)charter)

Delaware

86-3335466

Delaware86-3335466

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

360 S Rosemary, Suite 1700,

West Palm Beach, FL

33401

525 Okeechobee Boulevard, Suite 1050

West Palm Beach, FL

33401
(Address of Principal Executive Office)

(Zip Code)

(561) (561) 727-2000

(Registrant’s Telephone Number, Including Area Code)telephone number, including area code)

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

Title of Each Class

Trading

Symbol(s)

Trading

Symbol(s)

Name of Each Exchange

on Which Registered

None

None

N/AN/A

None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the precedingpast 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 November 12, 2021, the registrant had 50,000There were 561,096 issued and outstanding shares of the issuer’s common stock, outstanding.$.001 par value per share, on May 10, 2024.


Commonwealth Credit Partners BDC I, Inc.

Quarterly Report on Form 10-Q

TABLE OF CONTENTS

Page

PART I—FINANCIAL INFORMATION

3

1

Item 1.

Financial Statements

3

1

Item 2.

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

21

30

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

32

40

Item 4.

Controls and Procedures

33

41

PART II—OTHER INFORMATION

34

42

Item 1.

Legal Proceedings

34

42

Item 1A.

Risk Factors

34

42

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

34

42

Item 3.

Defaults upon Senior Securities

34

42

Item 4.

Mine Safety Disclosures

34

42

Item 5.

Other Information

34

42

Item 6.

Exhibits

Exhibits35

43

SIGNATURES

36

44


PART I - I—FINANCIAL INFORMATION

ITEM 1.ITEM1. FINANCIAL STATEMENTS

COMMONWEALTH CREDIT PARTNERS BDC I, INC.

STATEMENTCONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(amounts in thousands except share and per share data)

  September 30, 2021
(Unaudited)
 

 

March 31, 2024 (Unaudited)

 

 

December 31, 2023

 

Assets:

  

 

 

 

 

 

 

Non-controlled, non-affiliated investments, at fair value (amortized cost of $44,385)

  $ 44,549 

Investments, at fair value:

 

 

 

 

 

 

Non-controlled, non-affiliated investments (amortized cost of $626,515 and $611,648 as of March 31, 2024 and December 31, 2023, respectively)

 

$

626,017

 

 

$

606,738

 

Affiliated investments (amortized cost of $17,486 and $16,243 as of March 31, 2024 and December 31, 2023, respectively)

 

 

11,474

 

 

 

11,838

 

Total investments, at fair value

 

 

637,491

 

 

 

618,576

 

Cash and cash equivalents

   50,142 

 

 

9,766

 

 

 

8,887

 

Receivables:

  

 

 

 

 

 

 

Interest receivable

   66 

 

 

3,602

 

 

 

2,841

 

Prepaid expenses and other assets

   170 

 

 

278

 

 

 

110

 

  

 

 

Total Assets

  $94,927 

 

$

651,137

 

 

$

630,414

 

  

 

 

Liabilities:

  

 

 

 

 

 

 

Credit facility, net (Note 5)

  $44,913 

Credit facility (net of deferred financing costs of $42 and $50 as of March 31, 2024 and December 31, 2023, respectively)

 

$

109,758

 

 

$

100,750

 

Payables:

  

 

 

 

 

 

 

Management fee payable, net (Note 4)

   66 

 

 

1,572

 

 

 

1,529

 

Interest payable

 

 

739

 

 

 

673

 

Incentive fee payable, net (Note 4)

 

 

393

 

 

 

379

 

Directors fee payable

   22 

 

 

25

 

 

 

25

 

Accrued other general and administrative expenses

   268 

 

 

509

 

 

 

400

 

  

 

 

Total Liabilities

  $45,269 

 

$

112,996

 

 

$

103,756

 

  

 

 

Commitments and contingencies (Note 6)

  

Commitments and contingencies (Note 7)

 

 

 

 

 

 

Net Assets:

  

 

 

 

 

 

 

Common stock, $0.001 par value; 1,000,000 shares authorized; 50,000 issued and outstanding as of September 30, 2021

  $—   

Common Shares, $0.001 par value; 1,000,000 shares authorized; 561,096 and 547,439 as of March 31, 2024 and December 31, 2023, respectively issued and outstanding

 

$

1

 

 

$

1

 

Additional paid-in capital

   50,000 

 

 

549,493

 

 

 

536,354

 

Total distributable earnings (accumulated deficit)

   (342

 

 

(11,353

)

 

 

(9,697

)

  

 

 

Total Net Assets

  $49,658 

 

$

538,141

 

 

$

526,658

 

  

 

 

Total Liabilities and Net Assets

  $94,927 

 

$

651,137

 

 

$

630,414

 

  

 

 

Net Asset Value Per Common Share

  $993.16 

 

$

959.09

 

 

$

962.04

 

  

 

 

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

1


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share and per share data)

(Unaudited)

 

For the Three Months Ended

 

 

  For the Three
Months Ended
September 30,
2021
 For the Period
January 15, 2021
(Inception Date)
through
September 30, 2021
 

 

March 31, 2024

 

 

March 31, 2023

 

 

Income:

   

 

 

 

 

 

 

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

   

 

 

 

 

 

 

Interest income

  $245  $245 

$

 

19,236

 

$

 

13,657

 

 

Fee income

   14   14 

 

 

396

 

 

 

458

 

 

  

 

  

 

 

Total investment income from non-controlled, non-affiliated investments

   259   259 
  

 

  

 

 

Total Investment Income

   259  259 

 

 

19,632

 

 

 

14,115

 

 

Expenses:

   

 

 

 

 

 

Management fees

   103   103 

Incentive fees, net

 

 

393

 

 

 

-

 

 

Management fees, net

 

 

1,572

 

 

 

1,126

 

 

Interest expense

 

 

2,120

 

 

 

825

 

 

Professional fees

   47   47 

 

 

205

 

 

 

148

 

 

Directors fees

   27   27 

 

 

22

 

 

 

26

 

 

Amortization of offering costs

   36   36 

Organizational expenses

   241   486 

Other general and administrative expenses

   103   103 

 

 

323

 

 

 

282

 

 

  

 

  

 

 

Total Expenses

   557  802 

 

 

4,635

 

 

 

2,407

 

 

Less: Management fee waiver (Note 4)

   (37  (37
  

 

  

 

 

Net expenses

   520   765 
  

 

  

 

 

Net Investment Income (Loss)

   (261 (506

 

 

14,997

 

 

 

11,708

 

 

  

 

  

 

 

Realized and unrealized gains (losses) on investments

 

 

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

 

 

 

 

 

Net realized gains (losses):

   

 

 

 

 

 

Non-controlled, non-affiliated investments

   —     —   

 

 

(6,319

)

 

 

-

 

 

  

 

  

 

 

Total net realized gains (losses)

   —     —   

 

 

(6,319

)

 

 

-

 

 

  

 

  

 

 

Net change in unrealized gains (losses):

   

 

 

 

 

 

Non-controlled, non-affiliated investments

   164   164 

 

 

4,412

 

 

 

(1,798

)

 

  

 

  

 

 

Affiliated investments

 

 

(1,607

)

 

 

-

 

 

Total net change in unrealized gains (losses)

   164  164 

 

 

2,805

 

 

 

(1,798

)

 

  

 

  

 

 

Total realized and unrealized gains (losses)

   164  164 

 

 

(3,514

)

 

 

(1,798

)

 

  

 

  

 

 

Net Increase (Decrease) in Net Assets Resulting from Operations

  $(97)  $(342) 

$

 

11,483

 

 

 

9,910

 

 

  

 

  

 

 

Per Common Share Data:

   

 

 

 

 

 

 

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

  $ (17.03)  $ (39.11) 
  

 

  

 

 

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

  $(6.33)  $(26.44) 
  

 

  

 

 

Weighted Average Common Shares Outstanding—Basic and Diluted

   15,327  12,936 
  

 

  

 

 

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

$

 

27.36

 

 

 

28.62

 

 

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

$

 

20.95

 

 

 

24.23

 

 

Weighted Average Common Shares Outstanding - Basic and Diluted

 

 

548,039

 

 

 

409,042

 

 

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

2


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

STATEMENTSCONSOLIDATED STATEMENT OF CHANGESCHANGE IN NET ASSETS

(amounts in thousands except share and per share data)

(Unaudited)

 

For the Three Months Ended

 

 

  For the Three
Months Ended
September 30, 2021
 For the Period
January 15, 2021
(Inception Date)
through
September 30,
2021
 

 

March 31, 2024

 

 

March 31, 2023

 

 

Increase (Decrease) in Net Assets Resulting from Operations:

   

 

 

 

 

 

Net investment income (loss)

  $(261)  $(506) 

$

 

14,997

 

$

 

11,708

 

 

Net realized gains (losses) on investments

   —     —   

 

 

(6,319

)

 

 

-

 

 

Net change in unrealized gains (losses) on investments

   164   164 

 

 

2,805

 

 

 

(1,798

)

 

  

 

  

 

 

Net Increase (Decrease) in Net Assets Resulting from Operations

   (97 (342

 

 

11,483

 

 

 

9,910

 

 

  

 

  

 

 

 

 

 

 

 

Decrease in Net Assets Resulting from Stockholder Distributions

   

 

 

 

 

 

Dividends and distributions to stockholders

   —     —   
  

 

  

 

 

Distributions from net investment income

 

 

(13,139

)

 

 

(10,507

)

 

Net Decrease in Net Assets Resulting from Stockholder Distributions

   —     —   

 

 

(13,139

)

 

 

(10,507

)

 

  

 

  

 

 

 

 

 

 

 

Increase in Net Assets Resulting from Capital Share Transactions

   

 

 

 

 

 

Issuance of common shares

   49,999   50,000 

 

 

-

 

 

 

85,000

 

 

  

 

  

 

 

Reinvestment of distributions

 

 

13,139

 

 

 

10,507

 

 

Net Increase in Net Assets Resulting from Capital Share Transactions

   49,999  50,000 

 

 

13,139

 

 

 

95,507

 

 

  

 

  

 

 

Total Increase (Decrease) in Net Assets

   49,902  49,658 

 

 

11,483

 

 

 

94,910

 

 

Net Assets, Beginning of Period

   (244  —   

 

 

526,658

 

 

 

364,508

 

 

  

 

  

 

 

Net Assets, End of Period

  $ 49,658  $ 49,658 

$

 

538,141

 

$

 

459,418

 

 

  

 

  

 

 

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

3


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

STATEMENTCONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(Unaudited)

 

For the Three Months Ended

 

  For the Period
January 15, 2021
(Inception Date)
through
September 30,
2021
 

 

March 31, 2024

 

 

March 31, 2023

 

Cash Flows from Operating Activities:

  

 

 

 

 

 

 

Net increase (decrease) in net assets resulting from operations

  $(342) 

 

$

11,483

 

 

$

9,910

 

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

  

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

 

 

 

 

 

 

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

 

 

 

 

 

 

Net realized (gains)/losses on investments

   —   

 

 

6,319

 

 

 

 

Net change in unrealized (gains)/losses on investments

   (164

 

 

(2,805

)

 

 

1,798

 

Net accretion of discount on investments

   (8

 

 

(890

)

 

 

(587

)

Non-cash investment income

 

 

(31

)

 

 

(244

)

Purchases of portfolio investments

   (44,435

 

 

(31,644

)

 

 

(178,055

)

Amortization of deferred financing costs

 

 

8

 

 

 

8

 

Sales or repayments of portfolio investments

   58 

 

 

10,136

 

 

 

2,998

 

Increase/(decrease) in operating assets and liabilities:

  

 

 

 

 

 

 

(Increase)/decrease in interest receivable

   (66

 

 

(761

)

 

 

(579

)

(Increase)/decrease in prepaid expenses and other assets

   (170

 

 

(168

)

 

 

38

 

Increase/(decrease) in management fees payable, net

   66 

 

 

43

 

 

 

275

 

Increase/(decrease) in directors fee payable

   22 

Increase/(decrease) in interest payable

 

 

66

 

 

 

(33

)

Increase/(decrease) in incentive fee payable, net

 

 

14

 

 

 

 

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

   268 

 

 

109

 

 

 

35

 

  

 

 

Net cash provided by (used in) operating activities

   (44,771
  

 

 

Cash Flows from Financing Activities:

  

Net cash provided by (used in) Operating Activities

 

 

(8,121

)

 

 

(164,436

)

Cash Flows provided by (used in) Financing Activities:

 

 

 

 

 

 

Borrowings on credit facility

   45,000 

 

 

15,000

 

 

 

173,000

 

Payments of debt issuance costs

   (87

Payments on credit facility

 

 

(6,000

)

 

 

(95,000

)

Proceeds from issuance of common stock

   50,000 

 

 

 

 

 

85,000

 

  

 

 

Net cash provided by (used in) financing activities

   94,913 
  

 

 

Net cash provided by (used in) Financing Activities

 

 

9,000

 

 

 

163,000

 

Net increase (decrease) in cash and cash equivalents

   50,142 

 

 

879

 

 

 

(1,436

)

Cash and cash equivalents, beginning of period

   —   

 

 

8,887

 

 

 

8,355

 

  

 

 

Cash and cash equivalents, end of period

  $50,142 

 

$

9,766

 

 

$

6,919

 

  

 

 

 

 

 

 

 

 

Supplemental and Non-Cash Information:

  

 

 

 

 

 

 

Interest paid during the period

  $—   

 

$

2,054

 

 

$

858

 

Distributions declared during the period

 

$

13,139

 

 

$

10,507

 

Reinvestment of distributions during the period

 

$

13,139

 

 

$

10,507

 

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

4


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

(amounts in thousands, except per share data)

September 30, 2021March 31, 2024

(Unaudited)

Portfolio Company(3)(7)

 

Industry

 

Spread Above Index

 

Interest Rate (5)

 

 

Maturity Date

 

Principal
/ Shares

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Percentage of
Net Assets
(2)

 

Debt Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Lien Senior Secured(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

190 Octane Financing - Delayed Draw Loan (8)

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

12.04

%

 

5/10/2027

 

 

4,863

 

 

 

4,804

 

 

 

4,620

 

 

 

0.9

%

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

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

12.04

%

 

5/10/2027

 

 

674

 

 

 

659

 

 

 

616

 

 

 

0.1

%

190 Octane Financing - Term Loan (8)

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

12.04

%

 

5/10/2027

 

 

8,412

 

 

 

8,291

 

 

 

7,992

 

 

 

1.5

%

Abea Acquisition, Inc. - Delayed Draw Loan

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.83

%

 

11/30/2026

 

 

1,400

 

 

 

1,384

 

 

 

1,393

 

 

 

0.3

%

Abea Acquisition, Inc. - Term Loan

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.83

%

 

11/30/2026

 

 

11,153

 

 

 

11,038

 

 

 

11,098

 

 

 

2.1

%

AccessOne Medcard, Inc. - Term Loan

 

Health Care Technology

 

SOFR + 7.50% (0.50% floor)

 

 

12.83

%

 

8/20/2026

 

 

11,664

 

 

 

11,557

 

 

 

10,964

 

 

 

2.0

%

ACT Acquisition - Delayed Draw Term Loan (4)

 

Consumer Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.33

%

 

12/4/2028

 

 

1,445

 

 

 

1,411

 

 

 

1,438

 

 

 

0.3

%

ACT Acquisition - Revolving Credit Line (4)

 

Consumer Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.33

%

 

12/4/2028

 

 

-

 

 

 

(16

)

 

 

(3

)

 

 

0.0

%

ACT Acquisition - Term Loan (8)

 

Consumer Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.44

%

 

12/4/2028

 

 

6,562

 

 

 

6,423

 

 

 

6,536

 

 

 

1.2

%

Aurora Solutions LLC - Delayed Draw Loan (8)

 

Diversified Financials

 

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

 

 

11.93

%

 

12/31/2027

 

 

3,324

 

 

 

3,299

 

 

 

3,311

 

 

 

0.6

%

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

 

Diversified Financials

 

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

 

 

11.93

%

 

12/31/2027

 

 

513

 

 

 

501

 

 

 

508

 

 

 

0.1

%

Aurora Solutions LLC - Term Loan (8)

 

Diversified Financials

 

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

 

 

11.93

%

 

12/31/2027

 

 

9,421

 

 

 

9,325

 

 

 

9,384

 

 

 

1.7

%

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

 

Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.18

%

 

6/27/2028

 

 

-

 

 

 

(46

)

 

 

-

 

 

 

0.0

%

Batteries Plus Holding Corporation - Term Loan (8)

 

Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.18

%

 

6/27/2028

 

 

16,418

 

 

 

16,052

 

 

 

16,418

 

 

 

3.1

%

Billhighway - Delayed Draw Loan (4)(8)

 

Software & Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.18

%

 

2/8/2029

 

 

33

 

 

 

24

 

 

 

24

 

 

 

0.0

%

Billhighway - Revolving Credit Line (4)(8)

 

Software & Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.18

%

 

2/8/2029

 

 

-

 

 

 

(4

)

 

 

(4

)

 

 

0.0

%

Billhighway - Term Loan (8)

 

Software & Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.18

%

 

2/8/2029

 

 

3,540

 

 

 

3,490

 

 

 

3,491

 

 

 

0.6

%

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

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.94

%

 

2/25/2028

 

 

-

 

 

 

(17

)

 

 

-

 

 

 

0.0

%

BKH - Term Loan (8)

 

Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.94

%

 

2/25/2028

 

 

21,383

 

 

 

21,034

 

 

 

21,382

 

 

 

4.0

%

Bradford Health Services - Delayed Draw Term Loan (8)

 

Health Care Providers & Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.45

%

 

10/27/2028

 

 

7,521

 

 

 

7,452

 

 

 

7,521

 

 

 

1.4

%

Bradford Health Services - Term Loan (8)

 

Health Care Providers & Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.45

%

 

10/27/2028

 

 

13,030

 

 

 

12,813

 

 

 

13,030

 

 

 

2.4

%

Cardiovascular Logistics - Delayed Draw Term Loan A (8)

 

Health Care Providers & Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.70

%

 

1/31/2029

 

 

5,065

 

 

 

4,981

 

 

 

5,065

 

 

 

0.9

%

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

 

Health Care Providers & Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.70

%

 

1/31/2029

 

 

166

 

 

 

126

 

 

 

166

 

 

 

0.0

%

Cardiovascular Logistics - Term Loan (8)

 

Health Care Providers & Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.70

%

 

1/31/2029

 

 

7,178

 

 

 

7,059

 

 

 

7,178

 

 

 

1.3

%

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

 

Technology Hardware & Equipment

 

SOFR + 5.25% (1.00% floor)

 

 

10.68

%

 

10/20/2027

 

 

2,537

 

 

 

2,498

 

 

 

2,537

 

 

 

0.5

%

CheckedUp - Revolving Credit Line (4)(8)

 

Technology Hardware & Equipment

 

SOFR + 5.25% (1.00% floor)

 

 

10.68

%

 

10/20/2027

 

 

471

 

 

 

448

 

 

 

471

 

 

 

0.1

%

CheckedUp - Term Loan (8)

 

Technology Hardware & Equipment

 

SOFR + 5.25% (1.00% floor)

 

 

10.68

%

 

10/20/2027

 

 

9,052

 

 

 

8,932

 

 

 

9,052

 

 

 

1.7

%

CreditAssociates, LLC - Revolving Credit Line (4)

 

Diversified Financials

 

SOFR + 6.75% (1.00% floor)

 

 

12.08

%

 

3/29/2027

 

 

-

 

 

 

(12

)

 

 

(2

)

 

 

0.0

%

CreditAssociates, LLC - Term Loan

 

Diversified Financials

 

SOFR + 6.75% (1.00% floor)

 

 

12.08

%

 

3/29/2027

 

 

21,971

 

 

 

21,712

 

 

 

21,926

 

 

 

4.1

%

Discovery - Delayed Draw Term Loan A (4)

 

Health Care Providers & Services

 

SOFR + 5.75% (1.00% floor)

 

 

11.05

%

 

3/18/2030

 

 

73

 

 

 

70

 

 

 

67

 

 

 

0.0

%

Discovery - Delayed Draw Term Loan B (4)

 

Health Care Providers & Services

 

SOFR + 5.75% (1.00% floor)

 

 

11.05

%

 

3/18/2030

 

 

-

 

 

 

(11

)

 

 

(22

)

 

 

0.0

%

Discovery - Revolving Credit Line (4)

 

Health Care Providers & Services

 

SOFR + 5.75% (1.00% floor)

 

 

11.05

%

 

3/18/2030

 

 

-

 

 

 

(4

)

 

 

(4

)

 

 

0.0

%

Discovery - Term Loan

 

Health Care Providers & Services

 

SOFR + 5.75% (1.00% floor)

 

 

11.05

%

 

3/18/2030

 

 

2,612

 

 

 

2,581

 

 

 

2,581

 

 

 

0.5

%

Educators Publishing Service - Revolving Credit Line (4)

 

Media

 

SOFR + 6.00% (1.00% floor)

 

 

11.33

%

 

2/24/2028

 

 

-

 

 

 

(35

)

 

 

-

 

 

 

0.0

%

Educators Publishing Service - Term Loan

 

Media

 

SOFR + 6.00% (1.00% floor)

 

 

11.33

%

 

2/24/2028

 

 

17,458

 

 

 

17,102

 

 

 

17,458

 

 

 

3.2

%

Fiesta Holdings - Revolving Credit Line (4)(8)

 

Consumer Services

 

SOFR + 7.00% (2.00% floor)

 

 

12.45

%

 

10/30/2028

 

 

-

 

 

 

(21

)

 

 

-

 

 

 

0.0

%

Fiesta Holdings - Term Loan (8)

 

Consumer Services

 

SOFR + 7.00% (2.00% floor)

 

 

12.45

%

 

10/30/2028

 

 

9,668

 

 

 

9,444

 

 

 

9,668

 

 

 

1.8

%

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

 

Consumer Services

 

SOFR + 6.25% (2.00% floor)

 

 

11.70

%

 

3/22/2028

 

 

-

 

 

 

(14

)

 

 

-

 

 

 

0.0

%

Firebirds - Revolving Credit Line (4)(8)

 

Consumer Services

 

SOFR + 6.25% (2.00% floor)

 

 

11.70

%

 

3/22/2028

 

 

518

 

 

 

491

 

 

 

518

 

 

 

0.1

%

Firebirds - Term Loan (8)

 

Consumer Services

 

SOFR + 6.25% (2.00% floor)

 

 

11.70

%

 

3/22/2028

 

 

22,575

 

 

 

22,099

 

 

 

22,574

 

 

 

4.2

%

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

 

Capital Goods

 

SOFR + 5.75% (1.00% floor)

 

 

11.20

%

 

1/10/2029

 

 

-

 

 

 

(39

)

 

 

(19

)

 

 

0.0

%

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

 

Capital Goods

 

SOFR + 5.75% (1.00% floor)

 

 

11.20

%

 

1/10/2029

 

 

684

 

 

 

646

 

 

 

665

 

 

 

0.1

%

Hasa - Term Loan (8)(9)

 

Capital Goods

 

SOFR + 5.75% (1.00% floor)

 

 

11.20

%

 

1/10/2029

 

 

14,487

 

 

 

14,152

 

 

 

14,313

 

 

 

2.7

%

Hasa - Term Loan B (8)(9)

 

Capital Goods

 

SOFR + 5.75% (1.00% floor)

 

 

11.15

%

 

1/10/2029

 

 

1,009

 

 

 

989

 

 

 

997

 

 

 

0.2

%

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

 

Consumer Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.73

%

 

1/12/2028

 

 

4,552

 

 

 

4,470

 

 

 

4,552

 

 

 

0.8

%

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

 

Consumer Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.73

%

 

1/12/2028

 

 

-

 

 

 

(25

)

 

 

-

 

 

 

0.0

%

Kemper Sports Management - Term Loan (8)

 

Consumer Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.73

%

 

1/12/2028

 

 

18,761

 

 

 

18,457

 

 

 

18,761

 

 

 

3.5

%

Kent Water Sports Holdings, LLC - Delayed Draw Loan Last-Out (8)(10)(11)

 

Consumer Durables & Apparel

 

SOFR + 9.00% PIK

 

 

14.41

%

 

12/31/2025

 

 

13,691

 

 

 

12,828

 

 

 

6,257

 

 

 

1.2

%

Kent Water Sports Holdings, LLC - Delayed Draw Loan First-Out (4)(8)(10)(11)

 

Consumer Durables & Apparel

 

SOFR + 10.00% PIK

 

 

15.41

%

 

12/31/2025

 

 

5,217

 

 

 

4,658

 

 

 

5,217

 

 

 

1.0

%

MerchantWise Solutions, LLC - Delayed Draw Loan (4)

 

Software & Services

 

SOFR + 6.00% (0.75% floor)

 

 

11.30

%

 

6/1/2028

 

 

2,652

 

 

 

2,606

 

 

 

2,413

 

 

 

0.4

%

MerchantWise Solutions, LLC - Revolving Credit Line

 

Software & Services

 

SOFR + 6.00% (0.75% floor)

 

 

11.30

%

 

6/1/2028

 

 

1,542

 

 

 

1,521

 

 

 

1,422

 

 

 

0.3

%

MerchantWise Solutions, LLC - Term Loan

 

Software & Services

 

SOFR + 6.00% (0.75% floor)

 

 

11.30

%

 

6/1/2028

 

 

12,122

 

 

 

11,936

 

 

 

11,177

 

 

 

2.1

%

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

 

Diversified Financials

 

SOFR + 8.00% (1.00% floor)

 

 

13.44

%

 

6/11/2027

 

 

2,876

 

 

 

2,819

 

 

 

2,831

 

 

 

0.5

%

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

 

Diversified Financials

 

SOFR + 8.00% (1.00% floor)

 

 

13.44

%

 

6/11/2027

 

 

1,214

 

 

 

1,186

 

 

 

1,194

 

 

 

0.2

%

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

 

Diversified Financials

 

SOFR + 8.00% (1.00% floor)

 

 

13.44

%

 

6/11/2027

 

 

8,627

 

 

 

8,466

 

 

 

8,515

 

 

 

1.6

%

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

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

12.44

%

 

3/30/2027

 

 

1,143

 

 

 

1,128

 

 

 

1,143

 

 

 

0.2

%

Narcote, LLC - Term Loan (8)

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

12.44

%

 

3/30/2027

 

 

4,561

 

 

 

4,507

 

 

 

4,561

 

 

 

0.8

%

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

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

12.44

%

 

3/30/2027

 

 

2,736

 

 

 

2,705

 

 

 

2,736

 

 

 

0.5

%

National Debt Relief - Revolving Credit Line (8)

 

Diversified Financials

 

SOFR + 6.50% (1.50% floor)

 

 

11.94

%

 

2/7/2028

 

 

2,189

 

 

 

2,165

 

 

 

2,158

 

 

 

0.4

%

National Debt Relief - Delayed Draw Loan (8)

 

Diversified Financials

 

SOFR + 6.50% (1.50% floor)

 

 

11.94

%

 

2/7/2028

 

 

10,943

 

 

 

10,822

 

 

 

10,790

 

 

 

2.0

%

National Debt Relief - Term Loan (8)

 

Diversified Financials

 

SOFR + 6.50% (1.50% floor)

 

 

11.94

%

 

2/7/2028

 

 

13,131

 

 

 

12,985

 

 

 

12,948

 

 

 

2.4

%

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

 

Software & Services

 

SOFR + 5.75% (1.00% floor)

 

 

11.18

%

 

5/25/2027

 

 

-

 

 

 

(11

)

 

 

(12

)

 

 

0.0

%

Nuspire, LLC - Term Loan (8)

 

Software & Services

 

SOFR + 5.75% (1.00% floor)

 

 

11.18

%

 

5/25/2027

 

 

6,912

 

 

 

6,816

 

 

 

6,815

 

 

 

1.3

%

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

 

Health Care Equipment & Services

 

SOFR + 8.50% (2.00% floor)

 

 

13.94

%

 

3/22/2028

 

 

-

 

 

 

(73

)

 

 

(337

)

 

 

-0.1

%

5


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

Portfolio Company(1)(3)(7)

  

Industry

  

Interest Rate

  

Acquisition
Date

  

Maturity
Date

  Principal /
Shares
   Amortized
Cost
  Fair
Value
  Percentage
of Net Assets  (2)
 

Debt Investments

              

First Lien Senior Secured(5)

              

AccessOne Medcard, Inc.

  Health Care  6.50% (L+6.00%) (0.50% Floor)  8/20/2021  8/20/2026  $13,167   $12,940  $13,062   26.3

OneCare Media, LLC - Revolving Credit Line(4)

  Consumer Discretionary  7.50% (L+6.50%) (1.00% Floor)  9/29/2021  9/29/2026   —      (48  (48  (0.1)% 

OneCare Media, LLC - Term Loan

  Consumer Discretionary  7.50% (L+6.50%) (1.00% Floor)  9/29/2021  9/29/2026   15,576    15,265   15,265   30.7

Whitestone Home Furnishings, LLC

  Consumer Discretionary  7.00% (L+6.00%) (1.00% Floor)  8/20/2021  8/20/2026   15,774    15,463   15,505   31.1
            

 

 

  

 

 

  

 

 

 

Total First Lien Senior Secured

             43,620   43,784   88.0
            

 

 

  

 

 

  

 

 

 

Total Debt Investments

             43,620   43,784   88.0
            

 

 

  

 

 

  

 

 

 

Equity Investments

              

Preferred Equity

              

OneCare Media, LLC (6)

  Consumer Discretionary  NA  9/29/2021  NA   765    765   765   1.5
          

 

 

   

 

 

  

 

 

  

 

 

 

Total Equity Investments

             765   765   1.5
            

 

 

  

 

 

  

 

 

 

Total Investments

            $44,385  $44,549   89.5
            

 

 

  

 

 

  

 

 

 

Assets in Excess of Other Liabilities

              5,109   10.5
             

 

 

  

 

 

 

Net Assets

             $49,658   100.0
             

 

 

  

 

 

 

(1)

All of the Company’s investments, are qualifying assets under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. All investments held are deemed to be illiquid.

(2)

Percentages are based on net assets as of September 30, 2021.

(3)

The fair value of investments with respect to securities for which market quotations are not readily available are valued using significant unobservable inputs (See Note 3 to the financial statements).

(4)

The Company has various unfunded commitments to portfolio companies. Please refer to Note 6 - Commitments and Contingencies for details of these unfunded commitments. The negative cost, if applicable, is the result of the capitalized discount or unfunded commitment being greater than the principal amounts outstanding on the loan. The negative fair value, if applicable, is the result of the capitalized discount or unfunded commitment on the loan.

(5)

The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) or Prime (“P”) and which reset daily, monthly, quarterly, or semiannually. For each, the Company has provided the spread over LIBOR or Prime and the current interest rate in effect at September 30, 2021. Certain investments are subject to a LIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable.

(6)

Equity and members interests are non-income-producing unless otherwise noted.

(7)

All investments domiciled in the United States unless otherwise noted.

(amounts in thousands, except per share data)

March 31, 2024

(Unaudited)

Portfolio Company(3)(7)

 

Industry

 

Spread Above Index

 

Interest Rate (5)

 

 

Maturity Date

 

Principal
/ Shares

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Percentage of
Net Assets
(2)

 

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

 

Health Care Equipment & Services

 

SOFR + 8.50% (2.00% floor)

 

 

13.94

%

 

3/22/2028

 

 

344

 

 

 

327

 

 

 

305

 

 

 

0.1

%

Oak Dental - Term Loan (8)

 

Health Care Equipment & Services

 

SOFR + 8.50% (2.00% floor)

 

 

13.94

%

 

3/22/2028

 

 

17,887

 

 

 

17,507

 

 

 

17,064

 

 

 

3.2

%

OAO Acquisitions - Delayed Draw Term Loan (4)

 

Capital Goods

 

SOFR + 6.25% (1.25% floor)

 

 

11.58

%

 

12/27/2029

 

 

-

 

 

 

(9

)

 

 

(12

)

 

 

0.0

%

OAO Acquisitions - Revolving Credit Line (4)

 

Capital Goods

 

SOFR + 6.25% (1.25% floor)

 

 

11.58

%

 

12/27/2029

 

 

-

 

 

 

(9

)

 

 

(6

)

 

 

0.0

%

OAO Acquisitions - Term Loan

 

Capital Goods

 

SOFR + 6.25% (1.25% floor)

 

 

11.58

%

 

12/27/2029

 

 

6,322

 

 

 

6,230

 

 

 

6,265

 

 

 

1.2

%

OneCare Media, LLC - Revolving Credit Line (4)

 

Media

 

SOFR + 6.50% (1.00% floor)

 

 

11.83

%

 

9/29/2026

 

 

-

 

 

 

(21

)

 

 

(47

)

 

 

0.0

%

OneCare Media, LLC - Term Loan A

 

Media

 

SOFR + 6.50% (1.00% floor)

 

 

11.83

%

 

9/29/2026

 

 

10,265

 

 

 

10,152

 

 

 

10,029

 

 

 

1.9

%

OneCare Media, LLC - Term Loan B

 

Media

 

SOFR + 6.50% (1.00% floor)

 

 

11.83

%

 

9/29/2026

 

 

2,278

 

 

 

2,251

 

 

 

2,226

 

 

 

0.4

%

OneCare Media, LLC - Term Loan C

 

Media

 

SOFR + 6.50% (1.00% floor)

 

 

11.83

%

 

9/29/2026

 

 

1,424

 

 

 

1,403

 

 

 

1,391

 

 

 

0.3

%

OneCare Media, LLC - Term Loan D

 

Media

 

SOFR + 6.50% (1.00% floor)

 

 

11.83

%

 

9/29/2026

 

 

866

 

 

 

853

 

 

 

846

 

 

 

0.2

%

Peak Technologies - Term Loan

 

Technology Hardware & Equipment

 

SOFR + 6.25% (1.00% floor)

 

 

11.58

%

 

7/22/2027

 

 

28,366

 

 

 

27,905

 

 

 

28,365

 

 

 

5.3

%

PJW Ultimate Holdings LLC - Delayed Draw Term Loan

 

Consumer Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.33

%

 

11/17/2026

 

 

4,141

 

 

 

4,089

 

 

 

4,116

 

 

 

0.8

%

PJW Ultimate Holdings LLC - Revolving Credit Line (4)

 

Consumer Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.33

%

 

11/17/2026

 

 

492

 

 

 

470

 

 

 

479

 

 

 

0.1

%

PJW Ultimate Holdings LLC - Term Loan

 

Consumer Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.33

%

 

11/17/2026

 

 

9,766

 

 

 

9,653

 

 

 

9,707

 

 

 

1.8

%

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

 

Health Care Technology

 

SOFR + 7.50% (0.75% floor)

 

 

12.93

%

 

7/18/2028

 

 

1,800

 

 

 

1,781

 

 

 

1,753

 

 

 

0.3

%

Planet DDS - Term Loan (8)(9)

 

Health Care Technology

 

SOFR + 7.50% (0.75% floor)

 

 

12.97

%

 

7/18/2028

 

 

14,348

 

 

 

13,999

 

 

 

14,047

 

 

 

2.6

%

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

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

12.44

%

 

4/29/2027

 

 

452

 

 

 

406

 

 

 

302

 

 

 

0.1

%

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

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

12.44

%

 

4/29/2027

 

 

20,641

 

 

 

20,360

 

 

 

19,815

 

 

 

3.7

%

Rushmore Intermediate - Delayed Draw Loan 2nd Amend

 

Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.30

%

 

11/1/2027

 

 

1,169

 

 

 

1,135

 

 

 

1,142

 

 

 

0.2

%

Rushmore Intermediate - Term Loan B

 

Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.30

%

 

11/1/2027

 

 

1,125

 

 

 

1,100

 

 

 

1,099

 

 

 

0.2

%

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

 

Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.45

%

 

11/1/2027

 

 

489

 

 

 

463

 

 

 

465

 

 

 

0.1

%

Rushmore Intermediate - Delayed Draw Loan

 

Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.30

%

 

11/1/2027

 

 

1,262

 

 

 

1,245

 

 

 

1,233

 

 

 

0.2

%

Rushmore Intermediate - Revolving Credit Line (4)

 

Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.30

%

 

11/1/2027

 

 

806

 

 

 

790

 

 

 

775

 

 

 

0.1

%

Rushmore Intermediate - Term Loan

 

Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.30

%

 

11/1/2027

 

 

12,096

 

 

 

11,935

 

 

 

11,818

 

 

 

2.2

%

S4T Holdings Corp. - Delayed Draw Loan (8)

 

Commercial & Professional Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.44

%

 

12/28/2026

 

 

7,673

 

 

 

7,566

 

 

 

7,673

 

 

 

1.4

%

S4T Holdings Corp. - Term Loan (8)

 

Commercial & Professional Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.44

%

 

12/28/2026

 

 

25,693

 

 

 

25,386

 

 

 

25,692

 

 

 

4.8

%

Select Rehabilitation - Term Loan (8)

 

Health Care Providers & Services

 

SOFR + 8.50% (1.00% floor)

 

 

13.90

%

 

10/19/2027

 

 

19,848

 

 

 

19,468

 

 

 

17,486

 

 

 

3.2

%

Senior Helpers - Delayed Draw Loan (4)

 

Health Care Providers & Services

 

SOFR + 5.25% (1.00% floor)

 

 

10.58

%

 

3/20/2030

 

 

-

 

 

 

(18

)

 

 

(37

)

 

 

0.0

%

Senior Helpers - Term Loan

 

Health Care Providers & Services

 

SOFR + 5.25% (1.00% floor)

 

 

10.58

%

 

3/20/2030

 

 

4,290

 

 

 

4,204

 

 

 

4,204

 

 

 

0.8

%

The Smilist Management, Inc. - Delayed Draw Loan A

 

Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.83

%

 

12/23/2025

 

 

2,674

 

 

 

2,655

 

 

 

2,664

 

 

 

0.5

%

The Smilist Management, Inc. - Delayed Draw Loan B

 

Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.83

%

 

12/23/2025

 

 

5,696

 

 

 

5,653

 

 

 

5,674

 

 

 

1.1

%

The Smilist Management, Inc. - Delayed Draw Loan C

 

Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.83

%

 

12/23/2025

 

 

4,535

 

 

 

4,500

 

 

 

4,517

 

 

 

0.8

%

The Smilist Management, Inc. - Revolving Credit Line

 

Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.83

%

 

12/23/2025

 

 

549

 

 

 

545

 

 

 

546

 

 

 

0.1

%

The Smilist Management, Inc. - Term Loan

 

Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.83

%

 

12/23/2025

 

 

4,820

 

 

 

4,785

 

 

 

4,801

 

 

 

0.9

%

VardimanBlack Holdings LLC - Delayed Draw Loan (4)(10)

 

Health Care Equipment & Services

 

SOFR + 7.00% (0.50% floor)

 

 

12.33

%

 

3/18/2027

 

 

-

 

 

 

-

 

 

 

-

 

 

 

0.0

%

VardimanBlack Holdings LLC - Term Loan (10)

 

Health Care Equipment & Services

 

SOFR + 7.00% (0.50% floor)

 

 

12.33

%

 

3/18/2027

 

 

18,881

 

 

 

16,560

 

 

 

18,880

 

 

 

3.5

%

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

 

Commercial & Professional Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.70

%

 

12/30/2027

 

 

-

 

 

 

(19

)

 

 

(314

)

 

 

-0.1

%

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

 

Commercial & Professional Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.93

%

 

12/30/2027

 

 

495

 

 

 

482

 

 

 

385

 

 

 

0.1

%

Vecta Environmental Services - Term Loan (8)

 

Commercial & Professional Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.95

%

 

12/30/2027

 

 

8,078

 

 

 

7,950

 

 

 

7,052

 

 

 

1.3

%

VENU+ - Revolving Credit Line (8)

 

Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.23

%

 

11/30/2026

 

 

1,108

 

 

 

1,088

 

 

 

1,055

 

 

 

0.2

%

VENU+ - Term Loan (8)

 

Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.23

%

 

11/30/2026

 

 

19,202

 

 

 

18,839

 

 

 

18,280

 

 

 

3.4

%

West Creek Financial SPV- Debt Facility VI - Delayed Draw Term Loan (1)(4)(8)

 

Diversified Financials

 

SOFR + 6.75% (1.00% floor)

 

 

12.19

%

 

8/31/2027

 

 

529

 

 

 

499

 

 

 

509

 

 

 

0.1

%

West Creek Financial SPV- Debt Facility VI - Revolving Credit Line (1)(8)

 

Diversified Financials

 

SOFR + 6.75% (1.00% floor)

 

 

12.19

%

 

8/31/2027

 

 

1,444

 

 

 

1,418

 

 

 

1,426

 

 

 

0.3

%

West Creek Financial SPV- Debt Facility VI - Term Loan (1)(8)

 

Diversified Financials

 

SOFR + 6.75% (1.00% floor)

 

 

12.19

%

 

8/31/2027

 

 

5,101

 

 

 

5,010

 

 

 

5,040

 

 

 

0.9

%

Whitestone Home Furnishings, LLC - Term Loan

 

Consumer Durables & Apparel

 

SOFR + 6.50% (1.00% floor)

 

 

11.83

%

 

8/20/2026

 

 

14,588

 

 

 

14,429

 

 

 

14,399

 

 

 

2.7

%

Wilnat, Inc. - Term Loan D (8)

 

Capital Goods

 

SOFR + 5.00% (1.00% floor)

 

 

10.43

%

 

12/29/2026

 

 

1,723

 

 

 

1,699

 

 

 

1,740

 

 

 

0.3

%

Wilnat, Inc. - Revolving Credit Line (4)

 

Capital Goods

 

SOFR + 5.00% (1.00% floor)

 

 

10.33

%

 

12/29/2026

 

 

-

 

 

 

(14

)

 

 

-

 

 

 

0.0

%

Wilnat, Inc. - Term Loan B

 

Capital Goods

 

SOFR + 5.00% (1.00% floor)

 

 

10.33

%

 

12/29/2026

 

 

3,135

 

 

 

3,084

 

 

 

3,166

 

 

 

0.6

%

Wilnat, Inc. - Term Loan

 

Capital Goods

 

SOFR + 5.00% (1.00% floor)

 

 

10.33

%

 

12/29/2026

 

 

12,067

 

 

 

11,922

 

 

 

12,188

 

 

 

2.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total First Lien Senior Secured

 

 

 

 

 

 

 

 

 

 

 

648,217

 

 

 

634,340

 

 

 

628,252

 

 

 

117.0

%

Total Debt Investments

 

 

 

 

 

 

 

 

 

 

 

648,217

 

 

 

634,340

 

 

 

628,252

 

 

 

117.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Atlas US Holdings, LP - class X preferred

 

Diversified Financials

 

15.00% PIK

 

15.00% PIK

 

 

NA

 

 

283,965

 

 

$

284

 

 

$

568

 

 

 

0.1

%

Atlas US Holdings, LP - class B-2 units

 

Diversified Financials

 

NA

 

NA

 

 

NA

 

 

857,787

 

 

 

873

 

 

 

169

 

 

 

0.0

%

Educators Publishing Service - Series A-1 Preferred Units

 

Media

 

NA

 

NA

 

 

NA

 

 

887,237

 

 

 

887

 

 

 

1,011

 

 

 

0.2

%

6


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

(amounts in thousands, except per share data)

March 31, 2024

(Unaudited)

Portfolio Company(3)(7)

 

Industry

 

Spread Above Index

 

Interest Rate (5)

 

 

Maturity Date

 

Principal
/ Shares

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Percentage of
Net Assets
(2)

 

Kent Water Sports Holdings, LLC - Preferred Stock (9)(10)(11)

 

Consumer Durables & Apparel

 

NA

 

NA

 

 

NA

 

 

3,495

 

 

 

-

 

 

 

-

 

 

 

0.0

%

VardimanBlack Holdings LLC - Preferred Equity (10)

 

Health Care Equipment & Services

 

NA

 

NA

 

 

NA

 

 

9,268,770

 

 

 

2,908

 

 

 

2,908

 

 

 

0.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Preferred Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,952

 

 

 

4,656

 

 

 

0.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Consumer Services

 

NA

 

NA

 

 

NA

 

 

223,551

 

 

$

377

 

 

$

250

 

 

 

0.0

%

Cardiovascular Logistics - Class O2 Units

 

Health Care Providers & Services

 

NA

 

NA

 

 

NA

 

 

142,509

 

 

 

143

 

 

 

139

 

 

 

0.0

%

Firebirds - Class A Units

 

Consumer Services

 

NA

 

NA

 

 

NA

 

 

590,012

 

 

 

590

 

 

 

486

 

 

 

0.1

%

Firebirds - Class B Units

 

Consumer Services

 

NA

 

NA

 

 

NA

 

 

590,012

 

 

 

-

 

 

 

-

 

 

 

0.1

%

Kemper Sports Management Holdings LLC Equity (9)

 

Consumer Services

 

NA

 

NA

 

 

NA

 

 

610,763

 

 

 

611

 

 

 

735

 

 

 

0.0

%

Kent Water Sports Holdings, LLC - Common Stock (9)(10)(11)

 

Consumer Durables & Apparel

 

NA

 

NA

 

 

NA

 

 

97

 

 

 

-

 

 

 

-

 

 

 

0.1

%

Oak Dental - Class C Units (9)

 

Health Care Equipment & Services

 

NA

 

NA

 

 

NA

 

 

45

 

 

 

344

 

 

 

366

 

 

 

0.0

%

Rushmore Lender Co-Invest Blocker, LLC - Common Stock

 

Health Care Equipment & Services

 

NA

 

NA

 

 

NA

 

 

537,606

 

 

 

538

 

 

 

521

 

 

 

0.1

%

Senior Helpers - Class A-1

 

Health Care Providers & Services

 

NA

 

NA

 

 

NA

 

 

409

 

 

 

409

 

 

 

409

 

 

 

0.1

%

Senior Helpers - Class B

 

Health Care Providers & Services

 

NA

 

NA

 

 

NA

 

 

409

 

 

 

-

 

 

 

-

 

 

 

0.1

%

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

 

Media

 

NA

 

NA

 

 

NA

 

 

706

 

 

 

706

 

 

 

605

 

 

 

0.0

%

VardimanBlack Holdings LLC - Class A (10)

 

Health Care Equipment & Services

 

NA

 

NA

 

 

NA

 

 

19,103,095

 

 

 

-

 

 

 

-

 

 

 

0.1

%

CTM Acquisition LLC Equity

 

Consumer Services

 

NA

 

NA

 

 

NA

 

 

664,865

 

 

 

665

 

 

 

407

 

 

 

0.0

%

Vistria ESS Holdings, LLC - Equity

 

Commercial & Professional Services

 

NA

 

NA

 

 

NA

 

 

326

 

 

 

326

 

 

 

665

 

 

 

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,709

 

 

 

4,583

 

 

 

0.8

%

Total Equity Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,661

 

 

 

9,239

 

 

 

1.6

%

Total Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

$

644,001

 

 

 

637,491

 

 

 

118.6

%

Liabilities in Excess of Other Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(99,350

)

 

 

-18.6

%

Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

538,141

 

 

 

100.0

%

(1)
The Company deemed this asset to be a "non-qualifying asset" under Section 55(a) of the Investment Company Act of 1940, as amended. Qualifying assets must represent at least 70.0% of the Company's total assets at the time of acquisition of any additional non-qualifying assets. As of March 31, 2024, 4.29% of the Company's total assets are represented by investments at fair value that are considered non-qualifying assets.
(2)
Percentages are based on net assets as of March 31, 2024.
(3)
The fair value of investments with respect to securities for which market quotations are not readily available are valued using significant unobservable inputs (See Note 3 – Fair Value of Financial Instruments).
(4)
For investments in revolving credit facilities and delayed draw commitments, the cost basis of the funded investments purchased is offset by any costs/netbacks received for any unfunded portion on the total balance committed. The fair value is also adjusted for the price appreciation or depreciation on the unfunded portion. As a result, the purchase of commitments not completely funded may result in a negative fair value until it is called and funded. Please refer to Note 7 - Commitments and Contingencies for details of these unfunded commitments.
(5)
The majority of the investments bear interest at a rate that may be determined by reference to Secured Overnight Financing Rate (“SOFR") and which reset monthly, quarterly, semiannually, or annually. For each, the Company has provided the spread over the reference rate and the current interest rate in effect at the reporting date. As of March 31, 2024, the reference rates for the Company's variable rate loans were the 1 mo. SOFR at 5.33%, the 3 mo. SOFR at 5.30%, and the 6 mo. SOFR at 5.22%. Certain investments are subject to an interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable.
(6)
Equity and member interests are non-income-producing unless otherwise noted.
(7)
All investments domiciled in the United States unless otherwise noted.
(8)
Positions that have a SOFR reference rate, from time to time have an additional spread adjustment. This spread adjustment ranges from 0% - 0.25% depending on the contractual arrangement. These spread adjustments have been included in the all-in rate shown.
(9)
Ownership of this investment is through a wholly-owned subsidiary.
(10)
Investment is on non-accrual status.
(11)
Investment is deemed an Affiliated Investment; Affiliated investments generally are defined by the Investment Company Act of 1940, as amended, as investments in portfolio companies in which the Company owns between 5% and 25% of the voting securities. See Note 5 in the accompanying notes to the consolidated financial statements for additional information on transactions in which the issuer was an Affiliated Investment (but not a portfolio company that the Company is deemed to control).

7


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

(amounts in thousands, except per share data)

March 31, 2024

(Unaudited)

The following table shows the portfolio composition by industry grouping based on fair value at September 30, 2021:March 31, 2024:

   At September 30, 2021 
   Investments at   Percentage of 

Industry

  Fair Value   Total Portfolio 

Health Care

  $13,062    29.3

Consumer Discretionary

   31,487    70.7 
  

 

 

   

 

 

 

Total

  $44,549    100.0
  

 

 

   

 

 

 

 

 

At March 31, 2024

 

Industry

 

Investments at
Fair Value

 

 

Percentage of
Total Portfolio

 

Consumer Services

 

$

163,078

 

 

 

25.5

%

Diversified Financials

 

 

81,275

 

 

 

12.7

 

Health Care Providers & Services

 

 

75,985

 

 

 

11.9

 

Health Care Equipment & Services

 

 

56,239

 

 

 

8.8

 

Commercial & Professional Services

 

 

41,153

 

 

 

6.5

 

Technology Hardware & Equipment

 

 

40,425

 

 

 

6.3

 

Capital Goods

 

 

39,297

 

 

 

6.2

 

Media

 

 

33,519

 

 

 

5.3

 

Industrials

 

 

28,557

 

 

 

4.5

 

Health Care Technology

 

 

26,764

 

 

 

4.2

 

Consumer Durables & Apparel

 

 

25,873

 

 

 

4.1

 

Software & Services

 

 

25,326

 

 

 

4.0

 

 

 

$

637,491

 

 

 

100.0

%

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

8


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

(amounts in thousands, except per share data)

December 31, 2023

Portfolio Company(3)(7)

 

Industry

 

Spread Above Index

 

Interest
Rate

 

 

Maturity
Date

 

Principal
/ Shares

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Percentage
of Net
Assets
(2)

 

Debt Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Lien Senior Secured(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

190 Octane Financing - Delayed Draw Loan (8)

 

 Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

12.07

%

 

5/10/2027

 

$

4,875

 

 

$

4,812

 

 

$

4,797

 

 

 

0.9

%

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

 

 Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

12.07

%

 

5/10/2027

 

 

571

 

 

 

555

 

 

 

553

 

 

 

0.1

%

190 Octane Financing - Term Loan (8)

 

 Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

12.07

%

 

5/10/2027

 

 

8,434

 

 

 

8,302

 

 

 

8,299

 

 

 

1.6

%

Abea Acquisition, Inc. - Delayed Draw Loan

 

 Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

11/30/2026

 

 

1,397

 

 

 

1,380

 

 

 

1,390

 

 

 

0.3

%

Abea Acquisition, Inc. - Term Loan

 

 Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

11/30/2026

 

 

11,153

 

 

 

11,026

 

 

 

11,098

 

 

 

2.1

%

AccessOne Medcard, Inc. - Term Loan

 

 Health Care Technology

 

SOFR + 7.50% (0.50% floor)

 

 

12.85

%

 

8/20/2026

 

 

11,694

 

 

 

11,574

 

 

 

11,016

 

 

 

2.1

%

ACT Acquisition - Delayed Draw Term Loan (4)

 

 Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.10

%

 

12/4/2028

 

 

 

 

 

(19

)

 

 

(38

)

 

 

%

ACT Acquisition - Revolving Credit Line (4)

 

 Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.10

%

 

12/4/2028

 

 

 

 

 

(17

)

 

 

(17

)

 

 

%

ACT Acquisition - Term Loan (8)

 

 Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.22

%

 

12/4/2028

 

 

6,579

 

 

 

6,432

 

 

 

6,431

 

 

 

1.2

%

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

 

 Diversified Financials

 

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

 

 

11.96

%

 

12/31/2027

 

 

3,328

 

 

 

3,273

 

 

 

3,265

 

 

 

0.6

%

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

 

 Diversified Financials

 

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

 

 

11.96

%

 

12/31/2027

 

 

512

 

 

 

499

 

 

 

501

 

 

 

0.1

%

Aurora Solutions LLC - Term Loan (8)

 

 Diversified Financials

 

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

 

 

11.96

%

 

12/31/2027

 

 

9,433

 

 

 

9,328

 

 

 

9,348

 

 

 

1.8

%

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

 

 Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.21

%

 

6/27/2028

 

 

 

 

 

(48

)

 

 

(6

)

 

 

%

Batteries Plus Holding Corporation - Term Loan (8)

 

 Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.21

%

 

6/27/2028

 

 

16,460

 

 

 

16,070

 

 

 

16,410

 

 

 

3.1

%

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

 

 Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.97

%

 

2/25/2028

 

 

 

 

 

(18

)

 

 

(2

)

 

 

%

BKH - Term Loan (8)

 

 Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.97

%

 

2/25/2028

 

 

21,521

 

 

 

21,145

 

 

 

21,498

 

 

 

4.1

%

Bradford Health Services - Delayed Draw Term Loan (8)

 

 Health Care Providers & Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.48

%

 

10/27/2024

 

 

7,540

 

 

 

7,442

 

 

 

7,540

 

 

 

1.4

%

Bradford Health Services - Term Loan (8)

 

 Health Care Providers & Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.48

%

 

10/27/2028

 

 

13,063

 

 

 

12,837

 

 

 

13,063

 

 

 

2.5

%

Cardiovascular Logistics - Delayed Draw Term Loan A (8)

 

 Health Care Providers & Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.73

%

 

1/31/2029

 

 

5,078

 

 

 

4,989

 

 

 

4,997

 

 

 

0.9

%

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

 

 Health Care Providers & Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.73

%

 

1/31/2029

 

 

166

 

 

 

124

 

 

 

88

 

 

 

%

Cardiovascular Logistics - Term Loan (8)

 

 Health Care Providers & Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.73

%

 

1/31/2029

 

 

7,196

 

 

 

7,071

 

 

 

7,081

 

 

 

1.3

%

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

 

 Technology Hardware & Equipment

 

SOFR + 5.25% (1.00% floor)

 

 

10.71

%

 

10/20/2027

 

 

1,300

 

 

 

1,267

 

 

 

1,300

 

 

 

0.2

%

CheckedUp - Revolving Credit Line (4)(8)

 

 Technology Hardware & Equipment

 

SOFR + 5.25% (1.00% floor)

 

 

10.71

%

 

10/20/2027

 

 

1,621

 

 

 

1,596

 

 

 

1,621

 

 

 

0.3

%

CheckedUp - Term Loan (8)

 

 Technology Hardware & Equipment

 

SOFR + 5.25% (1.00% floor)

 

 

10.71

%

 

10/20/2027

 

 

9,075

 

 

 

8,945

 

 

 

9,075

 

 

 

1.7

%

CreditAssociates, LLC - Revolving Credit Line (4)

 

 Diversified Financials

 

SOFR + 6.75% (1.00% floor)

 

 

12.10

%

 

3/29/2027

 

 

 

 

 

(13

)

 

 

(8

)

 

 

%

CreditAssociates, LLC - Term Loan

 

 Diversified Financials

 

SOFR + 6.75% (1.00% floor)

 

 

12.10

%

 

3/29/2027

 

 

22,115

 

 

 

21,832

 

 

 

21,959

 

 

 

4.2

%

Educators Publishing Service - Revolving Credit Line (4)

 

 Media

 

SOFR + 6.00% (1.00% floor)

 

 

11.35

%

 

2/24/2028

 

 

 

 

 

(37

)

 

 

 

 

 

%

Educators Publishing Service - Term Loan

 

 Media

 

SOFR + 6.00% (1.00% floor)

 

 

11.35

%

 

2/24/2028

 

 

17,502

 

 

 

17,122

 

 

 

17,502

 

 

 

3.3

%

Fiesta Holdings - Revolving Credit Line (4)(8)

 

 Consumer Services

 

SOFR + 7.00% (2.00% floor)

 

 

12.48

%

 

10/30/2028

 

 

 

 

 

(22

)

 

 

(18

)

 

 

%

Fiesta Holdings - Term Loan (8)

 

 Consumer Services

 

SOFR + 7.00% (2.00% floor)

 

 

12.48

%

 

10/30/2028

 

 

9,692

 

 

 

9,455

 

 

 

9,498

 

 

 

1.8

%

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

 

 Consumer Services

 

SOFR + 6.25% (2.00% floor)

 

 

11.71

%

 

3/22/2028

 

 

 

 

 

(15

)

 

 

(14

)

 

 

%

Firebirds - Revolving Credit Line (4)(8)

 

 Consumer Services

 

SOFR + 6.25% (2.00% floor)

 

 

11.71

%

 

3/22/2028

 

 

691

 

 

 

662

 

 

 

677

 

 

 

0.1

%

Firebirds - Term Loan (8)

 

 Consumer Services

 

SOFR + 6.25% (2.00% floor)

 

 

11.71

%

 

3/22/2028

 

 

22,632

 

 

 

22,125

 

 

 

22,405

 

 

 

4.3

%

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

 

 Capital Goods

 

SOFR + 5.75% (1.00% floor)

 

 

11.23

%

 

1/10/2029

 

 

 

 

 

(41

)

 

 

(19

)

 

 

%

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

 

 Capital Goods

 

SOFR + 5.75% (1.00% floor)

 

 

11.23

%

 

1/10/2029

 

 

186

 

 

 

147

 

 

 

168

 

 

 

%

Hasa - Term Loan (8)(9)

 

 Capital Goods

 

SOFR + 5.75% (1.00% floor)

 

 

11.23

%

 

1/10/2029

 

 

14,524

 

 

 

14,173

 

 

 

14,349

 

 

 

2.7

%

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

 

 Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.96

%

 

1/12/2028

 

 

4,564

 

 

 

4,476

 

 

 

4,525

 

 

 

0.9

%

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

 

 Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.96

%

 

1/12/2028

 

 

 

 

 

(27

)

 

 

(12

)

 

 

%

Kemper Sports Management - Term Loan (8)

 

 Consumer Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.98

%

 

1/12/2028

 

 

18,809

 

 

 

18,482

 

 

 

18,677

 

 

 

3.5

%

Kent Water Sports Holdings, LLC - Delayed Draw Loan Last-Out (10)(11)(12)

 

 Consumer Durables & Apparel

 

SOFR + 9.00% PIK

 

 

14.44

%

 

12/31/2025

 

 

13,186

 

 

 

12,748

 

 

 

8,176

 

 

 

1.6

%

Kent Water Sports Holdings, LLC - Delayed Draw Loan First-Out (10)(11)(12)

 

 Consumer Durables & Apparel

 

SOFR + 10.00% PIK

 

 

15.44

%

 

12/31/2025

 

 

3,662

 

 

 

3,495

 

 

 

3,662

 

 

 

0.7

%

MerchantWise Solutions, LLC - Delayed Draw Loan (4)

 

 Software & Services

 

SOFR + 6.00% (0.75% floor)

 

 

11.33

%

 

6/1/2028

 

 

2,658

 

 

 

2,611

 

 

 

2,545

 

 

 

0.5

%

MerchantWise Solutions, LLC - Revolving Credit Line (4)

 

 Software & Services

 

SOFR + 6.00% (0.75% floor)

 

 

11.33

%

 

6/1/2028

 

 

231

 

 

 

209

 

 

 

174

 

 

 

%

MerchantWise Solutions, LLC - Term Loan (4)

 

 Software & Services

 

SOFR + 6.00% (0.75% floor)

 

 

11.33

%

 

6/1/2028

 

 

12,153

 

 

 

11,957

 

 

 

11,704

 

 

 

2.2

%

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

 

 Diversified Financials

 

SOFR + 8.00% (1.00% floor)

 

 

13.47

%

 

6/11/2027

 

 

2,876

 

 

 

2,814

 

 

 

2,814

 

 

 

0.5

%

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

 

 Diversified Financials

 

SOFR + 8.00% (1.00% floor)

 

 

13.47

%

 

6/11/2027

 

 

607

 

 

 

579

 

 

 

579

 

 

 

0.1

%

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

 

 Diversified Financials

 

SOFR + 8.00% (1.00% floor)

 

 

13.47

%

 

6/11/2027

 

 

8,627

 

 

 

8,453

 

 

 

8,472

 

 

 

1.6

%

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

 

 Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

12.47

%

 

3/30/2027

 

 

1,143

 

 

 

1,127

 

 

 

1,143

 

 

 

0.2

%

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

 

 Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

12.47

%

 

3/30/2027

 

 

4,584

 

 

 

4,526

 

 

 

4,584

 

 

 

0.9

%

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

 

 Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

12.47

%

 

3/30/2027

 

 

2,751

 

 

 

2,716

 

 

 

2,751

 

 

 

0.5

%

National Debt Relief - Delayed Draw Loan (8)

 

 Diversified Financials

 

SOFR + 6.00% (1.50% floor)

 

 

11.47

%

 

2/24/2027

 

 

10,943

 

 

 

10,810

 

 

 

10,801

 

 

 

2.1

%

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

 

 Diversified Financials

 

SOFR + 6.00% (1.50% floor)

 

 

11.47

%

 

2/24/2027

 

 

 

 

 

(26

)

 

 

(28

)

 

 

%

National Debt Relief - Term Loan (8)

 

 Diversified Financials

 

SOFR + 6.00% (1.50% floor)

 

 

11.47

%

 

2/24/2027

 

 

13,131

 

 

 

12,970

 

 

 

12,961

 

 

 

2.5

%

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

 

 Software & Services

 

SOFR + 5.75% (1.00% floor)

 

 

11.21

%

 

5/25/2027

 

 

 

 

 

(12

)

 

 

(29

)

 

 

%

Nuspire, LLC - Term Loan (8)

 

 Software & Services

 

SOFR + 5.75% (1.00% floor)

 

 

11.21

%

 

5/25/2027

 

 

6,930

 

 

 

6,826

 

 

 

6,701

 

 

 

1.3

%

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

 

 Health Care Equipment & Services

 

SOFR + 6.50% (2.00% floor)

 

 

11.97

%

 

3/22/2028

 

 

 

 

 

(78

)

 

 

(433

)

 

 

(0.1

)%

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

 

 Health Care Equipment & Services

 

SOFR + 6.50% (2.00% floor)

 

 

11.97

%

 

3/22/2028

 

 

344

 

 

 

326

 

 

 

294

 

 

 

0.1

%

Oak Dental - Term Loan (8)

 

 Health Care Equipment & Services

 

SOFR + 6.50% (2.00% floor)

 

 

12.09

%

 

3/22/2028

 

 

17,932

 

 

 

17,525

 

 

 

16,874

 

 

 

3.2

%

OAO Acquisitions - Delayed Draw Term Loan (4)

 

Capital Goods

 

SOFR + 6.25% (1.25% floor)

 

 

11.60

%

 

12/27/2029

 

 

 

 

 

(10

)

 

 

(20

)

 

 

%

OAO Acquisitions - Revolving Credit Line (4)

 

Capital Goods

 

SOFR + 6.25% (1.25% floor)

 

 

11.60

%

 

12/27/2029

 

 

 

 

 

(10

)

 

 

(10

)

 

 

%

OAO Acquisitions - Term Loan

 

Capital Goods

 

SOFR + 6.25% (1.25% floor)

 

 

11.60

%

 

12/27/2029

 

 

6,322

 

 

 

6,227

 

 

 

6,227

 

 

 

1.2

%

OneCare Media, LLC - Revolving Credit Line (4)

 

Media

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

9/29/2026

 

 

 

 

 

(23

)

 

 

(37

)

 

 

%

OneCare Media, LLC - Term Loan A

 

 Media

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

9/29/2026

 

 

10,412

 

 

 

10,284

 

 

 

10,224

 

 

 

1.9

%

OneCare Media, LLC - Term Loan B

 

 Media

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

9/29/2026

 

 

2,311

 

 

 

2,279

 

 

 

2,269

 

 

 

0.4

%

OneCare Media, LLC - Term Loan C

 

Media

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

9/29/2026

 

 

1,444

 

 

 

1,421

 

 

 

1,418

 

 

 

0.3

%

OneCare Media, LLC - Term Loan D

 

Media

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

9/29/2026

 

 

877

 

 

 

864

 

 

 

861

 

 

 

0.2

%

Peak Technologies - Term Loan

 

 Technology Hardware & Equipment

 

SOFR + 6.25% (1.00% floor)

 

 

11.60

%

 

7/22/2027

 

 

28,438

 

 

 

27,944

 

 

 

28,152

 

 

 

5.3

%

PJW Ultimate Holdings LLC - Delayed Draw Term Loan

 

 Consumer Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.35

%

 

11/17/2026

 

 

4,162

 

 

 

4,105

 

 

 

4,075

 

 

 

0.8

%

PJW Ultimate Holdings LLC - Revolving Credit Line (4)

 

 Consumer Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.35

%

 

11/17/2026

 

 

492

 

 

 

467

 

 

 

447

 

 

 

0.1

%

9


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

(amounts in thousands, except per share data)

December 31, 2023

Portfolio Company(3)(7)

 

Industry

 

Spread Above Index

 

Interest
Rate

 

 

Maturity
Date

 

Principal
/ Shares

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Percentage
of Net
Assets
(2)

 

PJW Ultimate Holdings LLC - Term Loan

 

 Consumer Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.35

%

 

11/17/2026

 

 

9,766

 

 

 

9,642

 

 

 

9,561

 

 

 

1.8

%

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

 

Health Care Technology

 

SOFR + 7.50% (0.75% floor)

 

 

12.96

%

 

7/18/2028

 

 

1,479

 

 

 

1,459

 

 

 

1,429

 

 

 

0.3

%

Planet DDS - Term Loan (8)(9)

 

Health Care Technology

 

SOFR + 7.50% (0.75% floor)

 

 

12.91

%

 

7/18/2028

 

 

14,348

 

 

 

13,984

 

 

 

14,032

 

 

 

2.7

%

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

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

12.47

%

 

4/29/2027

 

 

 

 

 

(50

)

 

 

(132

)

 

 

%

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

 

Industrials

 

SOFR + 7.00% (1.00% floor)

 

 

12.47

%

 

4/29/2027

 

 

20,924

 

 

 

20,615

 

 

 

20,191

 

 

 

3.8

%

Rushmore Intermediate - Delayed Draw Loan

 

Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.33

%

 

11/1/2027

 

 

1,262

 

 

 

1,244

 

 

 

1,227

 

 

 

0.2

%

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

 

 Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.33

%

 

11/1/2027

 

 

1,169

 

 

 

1,128

 

 

 

1,132

 

 

 

0.2

%

Rushmore Intermediate - Revolving Credit Line (4)

 

 Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.33

%

 

11/1/2027

 

 

 

 

 

(17

)

 

 

(38

)

 

 

%

Rushmore Intermediate - Term Loan

 

 Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.33

%

 

11/1/2027

 

 

12,096

 

 

 

11,925

 

 

 

11,757

 

 

 

2.2

%

Rushmore Intermediate - Term Loan B

 

 Health Care Equipment & Services

 

SOFR + 7.00% (1.00% floor)

 

 

12.33

%

 

11/1/2027

 

 

1,125

 

 

 

1,098

 

 

 

1,094

 

 

 

0.2

%

S4T Holdings Corp. - Delayed Draw Loan (8)

 

 Commercial & Professional Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.47

%

 

12/28/2026

 

 

7,692

 

 

 

7,575

 

 

 

7,692

 

 

 

1.5

%

S4T Holdings Corp. - Term Loan (8)

 

 Commercial & Professional Services

 

SOFR + 6.00% (1.00% floor)

 

 

11.47

%

 

12/28/2026

 

 

25,758

 

 

 

25,419

 

 

 

25,757

 

 

 

4.9

%

Select Rehabilitation - Term Loan (8)

 

 Health Care Providers & Services

 

SOFR + 8.50% (1.00% floor)

 

 

13.93

%

 

10/19/2027

 

 

19,898

 

 

 

19,494

 

 

 

19,043

 

 

 

3.6

%

The Smilist Management, Inc. - Delayed Draw Loan A

 

 Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

12/23/2025

 

 

2,688

 

 

 

2,666

 

 

 

2,634

 

 

 

0.5

%

The Smilist Management, Inc. - Delayed Draw Loan B

 

 Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

12/23/2025

 

 

5,726

 

 

 

5,675

 

 

 

5,611

 

 

 

1.1

%

The Smilist Management, Inc. - Delayed Draw Loan c

 

 Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

12/23/2025

 

 

4,558

 

 

 

4,518

 

 

 

4,467

 

 

 

0.8

%

The Smilist Management, Inc. - Revolving Credit Line

 

 Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

12/23/2025

 

 

549

 

 

 

544

 

 

 

538

 

 

 

0.1

%

The Smilist Management, Inc. - Term Loan

 

 Health Care Providers & Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

12/23/2025

 

 

4,845

 

 

 

4,805

 

 

 

4,748

 

 

 

0.9

%

VardimanBlack Holdings LLC - Delayed Draw Loan (8)(10)

 

 Health Care Equipment & Services

 

SOFR + 7.00% (0.50% floor)

 

 

12.46

%

 

3/18/2027

 

 

6,931

 

 

 

6,707

 

 

 

5,905

 

 

 

1.1

%

VardimanBlack Holdings LLC - Delayed Draw Loan 1st Amend (8)(10)

 

 Health Care Equipment & Services

 

SOFR + 8.00% (0.50% floor)

 

 

13.46

%

 

3/18/2027

 

 

11,327

 

 

 

10,948

 

 

 

9,650

 

 

 

1.8

%

VardimanBlack Holdings LLC - Term Loan (8)(10)

 

 Health Care Equipment & Services

 

SOFR + 7.00% (0.50% floor)

 

 

12.46

%

 

3/18/2027

 

 

8,342

 

 

 

8,072

 

 

 

7,108

 

 

 

1.3

%

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

 

 Commercial & Professional Services

 

SOFR + 6.25% (1.00% floor)

 

 

11.73

%

 

12/30/2027

 

 

 

 

 

(20

)

 

 

(336

)

 

 

(0.1

)%

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

 

 Commercial & Professional Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.96

%

 

12/30/2027

 

 

247

 

 

 

233

 

 

 

130

 

 

 

%

Vecta Environmental Services - Term Loan (8)

 

 Commercial & Professional Services

 

SOFR + 6.50% (1.00% floor)

 

 

11.98

%

 

12/30/2027

 

 

8,099

 

 

 

7,962

 

 

 

6,997

 

 

 

1.3

%

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

 

 Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.26

%

 

11/30/2026

 

 

739

 

 

 

717

 

 

 

704

 

 

 

0.1

%

VENU+ - Term Loan (8)

 

 Consumer Services

 

SOFR + 6.75% (1.00% floor)

 

 

12.26

%

 

11/30/2026

 

 

19,250

 

 

 

18,856

 

 

 

18,654

 

 

 

3.5

%

West Creek Financial SPV- Debt Facility VI - Delayed Draw Term Loan (4)(8)

 

 Diversified Financials

 

SOFR + 6.75% (1.00% floor)

 

 

12.22

%

 

8/31/2027

 

 

529

 

 

 

497

 

 

 

496

 

 

 

0.1

%

West Creek Financial SPV- Debt Facility VI - Revolving Credit Line (1)(8)

 

 Diversified Financials

 

SOFR + 6.75% (1.00% floor)

 

 

12.22

%

 

8/31/2027

 

 

1,444

 

 

 

1,417

 

 

 

1,416

 

 

 

0.3

%

West Creek Financial SPV- Debt Facility VI - Term Loan (1)(8)

 

 Diversified Financials

 

SOFR + 6.75% (1.00% floor)

 

 

12.22

%

 

8/31/2027

 

 

5,101

 

 

 

5,004

 

 

 

5,005

 

 

 

1.0

%

Whitestone Home Furnishings, LLC - Term Loan

 

 Consumer Durables & Apparel

 

SOFR + 6.50% (1.00% floor)

 

 

11.85

%

 

8/20/2026

 

 

14,665

 

 

 

14,487

 

 

 

14,342

 

 

 

2.7

%

Wilnat, Inc. - Revolving Credit Line (4)

 

 Capital Goods

 

SOFR + 5.00% (1.00% floor)

 

 

10.35

%

 

12/29/2026

 

 

 

 

 

(15

)

 

 

 

 

 

%

Wilnat, Inc. - Term Loan

 

 Capital Goods

 

SOFR + 5.00% (1.00% floor)

 

 

10.35

%

 

12/29/2026

 

 

12,098

 

 

 

11,939

 

 

 

12,098

 

 

 

2.3

%

Wilnat, Inc. - Term Loan B

 

 Capital Goods

 

SOFR + 5.00% (1.00% floor)

 

 

10.35

%

 

12/29/2026

 

 

3,143

 

 

 

3,087

 

 

 

3,143

 

 

 

0.6

%

Total First Lien Senior Secured

 

 

 

 

 

 

 

 

 

 

 

633,725

 

 

 

621,623

 

 

 

612,403

 

 

 

116.0

%

Total Debt Investments

 

 

 

 

 

 

 

 

 

 

 

633,725

 

 

 

621,623

 

 

 

612,403

 

 

 

116.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Equity(6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Atlas US Holdings, LP - class X preferred

 

 Diversified Financials

 

15.00% PIK

 

15.00% PIK

 

 

NA

 

 

207,508

 

 

$

208

 

 

$

415

 

 

 

0.1

%

Atlas US Holdings, LP - class B-2 units

 

 Diversified Financials

 

NA

 

NA

 

 

NA

 

 

857,787

 

 

 

873

 

 

 

289

 

 

 

0.1

%

Educators Publishing Service - Series A-1 Preferred Units

 

 Media

 

NA

 

NA

 

 

NA

 

 

887,237

 

 

 

887

 

 

 

1,117

 

 

 

0.2

%

Kent Water Sports Holdings, LLC - Preferred Stock (9)(10)(11)(12)

 

 Consumer Durables & Apparel

 

NA

 

NA

 

 

NA

 

 

1,398

 

 

 

 

 

 

 

 

 

%

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

 

 Media

 

NA

 

NA

 

 

NA

 

 

706

 

 

 

706

 

 

 

744

 

 

 

0.1

%

Total Preferred Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,674

 

 

 

2,565

 

 

 

0.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity(6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 Consumer Services

 

NA

 

NA

 

 

NA

 

 

223,551

 

 

$

377

 

 

$

353

 

 

 

0.1

%

Cardiovascular Logistics - Class O2 Units

 

 Health Care Providers & Services

 

NA

 

NA

 

 

NA

 

 

142,509

 

 

 

143

 

 

 

141

 

 

 

%

CTM Group - Class A-1 Units

 

 Consumer Services

 

NA

 

NA

 

 

NA

 

 

664,865

 

 

 

665

 

 

 

502

 

 

 

0.1

%

Firebirds - Class A Units

 

 Consumer Services

 

NA

 

NA

 

 

NA

 

 

590,012

 

 

 

590

 

 

 

466

 

 

 

0.1

%

Firebirds - Class B Units

 

 Consumer Services

 

NA

 

NA

 

 

NA

 

 

590,012

 

 

 

 

 

 

 

 

 

%

Kemper Sports Management Holdings LLC Equity (9)

 

 Consumer Services

 

NA

 

NA

 

 

NA

 

 

610,763

 

 

 

611

 

 

 

681

 

 

 

0.1

%

Kent Water Sports Holdings, LLC - Common Stock (9)(10)(11)(12)

 

 Consumer Durables & Apparel

 

NA

 

NA

 

 

NA

 

 

97

 

 

 

 

 

 

 

 

 

%

Oak Dental - Class C Units (9)

 

 Health Care Equipment & Services

 

NA

 

NA

 

 

NA

 

 

45

 

 

 

344

 

 

 

368

 

 

 

0.1

%

Rushmore Lender Co-Invest Blocker, LLC - Common Stock

 

 Health Care Equipment & Services

 

NA

 

NA

 

 

NA

 

 

537,606

 

 

 

538

 

 

 

498

 

 

 

0.1

%

Vistria ESS Holdings, LLC - Equity

 

 Commercial & Professional Services

 

NA

 

NA

 

 

NA

 

 

326

 

 

 

326

 

 

 

599

 

 

 

0.1

%

Total Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,594

 

 

 

3,608

 

 

 

0.7

%

Total Equity Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,268

 

 

 

6,173

 

 

 

1.2

%

Total Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

$

627,891

 

 

 

618,576

 

 

 

117.2

%

Liabilities in Excess of Other Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(91,918

)

 

 

(17.2

)%

10


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

(amounts in thousands, except per share data)

December 31, 2023

Portfolio Company(3)(7)

 

Industry

 

Spread Above Index

 

Interest
Rate

 

 

Maturity
Date

 

Principal
/ Shares

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Percentage
of Net
Assets
(2)

 

Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

526,658

 

 

 

100.0

%

(1)
The Company deemed this asset to be a “non-qualifying asset” under Section 55(a) of the Investment Company Act of 1940, as amended. Qualifying assets must represent at least 70.0% of the Company’s total assets at the time of acquisition of any additional non-qualifying assets. As of December 31, 2023, 4.32% of the Company’s total assets are represented by investments at fair value that are considered non-qualifying assets.
(2)
Percentages are based on net assets as of December 31, 2023.
(3)
The fair value of investments with respect to securities for which market quotations are not readily available are valued using significant unobservable inputs (See Note 3 – Fair Value of Financial Instruments).
(4)
For investments in revolving credit facilities and delayed draw commitments, the cost basis of the funded investments purchased is offset by any costs/netbacks received for any unfunded portion on the total balance committed. The fair value is also adjusted for the price appreciation or depreciation on the unfunded portion. As a result, the purchase of commitments not completely funded may result in a negative fair value until it is called and funded. Please refer to Note 7 - Commitments and Contingencies for details of these unfunded commitments.
(5)
The majority of the investments bear interest at a rate that may be determined by reference to Secured Overnight Financing Rate (“SOFR”) and which reset monthly, quarterly, semiannually, or annually. For each, the Company has provided the spread over the reference rate and the current interest rate in effect at the reporting date. As of December 31, 2023, the reference rates for the Company's variable rate loans were the 1 month SOFR at 5.35%, the 3 month SOFR at 5.33%, and the 6 month SOFR at 5.16%. Certain investments are subject to an interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable.
(6)
Equity investments are non-income-producing unless otherwise noted.
(7)
All investments domiciled in the United States unless otherwise noted.
(8)
Positions that have a SOFR reference rate, from time to time have an additional spread adjustment. This spread adjustment ranges from 0% - 0.26% depending on the contractual arrangement. These spread adjustments have been included in the all-in rate shown.
(9)
Ownership of this investment is through a wholly-owned subsidiary.
(10)
Investment is on non-accrual status.
(11)
Affiliated Investments generally are defined by the Investment Company Act as investments in portfolio companies in which the Company owns between 5% and 25% of the voting securities. Unless otherwise noted, investments in portfolio companies are non-control/non-affiliated investments.
(12)
During the fourth quarter of 2023, the Company received as part of a restructuring of Kent Water Sports Holdings, LLC, preferred and common shares which resulted in the portfolio company being classified as an affiliated investment. During the fourth quarter of 2023 a realized loss of $4.2 million was recognized by the Company in conjunction with the restructuring. Subsequent to classification as an affiliated investment, there have been no material changes to the investment’s principal balance, fair value or related income statement activity.

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

 

 

At December 31, 2023

 

 

 

Investments at

 

 

Percentage of

 

Industry

 

Fair Value

 

 

Total Portfolio

 

Consumer Services

 

$

161,594

 

 

 

26.1

%

Diversified Financials

 

 

78,285

 

 

 

12.7

 

Health Care Providers & Services

 

 

69,951

 

 

 

11.3

 

Health Care Equipment & Services

 

 

55,436

 

 

 

9.0

 

Commercial & Professional Services

 

 

40,839

 

 

 

6.6

 

Technology Hardware & Equipment

 

 

40,148

 

 

 

6.5

 

Capital Goods

 

 

35,936

 

 

 

5.8

 

Media

 

 

34,098

 

 

 

5.5

 

Industrials

 

 

28,537

 

 

 

4.6

 

Health Care Technology

 

 

26,477

 

 

 

4.3

 

Consumer Durables & Apparel

 

 

26,180

 

 

 

4.2

 

Software & Services

 

 

21,095

 

 

 

3.4

 

 

 

$

618,576

 

 

 

100

%

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

11


COMMONWEALTH CREDIT PARTNERS BDC I, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

September 30, 2021March 31, 2024

(Unaudited)

Note 1—Organization

Note 1 - Organization

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

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

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

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

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

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

Note 2 - 2—Summary of Significant Accounting Policies

Basis of Presentation

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

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

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

12


statements do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications consisting solely of normal accruals that are necessary for the fair presentation of financial results as of and for the periods presented. The Company is an investment companyunaudited interim consolidated financial statements and accordingly applies specific accountingnotes thereto should be read in conjunction with the financial statements and financial reporting requirements under Financial Accounting Standards Board (“FASB”notes thereto in the Company’s Form 10-K for the year ended December 31, 2023, as filed with the U.S. Securities and Exchange Commission (the “SEC”) Accounting Standards Topic 946, Financial Services-Investment Companies..

Use of Estimates

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

Valuation of Portfolio Investments

The CompanyInvestment Adviser applies fair value accounting in accordance with GAAP. Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments are reflected on the Company’s StatementConsolidated Statements of Assets and Liabilities at fair value, with changes in unrealized gains and losses resulting from changes in fair value reflected in the Company’s Consolidated Statements of Operations as “Net change in unrealized gains (losses) of investments” and realizations of portfolio investments reflected in the Company’s Consolidated Statements of Operations as “Net realized gains (losses) on investments”.

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

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

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

1)

Investments for which market quotations are readily available on an exchange are valued at such market quotations based on the closing price indicated from independent pricing services.

2)

Investments for which indicative prices are obtained from various pricing services and/or brokers or dealers are valued through a multi-step valuation process, as described below, to determine whether the quote(s) obtained is representative of fair value in accordance with GAAP.

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

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

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

ii) Investments for which one quote is received from a pricing service are validated by the Valuation Agent, in consultation with the investment professionals of the Investment Adviser. The personnel of the Valuation Agent, in consultation with the investment professionals of the Investment Adviser, analyze the market quotes obtained using an array of valuation methods (further described below) to validate the fair value. For assets where a

13


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

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

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

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

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

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

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

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

Investment Classification

The Company classifies its investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, “Control” is defined as the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company. In addition, in accordance with Section 2(a)(9) of the 1940 Act, any person who owns beneficially, either directly or through one or more controlled companies, more than 25% of the voting securities of a company shall be presumed to control such company. Any person who does not so own more than 25% of the voting securities of any company shall be presumed not to control such company. Any person who does not so own more than 25% of the voting securities of any company and/or does not have the power to exercise control over the management or policies of such portfolio company shall be presumed not to control such company. Consistent with the 1940 Act, “Affiliated Investments” are defined as those investments in companies in which the Company owns 5% or more of the voting securities. Consistent with the 1940 Act, “Non-affiliated Investments” are defined as investments that are neither Control Investments nor Affiliated Investments. As of March 31, 2024 and as of December 31, 2023, the Company did not “control” and was not an “affiliated person” of any of its portfolio companies, each as defined in the 1940 Act except as noted as of March 31, 2024 and December 31, 2023 in the consolidated schedule of investments.

14


Cash and Cash Equivalents

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

The Company considers all highly liquid investments with a maturity of three months or less, when acquired, to be cash equivalents. As of March 31, 2024 and December 31, 2023, the Company held cash and cash equivalents in the form of money market fund shares held in First American Government Obligations Fund with a fair value of $3.7 million and $2.5 million, respectively, representing 0.68% and 0.68%, respectively, of the Company’s net assets. Cash equivalents in the form of money market fund shares are valued at their reported net asset value (generally $1 per share) on the measurement date and are categorized within Level 1 of the fair value hierarchy under ASC 820, as inputs in the valuation are observable.

Organizational Expenses and Offering Costs

Organizational expenses consist of costs incurred to establish the Company and enable it legally to do business. Organization costs are expensed as incurred. Offering costs consist of costs incurred in connection with the offering of Common Stock of the Company. Offering costs are capitalized as a deferred charge and amortized to expense on a straight-line basis over 12 months from the inception date. There were no organizational or offering costs for the three months ended March 31, 2024 and 2023. As of March 31, 2024 and December 31, 2023, no offering costs were deferred.

The Company bears the organizational expenses and offering costs incurred in connection with the formation of the Company and the offering of shares of its Common Stock, including the out-of-pocket expenses of the Investment Adviser and its agents and affiliates. In addition, the Company reimburses the Investment Adviser for the organizational expenses and offering costs it incurs on the Company’s behalf. For the period from the Inception Date through March 31, 2024, the Company had incurred $0.48 million of organizational costs. If actual organizational expenses and offering costs incurred exceed $0.75 million, the Investment Adviser or its affiliate bear the excess costs.

Deferred Financing Costs

Financing costs incurred in connection with the Company’s credit facilities are capitalized and amortized into expense using the straight-line method, which approximates the effective yield method over the life of the respective facility. See Note 6—Borrowings.

Revenue Recognition

Interest Income

Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discount and premium on investments purchased are accreted/amortized over the expected life of the respective investment using the effective yield method. Loan origination fees, original issue discount (“OID”) and market discounts or premiums are capitalized and amortized into interest income using the effective interest method. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income. The Company may have loans in its portfolio that contain a payment-in-kind ("PIK") interest provision. PIK interest is accrued and recorded as income at the contractual rates, if deemed collectible. The PIK interest is added to the principal balance on the capitalization date and is generally due at maturity or when deemed by the issuer. For the three months ended March 31, 2024 and 2023, the Company recognized PIK interest from investments of $31 thousand and $244 thousand, respectively, which is included in Interest Income on the Consolidated Statements of Operations.

Fee Income

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

Non-accrual

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

15


depending upon management’s judgment of the ultimate outcome. Non-accrual investments are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current.

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

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

Income Taxes

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

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

Recent Accounting Standards Update

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023 and interim period within fiscal years beginning after December 15, 2024. The Company does not expect this guidance to impact its consolidated financial statements.

Note 3—Fair Value of Financial Instruments

Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosure (“ASC 820”) establishes a fair value hierarchy that prioritizes and ranks the inputs to valuation techniques used in measuring investments at fair value. The hierarchy classifies the inputs used in measuring fair value into three levels as follows:

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

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

16


each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.

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

The following table presents fair value measurements of investments, by major class, as of March 31, 2024, according to the fair value hierarchy:

 

 

Fair Value Measurements

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Totals

 

First Lien Senior Secured

 

$

 

 

$

 

 

$

628,252

 

 

$

628,252

 

Equity

 

 

 

 

 

 

 

 

9,239

 

 

 

9,239

 

Total

 

$

 

 

$

 

 

$

637,491

 

 

$

637,491

 

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

 

 

Fair Value Measurements

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Totals

 

First Lien Senior Secured

 

$

 

 

$

 

 

$

612,403

 

 

$

612,403

 

Equity

 

 

 

 

 

 

 

 

6,173

 

 

 

6,173

 

Total

 

$

 

 

$

 

 

$

618,576

 

 

$

618,576

 

17


The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three months ended March 31, 2024:

 

 

First Lien
Senior
Secured

 

 

Equity

 

 

Total

 

Balance as of December 31, 2023

 

$

612,403

 

 

$

6,173

 

 

$

618,576

 

Purchases and other adjustments to cost

 

 

31,190

 

 

 

485

 

 

 

31,675

 

Sales and repayments

 

 

(10,136

)

 

 

 

 

 

(10,136

)

Transfers in (a)

 

 

16,555

 

 

 

2,908

 

 

 

19,463

 

Transfers out (a)

 

 

(19,463

)

 

 

 

 

 

(19,463

)

Net realized gain/(loss) on investments

 

 

(6,319

)

 

 

 

 

 

(6,319

)

Net change in unrealized gain/(loss) on investments

 

 

3,132

 

 

 

(327

)

 

 

2,805

 

Net accretion of discount on investments

 

 

890

 

 

 

 

 

 

890

 

Balance as of March 31, 2024

 

$

628,252

 

 

$

9,239

 

 

$

637,491

 

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

 

$

3,132

 

 

$

(327

)

 

$

2,805

 

(a) During the three months ended March 31, 2024, there was a transfer from senior secured debt to equity as a result of an investment restructuring, in which $9.3 million of senior secured debt was exchanged for equity with a fair market value of $2.9 million.

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

 

 

First Lien
Senior
Secured

 

 

Equity

 

 

Total

 

Balance as of December 31, 2022

 

$

352,041

 

 

$

3,193

 

 

$

355,234

 

Purchases and other adjustments to cost

 

 

175,056

 

 

 

3,243

 

 

 

178,299

 

Sales and repayments

 

 

(2,998

)

 

 

-

 

 

 

(2,998

)

Net realized gains

 

 

-

 

 

 

-

 

 

 

 

Net change in unrealized gain/(loss) on investments

 

 

(1,638

)

 

 

(160

)

 

 

(1,798

)

Net accretion of discount on investments

 

 

587

 

 

 

-

 

 

 

587

 

Balance as of March 31, 2023

 

$

523,048

 

 

$

6,276

 

 

$

529,324

 

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

 

$

(1,638

)

 

$

(160

)

 

$

(1,798

)

Purchases represent the acquisition of new investments at cost. Sales and repayments represent principal payments received during the period. For the three months ended March 31, 2024 and 2023, there were no transfers between levels of the fair value hierarchy.

Significant Unobservable Inputs

The following table summarizes the significant unobservable inputs used to value Level 3 investments as of March 31, 2024. The table is not intended to be all-inclusive, but instead identifies the significant unobservable inputs relevant to the determination of fair values.

 

 

 

 

 

 

 

 

 

Selected Input Range

 

 

Asset Category

 

Fair Value

 

 

Primary Valuation
Technique

 

Unobservable
Inputs

 

Minimum

 

Maximum

 

Weighted
Average (a)

First Lien Senior Secured

 

$

597,898

 

 

Discounted Cash Flow

 

Discount Rate

 

8.5%

 

19.8%

 

11.9%

First Lien Senior Secured

 

 

30,354

 

 

Market Comparables

 

EBITDA Multiple

 

6.0x

 

12.0x

 

9.8x

Equity

 

 

521

 

 

Market Comparables

 

Revenue Multiple

 

2.4x

 

2.6x

 

2.5x

Equity

 

 

8,718

 

 

Market Comparables

 

EBITDA Multiple

 

5.5x

 

15.8x

 

11.0x

Total

 

$

637,491

 

 

 

 

 

 

 

 

 

 

 

18


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

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

 

 

 

 

 

 

 

 

 

Selected Input Range

 

 

Asset Category

 

Fair Value

 

 

Primary Valuation
Technique

 

Unobservable
Inputs

 

Minimum

 

Maximum

 

Weighted
Average (a)

First Lien Senior Secured

 

$

600,565

 

 

Discounted Cash Flow

 

Discount Rate

 

9.2%

 

19.9%

 

12.4%

First Lien Senior Secured

 

 

11,838

 

 

Market Comparables

 

EBITDA Multiple

 

6.0x

 

8.0x

 

7.0x

Equity

 

 

498

 

 

Market Comparables

 

Revenue Multiple

 

2.3x

 

2.5x

 

2.4x

Equity

 

 

5,675

 

 

Market Comparables

 

EBITDA Multiple

 

5.5x

 

15.5x

 

10.3x

Total

 

$

618,576

 

 

 

 

 

 

 

 

 

 

 

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

There were no significant changes in valuation approach or technique as of March 31, 2024 and December 31, 2023.

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

The income and market approaches were used in the determination of fair value of certain Level 3 assets as of March 31, 2024 and December 31, 2023. The significant unobservable inputs used in the income approach are the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments and any other end of term fees, as applicable. Included in the consideration and selection of discount rates are factors such as risk of default, interest rate risk, and changes in credit quality. The significant unobservable inputs used in the market approach are based on market comparable transactions and market multiples of publicly traded comparable companies. Increases or decreases in the valuation multiples in isolation may result in higher or lower fair value measurement, respectively, and increases or decreases in the discount rate in isolation may result in lower or higher fair value measurement, respectively.

As of March 31, 2024, the Company has two portfolio companies on a non-accrual status with a total cost of $36,954 and total market value of $33,262. As of December 31, 2023, the Company had two portfolio companies on a non-accrual status with a total cost of $41,970 and total market value of $34,501. Refer to Note 2 -Summary of Significant Accounting Policies—for additional details regarding the Company’s non-accrual policy.

For discussion of the fair value measurement of the Company’s borrowings, refer to Note 6—Borrowings.

Note 4—Related Party Transactions

Investment Advisory Agreement

On June 29, 2023, the Company entered into an amended and restated investment advisory and management agreement (the “Amended and Restated Investment Advisory Agreement”) with the Investment Adviser, following the approval of the Amended and Restated Investment Advisory Agreement by the Company’s stockholders by unanimous written consent on June 29, 2023. The terms of the Amended and Restated Investment Advisory Agreement became effective on July 1, 2023 and did not impact Management Fees (as defined below) paid in prior periods. The Amended and Restated Investment Advisory Agreement, among other things, clarified the methodology for calculating the Management Fee payable to the Investment Adviser during and after the Investment Period (as defined in the Amended and Restated Investment Advisory Agreement).

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

Operating Advisory Group, LLC (“OAG”), is a consulting firm that exclusively provides management consulting services, substantially all of which are provided to portfolio companies of Comvest Partners’ affiliated funds investing in a control equity strategy. The Company also engages OAG to provide assistance with certain discrete diligence and other matters in connection with the Company’s investing activities. For the three months ended March 31, 2024 and 2023, OAG charged $4 thousand and $0,

19


respectively, for due diligence services which were paid by portfolio companies of the Company. In addition, for the three months ended March 31, 2024 and 2023, OAG charged the Company $0 and $7 thousand, respectively, for diligence expenses which were paid by the Company. While neither the Company nor any of its affiliates or personnel own or share in any portion of the economics received by OAG, an affiliate of the Investment Adviser has been granted an option to acquire the shares of OAG’s parent company at a nominal value.

Management Fee

During the Investment Period, the Management Fee is calculated at an annual rate of 1.00% with respect to the Company’s Adjusted Average Assets Invested (defined below) in respect of the relevant quarterly period, in the manner set forth in the table below. During the Investment Period, “Adjusted Average Assets Invested” shall mean (a) the average of the sum of the Company’s (i) Drawn Capital Commitments, (ii) the aggregate dollar amount of distributions issued to stockholders in-kind pursuant to the Company’s dividend reinvestment plan (“DRIP”) as of the latest declaration date of any such distribution, excluding any amounts of such distribution received in cash by stockholders that have opted out of the DRIP, and (iii) outstanding principal on borrowings, in the case of clause (i) and clause (iii), as of the last business day of each month included in the relevant quarterly period less (b) the sum of the Company’s (iv) cumulative net unrealized losses, if any, and (v) cumulative net realized losses, if any, in the case of clause (iv) and clause (v), as of the last business day of the relevant quarter. For the avoidance of doubt, the quarterly Management Fees payable to the Investment Adviser are specifically set forth below.

After the Investment Period, the Management Fee will be calculated at an annual rate of 1.00% with respect to the Company’s Adjusted Average Assets Invested, except that after the Investment Period, “Adjusted Average Assets Invested” shall mean (a) the fair value of the Company’s investments, as of the last business day of each month included in the relevant quarterly period less (b) the sum of the Company’s cumulative net realized and unrealized losses, if any, as of the last business day of the relevant quarter.

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

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

Quarter Ending

 

Quarter

 

 

Target Adjusted
Average Assets
Invested ($in
millions)
1

 

 

Quarterly
Management Fee
Percentage

 

 

Quarterly Dollar
Amount ($in
millions)
2

 

September 30, 2021

 

 

1

 

 

$

80

 

 

 

1

%

 

$

0.20

 

December 31, 2021

 

 

2

 

 

$

160

 

 

 

1

%

 

$

0.40

 

March 31, 2022

 

 

3

 

 

$

240

 

 

 

1

%

 

$

0.60

 

June 30, 2022

 

 

4

 

 

$

320

 

 

 

1

%

 

$

0.80

 

September 30, 2022

 

 

5

 

 

$

400

 

 

 

1

%

 

$

1.00

 

December 31, 2022

 

 

6

 

 

$

480

 

 

 

1

%

 

$

1.20

 

March 31, 2023

 

 

7

 

 

$

560

 

 

 

1

%

 

$

1.40

 

June 30, 2023

 

 

8

 

 

$

640

 

 

 

1

%

 

$

1.60

 

September 30, 2023

 

 

9

 

 

$

650

 

 

 

1

%

 

$

1.625

 

December 31, 2023

 

 

10

 

 

$

650

 

 

 

1

%

 

$

1.625

 

March 31, 2024

 

 

11

 

 

$

726

 

 

 

1

%

 

$

1.82

 

June 30, 2024

 

12 and beyond 3

 

 

$

740

 

 

 

1

%

 

$

1.85

 

(1)
In accordance with the underlying agreement, the Management Fee paid at the end of any quarter shall be calculated based on the lower of the actual Adjusted Average Assets Invested in respect of the quarter and the target Adjusted Average Assets Invested for that quarter. The target Adjusted Average Assets have been increased to include amounts from the DRIP program not received in cash and will continue to increase beyond the period provided for in the schedule above.
(2)
Reflects dollar amount of Management Fees payable for the applicable quarter based on the Company’s target Adjusted Average Assets Invested as of the end of such quarter.
(3)
Reflects the Management Fee payable beginning in quarter 12 and extending through the end of the Investment Period.

20


For the three months ended March 31, 2024, the Company incurred $1.57 million in Management Fees under the Amended and Restated Investment Advisory Agreement. For the three months ended March 31, 2023, the Company incurred $1.13 million in Management Fees under the Investment Advisory Agreement.

There were no management fee waivers for the three months ended March 31, 2024 and 2023.

Incentive Fee

If, as of the last day of the relevant quarter, the Company’s Total Return (as defined below) in respect of the relevant Measurement Period (as defined below) equals or exceeds the “Hurdle Amount” (as defined below), which represents an annualized total return of 7.25%, the Investment Adviser will be paid an Incentive Fee calculated at an annual rate of 0.25% (0.0625% per quarter) with respect to the Company’s Incentive Fee Average Assets Invested (as defined below) on a cumulative basis for the Measurement Period less the aggregate amount of any previously paid Incentive Fees with respect to the Measurement Period.

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

“Total Return” means the sum of the Company’s net investment income with legal and other expenses incurred in connection with the Company’s formation and organization and the offering of its shares (“Organizational Expenses”) amortized ratably over a three-year period for the purposes of this calculation) in respect of the relevant Measurement Period and the Company’s realized and unrealized capital gains less realized and unrealized capital losses in respect of the relevant Measurement Period.

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

“Hurdle Amount” means 7.25% times the average of the “Drawn Capital Commitments” (as defined below) and the aggregate dollar amount of distributions issued to stockholders in-kind pursuant to the Company’s DRIP, less return of capital distributions for each quarter during the Measurement Period, (i) multiplied by the number of quarters in the Measurement Period, and (ii) divided by (4) four.

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

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

“Incentive Fee Average Assets Invested” during the Investment Period means (a) the average of the sum of the Company’s (i) Drawn Capital Commitments and (ii) the aggregate dollar amount of distributions issued to stockholders in-kind pursuant to the Company’s DRIP as of the latest declaration date of any such distribution, excluding any amounts of such distribution received in cash by stockholders that have opted out of the DRIP, and (iii) outstanding principal on borrowings, in the case of clause (i) and (iii), as of the last business day of each month included in the Measurement Period less (b) the Company’s net realized and unrealized losses, if any. After the Investment Period Incentive Fee Average Assets Invested means (a) the fair value of the Company’s investments, as of the last business day of each month included in the relevant quarterly period less (b) the sum of the Company’s cumulative net realized and unrealized losses, if any, as of the last business day of the relevant quarter.

For the three months ended March 31, 2024, the Company incurred $393 thousand in incentive fees under the Amended and Restated Investment Advisory Agreement. For the three months ended March 31, 2023, the Company did not incur incentive fees under the Investment Advisory Agreement.

There were no incentive fee waivers for the three months ended March 31, 2024.

21


Administration Agreement

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

The Administrator has hired a third-party sub-administrator (the "Sub-Administrator") to assist with the provision of administration services. For the three months ended March 31, 2024 and 2023, the Company incurred $0.08 million and $0.07 million, respectively, in administrative service fees under the administration agreement, payable to the Sub-Administrator. Administration service fees are included in other general and administrative expenses on the Statements of Operations.

Co-Investment Relief

The 1940 Act generally prohibits BDCs from entering into negotiated co-investments with affiliates absent an order from the SEC. On August 2, 2021, the SEC granted the Company exemptive relief (the “Order”) that allows it to enter into certain negotiated co-investment transactions alongside other funds managed by the Adviser or its affiliates (“Affiliated Funds”) in a manner consistent with its investment objective, positions, policies, strategies, and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with the conditions of the Order. Pursuant to the Order, the Company is permitted to co-invest with its affiliates if, among other things, a “required majority” (as defined in Section 57(o) of the 1940 Act) of the Company’s Independent Directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to the Company and the Company’s stockholders and do not involve overreaching in respect of the Company or the Company’s stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of the Company’s stockholders and is consistent with the Company’s investment objective and strategies. On August 16, 2023, the Company filed an application for an order to amend the Order pursuant to Sections 17(d) and 57(i) of the 1940 Act and Rule 17d-1 thereunder, permitting certain joint transactions otherwise prohibited by Sections 17(d) and 57(a)(4) of the 1940 Act.

Note 5—Transactions with Affiliated Investments

An affiliated investment is an investment in which the Company has an ownership interest of 5% or more of its voting securities. A controlled affiliate investment is an investment which the Company has an ownership interest of more than 25% of its voting securities. Please see the Company's consolidated schedule of investments for the type of investment, principal amount/ shares, interest rate including the spread, and the maturity date. Transactions related to the Company's investments with affiliates for the three months ended March 31, 2024 were as follows:

Portfolio Company

 

Type of Asset

 

Amount of interest included in income

 

 

Beginning Fair Value at December 31, 2023

 

 

Gross additions*

 

 

Gross reductions**

 

 

Realized Gain/(Loss)

 

 

Change in Unrealized Gain (Loss)

 

 

Fair Value at March 31, 2024

 

 

Affiliate company investment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kent Water Sports Holdings, LLC - Delayed Draw Loan Last-Out

 

First Lien Senior Secured

 

$

-

 

 

$

8,176

 

 

$

80

 

 

$

-

 

 

$

-

 

 

$

(1,999

)

 

$

6,257

 

 

Kent Water Sports Holdings, LLC - Delayed Draw Loan First-Out

 

First Lien Senior Secured

 

 

-

 

 

 

3,662

 

 

 

1,163

 

 

 

-

 

 

 

-

 

 

 

392

 

 

 

5,217

 

 

Kent Water Sports Holdings, LLC

 

Preferred Equity

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

Kent Water Sports Holdings, LLC

 

Common Equity

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

Total Affiliate Investments

 

 

 

$

-

 

 

$

11,838

 

 

$

1,243

 

 

$

-

 

 

$

-

 

 

$

(1,607

)

 

$

11,474

 

 

* Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest or dividends, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities, and the movement of an existing portfolio company into this category from a different category.

22


** Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities, and the movement of an existing portfolio company out of this category into a different category.

Note 6—Borrowings

Goldman Credit Facility

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

The Goldman Credit Facility is uncommitted and matures on the earlier of (i) the date on which either the Company or lender provide written notice of termination to the other party and (ii) the date that is 30 days prior to the last date on which the Company may issue capital drawdowns to its investors. Under the Goldman Credit Facility, the Company is permitted to borrow up to the lesser of $130 million and the Borrowing Base. The “Borrowing Base” is based upon the unfunded capital commitments of certain subscribed investors in the Company that have been approved by Goldman Sachs and meet certain criteria. The advance rate for such investors is currently 90%. The "Borrowing Base" was $130 million at March 31, 2024. The Goldman Credit Facility contains certain customary affirmative and negative covenants and events of default. The Goldman Credit Facility bears interest at a rate of Term SOFR + 2.82% per weighted average annualized interest cost annum.

The weighted average annualized interest cost for all borrowings for the three months ended March 31, 2024 and 2023 was 8.14% and 7.37%, respectively. The average daily debt outstanding for the three months ended March 31, 2024 and 2023 was $100.9 million and $42.6 million, respectively. The maximum debt outstanding for the three months ended March 31, 2024 and 2023 was $109.8 million and $101.5 million, respectively.

The following table represents borrowings as of March 31, 2024:

 

 

Total Aggregate
Borrowing Capacity

 

 

Total Principal
Outstanding

 

 

Less Deferred
Financing Costs

 

 

Amount per Statements of
Assets and Liabilities

 

Goldman Credit Facility

 

$

130,000

 

 

$

109,800

 

 

$

42

 

 

$

109,758

 

Total

 

$

130,000

 

 

$

109,800

 

 

$

42

 

 

$

109,758

 

The following table represents borrowings as of December 31, 2023:

 

 

Total Aggregate
Borrowing Capacity

 

 

Total Principal
Outstanding

 

 

Less Deferred
Financing Costs

 

 

Amount per Statements of
Assets and Liabilities

 

Goldman Credit Facility

 

$

130,000

 

 

$

100,800

 

 

$

50

 

 

$

100,750

 

Total

 

$

130,000

 

 

$

100,800

 

 

$

50

 

 

$

100,750

 

The following table represents interest and debt fees for the three months ended March 31, 2024:

 

 

For the three months ended March 31, 2024

 

 

 

Interest Rate(2)

 

Interest
Expense

 

 

Deferred
Financing
Costs
(1)

 

 

Other Fees(1)

 

Goldman Credit Facility

 

SOFR + 2.82%

 

$

2,080

 

 

$

8

 

 

$

32

 

Total

 

 

 

$

2,080

 

 

$

8

 

 

$

32

 

(1)
Amortization of deferred financing costs and other fees are included in interest expense on the Consolidated Statements of Operations.
(2)
As of March 31, 2024, the 1-month SOFR rate was 5.33%.

23


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

 

 

For the three months ended March 31, 2023

 

 

 

Interest Rate(2)

 

Interest
Expense

 

 

Deferred
Financing
Costs
(1)

 

 

Other Fees(1)

 

Goldman Credit Facility

 

SOFR + 2.82%

 

$

785

 

 

$

8

 

 

$

32

 

Total

 

 

 

$

785

 

 

$

8

 

 

$

32

 

(1)
Amortization of deferred financing costs and other fees are included in interest expense on the Consolidated Statements of Operations.
(2)
As of March 31, 2023, the 1-month SOFR rate was 4.81%.

At March 31, 2024 and December 31, 2023, the carrying amount of the Company’s secured borrowings approximated their fair value in accordance with ASC 820. As of March 31, 2024 and December 31, 2023, the Company’s borrowings would be deemed to be Level 3, as defined in Note 3—Fair Value of Financial Instruments.

Note 7—Commitments and Contingencies

Commitments

In the ordinary course of business, the Company may enter into future funding commitments. As of March 31, 2024 and December 31, 2023, the Company had unfunded commitments on delayed draw term loans and revolving credit lines of $58.5 million and $58.4 million, respectively. The Company maintains sufficient cash on hand, unfunded Capital Commitments, and available borrowings from the Goldman Credit Facility to fund such unfunded commitments.

24


As of March 31, 2024, the Company’s unfunded commitments consisted of the following:

Portfolio Company Name

 

Investment Type

 

Commitment Type

 

Unfunded
Commitments

 

190 Octane Financing

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

$

468

 

ACT Acquisition

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

254

 

ACT Acquisition

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

774

 

Aurora Solutions LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

766

 

Batteries Plus Holding Corporation

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

2,157

 

Billhighway

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

557

 

Billhighway

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

295

 

BKH

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,136

 

Cardiovascular Logistics

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

4,732

 

CheckedUp

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

509

 

CheckedUp

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,414

 

CreditAssociates, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,167

 

Discovery

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

363

 

Discovery

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,814

 

Discovery

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

363

 

Educators Publishing Service

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,774

 

Fiesta Holdings

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

923

 

Firebirds

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

864

 

Firebirds

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,382

 

Hasa

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

870

 

Hasa

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,616

 

Kemper Sports Management

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,676

 

Kemper Sports Management

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

983

 

Kent Water Sports

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

448

 

MerchantWise Solutions, LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

403

 

Mollie Funding II LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

576

 

Mollie Funding II LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

303

 

Narcote, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

218

 

Nuspire, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

879

 

Oak Dental

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

7,334

 

Oak Dental

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

516

 

OAO Acquisitions

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,317

 

OAO Acquisitions

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

659

 

OneCare Media, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

2,056

 

PJW Ultimate Holdings LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,647

 

Planet DDS

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

435

 

Raven Engineered Films, Inc.

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

3,318

 

Rushmore Intermediate

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

581

 

Rushmore Intermediate

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

538

 

Senior Helpers

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,839

 

VardimanBlack Holdings LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,317

 

Vecta Environmental Services

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

371

 

Vecta Environmental Services

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,473

 

West Creek Financial SPV

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,203

 

Wilnat, Inc.

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,235

 

Total

 

 

 

 

 

$

58,523

 

25


As of December 31, 2023, the Company’s unfunded commitments consisted of the following:

Portfolio Company Name

 

Investment Type

 

Commitment Type

 

Unfunded
Commitments

 

190 Octane Financing

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

$

571

 

ACT Acquisition

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,703

 

ACT Acquisition

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

774

 

Aurora Solutions LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

766

 

Batteries Plus Holding Corporation

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

2,158

 

BKH

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,136

 

Cardiovascular Logistics

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

4,733

 

CreditAssociates, LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,167

 

CheckedUp

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,753

 

CheckedUp

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

264

 

Educators Publishing Service

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,774

 

Fiesta Holdings

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

923

 

Firebirds

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,382

 

Firebirds

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

691

 

Hasa

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,616

 

Hasa

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,367

 

Kemper Sports Management

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

983

 

Kemper Sports Management

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,676

 

MerchantWise Solutions, LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

403

 

MerchantWise Solutions, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,311

 

Mollie Funding II LLC

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

576

 

Mollie Funding II LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

910

 

Narcote, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

218

 

National Debt Relief

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

2,189

 

Nuspire, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

879

 

Oak Dental

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

7,334

 

Oak Dental

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

516

 

OAO Acquisitions

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,317

 

OAO Acquisitions

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

659

 

OneCare Media, LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

2,056

 

PJW Ultimate Holdings LLC

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,647

 

Planet DDS

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

756

 

Raven Engineered Films, Inc.

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

3,770

 

Rushmore Intermediate

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

175

 

Rushmore Intermediate

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,344

 

Vecta Environmental Services

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

2,473

 

Vecta Environmental Services

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

618

 

Venu+

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

369

 

West Creek Financial SPV

 

 First Lien Senior Secured

 

 Delayed Draw Loan

 

 

1,203

 

Wilnat, Inc.

 

 First Lien Senior Secured

 

 Revolving Credit Line

 

 

1,235

 

 Total

 

 

 

 

 

$

58,395

 

The unrealized appreciation or depreciation associated with unfunded portfolio company commitments is recorded in the financial statements and reflected as an adjustment to the valuation of the related security in the Consolidated Schedule of Investments as of March 31, 2024 and December 31, 2023. The par amount of the unfunded portfolio company commitments is not recognized by the Company until the commitment is funded.

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

26


Litigation and Regulatory Matters

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

Indemnifications

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

Note 8—Capital

Investor Commitments

As of March 31, 2024, the Company has $656.6 million in Capital Commitments, of which $186.6 million, were unfunded. As of December 31, 2023 the Company had $656.6 million in Capital Commitments, of which $186.6 million, were unfunded.

Capital Drawdowns

There were no shares issued related to capital drawdowns for the three months ended March 31, 2024.

The following table summarizes the total shares issued and net proceeds (in thousands) through the DRIP for the three months ended March 31, 2024:

Share Issue Date

 

Shares Issued

 

 

Net Proceeds

 

March 28, 2024

 

 

13,657

 

 

$

13,139

 

Total Shares Issued

 

 

13,657

 

 

$

13,139

 

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

Share Issue Date

 

Shares Issued

 

 

Net Proceeds Received

 

February 24, 2023

 

 

87,145

 

 

$

85,000

 

Total Shares Issued

 

 

87,145

 

 

$

85,000

 

The following table summarizes the total shares and net proceeds (in thousands) issued through the DRIP for the three months ended March 31, 2023:

Share Issue Date

 

Shares Issued

 

 

Net Proceeds

 

March 28, 2023

 

 

10,772

 

 

$

10,507

 

Total Shares Issued

 

 

10,772

 

 

$

10,507

 

As of March 31, 2024 and December 31, 2023, 5,615 and 5,479, respectively, of the Company’s common shares were owned by Comvest Group Holdings SPV II LLC, a wholly owned subsidiary of an affiliate of Comvest Partners.

Distributions and Dividends

Distributions declared for the three months ended March 31, 2024 and 2023 totaled approximately $13.1 million and $10.5 million, respectively.

The following table reflects distributions declared, per share that have been declared by our Board for the three months ended March 31, 2024:

Date Declared

 

Record Date

 

Payment Date

 

Per Share Amount

 

March 28, 2024

 

March 28, 2024

 

March 28, 2024

 

$

24.00

 

27


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

Date Declared

 

Record Date

 

Payment Date

 

Per Share Amount

 

March 27, 2023

 

March 27, 2023

 

March 28, 2023

 

$

22.80

 

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

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

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

Note 9—Net Assets

The following table reflects the net assets activity for the three months ended March 31, 2024:

 

 

Common
stock-shares

 

 

Common
stock-par

 

 

Additional
paid in
capital

 

 

Total
distributable
earnings
(loss)

 

 

Total net
assets

 

Balance as of December 31, 2023

 

 

547,439

 

 

$

1

 

 

$

536,354

 

 

$

(9,697

)

 

$

526,658

 

Issuance of common stock, net of issuance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reinvestment of distributions (1)

 

 

13,657

 

 

 

 

 

 

13,139

 

 

 

 

 

 

13,139

 

Distributions to stockholders

 

 

 

 

 

 

 

 

 

 

 

(13,139

)

 

 

(13,139

)

Net investment income (loss)

 

 

 

 

 

 

 

 

 

 

 

14,997

 

 

 

14,997

 

Net realized gain (loss) from investment transactions

 

 

 

 

 

 

 

 

 

 

 

(6,319

)

 

 

(6,319

)

Net change in unrealized gain (loss) on investments

 

 

 

 

 

 

 

 

 

 

 

2,805

 

 

 

2,805

 

Balance as of March 31, 2024

 

 

561,096

 

 

$

1

 

 

$

549,493

 

 

$

(11,353

)

 

$

538,141

 

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

 

 

Common
stock-shares

 

 

Common
stock-par

 

 

Additional
paid in
capital

 

 

Total
distributable
earnings
(loss)

 

 

Total net
assets

 

Balance as of December 31, 2022

 

 

373,705

 

 

$

 

 

$

372,367

 

 

$

(7,859

)

 

$

364,508

 

Issuance of common stock, net of issuance costs

 

 

87,145

 

 

 

 

 

 

85,000

 

 

 

 

 

 

85,000

 

Reinvestment of distributions (1)

 

 

10,772

 

 

 

 

 

 

10,507

 

 

 

 

 

 

10,507

 

Distributions to stockholders

 

 

 

 

 

 

 

 

 

 

 

(10,507

)

 

 

(10,507

)

Net investment income (loss)

 

 

 

 

 

 

 

 

 

 

 

11,708

 

 

 

11,708

 

Net realized gain (loss) from investment transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in unrealized gain (loss) on investments

 

 

 

 

 

 

 

 

 

 

 

(1,798

)

 

 

(1,798

)

Balance as of March 31, 2023

 

 

471,622

 

 

$

 

 

$

467,874

 

 

$

(8,456

)

 

$

459,418

 

(1)
Less than $1.

28


Note 10—Earnings Per Share

Basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of shares outstanding during the period. Other potentially dilutive shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The following information sets forth the computation of the weighted average basic and diluted net change in net assets per share resulting from operations for the three months ended March 31, 2024, as well as the three months ended March 31, 2023.

 

 

For the Three Months Ended

 

 

 

 

March 31, 2024

 

 

March 31, 2023

 

 

Net increase (decrease) in net assets resulting from operations

 

$

11,483

 

 

$

9,910

 

 

Weighted average shares of common stock outstanding—basic and diluted

 

 

548,039

 

 

 

409,042

 

 

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

 

$

20.95

 

 

$

24.23

 

 

Note 11—Financial Highlights

The following is a schedule of financial highlights for the three months ended March 31, 2024 and 2023:

 

 

For the Three Months Ended

 

 

 

March 31, 2024

 

 

March 31, 2023

 

Per Common Share Operating Performance

 

 

 

 

 

 

Net Asset Value, Beginning of Period

 

$

962.04

 

 

$

975.39

 

Results of Operations: (1)

 

 

 

 

 

 

Net Investment Income (Loss)

 

 

27.36

 

 

 

28.62

 

Net Realized and Unrealized Gain (Loss) on Investments

 

 

(6.31

)

 

 

(7.09

)

Net Increase (Decrease) in Net Assets Resulting from Operations

 

 

21.05

 

 

 

21.53

 

Distributions to Common Stockholders

 

 

 

 

 

 

Distributions from Net Investment Income

 

 

(24.00

)

 

 

(22.80

)

Net Decrease in Net Assets Resulting from Distributions

 

 

(24.00

)

 

 

(22.80

)

Net Asset Value, End of Period

 

$

959.09

 

 

$

974.12

 

Shares Outstanding, End of Period

 

 

561,096

 

 

 

471,622

 

Total Return (3)

 

 

2.18

%

 

 

2.20

%

Net assets, end of period

 

$

538,141

 

 

$

459,418

 

Ratio/Supplemental Data

 

 

 

 

 

 

Weighted-average shares outstanding

 

 

548,039

 

 

 

409,042

 

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

 

 

11.41

%

 

 

11.90

%

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

 

 

11.41

%

 

 

11.90

%

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

 

 

3.53

%

 

 

2.45

%

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

 

 

3.53

%

 

 

2.45

%

Asset Coverage Ratio (6)

 

 

587

%

 

 

687

%

Portfolio turnover rate (4)

 

 

2

%

 

 

1

%

(1)
The per common share data was derived by using weighted average shares outstanding.
(2)
Ratios, excluding nonrecurring expenses, such as organization and offering costs, are annualized.
(3)
Total return is calculated assuming a purchase of shares of common stock at the current net asset value on the first day and a sale at the current net asset value on the last day of the period reported.
(4)
Portfolio turnover rate is calculated using the lesser of year-to-date purchases or sales over the average of the invested assets at fair value. Portfolio turnover rate is not annualized.
(5)
Ratio of total expenses to average net assets is calculated using total operating expenses over average net assets.
(6)
Asset coverage ratio is presented as of March 31, 2024 and as of March 31, 2023.

Note 12 - Subsequent Events

The Company has evaluated subsequent events through the filing of this Form 10-Q and has determined that there have been no subsequent events that require recognition or disclosure in these consolidated financial statements.

29


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

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

Forward Looking Statements

Statements we may make may contain forward-looking statements, that are not historical facts and are based on current expectations, estimates, projections, opinions and/or beliefs of the Company, the Investment Adviser and/or its affiliates (collectively, “Commonwealth”). These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “potential”, “project”, “seek”, “should”, “target”, “will”, “would” or variations of these words and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements for any reason, including the factors set forth in Item 1A.—Risk Factors contained in our annual report on Form 10-K for the year ended December 31, 2023 and in this quarterly report on Form 10-Q.

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

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

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

30


the adequacy of the Company’s cash resources;
risks associated with possible disruptions due to terrorism in the Company’s operations or the economy generally;
the impact of future acquisitions and divestitures;
the Company’s regulatory structure and tax status as a business development company (a “BDC”) and a regulated investment company (a “RIC”);
future changes in laws or regulations and conditions in the Company’s operating areas;
turmoil in Ukraine and Russia, including sanctions related to such turmoil, and the potential for volatility in energy prices and other supply chain issues and any impact on the industries in which we invest; and
the war between Israel and Hamas, which could potentially cause disruptions to portfolio companies located in the Middle East or that have substantial business relationships with companies in the affected region.

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

Overview

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

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

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

Portfolio and Investment Activity

During the three months ended March 31, 2024, we made $31.6 million of investments in new or existing portfolio companies and had $10.1 million in aggregate amount of sales and repayments, resulting in net investments of $21.5 million for the period. The total portfolio of debt investments at fair value consisted of 100% bearing variable interest rates and 0% bearing fixed interest rates.

Our portfolio composition, based on fair value at March 31, 2024 was as follows:

 

 

March 31, 2024

 

 

 

Percentage
of Total
Portfolio

 

 

Weighted Average
Current Yield for
Total Portfolio

 

First Lien Senior Secured

 

 

98.6

%

 

 

12.0

%

Equity

 

 

1.4

%

 

 

 

Total

 

 

100

%

 

 

12.0

%

31


Our portfolio composition, based on fair value at December 31, 2023 was as follows:

 

 

December 31, 2023

 

 

 

Percentage
of Total
Portfolio

 

 

Weighted Average
Current Yield for
Total Portfolio

 

First Lien Senior Secured

 

 

99.0

%

 

 

12.0

%

Equity

 

 

1.0

 

 

 

 

Total

 

 

100.0

%

 

 

12.0

%

The following table shows the asset mix of our new investment fundings for the three months ended March 31, 2024:

 

 

Asset Mix
(In thousands)

 

 

Percentage

 

First Lien Senior Secured

 

$

31,190

 

 

 

98.5

%

Equity

 

 

485

 

 

 

1.5

%

Total

 

$

31,675

 

 

 

100.0

%

Portfolio Asset Quality

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

Loan

Rating

Summary Description

1

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

2

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

3

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

4

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

5

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

6

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

As of March 31, 2024, the weighted average risk rating of our investments based on fair value was 2.4. As of March 31, 2024, the Company had two portfolio companies on non-accrual status. Refer to Note 2—Summary of Significant Accounting Policies—for additional details regarding the Company’s non-accrual policy.

 

 

As of March 31, 2024

 

Internal
Performance
Rating

 

Investments at
Fair Value
(In thousands)

 

 

Percentage
of Total
Investments

 

6

 

$

11,474

 

 

 

1.8

%

5

 

 

21,788

 

 

 

3.4

 

4

 

 

17,486

 

 

 

2.7

 

3

 

 

119,945

 

 

 

18.8

 

2

 

 

466,798

 

 

 

73.3

 

1

 

 

 

 

 

 

Total

 

$

637,491

 

 

 

100.0

%

32


As of December 31, 2023, the weighted average risk rating of our investments based on fair value was 2.4. As of December 31, 2023, the Company had two portfolio companies on non-accrual status. Refer to Note 2—Summary of Significant Accounting Policies—for additional details regarding the Company’s non-accrual policy.

 

 

As of December 31, 2023

 

Internal
Performance
Rating

 

Investments at
Fair Value
(In thousands)

 

 

Percentage
of Total
Investments

 

6

 

$

11,838

 

 

 

1.9

%

5

 

 

22,663

 

 

 

3.7

 

4

 

 

 

 

 

 

3

 

 

118,997

 

 

 

19.2

 

2

 

 

465,078

 

 

 

75.2

 

1

 

 

 

 

 

 

Total

 

$

618,576

 

 

 

100.0

%

The following tables show the weighted average rate, spread over the reference rate of floating rate and fees of investments originated and the weighted average rate of sales and payoffs of portfolio companies during the three months ended March 31, 2024.

For the Three Months
Ended March 31, 2024

Weighted average rate of new investment fundings

11.18

%

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

5.80

%

Weighted average OID fees of new investment funding

1.67

%

Weighted average rate of sales and payoffs of portfolio investments

10.62

%

The following tables show the weighted average rate and the spread over the reference rate of floating rate and fees of investments originated during the three months ended March 31, 2023.

For the Three Months
Ended March 31, 2023

Weighted average rate of new investment fundings

11.41

%

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

6.41

%

Weighted average OID fees of new investment funding

2.34

%

RESULTS OF OPERATIONS

Our operating results for the three months ended March 31, 2024 (dollars in thousands):

 

 

For the Three Months
Ended March 31, 2024

 

 

Total investment income

 

$

19,632

 

 

Less: Net expenses

 

 

4,635

 

 

Net investment income (loss)

 

 

14,997

 

 

Net realized gains (losses)

 

 

(6,319

)

 

Net change in unrealized gains (losses)

 

 

2,805

 

 

Net increase (decrease) in net assets resulting from
   operations

 

$

11,483

 

 

33


Our operating results for the three months ended March 31, 2023 were as follows (dollars in thousands):

 

 

For the Three Months
Ended March 31, 2023

 

 

Total investment income

 

$

14,115

 

 

Less: Net expenses

 

 

2,407

 

 

Net investment income (loss)

 

 

11,708

 

 

Net realized gains (losses)

 

 

 

 

Net change in unrealized gains (losses)

 

 

(1,798

)

 

Net increase (decrease) in net assets resulting from
   operations

 

$

9,910

 

 

Investment Income

Investment income for the three months ended March 31, 2024 and 2023 was driven by our deployment of capital and interest income from our investments. The composition of our investment income for the three months ended March 31, 2024 was as follows (dollars in thousands):

 

 

For the Three Months
Ended March 31, 2024

 

 

Interest income from investments

 

$

19,236

 

 

Fee income

 

 

396

 

 

Total investment income

 

$

19,632

 

 

The composition of our investment income for the three months ended March 31, 2023 was as follows (dollars in thousands):

 

 

For the Three Months
Ended March 31, 2023

 

 

Interest income from investments

 

$

13,657

 

 

Fee income

 

 

458

 

 

Total investment income

 

$

14,115

 

 

Operating Expenses

The composition of our operating expenses for the three months ended March 31, 2024 was as follows (dollars in thousands):

 

 

For the Three Months
Ended March 31, 2024

 

 

Incentive fees

 

$

393

 

 

Management fees

 

 

1,572

 

 

Interest expense

 

 

2,120

 

 

Professional fees

 

 

205

 

 

Directors’ fees

 

 

22

 

 

Other general and administrative expenses

 

 

323

 

 

Net expenses

 

$

4,635

 

 

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

 

 

For the Three Months
Ended March 31, 2023

 

 

Management fees

 

$

1,126

 

 

Interest expense

 

 

825

 

 

Professional fees

 

 

148

 

 

Directors’ fees

 

 

26

 

 

Other general and administrative expenses

 

 

282

 

 

Net expenses

 

$

2,407

 

 

34


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

Net realized gains (losses) and net change in unrealized gains (losses) on investments for the three months ended March 31, 2024 were as follows (dollars in thousands):

 

 

For the Three Months
Ended March 31, 2024

 

 

Net realized gains (losses)

 

 

 

 

Non-controlled, non-affiliated investments

 

$

(6,319

)

 

Total net realized gains (losses)

 

 

(6,319

)

 

Net change in unrealized gains (losses) on investments

 

 

 

 

Non-controlled, non-affiliated investments

 

 

4,412

 

 

Affiliated investments

 

 

(1,607

)

 

Total net change in unrealized gains (losses) on investments

 

 

2,805

 

 

Net realized and unrealized gains (losses)

 

$

(3,514

)

 

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

 

 

For the Three Months
Ended March 31, 2023

 

 

Net realized gains (losses)

 

 

 

 

Non-affiliate investments

 

$

 

 

Total net realized gains (losses)

 

 

 

 

Net change in unrealized gains (losses) on investments

 

 

 

 

Non-affiliate investments

 

 

(1,798

)

 

Total net change in unrealized gains (losses) on investments

 

 

(1,798

)

 

Net realized and unrealized gains (losses)

 

$

(1,798

)

 

Recent Developments

None.

Liquidity and Capital Resources

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

As of March 31, 2024, we are party to the Goldman Credit Facility, as described in more detail in Note 6—Borrowings.

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

Operating liquidity is our ability to meet our short-term liquidity needs. The following table presents our operating liquidity position as of March 31, 2024 and December 31, 2023:

 

 

As of

 

 

 

March 31, 2024

 

 

December 31, 2023

 

Cash and cash equivalents

 

$

9,766

 

 

$

8,887

 

Unfunded portfolio company commitments

 

 

(58,523

)

 

 

(58,395

)

Undrawn capital commitments

 

 

186,571

 

 

 

186,571

 

Total operational liquidity

 

$

137,814

 

 

$

137,063

 

35


Taxation as a RIC

We have elected to be treated as a RIC under Subchapter M of the Code. As a RIC, we generally will not be subject to corporate-level U.S. federal income taxes on any income that we distribute as dividends for U.S. federal income tax purposes to our stockholders. To maintain our qualification as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. In addition, in order to maintain RIC tax treatment, we must distribute to our stockholders, for each tax year, an amount equal to at least 90% of our “investment company taxable income,” which is generally our net ordinary income plus the excess, if any, of realized net short-term capital gain over realized net long-term capital loss and determined without regard to any deduction for dividends paid.

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

Related Party Transactions and Agreements

Investment Advisory Agreement

On June 29, 2023, the Company entered into an amended and restated investment advisory and management agreement (the “Amended and Restated Investment Advisory Agreement”) with the Investment Adviser, following the approval of the Amended and Restated Investment Advisory Agreement by the Company’s stockholders by unanimous written consent on June 29, 2023. The terms of the Amended and Restated Investment Advisory Agreement became effective on July 1, 2023 and did not impact Management Fees paid in prior periods.

The Board, including a majority of the directors that are not “interested persons” as defined in Section 2(a)(19) of the 1940 Act, most recently approved the renewal of the Amended and Restated Investment Advisory Agreement on May 10, 2024. Such approvals were made in accordance with, and on the basis of an evaluation satisfactory to the Board as required by, Section 15(c) of the 1940 Act and applicable rules and regulations thereunder, including a consideration of, among other factors, (i) the nature, quality and extent of the advisory and other services to be provided under the agreement, (ii) the investment performance of the personnel who manage investment portfolios with objectives similar to the Company’s, (iii) comparative data with respect to advisory fees or similar expenses paid by other BDCs with similar investment objectives and (iv) information about the services to be performed and the personnel performing such services under the agreement.

Administration Agreement

On June 29, 2021, we entered into an administration agreement (the “Administration Agreement”) with Commonwealth Credit Advisors LLC, a Delaware limited liability company (in such capacity, the “Administrator”), under which the Administrator will provide administrative services for us, including arranging office facilities for us and providing office equipment and clerical, bookkeeping and recordkeeping services at such facilities. The Board, including a majority of the directors that are not “interested persons” as defined in Section 2(a)(19) of the 1940 Act, most recently approved the renewal of the Administration Agreement on May 10, 2024. Such approvals were made in accordance with, and on the basis of an evaluation satisfactory to the Board as required by, Section 15(c) of the 1940 Act and applicable rules and regulations thereunder.

Co-Investment Relief

The 1940 Act generally prohibits BDCs from entering into negotiated co-investments with affiliates absent an order from the SEC. On August 2, 2021, the SEC granted the Company exemptive relief (the “Order”) that allows it to enter into certain negotiated co-investment transactions alongside other funds managed by the Adviser or its affiliates (“Affiliated Funds”) in a manner consistent with its investment objective, positions, policies, strategies, and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with the conditions of the Order. On August 16, 2023, the Company filed an application for an order to amend the Order pursuant to Sections 17(d) and 57(i) of the 1940 Act and Rule 17d-1 thereunder, permitting certain joint transactions otherwise prohibited by Sections 17(d) and 57(a)(4) of the 1940 Act.

Pursuant to the Order, the Company is permitted to co-invest with its affiliates if “among other things, a required majority” (as defined in Section 57(o) of the 1940 Act) of the Company’s Independent Directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to the Company and the Company’s stockholders and do not involve overreaching in respect of the Company or the Company’s

36


stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of the Company’s stockholders and is consistent with the Company’s investment objective and strategies. In addition, to the extent that our assets are treated as “plan assets” under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), we will only co-invest in the same issuer with certain funds or entities managed by the Investment Adviser or its affiliates, so long as their and our respective investments are at the same level of such issuer’s capital structure; provided, that in no event will we co-invest with any other fund or entity in contravention of the 1940 Act.

Distributions and Dividends

Distributions declared for the three months ended March 31, 2024 totaled approximately $13.14 million.

The following table reflects cash distributions, including dividends and returns of capital, if any, per share that have been declared by our Board for the fiscal quarters ended March 31, 2024 and March 31, 2023, respectively:

Fiscal Year Quarter

 

Date Declared

 

Record Date

 

Payment Date

 

Per Share Amount

 

First Quarter

 

March 28, 2024

 

March 28, 2024

 

March 28, 2024

 

$

24.00

 


Fiscal Year Ended

 

Date Declared

 

Record Date

 

Payment Date

 

Per Share Amount

 

First Quarter

 

March 27, 2023

 

March 27, 2023

 

March 28, 2023

 

$

22.80

 

We intend to pay quarterly distributions to our stockholders in amounts sufficient to qualify as and maintain our status as a RIC. We intend to distribute approximately all of our net investment income on a quarterly basis and substantially all of our taxable income on an annual basis, except that we may retain certain net capital gains for reinvestment.

Borrowings

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

Goldman Credit Facility

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

The Goldman Credit Facility is uncommitted and matures on the earlier of (i) the date on which either the Company or lender provide written notice of termination to the other party and (ii) the date that is 30 days prior to the last date on which the Company may issue capital drawdowns to its investors. Under the Goldman Credit Facility, the Company is permitted to borrow up to the lesser of $130 million and the Borrowing Base. The “Borrowing Base” is based upon the unfunded capital commitments of certain subscribed investors in the Company that have been approved by Goldman Sachs and meet certain criteria. The advance rate for such investors is currently 90% but may be subject to modification. The Goldman Credit Facility contains certain customary affirmative and negative covenants and events of default.

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

37


Contractual Obligations

The following table shows our payment obligations for repayment of debt and other contractual obligations as of March 31, 2024 (dollars in thousands):

 

 

Total Aggregate
Borrowing
Capacity
(1)

 

 

Total Principal
Outstanding

 

Goldman Sachs Credit Facility

 

$

130,000

 

 

$

109,800

 

Total

 

$

130,000

 

 

$

109,800

 

(1)
As of March 31, 2024, we had $20.2 million in unused borrowing capacity under the Goldman Credit Facility, subject to borrowing base limits.

Off-Balance Sheet Arrangements

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

Commitments

In the ordinary course of business, we may enter into future funding commitments. As of March 31, 2024, we had unfunded commitments on revolving credit lines and delayed draw loans of $58.5 million. We maintain sufficient financial resources to satisfy unfunded commitments, including cash on hand, undrawn capital commitments from our investors, and available borrowings to fund such unfunded commitments. Please refer to Note 7—Commitments and Contingencies in the notes to our consolidated financial statements for further detail of these unfunded commitments.

Significant Accounting Estimates and Critical Accounting Policies

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

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

Valuation of Portfolio Investments

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

Given that the Company's assets are currently treated as "plan assets" under the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and Section 4975 of the Code, one or more independent valuation firms (each a "Valuation Agent") will be engaged to independently value the Company's investments, in consultation with the Investment Adviser. The Company's quarterly valuation procedures, which are the procedures that will be followed by such Valuation Agent to the extent the Company's assets are treated as "plan assets" under ERISA and/or Section 4975 of the code, are set forth in more detail below:

1)
Investments for which market quotations are readily available on an exchange are valued at such market quotations based on the closing price indicated from independent pricing services.

38


2)
Investments for which indicative prices are obtained from various pricing services and/or brokers or dealers are valued through a multi-step valuation process, as described below, to determine whether the quote(s) obtained is representative of fair value in accordance with GAAP.

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

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

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

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

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

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

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

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

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

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

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

Investment Classification

The Company classifies its investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, “Control” is defined as the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company. In addition, in accordance with Section 2(a)(9) of the 1940 Act, any person who owns beneficially, either directly or through one or more controlled companies, more than 25% of the voting securities of a company shall be presumed to control such company. Any person who does not so own more than 25% of the voting securities of any company shall be presumed not to control such company. Any person who does not so own more than 25% of the voting securities of any company and/or does not have the power to exercise control over the management or policies of such portfolio company shall be presumed not to control such company. Consistent with the 1940 Act, “Affiliated Investments” are defined as those investments in companies in which the Company owns 5% or more of the voting securities. Consistent with the 1940 Act, “Non-affiliated Investments” are defined as investments that are neither Control Investments nor Affiliated Investments. As of September 30, 2021, the Company did not “control” and was not an “affiliated person” of any of its portfolio companies, each as defined in the 1940 Act.

Cash and Cash Equivalents

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

Organizational Expenses and Offering Costs

Organizational expenses consist of costs incurred to establish the Company and enable it legally to do business. Organization costs are expensed as incurred. Offering costs consist of costs incurred in connection with the offering of Common Stock of the Company. Offering costs are capitalized as a deferred charge and amortized to expense on a straight-line basis over 12 months from the inception date. Offering costs incurred for both the period from January 15, 2021 (Inception Date) through September 30, 2021 and the three months ended September 30, 2021, were $0.04 million. As of September 30, 2021, Offering costs deferred were $0.13 million, and are recorded in Prepaid expenses and other assets on the Statement of Assets and Liabilities.

The Company will bear the organizational expenses and offering costs incurred in connection with the formation of the Company and the offering of shares of its Common Stock, including the out-of-pocket expenses of the Investment Adviser and its agents and affiliates. In addition, the Company will reimburse the Investment Adviser for the organizational expenses and offering costs it incurs on the Company’s behalf. For the three months ended September 30, 2021 and the period January 15, 2021 (Inception Date) through September 30, 2021, the Company has incurred $0.24 million and $0.49 million, of organizational costs, respectively. If actual organizational expenses and offering costs incurred exceed $0.75 million, the Investment Adviser or its affiliate bear the excess costs.

Deferred Financing Costs

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

Revenue Recognition

Interest Income

Investment transactions are accounted for on the trade date. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discount and premium on investments purchased are accreted/amortized over the expected life of the respective investment using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion of discount and amortization of premium on investments.

Fee Income

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

Non-accrual

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

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

Gain or loss on the sale of investments is calculated using the specific identification method. The Company measures realized gain or loss by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized gain or loss will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when a gain or loss is realized.

Income Taxes

The Company intends to elect to be treated for federal income tax purposes as a RIC under Subchapter M of the Code. Generally, a RIC is not subject to federal income taxes in respect of each taxable year if it distributes dividends for federal income tax purposes to stockholders of an amount generally equal to at least 90% of “investment company taxable income,” as defined in the Code, and determined without regard to any deduction for dividends paid. Distributions declared prior to the filing of the previous year’s tax return and paid up to twelve months after the previous tax year can be carried back to the prior tax year in determining the distributions paid in such tax year. The Company intends to make sufficient distributions to maintain its ability to be subject to be taxed as a RIC each year. The Company may be subject to federal excise tax imposed at a rate of 4% on certain undistributed amounts. The Company will be subject to a 4.0% nondeductible federal excise tax on certain undistributed income unless the Company distributes, in a timely manner as required by the Code, an amount at least equal to the sum of (1) 98.0% of its respective net ordinary income earned for the calendar year and (2) 98.2% of its respective capital gain net income for the one-year period ending October 31 in the calendar year.

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

Recent Accounting Standards Update

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update No. 2020-04, “ReferenceRateReform(Topic848):FacilitationoftheEffectsofReferenceRateReformonFinancialReporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard is effective as of March 12, 2020 through December 31, 2022. In January 2021, the Financial Accounting Standards Board issued Accounting Standards Update 2021-01 “Reference Rate Reform (Topic 848): Scope” (“ASU 2021-01”). The amendments in ASU 2021-01 provide optional exceptions for applying GAAP to contract modifications, hedging relationships and other transactions affected reference rate reform if certain criteria are met. ASU 2020-04 and 2021-01 are elective and can be adopted between March 12, 2020 and December 31, 2022. Management is currently evaluating the impact of the optional guidance on the Company’s financial statements and disclosures.

Note 3 - Fair Value of Financial Instruments

Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosure (“ASC 820”) establishes a fair value hierarchy that prioritizes and ranks the inputs to valuation techniques used in measuring investments at fair value. The hierarchy classifies the inputs used in measuring fair value into three levels as follows:

Level 1—Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

Level 3—Unobservable inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

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

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

The following table presents fair value measurements of investments, by major class, as of September 30, 2021, according to the fair value hierarchy:

   Fair Value Measurements 
   Level 1   Level 2   Level 3   Totals 

First Lien Senior Secured

  $—     $—     $43,784   $43,784 

Preferred Equity

   —      —      765    765 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $—     $—     $44,549   $44,549 
  

 

 

   

 

 

   

 

 

   

 

 

 

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three months ended September 30, 2021 and the period from January 15, 2021 (Inception Date) through September 30, 2021:

   First Lien
Senior
Secured
   Preferred
Equity
   Total 

Balance as of January 15, 2021 (Inception Date)

  $—     $—     $—   

Purchases and other adjustments to cost

   43,670    765    44,435 

Sales and repayments

   (58   —      (58

Net realized gain/loss on investments

   —      —      —   

Net change in unrealized gain/loss on investments

   164    —      164 

Net accretion of discount on investments

   8    —      8 
  

 

 

   

 

 

   

 

 

 

Balance as of September 30, 2021

  $43,784   $765   $44,549 
  

 

 

   

 

 

   

 

 

 
Net change in unrealized gain/loss for the period relating to those Level 3 assets that were still held by the Company at the end of the period:  $164   $—     $164 

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

For the three months ended September 30, 2021 and the period from January 15, 2021 (Inception Date) through September 30, 2021, there were no transfers between levels of the fair value hierarchy.

The composition of the Company’s investments as of September 30, 2021, at amortized cost and fair value, were as follows:

   Amortized
Cost
   Fair
Value
   %
FV
 

First Lien Senior Secured

  $43,620   $43,784    98.3

Preferred Equity

   765    765    1.7
  

 

 

   

 

 

   

 

 

 
  $44,385   $44,549    100.00
  

 

 

   

 

 

   

 

 

 

Significant Unobservable Inputs

The following table summarizes the significant unobservable inputs used to value Level 3 investments as of September 30, 2021. The table is not intended to be all-inclusive, but instead identifies the significant unobservable inputs relevant to the determination of fair values.

               Selected Input Range    
Asset Category  Fair
Value
   Primary Valuation
Technique
   Unobservable
Inputs
   Minimum  Maximum  Weighted
Average (a)
 

First Lien Senior Secured

  $28,567    Discounted Cash Flow    
Discount
Rate
 
 
   7.0  8.3  7.6

First Lien Senior Secured (c)

   15,217    Market Comparables    
LTM
EBITDA
 
 
   8.8x   9.8x   9.3x 

Preferred Equity (b)(c)

   765    Market Comparables    
LTM
EBITDA
 
 
   8.8x   9.8x   9.3x 
  

 

 

         

Total

  $44,549         
  

 

 

         

(a)

Weighted averages are calculated based on fair value of investments.

(b)

This asset category contains one investment.

(c)

These instruments were held at cost as an approximation of fair value.

There were no significant changes in valuation approach or technique as of September 30, 2021.

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

The income and market approaches were used in the determination of fair value of certain Level 3 assets as of September 30, 2021.March 31, 2024. The significant unobservable inputs used in the income approach are the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments and any other end of term fees, as applicable. Included in the consideration and selection of discount rates are factors such as risk of default, interest rate risk, and changes in credit quality. The significant unobservable inputs used in the market approach are based on market comparable transactions and market multiples of publicly traded comparable companies. Increases or decreases in the valuation multiples in isolation may result in higher or lower fair value measurement, respectively, and increases or decreases in the discount rate in isolation may result in lower or higher fair value measurement, respectively.

As of September 30, 2021, the Company had no portfolio companies on non-accrual status. Refer to Note 2 - Summary of Significant Accounting Policies - for additional details regarding the Company’s non-accrual policy.

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

Note 4 - Related Party Transactions

Investment Advisory Agreement

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

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

Management Fee

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

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

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

The table set forth below shows the following quarterly fee percentages shall be payable with respect to the Company’s target Adjusted Average Assets Invested from the quarter ending September 30, 2021 through the end of the Investment Period:

Quarter Ending  Quarter   Target Adjusted
Average Assets
Invested ($ in
millions)1
   Quarterly
Management Fee
Percentage
  Quarterly Dollar
Amount ($ in
millions)2
 

September 30, 2021

   1   $80    1  0.2 

December 31, 2021

   2   $160    1  0.4 

March 31, 2022

   3   $240    1  0.6 

June 30, 2022

   4   $320    1  0.8 

September 30, 2022

   5   $400    1  1 

December 31, 2022

   6   $480    1  1.2 

March 31, 2023

   7   $560    1  1.4 

June 30, 2023

   8   $640    1  1.6 

September 30, 2023

   9   $650    1  1.625 

December 31, 2023

   10   $650    1  1.625 

March 31, 2024

   11   $650    1  1.625 

June 30, 2024

   12 and beyond 3   $650    1  1.625 

(1)

For the avoidance of doubt, the Management Fee paid at the end of any quarter shall be calculated based on the lower of the actual Adjusted Average Assets Invested in respect of the quarter and the target Adjusted Average Assets Invested for that quarter.

(2)

Reflects dollar amount of Management Fees payable for the applicable quarter based on the Company’s target Adjusted Average Assets Invested as of the end of such quarter.

(3)

Reflects the Management Fee payable beginning in quarter 12 and extending through the end of the Investment Period.

For both the three months ended September 30, 2021, and the period January 15, 2021 (Inception Date) to September 30, 2021, the Company incurred $0.10 million in Management Fees under the Investment Advisory Agreement.

The Investment Adviser has chosen to voluntarily waive $0.04 million of management fees earned in accordance with the Investment Advisory Agreement for the three months ended September 30, 2021 and the period from January 15, 2021 (Inception date) through September 30, 2021. Any fees waived under the Investment Advisory Agreement are not subject to reimbursement to the Investment Adviser.

As of September 30, 2021, $0.07 million was payable to the Adviser for management fees.

Incentive Fee

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

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

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

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

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

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

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

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

For the three months ended September 30, 2021 and for the period January 15, 2021 (Inception Date) through September 30, 2021, there was no incentive fee earned and thus no amounts have been accrued.

Administration Agreement

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

The Administrator has hired a third party sub-administrator to assist with the provision of administration services. For both the three months ended September 30, 2021 and the period January 15, 2021 (Inception Date) through September 30, 2021, the Company incurred $0.04 million in administrative service fees under the administration agreement, payable to the sub-administrator.

Co-Investment Relief

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

Note 5 - Borrowings

Goldman Credit Facility

On August 11, 2021, the Company entered into a Credit Agreement (together with the exhibits and schedules thereto, the ‘‘Goldman Credit Facility’’) as the borrower and Goldman Sachs Bank USA (“Goldman Sachs”) as the lender. The Goldman Credit Facility is structured as a revolving credit facility secured by the capital commitments of the Company’s subscribed investors and certain related assets.

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

The weighted average annualized interest cost for all borrowings for the three months ended September 30, 2021 was 2.79%. The average daily debt outstanding for the three months ended September 30, 2021 was $1 million. The maximum debt outstanding for the three months ended September 30, 2021 was $45 million.

The following table represents borrowings as of September 30, 2021:

   Total Aggregate
Borrowing Capacity
   Total Principal
Outstanding
   Less Deferred
Financing Costs
   Amount per Statements of
Assets and Liabilities
 

Goldman Credit Facility

  $130,000   $45,000   $87   $44,913 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $130,000   $45,000   $87   $44,913 
  

 

 

   

 

 

   

 

 

   

 

 

 

The following table represents interest and debt fees for the three months ended September 30, 2021:

   Three months ended September 30, 2021 
   Interest Rate (2)  Interest Expense   Deferred
Financing Costs(1)
   Other Fees 

Goldman Credit Facility

   L+2.70 $7   $—     $—   
   

 

 

   

 

 

   

 

 

 

Total

   $7   $—     $—   
   

 

 

   

 

 

   

 

 

 

(1)

Amortization of deferred financing costs.

(2)

As of September 30, 2021, the 1-month LIBOR rate was 0.08%.

At September 30, 2021, the carrying amount of the Company’s secured borrowings approximated their fair value in accordance with ASC 820. As of September 30, 2021, the Company’s borrowings would be deemed to be Level 3, as defined in Note 3 - Fair Value of Financial Instruments.

Note 6 - Commitments and Contingencies

Commitments

In the ordinary course of business, the Company may enter into future funding commitments. As of September 30, 2021, the Company had unfunded commitments on delayed draw term loans of $2.4 million. The Company maintains sufficient cash on hand, unfunded Capital Commitments, and available borrowings to fund such unfunded commitments.

As of September 30, 2021, the Company’s unfunded commitments consisted of the following:

Portfolio Company Name

  

Investment Type

  

Commitment Type

  Total Commitment   Remaining Commitment 

OneCare Media, LLC

  First Lien Senior Secured  Revolving Credit Line  $2,396   $2,396 
      

 

 

   

 

 

 

Total

      $2,396   $2,396 
      

 

 

   

 

 

 

Litigation and Regulatory Matters

In the ordinary course of business, the Company may become subject to litigation, claims, and regulatory matters. The Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time.

Indemnifications

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

Note 7 - Capital

Investor Commitments

As of September 30, 2021, the Company had $656.6 million, in Capital Commitments, of which $606.6 million, were unfunded.

Capital Drawdowns

The following table summarizes the total shares issued and proceeds related to capital drawdowns:

Share Issue Date

  Shares Issued   Net Proceeds Received 

June 14, 2021

   1   $1 

August 17, 2021

   29,999    29,999 

September 28, 2021

   20,000    20,000 
  

 

 

   

 

 

 

Total Shares Issued

   50,000   $50,000 
  

 

 

   

 

 

 

As of September 30, 2021, 500 of the Company’s common shares were owned by Comvest Group Holdings SPV II LLC, a wholly owned subsidiary of an affiliate of Comvest Partners.

Note 8 - Net Assets

The following table reflects the net assets activity for the three months ended September 30, 2021:

   Common
stock - shares
   Common
stock - par (1)
   Additional
paid-in
capital
   Total
distributable
earnings
(accumulated
deficit)
  Total net
assets
 

Balance as of June 30, 2021

   1   $—     $1   $(245 $(244

Issuance of common stock, net of issuance costs

   49,999    —      49,999    —     49,999 

Net investment income (loss)

   —      —      —      (261  (261

Net realized gain (loss) from investment transactions

   —      —      —      —     —   

Net change in unrealized appreciation (depreciation) on investments

   —      —      —      164   164 
  

 

 

   

 

 

   

 

 

   

 

 

  

 

 

 

Balance as of September 30, 2021

   50,000   $—     $50,000   $(342 $49,658 
  

 

 

   

 

 

   

 

 

   

 

 

  

 

 

 

The following table reflects the net assets activity for the period January 15, 2021 (Inception Date) to September 30, 2021:

   Common
stock - shares
   Common
stock - par (1)
   Additional
paid in
capital
   Total
distributable
earnings
(accumulated
deficit)
  Total net
assets
 

Balance as of January 15, 2021 (Inception Date)

   —     $—     $—     $—    $—   

Issuance of common stock, net of issuance costs

   50,000    —      50,000    —     50,000 

Net investment income (loss)

   —      —      —      (506  (506

Net realized gain (loss) from investment transactions

   —      —      —      —     —   

Net change in unrealized appreciation (depreciation) on investments

   —      —      —      164   164 
  

 

 

   

 

 

   

 

 

   

 

 

  

 

 

 

Balance as of September 30, 2021

   50,000   $—     $50,000   $(342 $49,658 
  

 

 

   

 

 

   

 

 

   

 

 

  

 

 

 

(1)

Less than $1.

Note 9 - Earnings Per Share

Basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of shares outstanding during the period. Other potentially dilutive shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The following information sets forth the computation of the weighted average basic and diluted net decrease in net assets per share resulting from operations for the three months ended September 30, 2021 and the period January 15, 2021 (Inception Date) to September 30, 2021.

   For the Three
Months Ended
September 30, 2021
  For the Period
January 15, 2021
(Inception Date)
through
September 30, 2021
 

Net increase (decrease) in net assets resulting from operations

  $(97 $(342

Weighted average shares of common stock

   

outstanding - basic and diluted

   15,327   12,936 

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

  $(6.33 $(26.44

Note 10 - Financial Highlights

The Company commenced investing operations on August 17, 2021. Net asset value, at the beginning of the period represents the initial price per share issued on that date. The following is a schedule of financial highlights for the period January 15, 2021 (Inception Date) through September 30, 2021:

   For the Period
January 15, 2021
(Inception Date)
through
September 30, 2021
 
Per Common Share Operating Performance  

Net Asset Value, Beginning of Period

  $1,000.00 

Results of Operations: (1)

  

Net Investment Income (Loss)

   (39.11

Net Realized and Unrealized Gain (Loss) on Investments

   32.27 
  

 

 

 

Net Increase (Decrease) in Net Assets Resulting from Operations

   (6.84
  

 

 

 

Net Asset Value, End of Period

  $993.16 
  

 

 

 

Shares Outstanding, End of Period

   50,000 

Total Return(3)

   (0.68%) 

Net assets, end of period

  $49,658 
Ratio/Supplemental Data  

Weighted-average shares outstanding

   12,936 

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

   (4.38%) 

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

   (3.98%) 

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

   7.20

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

   6.80

Asset coverage ratio

   210.57

Portfolio turnover rate (4)

   0.13

(1)

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

(2)

Ratios, excluding nonrecurring expenses, such as organization and offering costs, are annualized.

(3)

Total return is calculated assuming a purchase of shares of common stock at the current net asset value on the first day and a sale at the current net asset value on the last day of the period reported.

(4)

Portfolio turnover rate is calculated using the lesser of year-to-date purchases or sales over the average of the invested assets at fair value. Portfolio turnover rate is not annualized.

(5)

Ratio of total expenses to average net assets is calculated using total operating expenses, over average net assets.

Note 11 - Subsequent Events

The Company has evaluated subsequent events through the filing of this Form 10-Q and has determined that there have been no events that have occurred that would require adjustments to the Company’s disclosures in the financial statements.

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

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

Forward Looking Statements

Statements we may make, may contain forward-looking statements, that are not historical facts are based on current expectations, estimates, projections, opinions and/or beliefs of the Company, the Investment Adviser and/or its affiliates (collectively, “Commonwealth”). These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “potential”, “project”, “seek”, “should”, “target”, “will”, “would” or variations of these words and similar expressions are intended to identify forward-looking statements. The forward-looking statements contained in this Quarterly Report on Form 10-Q involve risks and uncertainties.

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

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

the Company’s future operating results;

changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, including with respect to changes from the impact of the COVID-19 pandemic; the length and duration of the COVID-19 outbreak in the United States as well as worldwide and the magnitude of the economic impact of that outbreak;

lack of sufficient investment opportunities;

volatility of leveraged loan markets;

risk of borrower default;

the restricted nature of investment positions;

the illiquid nature of our portfolio;

interest rate volatility, including volatility associated with the decommissioning of LIBOR and the transition to new reference rates;

the effect of the COVID-19 pandemic on the Company’s business prospects and the prospects of the Company’s portfolio companies, including the Company’s and the portfolio companies’ ability to achieve their respective objectives;

the effect of the disruption caused by the COVID-19 pandemic on the Company’s ability to effectively manage the Company’s business and on the availability of equity and debt capital and the Company’s use of borrowed money to finance a portion of the Company’s investments;

the Company’s business prospects and the prospects of the Company’s prospective portfolio companies;

the impact of increased competition;

the Company’s contractual arrangements and relationships with third parties;

the dependence of the Company’s future success on the general economy and its impact on the industries in which the Company invests;

the ability of the Company’s prospective portfolio companies to achieve their objectives;

the relative and absolute performance of the Investment Adviser;

the ability of the Investment Adviser and its affiliates to retain talented professionals;

the Company’s expected financings and investments;

the Company’s ability to pay dividends or make distributions;

the adequacy of the Company’s cash resources;

risks associated with possible disruptions due to terrorism in the Company’s operations or the economy generally;

the impact of future acquisitions and divestitures;

the Company’s regulatory structure and tax status as a BDC and a regulated investment company (a “RIC”); and

future changes in laws or regulations and conditions in the Company’s operating areas.

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

Overview

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

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

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

Financial and Operating Highlights

At September 30, 2021

  

Investment Portfolio

  $44,549 

Net assets

  $49,658 

Debt (net of deferred financing costs)

  $44,913 

Net asset value per share

  $993.16 

Portfolio Activity for the Three Months Ended September 30, 2021

 

Purchases during the period

  $44,435 

Sales or repayments during the period

  $58 

Number of portfolio companies at end of period

   3 

Operating Results for the Three Months Ended September 30, 2021

 

Net investment income (loss) per share

  $(17.03

Net increase in net assets resulting from operations per share

  $(6.33

Net investment gain/loss

  $(261

Net realized and unrealized gain/loss

  $164 

Net increase/decrease in net assets resulting from operations

  $(97

Portfolio and Investment Activity

During the three months ended September 30, 2021, we made $44 million of investments in new portfolio companies and had $58 thousand in aggregate amount of sales and repayments, resulting in net investments of $44 million for the period. The total portfolio of debt investments at fair value consisted of 100% bearing variable interest rates and 0% bearing fixed interest rates.

Our portfolio composition, based on fair value at September 30, 2021 was as follows:

   September 30, 2021 
   Percentage of Total
Portfolio
  Weighted Average
Current Yield for Total
Portfolio
 

First Lien Senior Secured

   98.3  7.0

Preferred Equity

   1.7   0 
  

 

 

  

 

 

 

Total

   100.0  7.0
  

 

 

  

 

 

 

The Company commenced investment operations on August 17, 2021 and, as a result, did not have investments prior to this date.

The following table shows the asset mix of our new investment fundings for the three months ended September 30, 2021:

   Three months ended
September 30, 2021
 
   Fair Value (in
thousands)
   Percentage 

First Lien Senior Secured

  $43,784    98.3

Preferred Equity

   765    1.7 
  

 

 

   

 

 

 

Total

  $44,549    100.0
  

 

 

   

 

 

 

Portfolio Asset Quality

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

Loan
Rating

Summary Description

1Investments that are performing at or above expectations. No issues or foreseen issues on performance, covenants, liquidity, etc. The credit is expected to be repaid at maturity through available cash flow or to be refinanced.
2Investments that are performing substantially within our expectations, with the risks remaining neutral or favorable. All new loans are initially rated 2. The credit is expected to be repaid at maturity through available cash flow or to be refinanced by a third party.
3Investments that are performing below our expectations and that require closer monitoring, but where we expect no loss of investment return or principal.
4Investments that are performing below our expectations and for which risk has increased materially since the original investment. There is a probability of some loss of investment return, but no loss of principal is expected.
5Investments that are performing substantially below our expectations and whose risks have increased substantially since the original investment. Typically, the borrower will be in default, or the loan will have been modified to address a default.
6Investments that are performing poorly; it is unlikely that the enterprise or asset values currently exceed the debt and/or material reduction in enterprise value is reasonably foreseen.

The weighted average risk rating of our investments based on fair value was 2.0 as of September 30, 2021. As of September 30, 2021, the Company had no portfolio companies on non-accrual status. Refer to Note 2—Summary of Significant Accounting Policies - for additional details regarding the Company’s non-accrual policy.

   As of September 30, 2021 

Internal
Performance
Rating

  Investments
at Fair Value
(In thousands)
   Percentage of
Total
Investments
 

6

  $—      —   

5

   —      —   

4

   —      —   

3

   —      —   

2

   44,549    100.0 

1

   —      —   
  

 

 

   

 

 

 

Total

  $44,549    100.0
  

 

 

   

 

 

 

The following table shows the amortized cost, fair value, and percentages of our portfolio of investments in non-accrual status:

Three months ended September 30, 2021

Non-accrual investments at amortized cost (000s)

$—  

Non-accrual investments / total debt investments at amortized cost

—  

Non-accrual investments at fair value (000s)

$—  

Non-accrual investments / total debt investments at fair value

—  

As of September 30, 2021, we had no loans in non-accrual status, and non-accrual investments as a percentage of total debt investments at cost and fair value were 0%.

The following table shows the weighted average rate, spread over LIBOR of floating rate and fees of investments originated and the weighted average rate of sales and payoffs of portfolio companies during the three months ended September 30, 2021.

Three months ended
September 30,

2021

Weighted average rate of new investment fundings

7.02

Weighted average spread over LIBOR of new floating rate investment fundings

6.17

Weighted average fees of new investment fundings

1.93

Weighted average rate of sales and payoffs of portfolio investments

6.72

RESULTS OF OPERATIONS

We commenced investment operations on August 17, 2021, and therefore do not have prior periods with which to compare operating results. Our operating results for the three months ended September 30, 2021 and for the period from January 15, 2021 (Inception Date) through September 30, 2021, were as follows (dollars in thousands):

   For the Three
Months Ended
September 30, 2021
   For the Period from
January 15, 2021
(Inception Date)
through
September 30, 2021
 

Total investment income

  $259   $259 

Less: Net expenses

   520    765 
  

 

 

   

 

 

 

Net investment income (loss)

   (261   (506

Net realized gains (losses)

   —      —   

Net change in unrealized gains (losses)

   164    164 
  

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

  $(97  $(342
  

 

 

   

 

 

 

Investment Income

Investment income for the three months ended September 30, 2021 was driven by our deployment of capital since August 17, 2021 (commencement of investment operations) and an increasing invested balance.The composition of our investment income for the three months ended September 30, 2021 was as follows (dollars in thousands):

   For the Three
Months Ended
September 30, 2021
   For the Period from
January 15, 2021
(Inception Date)
through
September 30, 2021
 

Interest from investments

  $245   $245 

Fee income

   14    14 
  

 

 

   

 

 

 

Total investment income

  $259   $259 
  

 

 

   

 

 

 

Operating Expenses

The composition of our operating expenses for the three months ended September 30, 2021 was as follows (dollars in thousands):

   For the Three
Months Ended
September 30, 2021
   For the Period from
January 15, 2021
(Inception Date)
through
September 30, 2021
 

Organizational Expenses

  $241   $486 

Management fees

   103    103 

Other general and administrative expenses

   103    103 

Amortization of offering costs

   36    36 

Directors fees

   27    27 

Professional fees

   47    47 

Management fee waiver

   (37   (37
  

 

 

   

 

 

 

Net expenses

  $520   $765 
  

 

 

   

 

 

 

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

Net realized gains (losses) and net change in unrealized gains (losses) on investments for the three months ended September 30, 2021 were as follows (dollars in thousands):

   For the Three
Months Ended
September 30, 2021
   For the Period from
January 15, 2021
(Inception Date)
through
September 30, 2021
 

Net realized gains (losses)

    

Non-affiliate investments

  $—     $—   
  

 

 

   

 

 

 

Total net realized gains (losses)

   —      —   

Net change in unrealized gains (losses) on investments

    

Non-affiliate investments

   164    164 
  

 

 

   

 

 

 

Total net change in unrealized gains (losses) on investments

   164    164 
  

 

 

   

 

 

 

Net realized and unrealized gains (losses)

  $164   $164 
  

 

 

   

 

 

 

Impact of COVID-19 Pandemic

The ongoing spread of COVID-19 has had, and is expected to continue to have, a material adverse impact on local economies in the affected locations and also on the global economy. Many countries have reacted by instituting quarantines and travel restrictions, which has resulted in disruptions in supply chains and adversely impacted various industries, including but not limited to retail, transportation, hospitality, energy and entertainment. These developments may adversely impact certain companies and other issuers in which the Company invests and the value of the Company’s investments therein. In addition, while disruptions to the operations of the Company (including those relating to the Company and the Investment Adviser) or the Company’s or the Investment Adviser’s service providers are not expected, such disruptions (including through quarantine measures and travel restrictions imposed on personnel located in affected locations, or any related health issues of such personnel) could nonetheless occur. Any of the foregoing events could materially and adversely affect the Company’s ability to source, manage and divest investments and pursue investment objective and strategies. Similar consequences could arise with respect to other infectious diseases. Given the significant economic and financial market disruptions associated with the COVID-19 pandemic, the valuation and performance of the Company’s investments, and therefore shares, may be impacted adversely. The duration of the COVID-19 pandemic and its effects cannot be determined at this time, but the effects could be present for an extended period of time.

Recent Developments

None.

Liquidity and Capital Resources

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

As of September 30, 2021, we are party to the Goldman Credit Facility, as described in more detail in Note 5 - Borrowings.

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

As of September 30, 2021, we had $50 million of cash. In addition, we had $85 million of availability under the Goldman Credit Facility (subject to borrowing base availability) and had approximately $607 million of uncalled Capital Commitments to purchase shares of our Common Stock. We expect to have sufficient liquidity for our investing activities and to conduct our operations in the near term.

Taxation as a RIC

We have elected to be treated as a RIC under Subchapter M of the Code. As a RIC, we generally will not be subject to corporate-level U.S. federal income taxes on any income that we distribute as dividends for U.S. federal income tax purposes to our stockholders. To maintain our qualification as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. In addition, in order to maintain RIC tax treatment, we must distribute to our stockholders, for each tax year, an amount equal to at least 90% of our “investment company taxable income,” which is generally our net ordinary income plus the excess, if any, of realized net short-term capital gain over realized net long-term capital loss and determined without regard to any deduction for dividends paid, or the annual distribution requirement.

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

Related Party Transactions and Agreements

Investment Advisory Agreement

We entered into an Investment Advisory Agreement, dated as of June 29, 2021, which was approved by our Board for an initial two year term, under which the Investment Adviser, subject to the overall supervision of our Board manages the day-to-day operations of, and provides investment advisory services to us. Affiliates of the Investment Adviser also provide investment advisory services to other funds that have investment mandates that are similar, in whole and in part, with ours. The Investment Adviser has adopted policies designed to manage and mitigate the conflicts of interest associated with the allocation of investment opportunities among multiple funds. In addition, any affiliated fund currently formed or formed in the future and managed by the Investment Adviser or its affiliates may have overlapping investment objectives with our own and, accordingly, may invest in asset classes similar to those targeted by us. However, in certain instances due to regulatory, tax, investment, or other restrictions, certain investment opportunities may not be appropriate for either us or other funds managed by the Investment Adviser or its affiliates. For the three months ended September 30, 2021 and the period from January 15, 2021 (inception date) through September 30, 2021, $0.10 million of gross management fees, $0.07 million of net management fees, all of which were payable as of September 30, 2021. No incentive fees were accrued as of September 30, 2021.

Administration Agreement

On June 29, 2021, we entered into an administration agreement (the “Administration Agreement”) with Commonwealth Credit Advisors LLC, a Delaware limited liability company (in such capacity, the “Administrator”), under which the Administrator will provide administrative services for us, including arranging office facilities for us and providing office equipment and clerical, bookkeeping and recordkeeping services at such facilities. Under the Administration Agreement, the Administrator will also perform, or oversee the performance of, our required administrative services, which includes being responsible for the financial records which we are required to maintain and preparing reports to our stockholders and reports filed with the SEC and providing the services of our chief financial officer, chief compliance officer, and their respective staffs. In addition, the Administrator will assist us in determining and publishing our net asset value, overseeing the preparation and filing of tax returns and the printing and dissemination of reports to our stockholders and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others. The Administrator may also provide on our behalf managerial assistance to our portfolio companies.

The Administrator has hired a third party sub-administrator to assist with the provision of administration services. For both the three months ended September 30, 2021 and the period January 15, 2021 (Inception Date) through September 30, 2021, the Company incurred $0.04 million in administrative service fees under the administration agreement, payable to the sub-administrator.

Co-Investment Relief

The 1940 Act generally prohibits BDCs from entering into negotiated co-investments with affiliates absent an order from the SEC. On August 2, 2021, the SEC granted the Company exemptive relief (the “Order”) that allows it to enter into certain negotiated co-investment transactions alongside other funds managed by the Adviser or its affiliates (“Affiliated Funds”) in a manner consistent with its investment objective, positions, policies, strategies, and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with the conditions of the Order. Pursuant to the Order, the Company is permitted to co-invest with its affiliates if a “, among other things, required majority” (as defined in Section 57(o) of the 1940 Act) of the Company’s independent directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to the Company and the Company’s stockholders and do not involve overreaching in respect of the Company or the Company’s stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of the Company’s stockholders and is consistent with the Company’s investment objective and strategies. In addition, to the extent that our assets are treated as “plan assets” under ERISA, we will only co-invest in the same issuer with certain funds or entities managed by the Investment Adviser or its affiliates, so long as their and our respective investments are at the same level of such issuer’s capital structure; provided, that in no event will we co-invest with any other fund or entity in contravention of the 1940 Act.

Borrowings

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

Goldman Credit Facility

On August 11, 2021, Commonwealth Credit Partners BDC, Inc. (the “Company”), entered into a Credit Agreement (together with the exhibits and schedules thereto, the ‘‘Goldman Credit Facility’’) as the borrower and Goldman Sachs Bank USA (“Goldman Sachs”) as the lender. The Goldman Credit Facility is structured as a revolving credit facility secured by the Capital Commitments of the Company’s subscribed investors and certain related assets.

The Goldman Credit Facility is uncommitted and matures on the earlier of (i) the date on which either the Company or Lender provide written notice of termination to the other party and (ii) the date that is 30 days prior to the last date on which the Company may issue capital drawdowns to its investors. Under the Goldman Credit Facility, the Company is permitted to borrow up to the lesser of $130 million and the Borrowing Base. The “Borrowing Base” is based upon the unfunded capital commitments of certain subscribed investors in the Company that have been approved by Goldman Sachs and meet certain criteria. The advance rate for such investors is currently 90% but may be subject to modification. The Goldman Credit Facility contains certain customary affirmative and negative covenants and events of default.

The Goldman Credit Facility bears interest at a rate of either LIBOR plus 2.70% per annum, Term SOFR plus 0.11448% plus 2.70% per annum, and the United States prime rate plus 1.70% per annum.

Contractual Obligations

The following table shows our payment obligations for repayment of debt and other contractual obligations as of September 30, 2021 (dollars in thousands):

   Total Aggregate
Borrowing
Capacity (1)
   Total Principal
Outstanding
 

Goldman Sachs Credit Facility

  $130,000   $45,000 
  

 

 

   

 

 

 

Total

  $130,000   $45,000 
  

 

 

   

 

 

 

(1)

As of September 30, 2021, we had $85.0 million in unused borrowing capacity under the Goldman Credit Facility, subject to borrowing base limits.

Off-Balance Sheet Arrangements

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

Commitments

In the ordinary course of business, we may enter into future funding commitments. As of September 30, 2021, we had unfunded commitments on revolving credit lines of $2.4 million. We maintain sufficient financial resources to satisfy unfunded commitments, including cash on hand, undrawn capital commitments from our investors, and available borrowings to fund such unfunded commitments. Please refer to Note 6—Commitments and Contingencies in the notes to our consolidated financial statements for further detail of these unfunded commitments.

Significant Accounting Estimates and Critical Accounting Policies

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

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

Valuation of Portfolio Investments

We will value our portfolio investments on a quarterly basis, or more frequently if required under the 1940 Act. For purposes of the 1940 Act, our Board is ultimately and solely responsible for determining the fair value of our portfolio investments on a quarterly basis in good faith, including investments that are not publicly traded, those whose market prices are not readily available and any other situation where our portfolio investments require a fair value determination. Security transactions are accounted for on a trade date basis.

To the extent (i) Benefit Plan Investors hold 25% or more of our outstanding Shares, and (ii) our Shares are not listed on a national securities exchange, one or more Valuation Agents will be engaged to independently value our investments, in consultation with the Investment Adviser. Our quarterly valuation procedures, which are the procedures that will be followed by such Valuation Agent to the extent (i) Benefit Plan Investors hold 25% or more of our outstanding Shares, and (ii) our Shares are not listed on a national securities exchange, are set forth in more detail below:

1)

Investments for which market quotations are readily available on an exchange are valued at such market quotations based on the closing price indicated from independent pricing services.

2)

Investments for which indicative prices are obtained from various pricing services and/or brokers or dealers are valued through a multi-step valuation process, as described below, to determine whether the quote(s) obtained is representative of fair value in accordance with GAAP.

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

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

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

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

3)

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

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

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

The income and market approaches were used in the determination of fair value of certain Level 3 assets as of September 30, 2021. The significant unobservable inputs used in the income approach are the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments and any other end of term fees, as applicable. Included in the consideration and selection of discount rates are factors such as risk of default, interest rate risk, and changes in credit quality. The significant unobservable inputs used in the market approach are based on market comparable transactions and market multiples of publicly traded comparable companies.

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

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

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

39


each portfolio investment for which we do not have a readily available market quotation will be reviewed by an independent valuation firm engaged by our Board.

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

Revenue Recognition

Interest Income

Investment transactions are accounted for on the trade date. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discount and premium on investments purchased are accreted/amortized over the expected life of the respective investment using the effective yieldinterest method. Loan origination fees, original issue discount (“OID”) and market discounts or premiums are capitalized and amortized into interest income using the effective interest method. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income. The amortized cost of investments representsCompany may have loans in its portfolio that contain a payment-in-kind ("PIK") interest provision. PIK interest is accrued and recorded as income at the original cost adjusted forcontractual rates, if deemed collectible. The PIK interest is added to the accretion of discountprincipal balance on the capitalization date and amortization of premium on investments.is generally due at maturity or when deemed by the issuer.

Fee Income

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

Non-accrual

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

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

Investment transactions are accounted for on the trade date. Gain or loss on the sale of investments is calculated using the specific identification method. The Company measures realized gain or loss by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized gain or loss previously recognized. Net change in unrealized gain or loss will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized gain or loss, when a gain or loss is realized.

Organizational Expenses and Offering Costs

Organizational expenses consist of costs incurred to establish the Company and enable it legally to do business. Organizational costs are expensed as incurred. Offering costs consist of costs incurred in connection with the offering of Common Stock of the Company. Offering costs incurred for the period January 15, 2021 (Inception Date) through September 30, 2021 were $0.04 million. Offering costs are capitalized as a deferred charge and amortized to expense on a straight-line basis over 12 months from the Inception Date. As of September 30, 2021, Offering costs deferred were $0.13 million, and are recorded in Prepaid expenses and other assets on the Statement of Assets and Liabilities.

The Company will bear the organizational expenses and offering costs incurred in connection with the formation of the Company and the offering of shares of its Common Stock, including the out-of-pocket expenses of the Investment Adviser and its agents and affiliates. In addition, the Company will reimburse the Investment Adviser for the organizational expenses and offering costs it incurs on the Company’s behalf. For the three months ended September 30, 2021 and the period from January 15, 2021 (Inception Date) through September 30, 2021, the Company has incurred $0.24 million and $0.49 million of organizational costs, respectively. If actual organizational expenses and offering costs incurred exceed $0.75 million the Investment Adviser or its affiliate will bear the excess costs.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to certain financial market risks, such as interest rate fluctuations. In addition, U.S. and global capital markets and credit markets have experienced a higher level of stress due to the global COVID-19 pandemic, which has resulted in an increase in the level of volatility across such markets. Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. In connection with the COVID-19 pandemic, the U.S. Federal Reserve and other central banks have reduced certainA prolonged reduction in interest rates will reduce our gross investment income and LIBOR has decreased.could result in a decrease in our net investment income if such decreases in SOFR are not offset by a corresponding increase in the spread over SOFR that we earn on any portfolio investments, a decrease in our operating expenses, including with respect to our income incentive fee, or a decrease in the interest rate of our floating interest rate liabilities tied to SOFR. As of September 30, 2021, 100.0%March 31, 2024, 100% of investments at fair value (excluding unfunded debt investments) represent floating-rate investments with a LIBORreference rate floor and none of our debt investments at fair value represent fixed-rate investments. Additionally, our Goldman Credit Facility is also subject to floating interest rates and are currently paid based on floating LIBOR rates and prime interestSOFR rates.

40


The following table estimates the potential changes in net cash flow generated from interest income and expenses, should interest rates increase by 50, 100, 200 or 200300 basis points, or decrease by 25100 or 200 basis pointspoints. Interest income is calculated as revenue from interest generated from our portfolio of investments held as of March 31, 2024. Interest expense is calculated based on the terms of our outstanding revolving credit facility and subscription line. For our Goldman Credit Facility, we use the outstanding balance as of March 31, 2024. Interest expense on this balance is calculated using the interest rate as of March 31, 2024, adjusted for the three months ended September 30, 2021.hypothetical changes in rates, as shown below.

Assuming that the interim and unaudited Consolidated Statements of Assets and Liabilities as of March 31, 2024 was to remain constant and that we took no actions to alter our interest rate sensitivity as of such date, the following table shows the annualized impact of hypothetical base rate changes in interest rates. Actual results could differ significantly from those estimated in the table.

Change in Interest Rates

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

 

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

 

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

 

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

 

Down 25 basis points

  $(8  $(3  $(5

Down 100 basis points

 

$

(6,482

)

$

(1,098

)

$

(5,384

)

Down 200 basis points

 

 

(12,964

)

 

(2,196

)

 

(10,768

)

Up 100 basis points

   34    10   $24 

 

 

6,482

 

1,098

 

5,384

 

Up 200 basis points

   68    20   $48 

 

 

12,964

 

2,196

 

10,768

 

Up 300 basis points

   102    31   $71 

 

 

19,447

 

3,294

 

16,153

 

Because we may borrow money to make investments, our net investment income may be dependent on the difference between the rate at which we borrow funds and the rate at which we invest these funds. In periods of increasing interest rates, our cost of funds would increase, which may reduce our net investment income. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “1934 Act”) we evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the 1934 Act) as of September 30, 2021.March 31, 2024. Based on the foregoing evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of September 30, 2021,March 31, 2024, our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level that we would meet our disclosure obligations.

Changes in internal control over financial reporting

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

41


PART II - II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

As of September 30, 2021, weWe, and our wholly-owned direct subsidiaries, the Investment Adviser and the Administrator are not currently subject to any material legal proceedings nor, to our knowledge, is any material legal proceeding threatened against us.as of March 31, 2024. From time to time, we our wholly-owned direct subsidiaries, the Investment Adviser and the Administrator may be a party to certain legal proceedings inincidental to the ordinarynormal course of our business including proceedings relating to the enforcement of our rights under loans to or other contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our business, financial statements.condition or results of operations.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K— for the fiscal year ended December 31, 2023, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may materially affect our business, our structure, our financial condition, our investments and/or operating results. There have been no material changes fromduring the three months ended March 31, 2024 to the risk factors previously discloseddiscussed in Item 1A.—Risk Factors in our registration statementAnnual Report on Form 10 filed with the SEC on July 6, 2021, as amended.10-K.

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

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

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

Rule 10b5-1 Trading Plans

During the fiscal quarter ended March 31, 2024, none of our directors or executive officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of our securities to satisfy the affirmative defense conditions of Rule 10b5 1(c) or any “non-Rule 10b5-1 trading arrangement.”

42


ITEM 6. EXHIBITS

The following exhibits are filed as part of this report, or hereby incorporated by reference to exhibits previously filed with the SEC (and are numbered in accordance with Item 601 of Regulation S-K).United States Securities and Exchange Commission:

Exhibit

Number

Description of Document

3.1

Amended and Restated Certificate of Incorporation(1)

3.2

By-Laws(2)By-Laws(1)

10.1

31.1*

Credit Agreement, dated as of August  11, 2021, by and among Commonwealth Credit Partners BDC I, Inc., as borrower, and Goldman Sachs Bank USA, as lender, as the Facility B credit facility as part of the umbrella credit facility first entered into on June  14, 2021 by Goldman Sachs Bank USA and affiliates of Commonwealth Credit Partners BDC I, Inc.(3)

10.2Amendment to Credit Agreement, dated as of September  27, 2021, by and among Commonwealth Credit Partners BDC I, Inc., as borrower, and Goldman Sachs Bank USA, as lender, as the Facility B credit facility as part of the umbrella credit facility first entered into on June  14, 2021 by Goldman Sachs Bank USA and affiliates of Commonwealth Credit Partners BDC I, Inc.(4)
31.1*Certification of the Chief Executive Officer pursuant to Rule 13a-14 (a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

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

32.1**

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

32.2**

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

101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*

Filed herewith.

(1)

Previously filed as Exhibit 3.1 to the Company’s Form 10 Registration Statement filed on July 6, 2021.

(2)

Previously filed as Exhibit 3.2 to the Company’s Form 10 Registration Statement filed on July 6, 2021.

(3)

Previously filed as Exhibit 10.1 to the Company’s Form 8-K filed on August 13, 2021.

(4)

Previously filed as Exhibit 10.1 to the Company’s Form 8-K filed on September 30, 2021.

* Filed herewith.

* * Furnished herewith.

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

43


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Commonwealth Credit Partners BDC I, Inc.

Date: November 12, 2021May 10, 2024

By:

By:

/s/ Robert O’Sullivan

Name:

Title:

Name:

Robert O’Sullivan

Title:

Chief Executive Officer

Date: November 12, 2021May 10, 2024

By:

By:

/s/ Cecilio M. Rodriguez

Name:

Title:

Name:

Cecilio M. Rodriguez

Title:

Chief Financial Officer

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