UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 20212024

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

Commission File Number: 000-56201814-01363

Kayne Anderson BDC, Inc.

Delaware83-0531326

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

811 Main Street, 14th Floor,717 Texas Avenue, Suite 2200, Houston, TX77002
(Address of principal executive offices)(Zip Code)

(713) 493-2020

(Registrant’s telephone number, including area code)

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

Title of each classTrading Symbol(s)Name of each exchange on which registered
NoneNoneNone

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes  ☐ No

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or 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 May 14, 2021,7, 2024, the registrant had 9,199,76765,116,459 shares of common stock, $0.001 par value per share, outstanding. As of May 14, 2021,issued and outstanding and there was no public market for the registrant’s shares.

 

 

 

Table of Contents

Page
PART I.FINANCIAL INFORMATION1
Item 1.Consolidated Financial Statements (Unaudited)1
Consolidated Statements of Assets and Liabilities as of March 31, 20212024 (Unaudited) and December 31, 202020231
Consolidated StatementStatements of Operations for the quarterthree months ended March 31, 20212024 and 2023 (Unaudited)2
Consolidated Statement of Changes in Net Assets for the quarterthree months ended March 31, 20212024 and 2023 (Unaudited)3
Consolidated Statement of Cash Flows for the quarterthree months ended March 31, 20212024 and 2023 (Unaudited)4
Consolidated Schedule of Investments as of March 31, 20212024 (Unaudited) and December 31, 20235
Notes to Consolidated Financial Statements (Unaudited)723
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations2043
Item 3.Quantitative and Qualitative Disclosures About Market Risk2954
Item 4.Controls and Procedures2954
PART II.OTHER INFORMATION3055
Item 1.Legal Proceedings3055
Item 1A.Risk Factors3055
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds3155
Item 3.Defaults Upon Senior Securities3155
Item 4.Mine Safety Disclosures3155
Item 5.Other Information3155
Item 6.Exhibits3256
Signatures3358

i

 

Forward-Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements that involve substantial known and unknown risks, uncertainties and other factors. Undue reliance should not be placed on such statements. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about the company, current and prospective portfolio investments, the industry, beliefs and assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond control of Kayne Anderson BDC, Inc. (“the CompanyCompany”) and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including:

●future operating results;

●business prospects and the prospects of portfolio companies;companies in which we invest;

●the ability of our portfolio companies to achieve their objectives;

●changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, including changes from the impact of the novel coronavirus (SARS-CoV-2) and related respiratory disease (“COVID-19”) pandemic;markets;

●the ability of KA Credit Advisors, LLC (our “Advisor”) to locate suitable investments and to monitor and administer investments;

●the ability of the Advisor and its affiliates to attract and retain highly talented professionals;

●risk associated with possible disruptions in operations or the economy generally;

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

●the timing of cash flows, distributions and dividends, if any, from the operations of the companies in which the Company invests;

 

●the ability of the companies in which the Company invests to achieve their objectives, including as a result of the current COVID-19 pandemic;

●the ability of the Company to continue to effectively manage the business due to the disruptions caused by the current COVID-19 pandemic;

●the dependence of the future success on the general economy and its effect on the industries in which the Company invests;

●the ability to maintain qualification as a business development company (“BDC”) and as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”);

●the use of borrowed money to finance a portion of the Company’s investments;

●the adequacy, availability and pricing of financing sources and working capital for the Company;

●actual or potential conflicts of interest with the Advisor and its affiliates;

●contractual arrangements and relationships with third parties;

●the currentrisk associated with an economic downturn, increased inflation, political instability, interest rate volatility, loss of key personnel, and the illiquid nature of investments of the Company; and

●the risks, uncertainties and other factors the Company identifies under “Item 1A. Risk Factors” and elsewhere in this quarterly report on Form 10-Q.10-Q, as well as in the Company’s annual report on Form 10-K for the year ended December 31, 2023.

Although the Company believes that the assumptions on which these forward-looking statements areWe have based are reasonable, any of the assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statementincluded in this quarterly report on Form 10-Q should not be regarded as a representation byinformation available to us that our plans and objectives will be achieved. These risks and uncertainties include those described or identified in the section entitled “Item 1A. Risk Factors” and elsewhere in this quarterly report on Form 10-Q. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this quarterly reportreport. We assume no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Although we undertake no obligation to revise or update any forward-looking statements, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the United States Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-Q. Moreover, the Company assumes no duty10-K, registration statements on Form 10, quarterly reports on Form 10-Q and does not undertake to update the forward-looking statements.current reports on Form 8-K.

ii

 

PART I—I — FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements.

Kayne Anderson BDC, Inc.

Consolidated Statements of Assets and Liabilities

(amounts in 000’s, except share and per share amounts)

  March 31,
2024
(Unaudited)		  December 31,
2023		 
Assets:      
Investments, at fair value:      
Long-term investments (amortized cost of $1,759,819 and $1,343,223) $1,784,045  $1,363,498 
Short-term investments (amortized cost of $10,868 and $12,802)  10,868   12,802 
Cash and cash equivalents  33,418   34,069 
Receivable for principal payments on investments  293   104 
Interest receivable  15,551  12,874 
Prepaid expenses and other assets  266   319 
Total Assets $1,844,441  $1,423,666 
         
Liabilities:        
Corporate Credit Facility (Note 6) $198,000  $234,000 
Unamortized Corporate Credit Facility issuance costs  (1,522)  (1,715)
Revolving Funding Facility (Note 6)  319,000   306,000 
Unamortized Revolving Funding Facility issuance costs  (1,589)  (2,019)
Revolving Funding Facility II (Note 6)  67,000   70,000 
Unamortized Revolving Funding Facility II issuance costs  (1,729)  (1,805)
Subscription Credit Agreement (Note 6)  -   10,750 
Unamortized Subscription Credit Facility issuance costs  -   (41)
Notes (Note 6)  75,000   75,000 
Unamortized notes issuance costs  (799)  (851)
Payable for investments purchased  299,692   - 
Capital payable (Note 11)  29,025   - 
Distributions payable  19,516   22,050 
Management fee payable  3,522   2,996 
Incentive fee payable  16,826   14,195 
Accrued expenses and other liabilities  10,942   11,949 
Accrued excise tax expense  -   101 
Total Liabilities $1,032,884  $740,610 
         
Commitments and contingencies (Note 8)        
         
Net Assets:        
Common Shares, $0.001 par value; 100,000,000 shares authorized; 48,789,228 and 41,603,666 as of March 31, 2024 and December 31, 2023, respectively, issued and outstanding $49  $42 
Additional paid-in capital  790,245   669,990 
Total distributable earnings (deficit)  21,263   13,024 
Total Net Assets $811,557  $683,056 
Total Liabilities and Net Assets $1,844,441  $1,423,666 
Net Asset Value Per Common Share $16.63  $16.42 

See accompanying notes to consolidated financial statements.


 

  March 31,
2021
(Unaudited)		  December 31,
2020		 
Assets:      
Investments, at fair value:      
Long-term investments (amortized cost of $153,232,958) $156,031,005  $- 
Short-term investments (amortized cost of $17,377,178)  17,377,178   - 
Cash and cash equivalents  5,806,600   10,000 
Deferred offering costs  219,547   230,534 
Receivable for sales of investments  3,953,182   - 
Receivable for principal payments on investments  68,037   - 
Interest receivable  713,787   - 
Prepaid expenses and other assets  170,945   177,075 
Total Assets $184,340,281  $417,609 
         
Liabilities:        
Loan and Security Agreement (Note 6) $50,000,000  $- 
Unamortized Loan and Security Agreement issuance costs  (325,938)  - 
Subscription Credit Facility (Note 6)  40,000,000   - 
Unamortized Subscription Credit Facility issuance costs  (187,468)  - 
Accrued organizational and offering costs  101,596   141,360 
Payable for investments purchased  5,120,113   - 
Payables to affiliates (Note 3)  1,215,005   1,074,399 
Management fee payable  176,043   - 
Accrued expenses and other liabilities  361,660   - 
Accrued other general and administrative expenses  232,363   - 
Total Liabilities $96,693,374  $1,215,759 
         
Commitments and contingencies (Note 8)        
         
Net Assets:        
Common Shares, $0.001 par value; 100,000,000 shares authorized; 5,667,333 as of March 31, 2021 issued and outstanding  5,667   - 
Additional paid-in capital  85,004,333   - 
Total distributable earnings (deficit)  2,636,907   - 
Total member’s capital (deficit)  -   (798,150)
Total Net Assets $87,646,907  $(798,150)
Total Liabilities and Net Assets $184,340,281  $417,609 
Net Asset Value Per Common Share $15.47   n/a 

Kayne Anderson BDC, Inc.

Consolidated Statements of Operations

(amounts in 000’s, except share and per share amounts)

(Unaudited)

  For the three months ended
March 31,		 
  2024  2023 
Income:      
Investment income from investments:      
Interest income $46,237  $36,366 
Dividend income  257   - 
Total Investment Income  46,494   36,366 
         
Expenses:        
Management fees  3,522   2,685 
Incentive fees  2,631   2,138 
Interest expense  15,656   11,523 
Professional fees  264   150 
Directors fees  147   139 
Other general and administrative expenses  471   449 
Total Expenses  22,691   17,084 
Net Investment Income (Loss)  23,803   19,282 
         
Realized and unrealized gains (losses) on investments        
Net realized gains (losses):        
Investments  -   - 
Total net realized gains (losses)  -   - 
Net change in unrealized gains (losses):        
Investments  3,952   125 
Total net change in unrealized gains (losses)  3,952   125 
Total realized and unrealized gains (losses)  3,952   125 
         
Net Increase (Decrease) in Net Assets Resulting from Operations $27,755  $19,407 
         
Per Common Share Data:        
Basic and diluted net investment income per common share $0.52  $0.54 
Basic and diluted net increase in net assets resulting from operations $0.61  $0.54 
Weighted Average Common Shares Outstanding - Basic and Diluted  45,345,417   35,929,436 

See accompanying notes to consolidated financial statements.


 

Kayne Anderson BDC, Inc.

Consolidated Statements of Changes in Net Assets

(amounts in 000’s)

(Unaudited)

  For the three months ended
March 31,		 
  2024  2023 
Increase (Decrease) in Net Assets Resulting from Operations:      
Net investment income (loss) $23,803  $19,282 
Net realized gains (losses) on investments  -   - 
Net change in unrealized gains (losses) on investments  3,952   125 
Net Increase (Decrease) in Net Assets Resulting from Operations  27,755   19,407 
         
Decrease in Net Assets Resulting from Stockholder Dividends        
Dividends to stockholders  (19,516)  (16,890)
Net Decrease in Net Assets Resulting from Stockholder Dividends  (19,516)  (16,890)
         
Increase in Net Assets Resulting from Capital Share Transactions        
Issuance of common shares  118,689   - 
Reinvestment of dividends  1,573   955 
Net Increase in Net Assets Resulting from Capital Share Transactions  120,262   955 
Total Increase (Decrease) in Net Assets  128,501   3,472 
Net Assets, Beginning of Period  683,056   592,041 
Net Assets, End of Period $811,557  $595,513 

See accompanying notes to consolidated financial statements.


Kayne Anderson BDC, Inc.

Consolidated Statements of Cash Flows

(amounts in 000’s)

(Unaudited)

  For the three months ended
March 31,		 
  2024  2023 
       
Cash Flows from Operating Activities:      
Net increase (decrease) in net assets resulting from operations $27,755  $19,407 
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities:        
Net realized (gains)/losses on investments  -   - 
Net change in unrealized (gains)/losses on investments  (3,952)  (125)
Net accretion of discount on investments  (2,621)  (2,115)
Sales (purchases) of short-term investments, net  1,934   (5,345)
Purchases of portfolio investments  (446,080)  (104,080)
Proceeds from sales of investments and principal repayments  32,390   17,245 
Paid-in-kind interest from portfolio investments  (284)  (165)
Amortization of deferred financing cost  897   591 
Increase/(decrease) in operating assets and liabilities:        
(Increase)/decrease in interest and dividends receivable  (2,677)  (3,153)
(Increase)/decrease in receivable for principal payments on investments  (189)  (79)
 Increase/(decrease) in excise tax payable  (101)  - 
(Increase)/decrease in prepaid expenses and other assets  53   64 
Increase/(decrease) in payable for investments purchased  299,692   (956)
Increase/(decrease) in management fees payable  526   270 
Increase/(decrease) in incentive fee payable  2,631   2,138 
Increase/(decrease) in accrued other general and administrative expenses  (1,007)  (587)
Net cash used in operating activities  (91,033)  (76,890)
Cash Flows from Financing Activities:        
Borrowings/(payments) on Corporate Credit Facility, net  (36,000)  28,000 
Borrowings on Revolving Funding Facility, net  13,000   75,000 
Borrowings/(payments) on Revolving Funding Facility II, net  (3,000)  - 
Payments on Subscription and Credit Agreement, net  (10,750)  (16,000)
Payments of debt issuance costs  (105)  (67)
Deposits for issuance of common shares  29,025   7,110 
Dividends paid in cash  (20,477)  (14,473)
Proceeds from issuance of common shares  118,689   - 
Net cash provided by financing activities  90,382   79,570 
Net increase (decrease) in cash and cash equivalents  (651)  2,680 
Cash and cash equivalents, beginning of period  34,069   8,526 
Cash and cash equivalents, end of period $33,418  $11,206 
         
Supplemental and Non-Cash Information:        
Interest paid during the period $15,783  $11,213 
Non-cash financing activities not included herein consisted of reinvestment of dividends $1,573  $955 

See accompanying notes to consolidated financial statements.


Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of March 31, 2024

(amounts in 000's, except number of shares, units)

(Unaudited)

        Maturity Principal /  Amortized  Fair  Percentage 
Portfolio Company(1) Footnotes Investment (2) Interest Rate Date Par  Cost(3)(4)  Value  of Net Assets 
Debt and Equity Investments                    
Debt  Investments                    
Aerospace & defense                        
Basel U.S. Acquisition Co., Inc. (IAC) (5)(6) First lien senior secured revolving loan 11.47% (S + 6.00%) 12/5/2028 $-  $-  $-   0.0%
    First lien senior secured loan 11.47% (S + 6.00%) 12/5/2028  18,448   18,036   18,724   2.3%
Fastener Distribution Holdings, LLC (5) First lien senior secured loan 11.95% (S + 6.50%) 10/1/2025  20,443   20,096   20,443   2.5%
    First lien senior secured delayed draw loan 11.95% (S + 6.50%) 10/1/2025  9,075   8,998   9,075   1.1%
Precinmac (US) Holdings, Inc. (5) First lien senior secured loan 11.43% (S + 6.00%) 8/31/2027  5,339   5,273   5,312   0.7%
    First lien senior secured delayed draw loan 11.43% (S + 6.00%) 8/31/2027  1,099   1,085   1,094   0.1%
TransDigm Inc (5) First lien senior secured loan 8.06% (S + 2.75%) 8/24/2028  10,060   10,114   10,091   1.3%
Vitesse Systems Parent, LLC (5) First lien senior secured loan 12.44% (S + 7.00%) 12/22/2028  31,130   30,388   31,130   3.8%
           95,594   93,990   95,869   11.8%
Automobile components                        
Clarios Global LP (5)(6) First lien senior secured loan 8.33% (S + 3.00%) 5/6/2030  10,060   10,102   10,076   1.3%
Speedstar Holding LLC (5) First lien senior secured loan 12.74% (S + 7.25%) 1/22/2027  

4,846

   

4,791

   

4,820

   0.6%
    First lien senior secured loan 

12.71% (S + 7.25%)

 1/22/2027  

1,152

   

1,126

   

1,147

   

0.1

%
    First lien senior secured delayed draw loan 12.74% (S + 7.25%) 1/22/2027  271   265   269   0.0%
Vehicle Accessories, Inc. (5) First lien senior secured loan 10.94% (S + 5.50%) 11/30/2026  26,626   26,341   26,626   3.3%
    First lien senior secured revolving loan 

10.94% (S + 5.50%)

 11/30/2026  688   666   688   0.1%
           

43,643

   43,291   43,626   5.4%
Biotechnology                        
Alcami Corporation (Alcami) (5) First lien senior secured delayed draw loan 12.47% (S + 7.00%) 

12/21/2028

  853   804   870   0.1%
    First lien senior secured revolving loan 12.49% (S + 7.00%) 12/21/2028  -   -   -   0.0%
    First lien senior secured loan 12.49% (S + 7.00%) 12/21/2028  11,618   11,284   11,850   1.5%
           12,471   12,088   12,720   1.6%
Building products                        
Eastern Wholesale Fence (5) First lien senior secured loan 13.45% (S + 8.00%) 10/30/2025  18,624   18,176   18,624   2.3%
    First lien senior secured revolving loan 13.47% (S + 8.00%) 10/30/2025  1,134   1,128   1,134   0.1%
Ruff Roofers Buyer, LLC (5) First lien senior secured loan 11.08% (S + 5.75%) 11/19/2029  7,168   6,902   7,240   0.9%
    First lien senior secured delayed draw loan 11.08% (S + 5.75%) 

11/18/2024

  -   -   -   0.0%
    First lien senior secured delayed draw loan 11.08% (S + 5.75%) 11/17/2025  -   -   -   0.0%
    First lien senior secured revolving loan 11.08% (S + 5.75%) 11/19/2029      -   -   0.0%
           26,926   26,206   26,998   3.3%
Capital markets                        
Atria Wealth Solutions, Inc. (5) First lien senior secured loan 12.07% (S + 6.50%) 5/31/2024  5,074   5,070   5,074   0.6%
    First lien senior secured delayed draw loan 12.07% (S + 6.50%) 5/31/2024  3,210   3,206   3,210   0.4%
           8,284   8,276   8,284   1.0%
Chemicals                        
AkzoNobel Specialty Chemicals (5) First lien senior secured loan 9.42% (S + 4.00%) 4/3/2028  10,035   10,097   10,050   1.2%
FAR Technologies Holdings, Inc.(f/k/a Cyalume Technologies Holdings, Inc.) (5) First lien senior secured loan 10.56% (S + 5.00%) 8/30/2024  1,274   1,272   1,274   0.2%
Fralock Buyer LLC (5) First lien senior secured loan 11.56% (S + 6.00%) 

3/31/2025

  11,648   11,644   11,561   1.4%
    First lien senior secured revolving loan 11.56% (S + 6.00%) 

3/31/2025

  449   449   446   0.1%
Shrieve Chemical Company, LLC (5) First lien senior secured loan 

11.80% (S + 6.38%)

 

12/2/2024

  8,680   8,606   8,680   1.1%
USALCO, LLC (5) First lien senior secured loan 11.56% (S + 6.00%) 10/19/2027  18,939   18,655   19,081   2.3%
    First lien senior secured revolving loan 11.44% (S + 6.00%) 10/19/2026  1,494   1,468   1,505   0.2%
           52,519   52,191   52,597   6.5%

See accompanying notes to consolidated financial statements.

 


 

Kayne Anderson BDC, Inc.

Consolidated StatementSchedule of OperationsInvestments

As of March 31, 2024

(amounts in 000's, except number of shares, units)

(Unaudited)

  For the quarter ended 
  March 31,
2021		 
Income:   
Investment income from investments:   
Interest income $1,736,558 
Total Investment Income  1,736,558 
     
Expenses:    
Interest expense  461,469 
Management fees  176,043 
Professional fees  107,617 
Directors fees  65,000 
Offering costs  38,952 
Initial organization costs  175,465 
Other general and administrative expenses  97,327 
Total Expenses  1,121,873 
Net Investment Income (Loss)  614,685 
     
Realized and unrealized gains (losses) on investments    
Net realized gains (losses):    
Investments  32,324 
Total net realized gains (losses)  32,324 
Net change in unrealized gains (losses):    
Investments  2,798,048 
Total net change in unrealized gains (losses)  2,798,048 
Total realized and unrealized gains (losses)  2,830,372 
     
Net Increase (Decrease) in Net Assets Resulting from Operations $3,445,057 
     
Per Common Share Data:    
Basic and diluted net investment income per common share $0.11 
Basic and diluted net increase in net assets resulting from operations $0.61 
Weighted Average Common Shares Outstanding - Basic and Diluted  5,667,333 

        Maturity Principal /  Amortized  Fair  Percentage 
Portfolio Company(1) Footnotes Investment (2) Interest Rate Date Par  Cost(3)(4)  Value  of Net Assets 
Commercial services & supplies                        
Advanced Environmental Monitoring (5)(7) First lien senior secured loan 11.96% (S + 6.50%) 1/29/2026  10,158   10,014   10,158   1.3%
Alight Solutions (Tempo Acquisition LLC) (5) First lien senior secured loan 8.08% (S + 2.75%) 8/31/2028  10,035   10,076   10,060   1.2%
Allentown, LLC (5) First lien senior secured loan 11.43% (S + 6.00%) 4/22/2027  7,566   7,519   7,604   0.9%
    First lien senior secured delayed draw loan 11.43% (S + 6.00%) 4/22/2027  1,367   1,352   1,374   0.2%
    First lien senior secured revolving loan 11.43% (S + 6.00%) 4/22/2027  -   -   -   0.0%
American Equipment Holdings LLC (5) First lien senior secured loan 11.86% (S + 6.00%) 11/5/2026  19,994   19,733   19,994   2.5%
    First lien senior secured loan 11.59% (S + 6.00%) 11/5/2026  2,639   2,586   2,639   0.3%
    First lien senior secured delayed draw loan 11.86% (S + 6.00%) 11/5/2026  6,223   6,089   6,223   0.8%
    First lien senior secured delayed draw loan 11.51% (S + 6.00%) 11/5/2026  4,956   4,898   4,956   0.6%
    First lien senior secured revolving loan 11.86% (S + 6.00%) 11/5/2026  -   -   -   0.0%
Arborworks Acquisition LLC (5)(8)(9)(10) First lien senior secured loan   11/9/2028  4,688   4,688   4,688   0.6%
    First lien senior secured revolving loan   11/9/2028  2,345   2,345   2,345   0.3%
BLP Buyer, Inc. (Bishop Lifting Products) (5) First lien senior secured loan 11.08% (S + 5.75%) 12/22/2029  26,099   25,601   26,360   3.2%
    First lien senior secured delayed draw loan 11.08% (S + 5.75%) 12/22/2029  637   601   644   0.1%
    First lien senior secured revolving loan 11.08% (S + 5.75%) 12/22/2029  273   202   275   0.0%
Gusmer Enterprises, Inc. (5) First lien senior secured loan 11.94% (S + 6.50%) 5/7/2027  4,735   4,675   4,735   0.5%
    First lien senior secured delayed draw loan 11.94% (S + 6.50%) 5/7/2027  7,931   7,789   7,931   1.0%
    First lien senior secured revolving loan 11.94% (S + 6.50%) 5/7/2027  -   -   -   0.0%
PMFC Holding, LLC (5) First lien senior secured loan 12.98% (S + 7.50%) 7/31/2025  5,547   5,434   5,547   0.7%
    First lien senior secured delayed draw loan 12.96% (S + 7.50%) 7/31/2025  2,782   2,780   2,782   0.3%
    First lien senior secured revolving loan 12.97% (S + 7.50%) 7/31/2025  547   547   547   0.1%
Regiment Security Partners LLC (5) First lien senior secured loan 15.48% (S + 8.00%) 9/15/2026  6,364   6,297   6,364   0.8%
    First lien senior secured delayed draw loan 15.48% (S + 8.00%) 9/15/2026  2,602   2,583   2,602   0.3%
    First lien senior secured revolving loan 15.48% (S + 8.00%) 9/15/2026  1,448   1,429   1,448   0.2%
           128,936   127,238   129,276   15.9%
Construction materials                        
Quikrete Holdings Inc (5) First lien senior secured loan 8.19% (S + 2.25%) 3/19/2029  14,962   14,962   14,962   1.8%
                         
Containers & packaging                        
Carton Packaging Buyer, Inc. (Century Box) (5) First lien senior secured loan 11.31% (S + 6.00%) 10/30/2028  24,200   23,572   24,201   3.0%
    First lien senior secured revolving loan 11.31% (S + 6.00%) 10/30/2028  -   -   -   0.0%
Drew Foam Companies, Inc. (5) First lien senior secured loan 12.70% (S + 7.25%) 11/5/2025  7,034   6,986   6,981   0.9%
    First lien senior secured loan 12.72% (S + 7.25%) 11/5/2025  19,993   19,768   19,843   2.4%
FCA, LLC (FCA Packaging) (5) First lien senior secured loan 11.59% (S + 6.50%) 7/18/2028  18,673   18,460   18,860   2.3%
    First lien senior secured revolving loan 14.00% (P + 5.50%) 7/18/2028  1,780   1,751   1,798   0.2%
Innopak Industries, Inc. (5) First lien senior secured loan 11.68% (S + 6.25%) 3/5/2027  28,154   27,538   28,154   3.5%
           99,834   98,075   99,837   12.3%

See accompanying notes to consolidated financial statements.

 


 

Kayne Anderson BDC, Inc.

Consolidated StatementSchedule of ChangesInvestments

As of March 31, 2024

(amounts in Net Assets000's, except number of shares, units)

(Unaudited)

  For the quarter ended 
  March 31,
2021		 
Increase (Decrease) in Net Assets Resulting from Operations:   
Net investment income (loss) $614,685 
Net realized gains (losses) on investments  32,324 
Net change in unrealized gains (losses) on investments  2,798,048 
Net Increase (Decrease) in Net Assets Resulting from Operations  3,445,057 
     
Increase in Net Assets Resulting from Capital Share Transactions    
Issuance of common shares  85,000,000 
Net Increase in Net Assets Resulting from Capital Share Transactions  85,000,000 
Total Increase (Decrease) in Net Assets  88,445,057 
Net Assets, Beginning of Period  (798,150)
Net Assets, End of Period $87,646,907 

        Maturity Principal /  Amortized  Fair  Percentage 
Portfolio Company(1) Footnotes Investment (2) Interest Rate Date Par  Cost(3)(4)  Value  of Net Assets 
Diversified consumer services                        
Fugue Finance B.V. (5)(6) First lien senior secured loan 9.07% (S + 3.75%) 2/26/2031  3,000   3,000   3,005   0.4%
                         
Diversified telecommunication services                        
Liberty Global/Vodafone Ziggo (5)(6) First lien senior secured loan 7.94% (S + 2.50%) 4/30/2028  10,060   9,951   9,907   1.2%
Network Connex (f/k/a NTI Connect, LLC) (5) First lien senior secured loan 10.95% (S + 5.50%) 1/31/2026  5,182   5,130   5,182   0.6%
Virgin Media Bristor LLC (5) First lien senior secured loan 7.94% (S + 2.50%) 1/31/2028  17,500   17,312   17,222   2.2%
           32,742   32,393   32,311   4.0%
Electrical equipment                        
Westinghouse (Wec US Holdings LTD) (5) First lien senior secured loan 8.08% (S + 2.75%) 1/25/2031  10,060   10,073   10,045   1.2%
                         
Entertainment                        
UFC Holdings LLC (5) First lien senior secured loan 8.34% (S + 2.75%) 4/29/2026  17,450   17,494   17,472   2.2%
                         
Food products                        
BC CS 2, L.P. (Cuisine Solutions) (5)(6)(11)   13.55% (S + 8.00%) 7/8/2028  21,555   21,090   21,986   2.7%
BR PJK Produce, LLC (Keany) (5) First lien senior secured loan 11.45% (S + 6.00%) 11/14/2027  29,490   28,932   29,711   3.7%
    First lien senior secured delayed draw loan 11.48% (S + 6.00%) 11/14/2027  2,930   2,812   2,952   0.4%
CCFF Buyer, LLC (California Custom Fruits & Flavors, LLC) (5) First lien senior secured loan 11.00% (S +5.75%) 2/26/2030  13,966   13,469   13,966   1.7%
    First lien senior secured delayed draw loan 11.00% (S +5.75%) 2/26/2026  -   -   -   0.0%
    First lien senior secured revolving loan 11.00% (S +5.75%) 2/26/2030  -   -   -   0.0%
City Line Distributors, LLC (5) First lien senior secured loan 11.42% (S + 6.00%) 8/31/2028  8,873   8,673   8,962   1.1%
    First lien senior secured delayed draw loan 11.43% (S + 6.00%) 8/31/2028  3,636   3,522   3,672   0.5%
    First lien senior secured revolving loan 11.42% (S + 6.00%) 8/31/2028  -   -   -   0.0%
Gulf Pacific Holdings, LLC (5) First lien senior secured loan 11.45% (S + 6.00%) 9/30/2028  20,129   19,811   20,028   2.5%
    First lien senior secured delayed draw loan 11.48% (S + 6.00%) 9/30/2028  1,697   1,618   1,689   0.2%
    First lien senior secured revolving loan 11.49% (S + 6.00%) 9/30/2028  2,697   2,607   2,683   0.3%
IF&P Foods, LLC (FreshEdge) (5) First lien senior secured loan 10.88% (S + 5.63%) 10/3/2028  27,176   26,640   26,836   3.3%
    First lien senior secured loan 11.26% (S + 6.00%) 10/3/2028  216   211   216   0.0%
    First lien senior secured delayed draw loan 10.88% (S + 5.63%) 10/3/2028  4,035   3,963   3,984   0.5%
    First lien senior secured revolving loan 10.95% (S + 5.63%) 10/3/2028  2,851   2,786   2,816   0.3%
J&K Ingredients, LLC (5) First lien senior secured loan 11.58% (S + 6.25%) 11/16/2028  11,552   11,280   11,609   1.4%
Siegel Egg Co., LLC (5) First lien senior secured loan 11.93% (S + 6.50%) 12/29/2026  14,532   14,380   13,588   1.7%
    First lien senior secured revolving loan 11.93% (S + 6.50%) 12/29/2026  2,594   2,561   2,425   0.3%
Worldwide Produce Acquisition, LLC (5) First lien senior secured delayed draw loan 11.56% (S + 6.25%) 1/18/2029  559   545   554   0.1%
    First lien senior secured delayed draw loan 11.56% (S + 6.25%) 1/18/2029  464   437   460   0.1%
    First lien senior secured revolving loan 11.56% (S + 6.25%) 1/18/2029  -   -   -   0.0%
    First lien senior secured loan 11.56% (S + 6.25%) 1/18/2029  2,853   2,781   2,825   0.3%
           171,805   168,118   170,962   21.1%

See accompanying notes to consolidated financial statements.

 


 

Kayne Anderson BDC, Inc.

Consolidated StatementSchedule of Cash FlowsInvestments

As of March 31, 2024

(amounts in 000's, except number of shares, units)

(Unaudited)

  For the quarter ended 
  March 31,
2021		 
Cash Flows from Operating Activities:   
Net increase (decrease) in net assets resulting from operations $3,445,057 
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities:    
Net realized (gains)/losses on investments  (32,324)
Net change in unrealized (gains)/losses on investments  (2,798,048)
Net accretion of discount on investments  (168,177)
Purchases of short-term investments  (17,377,178)
Purchases of portfolio investments  (157,975,978)
Proceeds from sale of portfolio investments  5,018,061 
Paid-in-kind interest from portfolio investments  (74,540)
Amortization of deferred financing cost  35,047 
Increase/(decrease) in operating assets and liabilities:    
(Increase)/decrease in receivable for sales of investments  (3,953,182)
(Increase)/decrease in interest and dividends receivable  (713,787)
(Increase)/decrease in deferred offering costs  10,987 
(Increase)/decrease in receivable for principal payments on investments  (68,037)
(Increase)/decrease in prepaid expenses and other assets  6,130 
Increase/(decrease) in payable for investments purchased  5,120,113 
Increase/(decrease) in management fees payable  176,043 
Increase/(decrease) in payable to affiliate  140,606 
Increase/(decrease) in accrued organizational and offering costs  (39,764)
Increase/(decrease) in accrued expenses and other liabilities  361,660 
Increase/(decrease) in accrued other general and administrative expenses  232,363 
Net cash used in operating activities  (168,654,948)
Cash Flows from Financing Activities:    
Borrowings on Loan and Security Agreement, net  50,000,000 
Borrowings on Subscription Credit Facility, net  40,000,000 
Payments of debt issuance costs  (548,452)
Proceeds from issuance of common shares  85,000,000 
Net cash provided by financing activities  174,451,548 
Net increase in cash and cash equivalents  5,796,600 
Cash and cash equivalents, beginning of period  10,000 
Cash and cash equivalents, end of period $5,806,600 
     
Supplemental and Non-Cash Information:    
Interest paid during the period $11,396 
        Maturity Principal /  Amortized  Fair  Percentage 
Portfolio Company(1) Footnotes Investment (2) Interest Rate Date Par  Cost(3)(4)  Value  of Net Assets 
Health care providers & services                        
Brightview, LLC (5) First lien senior secured loan 11.44% (S + 6.00%) 12/14/2026  12,837   12,825   12,709   1.6%
    First lien senior secured delayed draw loan 11.44% (S + 6.00%) 12/14/2026  1,714   1,711   1,697   0.2%
    First lien senior secured revolving loan 11.44% (S + 6.00%) 12/14/2026  194   189   192   0.0%
Guardian Dentistry Partners (5) First lien senior secured loan 11.94% (S + 6.50%) 8/20/2026  8,037   7,921   8,037   1.0%
    First lien senior secured delayed draw loan 11.94% (S + 6.50%) 8/20/2026  15,643   15,445   15,643   1.9%
    First lien senior secured delayed draw loan 11.94% (S + 6.50%) 8/20/2026  5,794   5,794   5,794   0.7%
Guided Practice Solutions: Dental, LLC (GPS) (5) First lien senior secured delayed draw loan 11.69% (S + 6.25%) 12/28/2028  8,153   7,764   8,214   1.0%
Light Wave Dental Management LLC (5) First lien senior secured revolving loan 12.30% (S + 7.00%) 6/30/2029  3,009   2,930   3,031   0.4%
    First lien senior secured loan 12.30% (S + 7.00%) 6/30/2029  22,367   21,798   22,534   2.8%
MVP VIP Borrower, LLC (5) First lien senior secured loan 11.80% (S + 6.50%) 1/3/2029  19,627   19,167   19,627   2.4%
    First lien senior secured delayed draw loan 11.81% (S + 6.50%) 1/3/2029  1,583   1,546   1,583   0.2%
Refocus Management Services, LLC (5) First lien senior secured loan 11.66% (S + 6.25%) 2/14/2029  18,359   17,693   18,359   2.3%
    First lien senior secured delayed draw loan 11.66% (S + 6.25%) 8/14/2025  -   -   -   0.0%
    First lien senior secured revolving loan 11.66% (S + 6.25%) 2/14/2029  -   -   -   0.0%
SGA Dental Partners Holdings, LLC (5) First lien senior secured loan 11.59% (S + 6.00%) 12/30/2026  11,797   11,646   11,797   1.4%
    First lien senior secured loan 11.56% (S + 6.00%) 12/30/2026  1,677   1,567   1,677   0.2%
    First lien senior secured delayed draw loan 11.59% (S + 6.00%) 12/30/2026  10,996   10,861   10,996   1.4%
    First lien senior secured delayed draw loan 11.59% (S + 6.00%) 12/31/2024  -   -   -   0.0%
    First lien senior secured revolving loan 11.59% (S + 6.00%) 12/30/2026  -   -   -   0.0%
           141,787   138,857   141,890   17.5%
Health care equipment & supplies                        
LSL Industries, LLC (LSL Healthcare) (5) First lien senior secured loan 12.44% (S + 7.00%) 11/3/2027  19,479   18,910   19,285   2.4%
    First lien senior secured delayed draw loan 12.44% (S + 7.00%) 11/3/2024  -   -   -   0.0%
    First lien senior secured revolving loan 12.44% (S + 7.00%) 11/3/2027  -   -   -   0.0%
Medline Borrower LP (5) First lien senior secured loan 8.20% (S + 2.75%) 10/23/2028  10,060   10,106   10,081   1.2%
           29,539   29,016   29,366   3.6%

See accompanying notes to consolidated financial statements.


 

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of March 31, 20212024

(amounts in 000's, except number of shares, units)

(Unaudited)

        Maturity Principal /  Amortized  Fair  Percentage 
Portfolio Company(1) Footnotes Investment (2) Interest Rate Date Par  Cost(3)(4)  Value  of Net Assets 
Hotels, restaurants & leisure                        
Inspire Brands (5) First lien senior secured loan 8.18% (S+ 2.75%) 12/15/2027  10,060   10,085   10,059   1.3%
Restaurant Brands (1011778 BC ULC) (5)(6) First lien senior secured loan 7.58% (S+ 2.25%) 9/23/2030  17,456   17,476   17,439   2.1%
           27,516   27,561   27,498   3.4%
Household durables                        
Curio Brands, LLC (5) First lien senior secured loan 10.68% (S + 5.25%) 12/21/2027  17,128   16,833   17,000   2.1%
    First lien senior secured revolving loan 10.68% (S + 5.25%) 12/21/2027  -   -   -   0.0%
    First lien senior secured delayed draw loan 10.68% (S + 5.25%) 12/21/2027  4,111   4,111   4,080   0.5%
           21,239   20,944   21,080   2.6%
Household products                        
Home Brands Group Holdings, Inc. (ReBath) (5) First lien senior secured loan 10.20% (S + 4.75%) 11/8/2026  16,738   16,534   16,738   2.1%
    First lien senior secured revolving loan 10.20% (S + 4.75%) 11/8/2026  -   -   -   0.0%
           16,738   16,534   16,738   2.1%
Insurance                        
Allcat Claims Service, LLC (5) First lien senior secured loan 11.43% (S + 6.00%) 7/7/2027  7,697   7,586   7,697   0.9%
    First lien senior secured delayed draw loan 11.43% (S + 6.00%) 7/7/2027  21,550   21,190   21,550   2.7%
    First lien senior secured revolving loan 11.43% (S + 6.00%) 7/7/2027  -   -   -   0.0%
AmWINS Group Inc (5) First lien senior secured loan 7.69% (S + 2.25%) 2/19/2028  10,034   10,051   10,032   1.2%
           39,281   38,827   39,279   4.8%
IT services                        
Asurion 

(5)

 First lien senior secured loan 

8.69% (S+ 3.25%)

 12/23/2026  

6,782

   

6,782

   

6,635

   

0.8

% 
Domain Information Services Inc. (Integris) (5) First lien senior secured loan 11.23% (S + 5.75%) 6/30/2026  20,392   20,114   20,392   2.5%
Improving Acquisition LLC (5) First lien senior secured loan 12.19% (S + 6.50%) 7/26/2027  31,571   31,099   31,413   3.9%
    First lien senior secured revolving loan 12.19% (S + 6.50%) 7/26/2027  -   -   -   0.0%
           

58,745

   

57,995

   58,440   

7.2

%
Leisure products                        
BCI Burke Holding Corp. (5) First lien senior secured loan 11.06% (S + 5.50%) 12/14/2027  14,432   14,296   14,720   1.8%
    First lien senior secured delayed draw loan 11.06% (S + 5.50%) 12/14/2027  542   514   553   0.1%
    First lien senior secured revolving loan 11.06% (S + 5.50%) 6/14/2027  -   -   -   0.0%
MacNeill Pride Group (5) First lien senior secured loan 11.81% (S + 6.25%) 4/22/2026  8,233   8,182   8,109   1.0%
    First lien senior secured delayed draw loan 11.81% (S + 6.25%) 4/22/2026  3,269   3,234   3,220   0.4%
    First lien senior secured revolving loan 11.81% (S + 6.25%) 4/22/2026  599   584   590   0.1%
Pixel Intermediate, LLC (5)(6) First lien senior secured loan 11.56% (S + 6.25%) 2/1/2029  20,880   20,369   20,880   2.6%
    First lien senior secured revolving loan 11.59% (S + 6.25%) 2/1/2029  3,766   3,613   3,766   0.5%
Trademark Global LLC (5) First lien senior secured loan 12.93% (S +5.75%, 1.50% is PIK) 7/30/2024  11,850   11,838   10,606   1.3%
    First lien senior secured revolving loan 12.93% (S +5.75%, 1.50% is PIK) 7/30/2024  2,642   2,636   2,364   0.3%
VENUplus, Inc. (f/k/a CTM Group, Inc.) (5) First lien senior secured loan 12.24% (S + 6.75%) 11/30/2026  4,409   4,325   4,365   0.4%
           70,622   69,591   69,173   8.5%

See accompanying notes to consolidated financial statements.

(Unaudited)


 

Portfolio
Company(1)		 Investment Interest Rate Maturity
Date		 Principal /
Par		  Amortized
Cost(2)(3)		  Fair
Value		  Percentage
of Net
Assets		 
Debt Investments                  
Private Credit Investments(4)                  
Automobiles & components                  
Speedstar Holding LLC First lien senior secured loan 8.00% (L + 7.00%) 1/22/2027 $5,043,224  $4,932,963  $5,043,224   5.8%
  First lien senior secured  delayed draw term loan 8.00% (L + 7.00%) 1/22/2027  -   -   -   0.0%
         5,043,224   4,932,963   5,043,224   5.8%
Capital goods                      
Broder Bros., Co. First lien senior secured loan 9.75% (L + 8.50%) 12/2/2022  5,461,140   4,985,667   5,242,695   6.0%
Fastener Distribution Holdings, LLC First lien senior secured  delayed draw term loan 8.00% (L + 7.00%) 4/1/2022  2,220,231   2,201,059   2,220,231   2.5%
  First lien senior secured loan 8.00% (L + 7.00%) 4/1/2022  1,954,628   1,937,747   1,954,628   2.2%
Friedrich Air Conditioning Co., LTD First lien senior secured loan 7.00% (L + 6.00%) 2/7/2023  1,496,769   1,483,353   1,496,769   1.7%
GEON Performance Solutions First lien senior secured loan 7.88% (L + 6.25%) 10/25/2024  4,426,724   4,384,865   4,426,724   5.1%
  First lien senior secured revolving loan 7.88% (L + 6.25%) 10/25/2024  -   -   -   0.0%
         15,559,492   14,992,691   15,341,047   17.5%
Commercial & professional services                      
Advanced Environmental Monitoring First lien senior secured loan 7.50% (L + 6.50%) 1/29/2026  7,371,545   7,124,922   7,371,545   8.4%
PMFC Holding, LLC First lien senior secured  delayed draw term loan 8.50% (L + 7.50%) 7/31/2023  2,868,984   2,842,716   2,868,984   3.3%
  First lien senior secured loan 8.50% (L + 7.50%) 7/31/2023  5,718,855   5,666,642   5,718,855   6.5%
  First lien senior secured revolving loan 8.50% (L + 7.50%) 7/31/2023  -   -   -   0.0%
         15,959,384   15,634,280   15,959,384   18.2%
Consumer durables and apparel                      
BEL USA, LLC First lien senior secured loan 9.50% (L + 8.00%), incl. 1.20% PIK 11/2/2023  149,823   148,451   147,575   0.2%
  First lien senior secured loan 8.00% (L + 6.50%) 11/2/2023  9,003,046   8,793,062   8,868,001   10.1%
New Era Cap Company, Inc. First lien senior secured loan 7.50% (L + 6.50%) 9/10/2023  12,822,254   12,702,812   12,950,477   14.8%
YS Garments, LLC First lien senior secured loan 7.00% (L + 6.00%) 8/9/2024  8,526,896   8,325,213   8,484,261   9.7%
         30,502,019   29,969,538   30,450,314   34.8%
Diversified financials                      
Atria Wealth Solutions, Inc. First lien senior secured loan 7.00% (L + 6.00%) 11/30/2022  5,231,057   5,158,971   5,231,057   6.0%
         5,231,057   5,158,971   5,231,057   6.0%
Food, beverage & tobacco                      
Pretzels, LLC First lien senior secured loan 7.00% (L + 6.00%) 10/22/2024  3,238,013   3,207,706   3,270,393   3.7%
WhiteBridge Pet Brands, LLC First lien senior secured loan 6.25% (L + 5.25%) 1/24/2025  7,924,558   7,732,115   7,924,558   9.0%
         11,162,571   10,939,821   11,194,951   12.7%
Health care equipment & services                      
OMH-HealthEdge Holdings, LLC First lien senior secured loan 6.25% (L + 5.25%) 10/24/2025  12,468,750   12,191,705   12,468,750   14.2%
Smile Doctors, LLC First lien senior secured loan 7.00% (L + 6.00%) 10/6/2022  2,171,400   2,151,997   2,171,400   2.5%
Smile Doctors, LLC First lien senior secured revolving loan 7.00% (L + 6.00%) 10/6/2022  -   -   -   0.0%
         14,640,150   14,343,702   14,640,150   16.7%
Household & personal products                      
PH Beauty Holdings III, Inc. First lien senior secured loan 5.19% (L + 5.00%) 9/28/2025  9,716,284   9,295,425   9,376,214   10.7%
         9,716,284   9,295,425   9,376,214   10.7%
Materials                      
Cyalume Technologies Holdings, Inc. First lien senior secured loan 7.50% (L + 6.00%) 10/25/2024  1,897,752   1,879,812   1,897,752   2.2%
Deflecto, LLC First lien senior secured loan 8.50% (L + 7.50%) 9/22/2022  962,676   954,114   962,676   1.1%
Drew Foam Companies, Inc. First lien senior secured loan 7.50% (L + 6.50%) 11/5/2025  3,684,298   3,630,231   3,684,298   4.2%
  First lien senior secured loan 7.50% (L + 6.50%) 11/15/2025  792,178   780,672   792,178   0.9%
  First lien senior secured loan 7.50% (L + 6.50%) 11/5/2025  3,029,073   2,984,621   3,029,073   3.5%
Fralock Buyer LLC First lien senior secured loan 7.00% (L + 6.00%) 4/17/2024  5,522,176   5,403,220   5,522,176   6.3%
  First lien senior secured revolving loan 7.00% (L + 6.00%) 4/17/2024  -   -   -   0.0%
Meridian Adhesives Group, Inc. First lien senior secured loan 6.50% (L + 5.50%) 9/25/2023  5,726,424   5,673,201   5,726,424   6.5%
  First lien senior secured loan 7.25% (L + 6.25%) 9/25/2023  4,304,444   4,211,378   4,304,444   4.9%
         25,919,021   25,517,249   25,919,021   29.6%
Pharmaceuticals, biotech & life sciences                      
Foundation Consumer Brands First lien senior secured loan 7.38% (L + 6.38%) 10/1/2026  9,423,077   9,327,157   9,423,077   10.8%
  First lien senior secured revolving loan 7.38% (L + 6.38%) 10/1/2026  -   -   -   0.0%
         9,423,077   9,327,157   9,423,077   10.8%
Retailing                      
Sundance Holdings Group, LLC First lien senior secured loan 9.00% (L + 8.00%), incl 2.00% PIK 5/1/2024  9,521,641   9,063,700   9,378,816   10.7%
         9,521,641   9,063,700   9,378,816   10.7%
Total Private Credit Investments        152,677,920   149,175,497   151,957,255   173.5%

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of March 31, 2024

(amounts in 000's, except number of shares, units)

(Unaudited)

        Maturity Principal /  Amortized  Fair  Percentage 
Portfolio Company(1) Footnotes Investment (2) Interest Rate Date Par  Cost(3)(4)  Value  of Net Assets 
Machinery                    
PVI Holdings, Inc (5) First lien senior secured loan 11.79% (S + 6.39%) 1/18/2028  23,835   23,556   24,252   3.0%
Techniks Holdings, LLC / Eppinger Holdings Germany GMBH (5)(6) First lien senior secured loan 12.70% (S + 7.25%) 2/4/2025  24,750   24,481   24,688   3.1%
    First lien senior secured revolving loan 11.71% (S + 6.25%) 2/4/2025  1,050   1,024   1,047   0.1%
           49,635   49,061   49,987   6.2%
Media                        
Authentic Brands (5) First lien senior secured loan 8.93% (S + 3.50%) 12/21/2028  10,034   10,089   10,066   1.2%
Directv Financing LLC (5) First lien senior secured loan 10.44% (S + 5.00%) 8/2/2027  16,923   17,045   16,930   2.1%
           26,957   27,134   26,996   3.3%
Personal care products                        
DRS Holdings III, Inc. (Dr. Scholl’s) (5) First lien senior secured loan 11.71% (S + 6.25%) 11/1/2025  10,973   10,930   10,946   1.4%
    First lien senior secured revolving loan 11.68% (S + 6.25%) 11/1/2025  -   -   -   0.0%
PH Beauty Holdings III, Inc. (5) First lien senior secured loan 10.72% (S + 5.00%) 9/28/2025  9,417   9,277   9,205   1.1%
Silk Holdings III Corp. (Suave) (5) First lien senior secured loan 13.06% (S + 7.75%) 5/1/2029  19,850   19,320   20,247   2.5%
           40,240   39,527   40,398   5.0%
Pharmaceuticals                        
Foundation Consumer Brands (5) First lien senior secured loan 11.73% (S + 6.25%) 2/12/2027  6,754   6,720   6,821   0.8%
    First lien senior secured revolving loan 11.73% (S + 6.25%) 2/12/2027  -   -   -   0.0%
Jazz Pharmaceuticals (5)(6) First lien senior secured loan 8.44% (S + 3.00%) 5/5/2028  17,450   17,581   17,537   2.2%
Organon & Co (5)(6) First lien senior secured loan 8.43% (S + 3.00%) 6/2/2028  17,500   17,579   17,544   2.2%
           41,704   41,880   41,902   5.2%
Professional services                        
4 Over International, LLC (5) First lien senior secured loan 12.43% (S + 7.00%) 12/7/2026  19,291   18,660   19,244   2.4%
DISA Holdings Corp. (DISA) (5) First lien senior secured delayed draw loan 10.84% (S + 5.50%) 9/9/2028  8,372   8,124   8,372   1.0%
    First lien senior secured revolving loan 10.84% (S + 5.50%) 9/9/2028  -   -   -   0.0%
    First lien senior secured loan 10.34% (S + 5.50%) 9/9/2028  1,317   1,298   1,317   0.2%
    First lien senior secured loan 10.34% (S + 5.50%) 9/9/2028  22,121   21,594   22,121   2.7%
Dun & Bradstreet Corp (5) First lien senior secured loan 8.08% (S + 2.75%) 1/18/2029  10,060   10,073   10,057   1.2%
Envirotech Services, LLC (5) First lien senior secured loan 11.32% (S + 6.00%) 1/18/2029  33,296   32,425   33,296   4.1%
    First lien senior secured revolving loan 11.32% (S + 6.00%) 1/18/2029  -   -   -   0.0%
           94,457   92,174   94,407   11.6%

See accompanying notes to consolidated financial statements.


Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of March 31, 2024

(amounts in 000's, except number of shares, units)

(Unaudited)

        Maturity Principal /  Amortized  Fair  Percentage 
Portfolio Company(1) Footnotes Investment (2) Interest Rate Date Par  Cost(3)(4)  Value  of Net Assets 
Semiconductors & semiconductor equipment                        
MKS Instruments (5)(6) First lien senior secured loan 7.82% (S + 2.50%) 8/17/2029  17,455   17,521   17,444   2.1%
                         
Software                        
AIDC Intermediate Co 2, LLC (Peak Technologies) (5) First lien senior secured loan 11.72% (S + 6.25%) 7/22/2027  34,563   33,710   34,908   4.3%
                         
Specialty retail                        
Great Outdoors Group, LLC (5) First lien senior secured loan 9.19% (S + 3.75%) 3/6/2028

  17,455   17,505   17,453   2.2%
Harbor Freight Tools USA Inc (5) First lien senior secured loan 8.19% (S + 2.75%) 10/19/2027  17,500   17,513   17,482   2.1%
Sundance Holdings Group, LLC (5)(7) First lien senior secured loan 14.98% (S + 8.00%), 1.50% is PIK

 5/1/2024  9,367   9,319   9,063   1.1%
    First lien senior secured delayed draw loan 

14.98% (S + 8.00%), 1.50% is PIK

 5/1/2024  3   3   4   0.0%
           44,325   44,340   44,002   5.4%
Textiles, apparel & luxury goods                        
American Soccer Company, Incorporated (SCORE) (5) First lien senior secured loan 12.70% (S + 7.25%) 7/20/2027  29,741   29,275   28,923   3.6%
    First lien senior secured revolving loan 12.72% (S + 7.25%) 7/20/2027  2,838   2,781   2,760   0.3%
BEL USA, LLC (5) First lien senior secured loan 12.48% (S + 7.00%) 6/2/2026  5,786   5,760   5,786   0.7%
    First lien senior secured loan 12.48% (S + 7.00%) 6/2/2026  95   95   95   0.0%
YS Garments, LLC (5) First lien senior secured loan 12.92% (S + 7.50%) 8/9/2026  6,792   6,712   6,673   0.8%
           45,252   44,623   44,237   5.4%
Trading companies & distributors                        
BCDI Meteor Acquisition, LLC (Meteor) (5) First lien senior secured loan 12.40% (S + 7.00%) 6/29/2028  16,256   15,931   16,418   2.0%
Broder Bros., Co. (5) First lien senior secured loan 11.56% (S+ 6.00%) 12/4/2025  4,583   4,410   4,583   0.6%
CGI Automated Manufacturing, LLC (5) First lien senior secured loan 12.56% (S + 7.00%) 12/17/2026  20,377   19,775   20,377   2.5%
    First lien senior secured loan 12.56% (S + 7.00%) 12/17/2026  6,637   6,526   6,637   0.8%
    First lien senior secured delayed draw loan 12.56% (S + 7.00%) 12/17/2026  3,592   3,496   3,592   0.4%
    First lien senior secured revolving loan 12.57% (S + 7.00%) 12/17/2026  1,007   930   1,008   0.1%
EIS Legacy, LLC (5) First lien senior secured loan 11.19% (S + 5.75%) 11/1/2027  18,018   17,685   18,018   2.2%
    First lien senior secured loan 11.17% (S + 5.75%) 11/1/2027  9,642   9,467   9,642   1.2%
    First lien senior secured delayed draw loan 11.19% (S + 5.75%) 4/20/2025  -   -   -   0.0%
    First lien senior secured revolving loan 11.19% (S + 5.75%) 11/1/2027  -   -   -   0.0%
Engineered Fastener Company, LLC (EFC International) (5) First lien senior secured loan 11.95% (S + 6.50%) 11/1/2027  23,545   23,080   24,133   3.0%
Genuine Cable Group, LLC (5) First lien senior secured loan 11.18% (S + 5.75%) 11/1/2026  28,983   28,322   28,911   3.6%
    First lien senior secured loan 11.18% (S + 5.75%) 11/1/2026  5,492   5,347   5,478   0.7%
I.D. Images Acquisition, LLC (5) First lien senior secured loan 11.70% (S + 6.25%) 7/30/2026  13,615   13,512   13,615   1.7%
    First lien senior secured delayed draw loan 11.70% (S + 6.25%) 7/30/2026  2,479   2,447   2,479   0.3%
    First lien senior secured loan 11.68% (S + 6.25%) 7/30/2026  4,510   4,451   4,510   0.6%
    First lien senior secured loan 11.70% (S + 6.25%) 7/30/2026  1,041   1,031   1,041   0.1%
    First lien senior secured revolving loan 11.70% (S + 6.25%) 7/30/2026  -   -   -   0.0%

See accompanying notes to consolidated financial statements.


Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of March 31, 2024

(amounts in 000's, except number of shares, units)

(Unaudited)

        Maturity Principal /  Amortized  Fair  Percentage 
Portfolio Company(1) Footnotes Investment (2) Interest Rate Date Par  Cost(3)(4)  Value  of Net Assets 
Krayden Holdings, Inc. (5) First lien senior secured delayed draw loan 11.15% (S + 5.75%) 3/1/2025  -   -   -   0.0%
    First lien senior secured delayed draw loan 11.15% (S + 5.75%) 3/1/2025  -   -   -   0.0%
    First lien senior secured revolving loan 11.15% (S + 5.75%) 3/1/2029  -   -   -   0.0%
    First lien senior secured loan 11.15% (S + 5.75%) 3/1/2029  9,467   9,131   9,467   1.2%
OAO Acquisitions, Inc. (BearCom) (5) First lien senior secured loan 11.58% (S + 6.25%) 12/27/2029  21,370   20,995   21,584   2.7%
    First lien senior secured delayed draw loan 11.58% (S + 6.25%) 12/27/2025  -   -   -   0.0%
    First lien senior secured revolving loan 11.58% (S + 6.25%) 12/27/2029  -   -   -   0.0%
United Safety & Survivability Corporation (USSC) (5) First lien senior secured loan 11.96% (S + 6.50%) 9/30/2027  12,404   12,135   12,404   1.4%
    First lien senior secured loan 11.98% (S + 6.50%) 9/28/2027  1,603   1,492   1,603   0.2%
    First lien senior secured delayed draw loan 11.98% (S + 6.50%) 9/30/2027  3,153   3,106   3,153   0.4%
    First lien senior secured revolving loan 11.98% (S + 6.50%) 9/30/2027  1,339   1,329   1,339   0.2%
Univar (Windsor Holdings LLC) (5) First lien senior secured loan 9.33% (S + 4.00%) 8/1/2030  10,035   10,102   10,054   1.2%
           219,148   214,700   220,046   27.1%
Wireless telecommunication services                        
Centerline Communications, LLC (5) First lien senior secured loan 12.48% (S + 6.00%), 1.00% is PIK 8/10/2027  14,945   14,726   13,936   1.8%
    First lien senior secured loan 13.48% (S + 8.00%) 8/10/2027  852   831   795   0.1%
    First lien senior secured delayed draw loan 12.48% (S + 6.00%), 1.00% is PIK 8/10/2027  7,044   6,942   6,568   0.8%
    First lien senior secured delayed draw loan 12.48% (S + 6.00%), 1.00% is PIK 8/10/2027  6,202   6,103   5,783   0.7%
    First lien senior secured revolving loan 12.48% (S + 6.00%), 1.00% is PIK 8/10/2027  1,805   1,780   1,805   0.2%
    First lien senior secured loan 12.48% (S + 6.00%), 1.00% is PIK 8/10/2027  1,020   995   952   0.1%
           31,868   31,377   29,839   3.7%
Total Debt Investments          1,769,297   1,742,767   1,765,594   217.5%

See accompanying notes to consolidated financial statements.


 


Portfolio
Company(1)		 Investment Interest
Rate		 Maturity
Date		 Principal /
Par		  Amortized
Cost(2)(3)		  Fair
Value		  Percentage
of Net
Assets		 
                   
Liquid Credit Investments                  
Automobiles & components                  
Clarios Global LP (4) First lien senior secured loan 3.36% (L + 3.25%) 4/30/2026  433,744   433,744   428,865   0.5%
         433,744   433,744   428,865   0.5%
Capital goods                      
Harsco Corporation (4)(5) First lien senior secured loan 2.75% (L + 2.25%) 3/10/2028  192,616   191,653   190,930   0.2%
Kodiak Building Partners Foundation (4) First lien senior secured loan 4.00% (L + 3.25%) 3/13/2028  674,086   670,727   669,873   0.8%
LSF11 Skyscraper HoldCo S.a.r.l. (4)(5) First lien senior secured loan 4.25% (L + 3.50%) 9/29/2027  191,582   190,624   191,103   0.2%
TAMKO Building Products LLC (4)(5) First lien senior secured loan 3.36% (L + 3.25%) 5/29/2026  443,409   440,084   440,917   0.5%
         1,501,693   1,493,088   1,492,823   1.7%
Chemicals                      
Tronox Holdings plc First lien senior secured loan 4.63% 5/15/2029  100,000   100,000   100,125   0.1%
         100,000   100,000   100,125   0.1%
Health care equipment & services                      
Boncura Health Solutions (fka, Midwest Physician Administrative Services) (4)(5) First lien senior secured loan 4.00% (L + 3.25%) 3/12/2028  231,139   229,983   229,551   0.3%
         231,139   229,983   229,551   0.3%
Materials                      
Arconic Corporation First lien senior secured loan 6.13% 2/15/2028  100,000   106,190   106,366   0.1%
         100,000   106,190   106,366   0.1%
Software & services                      
Orion Advisor Solutions, Inc. (4)(5) First lien senior secured loan 4.50% (L + 3.75%) 9/24/2027  137,723   137,379   137,551   0.2%
RealPage, Inc. (4)(5) First lien senior secured loan 3.75% (L + 3.25%) 2/18/2028  962,483   960,077   957,536   1.1%
         1,100,206   1,097,456   1,095,087   1.3%
Technology hardware & equipment                      
International Game Technology PLC First lien senior secured loan 4.13% 4/15/2026  200,000   200,000   205,550   0.2%
         200,000   200,000   205,550   0.2%
Transportation                      
American Airlines, Inc. First lien senior secured loan 5.50% 4/20/2026  298,000   298,000   310,126   0.4%
  First lien senior secured loan 5.75% 4/20/2029  99,000   99,000   105,257   0.1%
         397,000   397,000   415,383   0.5%
Total Liquid Credit Investments(6)        4,063,782   4,057,461   4,073,750   4.7%
Total Debt Investments        156,741,702   153,232,958   156,031,005   178.2%
                       
  Number of
Shares		  Cost  Fair
Value		  Percentage
of Net
Assets		 
Short-Term Investments                
First American Treasury Obligations Fund - Class Z, 0.03% (7)  17,377,178   17,377,178   17,377,178   19.8%
Total Short-Term Investments  17,377,178   17,377,178   17,377,178   19.8%
                 
Total Investments     $170,610,136  $173,408,183   198.0%
                 
Liabilities in Excess of Other Assets          (85,761,276)  (98.0)%
Net Assets         $87,646,907   100.0%
                       

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of March 31, 2024

(amounts in 000's, except number of shares, units)

(Unaudited)

    Number of     Fair  Percentage 
  Footnotes Shares/Units  Cost  Value  of Net Assets 
Equity Investments(10)              
Automobile components              
Vehicle Accessories, Inc. - Class A common (12)  128,250   -   355   0.1%
Vehicle Accessories, Inc. - preferred (12)  250,000   250   298   0.0%
        250   653   0.1%
Commercial services & supplies                  
American Equipment Holdings LLC  - Class A units (13)  426   284   639   0.1%
BLP Buyer, Inc. (Bishop Lifting Products) - Class A common (14)  582,469   652   1,200   0.1%
Arborworks Acquisition LLC - Class A preferred units (10)  21,716   9,179   9,166   1.1%
Arborworks Acquisition LLC - Class B preferred units (10)  21,716   -   -   0.0%
Arborworks Acquisition LLC - Class A common units (10)  2,604   -   -   0.0%
        10,115   11,005   1.3%
Food products                  
BC CS 2, L.P. (Cuisine Solutions) (6)(11)  2,000,000   2,000   2,834   0.4%
CCFF Parent, LLC (California Custom Fruits & Flavors, LLC) – Class A-1 units (15)   750   750   750   0.1%
City Line Distributors, LLC - Class A units (15)  669,866   670   777   0.1%
Gulf Pacific Holdings, LLC - Class A common (13)  250   250   137   0.0%
Gulf Pacific Holdings, LLC - Class C common (13)  250   -   -   0.0%
IF&P Foods, LLC (FreshEdge) - Class A preferred (13)  750   750   905   0.1%
IF&P Foods, LLC (FreshEdge) - Class B common (13)  750   -   -   0.0%
Siegel Parent, LLC – common (16)  250   250   72   0.0%
Siegel Parent, LLC - Convertible note (16)  17   17   17   0.0%
        4,687   5,492   0.7%
Healthcare equipment & supplies                  
LSL Industries, LLC (LSL Healthcare) – common (13)  7,500   750   516   0.1%
IT services                  
Domain Information Services Inc. (Integris) – common    250,000   250   344   0.0%
Specialty retail                  
Sundance Direct Holdings, Inc. - common    21,479   -   -   0.0%
Textiles, apparel & luxury goods                  
American Soccer Company, Incorporated (SCORE) – common (16)  1,000,000   1,000   441   0.1%
Total Equity Investments        17,052   18,451   2.3%
                   
Total Debt and Equity Investments        1,759,819   1,784,045   219.8%

    Number of     Fair  Percentage 
  Footnotes Shares  Cost  Value  of Net Assets 
Short-Term Investments                  
Morgan Stanley Institutional Liquidity Fund, Institutional Class, 5.16% (17)  10,868,089   10,868   10,868   1.3%
Total Short-Term Investments    10,868,089   10,868   10,868   1.3%
                   
Total Investments       $1,770,687  $1,794,913   221.1%
                   
Liabilities in Excess of Other Assets            (983,356)  (121.1)%
Net Assets           $811,557   100.0%

 

(1)(1)As of March 31, 2021,2024, all investments are non-controlled, non-affiliated investments. Non-controlled, non-affiliated investments are defined as investments in which the Company owns less than 5% of the portfolio company’s outstanding voting securities and does not have the power to exercise control over the management or policies of such portfolio company.

(2)(2)Debt investments are pledged to the Company’s credit facilities, and a single debt investment may be divided into parts that are individually pledged to separate credit facilities.

(3)The amortized cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.

See accompanying notes to consolidated financial statements.


Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of March 31, 2024

(amounts in 000's, except number of shares, units)

(Unaudited)

(4)(3)As of March 31, 2021,2024, the tax cost of the Company'sCompany’s investments approximates their amortized cost.

(5)(4)

Loan contains a variable rate structure, that may be subject to an interest rate floor. Variable rate loans bear interest at a rate that may be determined by reference to either the London Interbank OfferedSecured Overnight Funding Rate (“LIBOR”SOFR” or “L”“S”) (which can include one-, two-, three- or six-month LIBOR)SOFR), or an alternate base rate (which can include the Federal Funds Effective Rate or the Prime Rate),Rate or “P”).

(6)(5)Non-qualifying investment as defined by Section 55(a) of the Investment Company Act of 1940.  The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of March 31, 2024, 10.1% of the Company’s total assets were in non-qualifying investments.

(7)Investments orThe Company may be entitled to receive additional interest as a result of an arrangement with other lenders in the syndication. In exchange for the higher interest rate, the “last-out” portion is at a greater risk of loss.  Certain lenders represent a “first out” portion of such investmentsthe investment and have yetpriority to settlethe “last-out” portion with respect to payments of principal and interest.

(8)Debt investment on non-accrual status as of March 31, 2021.2024.

(9)(6)Liquid credit investments are traded corporate bonds, loans or loan participations that are valued using the bid price provided by an independent pricing service, by an independent broker, the agent bank, syndicate bank or principal market maker. See Note 5 – Fair Value.Non-income producing investment.

(10)(7)In November 2023, the Company completed a restructure of the investment in Arborworks Acquisition LLC whereby the existing term loan and revolver were restructured to a new term loan and preferred and common equity. KABDC Corp II, LLC, a wholly owned subsidiary of the Company, holds the preferred and common equity of Arborworks Acquisition LLC that the Company owns following this restructure.

(11)

The Company has a senior secured loan in an investment vehicle (BC CS 2, L.P.) that is collateralized by a preferred stock investment in Cuisine Solutions, Inc..

(12)The Company owns 0.19% of the common equity and 0.43% of the preferred equity of Vehicle Accessories, Inc.

(13)The Company owns 26.81% of a pass-through, taxable limited liability company, KSCF IV Equity Aggregator Blocker, LLC (the “Aggregator Blocker”), which holds the Company’s equity investments in American Equipment Holdings LLC, Gulf Pacific Holdings, LLC, IF&P Foods, LLC (FreshEdge) and LSL Industries, LLC (LSL Healthcare). Through the Company’s ownership of the Aggregator Blocker, the Company owns the respective units of each company listed above in the Schedule of Investments.

(14)The Company owns 0.53% of the common equity BLP Buyer, Inc. (Bishop Lifting Products).

(15)KABDC Corp, LLC, a wholly owned subsidiary of the Company, owns 0.62% of the common equity of City Line Distributors, LLC and 0.75% of the common equity of CCFF Parent, LLC (California Custom Fruits & Flavors, LLC).

(16)The Company owns 25.31% of a pass-through limited liability company, KSCF IV Equity Aggregator, LLC (the “Aggregator”), which holds the Company’s equity investments in Siegel Parent, LLC and American Soccer Company, Incorporated (SCORE).  The Aggregator’s ownership of Siegel Parent, LLC is 1.1442%. Through the Company’s ownership of the Aggregator, the Company owns the respective units of each company listed above in the Schedule of Investments.

(17)The indicated rate indicated is the yield as of March 31, 2021.2024.

See accompanying notes to consolidated financial statements.


 

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2023

(amounts in 000’s, except number of shares, units)

        Maturity Principal /  Amortized  Fair  Percentage 
Portfolio Company(1) Footnotes Investment(2) Interest Rate Date Par  Cost(3)(4)  Value  of Net Assets 
Debt and Equity Investments                    
Private Credit Investments(5)                    
Aerospace & defense                    
Basel U.S. Acquisition Co., Inc. (IAC) (6) First lien senior secured revolving loan 11.51% (S + 6.00%) 12/5/2028 $-  $-  $-   0.0%
    First lien senior secured loan 11.51% (S + 6.00%) 12/5/2028  18,494   18,066   18,679   2.7%
Fastener Distribution Holdings, LLC   First lien senior secured loan 12.00% (S + 6.50%) 10/1/2025  20,494   20,090   20,494   3.0%
    First lien senior secured delayed draw loan 12.00% (S + 6.50%) 10/1/2025  9,098   9,009   9,098   1.3%
Precinmac (US) Holdings, Inc.   First lien senior secured loan 11.46% (S + 6.00%) 8/31/2027  5,352   5,281   5,272   0.8%
    First lien senior secured delayed draw loan 11.46% (S + 6.00%) 8/31/2027  1,102   1,087   1,086   0.2%
Vitesse Systems Parent, LLC   First lien senior secured loan 12.63% (S + 7.00%) 12/22/2028  31,208   30,430   31,208   4.6%
           85,748   83,963   85,837   12.6%
Automobile components                        
Speedstar Holding LLC   First lien senior secured loan 12.79% (S + 7.25%) 1/22/2027  6,012   5,925   5,982   0.9%
    First lien senior secured delayed draw loan 12.78% (S + 7.25%) 1/22/2027  271   265   270   0.0%
Vehicle Accessories, Inc.   First lien senior secured loan 10.72% (S + 5.25%) 11/30/2026  21,011   20,770   21,011   3.1%
    First lien senior secured revolving loan 10.72% (S + 5.25%) 11/30/2026  -   -   -   0.0%
           27,294   26,960   27,263   4.0%
Biotechnology                        
Alcami Corporation (Alcami)   First lien senior secured delayed draw loan 12.46% (S + 7.00%) 6/30/2024  -   -   -   0.0%
    First lien senior secured revolving loan 12.46% (S + 7.00%) 12/21/2028  -   -   -   0.0%
    First lien senior secured loan 12.46% (S + 7.00%) 12/21/2028  11,618   11,197   11,850   1.7%
           11,618   11,197   11,850   1.7%
Building products                        
Ruff Roofers Buyer, LLC   First lien senior secured loan 11.08% (S + 5.75%) 11/19/2029  7,186   6,910   7,186   1.1%
    First lien senior secured delayed draw loan 11.08% (S + 5.75%) 11/17/2024  -   -   -   0.0%
    First lien senior secured delayed draw loan 11.08% (S + 5.75%) 11/17/2025  -   -   -   0.0%
    First lien senior secured revolving loan 11.08% (S + 5.75%) 11/19/2029  -   -   -   0.0%
Eastern Wholesale Fence   First lien senior secured loan 13.50% (S + 8.00%) 10/30/2025  20,271   19,875   20,069   2.9%
    First lien senior secured revolving loan 13.50% (S + 8.00%) 10/30/2025  368   364   365   0.0%
           27,825   27,149   27,620   4.0%
Capital markets                        
Atria Wealth Solutions, Inc.   First lien senior secured loan 11.97% (S + 6.50%) 5/31/2024  5,087   5,080   5,087   0.7%
    First lien senior secured delayed draw loan 11.97% (S + 6.50%) 5/31/2024  3,218   3,211   3,218   0.5%
           8,305   8,291   8,305   1.2%
Chemicals                        
FAR Technologies Holdings, Inc.(f/k/a Cyalume Technologies Holdings, Inc.)   First lien senior secured loan 10.61% (S + 5.00%) 8/30/2024  1,274   1,271   1,274   0.2%
Fralock Buyer LLC   First lien senior secured loan 11.61% (S + 6.00%) 4/17/2024  11,654   11,628   11,567   1.7%
    First lien senior secured revolving loan 11.61% (S + 6.00%) 4/17/2024  449   449   446   0.1%
Shrieve Chemical Company, LLC   First lien senior secured loan 11.90% (S + 6.38%) 12/2/2024  8,720   8,628   8,720   1.3%
USALCO, LLC   First lien senior secured loan 11.61% (S + 6.00%) 10/19/2027  18,989   18,684   18,989   2.8%
    First lien senior secured revolving loan 11.47% (S + 6.00%) 10/19/2026  1,049   1,021   1,049   0.1%
           42,135   41,681   42,045   6.2%
Commercial services & supplies                        
Advanced Environmental Monitoring (7) First lien senior secured loan 12.01% (S + 6.50%) 1/29/2026  10,158   9,994   10,158   1.5%
Allentown, LLC   First lien senior secured loan 11.46% (S + 6.00%) 4/22/2027  7,586   7,535   7,586   1.1%
    First lien senior secured delayed draw loan 11.46% (S + 6.00%) 4/22/2027  1,370   1,354   1,370   0.2%
    First lien senior secured revolving loan 13.50% (P + 5.00%) 4/22/2027  235   234   235   0.0%

See accompanying notes to consolidated financial statements.

 


 


Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2023

(amounts in 000’s, except number of shares, units)

        Maturity Principal /  Amortized  Fair  Percentage 
Portfolio Company(1) Footnotes Investment(2) Interest Rate Date Par  Cost(3)(4)  Value  of Net Assets 
American Equipment Holdings LLC   First lien senior secured loan 11.86% (S + 6.00%) 11/5/2026  20,045   19,812   19,945   2.9%
    First lien senior secured delayed draw loan 11.88% (S + 6.00%) 11/5/2026  6,239   6,167   6,208   0.9%
    First lien senior secured delayed draw loan 11.81% (S + 6.00%) 11/5/2026  4,969   4,905   4,944   0.7%
    First lien senior secured revolving loan 11.74% (S + 6.00%) 11/5/2026  2,736   2,672   2,723   0.4%
Arborworks Acquisition LLC (8)(9)(10) First lien senior secured loan   11/6/2028  4,688   4,688   4,688   0.7%
    First lien senior secured revolving loan   11/6/2028  1,253   1,253   1,253   0.2%
BLP Buyer, Inc. (Bishop Lifting Products)   First lien senior secured loan 11.11% (S + 5.75%) 12/22/2029  26,099   25,549   26,099   3.8%
    First lien senior secured delayed draw loan 11.11% (S + 5.75%) 12/22/2025  -   -   -   0.0%
    First lien senior secured revolving loan 11.11% (S + 5.75%) 12/22/2029  273   196   273   0.0%
Gusmer Enterprises, Inc.   First lien senior secured loan 12.47% (S + 7.00%) 5/7/2027  4,747   4,682   4,735   0.7%
    First lien senior secured delayed draw loan 12.47% (S + 7.00%) 5/7/2027  7,951   7,798   7,931   1.2%
    First lien senior secured revolving loan 12.47% (S + 7.00%) 5/7/2027  -   -   -   0.0%
PMFC Holding, LLC   First lien senior secured loan 13.02% (S + 7.50%) 7/31/2025  5,561   5,427   5,561   0.8%
    First lien senior secured delayed draw loan 13.03% (S + 7.50%) 7/31/2025  2,789   2,787   2,789   0.4%
    First lien senior secured revolving loan 13.03% (S + 7.50%) 7/31/2025  547   547   547   0.1%
Regiment Security Partners LLC   First lien senior secured loan 13.52% (S + 8.00%) 9/15/2026  6,383   6,309   6,383   1.0%
    First lien senior secured delayed draw loan 13.52% (S + 8.00%) 9/15/2026  2,609   2,588   2,609   0.4%
    First lien senior secured revolving loan 13.52% (S + 8.00%) 9/15/2026  1,448   1,427   1,448   0.2%
           117,686   115,924   117,485   17.2%
Containers & packaging                    
Carton Packaging Buyer, Inc. (Century Box)   First lien senior secured loan 11.39% (S + 6.00%) 10/30/2028  24,261   23,605   24,262   3.6%
    First lien senior secured revolving loan 11.39% (S + 6.00%) 10/30/2028  -   -   -   0.0%
Drew Foam Companies, Inc.   First lien senior secured loan 12.75% (S + 7.25%) 11/5/2025  7,052   6,997   6,999   1.0%
    First lien senior secured loan 12.80% (S + 7.25%) 11/5/2025  20,045   19,789   19,895   2.9%
FCA, LLC (FCA Packaging)   First lien senior secured loan 11.90% (S + 6.50%) 7/18/2028  18,673   18,419   19,047   2.8%

See accompanying notes to consolidated financial statements.


Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2023

(amounts in 000’s, except number of shares, units)

        Maturity Principal /  Amortized  Fair  Percentage 
Portfolio Company(1) Footnotes Investment(2) Interest Rate Date Par  Cost(3)(4)  Value  of Net Assets 
    First lien senior secured revolving loan 11.90% (S + 6.50%) 7/18/2028  -   -   -   0.0%
Innopak Industries, Inc.   First lien senior secured loan 11.71% (S + 6.25%) 3/5/2027  28,224   27,564   28,224   4.1%
           98,255   96,374   98,427   14.4%
Diversified telecommunication services                        
Network Connex (f/k/a NTI Connect, LLC)   First lien senior secured loan 11.00% (S + 5.50%) 1/31/2026  5,195   5,140   5,196   0.8%
           5,195   5,140   5,196   0.8%
Food products                        
BC CS 2, L.P. (Cuisine Solutions) (6)(11)   13.55% (S + 8.00%) 7/8/2028  21,555   21,063   21,555   3.2%
BR PJK Produce, LLC (Keany)   First lien senior secured loan 11.50% (S + 6.00%) 11/14/2027  29,564   28,973   29,564   4.3%
    First lien senior secured delayed draw loan 11.46% (S + 6.00%) 11/14/2027  2,938   2,812   2,938   0.4%
City Line Distributors, LLC   First lien senior secured loan 11.47% (S + 6.00%) 8/31/2028  8,895   8,576   8,895   1.3%
    First lien senior secured delayed draw loan 11.47% (S + 6.00%) 3/3/2025  -   -   -   0.0%
    First lien senior secured revolving loan 11.47% (S + 6.00%) 8/31/2028  -   -   -   0.0%
Gulf Pacific Holdings, LLC   First lien senior secured loan 11.25% (S + 5.75%) 9/30/2028  20,180   19,847   20,079   2.9%
    First lien senior secured delayed draw loan 11.38% (S + 5.75%) 9/30/2028  1,701   1,618   1,693   0.2%
    First lien senior secured revolving loan 11.29% (S + 5.75%) 9/30/2028  2,697   2,602   2,683   0.4%
IF&P Foods, LLC (FreshEdge)   First lien senior secured loan 11.07% (S + 5.63%) 10/3/2028  27,245   26,684   26,904   4.0%
    First lien senior secured loan 11.48% (S + 6.00%) 10/3/2028  216   211   213   0.0%
    First lien senior secured delayed draw loan 11.07% (S + 5.63%) 10/3/2028  4,045   3,969   3,994   0.6%
    First lien senior secured revolving loan 10.91% (S + 5.63%) 10/3/2028  1,759   1,690   1,737   0.3%
J&K Ingredients, LLC   First lien senior secured loan 11.63% (S + 6.25%) 11/16/2028  11,581   11,295   11,581   1.7%
Siegel Egg Co., LLC   First lien senior secured loan 11.99% (S + 6.50%) 12/29/2026  15,466   15,290   14,616   2.1%
    First lien senior secured revolving loan 11.99% (S + 6.50%) 12/29/2026  2,594   2,557   2,451   0.4%
Worldwide Produce Acquisition, LLC   First lien senior secured delayed draw loan 11.60% (S + 6.25%) 1/18/2029  631   587   625   0.1%
    First lien senior secured delayed draw loan 11.60% (S + 6.25%) 4/18/2024  -   -   -   0.0%
    First lien senior secured revolving loan 11.60% (S + 6.25%) 1/18/2029  198   190   196   0.0%
    First lien senior secured loan 11.60% (S + 6.25%) 1/18/2029  2,860   2,786   2,832   0.4%
           154,125   150,750   152,556   22.3%
Health care providers & services                        
Brightview, LLC   First lien senior secured loan 11.47% (S + 6.00%) 12/14/2026  12,870   12,855   12,645   1.9%
    First lien senior secured delayed draw loan 11.47% (S + 6.00%) 12/14/2026  1,719   1,714   1,689   0.3%
    First lien senior secured revolving loan 11.47% (S + 6.00%) 12/14/2026  774   774   761   0.1%
Guardian Dentistry Partners   First lien senior secured loan 11.97% (S + 6.50%) 8/20/2026  8,057   7,929   8,057   1.2%
    First lien senior secured delayed draw loan 11.97% (S + 6.50%) 8/20/2026  15,682   15,464   15,682   2.3%
    First lien senior secured delayed draw loan 11.97% (S + 6.50%) 8/20/2026  5,808   5,808   5,808   0.9%
Guided Practice Solutions: Dental, LLC (GPS)   First lien senior secured delayed draw loan 11.72% (S + 6.25%) 12/29/2025  6,475   6,056   6,475   0.9%
Light Wave Dental Management LLC   First lien senior secured revolving loan 12.35% (S + 7.00%) 6/30/2029  2,181   2,099   2,181   0.3%
    First lien senior secured loan 12.35% (S + 7.00%) 6/30/2029  22,423   21,834   22,423   3.3%
SGA Dental Partners Holdings, LLC   First lien senior secured loan 11.67% (S + 6.00%) 12/30/2026  11,828   11,683   11,828   1.7%
    First lien senior secured loan 11.61% (S + 6.00%) 12/30/2026  1,681   1,563   1,681   0.2%
    First lien senior secured delayed draw loan 11.67% (S + 6.00%) 12/30/2026  11,024   10,856   11,024   1.6%
    First lien senior secured delayed draw loan 11.67% (S + 6.00%) 4/19/2024  -   -   -   0.0%
    First lien senior secured revolving loan 11.67% (S + 6.00%) 12/30/2026  -   -   -   0.0%
           100,522   98,635   100,254   14.7%

See accompanying notes to consolidated financial statements.


Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2023

(amounts in 000’s, except number of shares, units)

        Maturity Principal /  Amortized  Fair  Percentage 
Portfolio Company(1) Footnotes Investment (2) Interest Rate Date Par  Cost(3)(4)  Value  of Net Assets 
Health care equipment & supplies                    
LSL Industries, LLC (LSL Healthcare)   First lien senior secured loan 12.15% (S + 6.50%) 11/3/2027  19,529   18,911   19,334   2.8%
    First lien senior secured delayed draw loan 12.15% (S + 6.50%) 11/3/2024  -   -   -   0.0%
    First lien senior secured revolving loan 12.15% (S + 6.50%) 11/3/2027  -   -   -   0.0%
           19,529   18,911   19,334   2.8%
Household durables                        
Curio Brands, LLC   First lien senior secured loan 10.96% (S + 5.50%) 12/21/2027  17,173   16,859   16,830   2.5%
    First lien senior secured revolving loan 10.96% (S + 5.50%) 12/21/2027  -   -   -   0.0%
    First lien senior secured delayed draw loan 10.96% (S + 5.50%) 12/21/2027  4,121   4,121   4,039   0.6%
           21,294   20,980   20,869   3.1%
Household products                        
Home Brands Group Holdings, Inc. (ReBath)   First lien senior secured loan 10.29% (S + 4.75%) 11/8/2026  17,052   16,826   16,967   2.5%
    First lien senior secured revolving loan 10.29% (S + 4.75%) 11/8/2026  -   -   -   0.0%
           17,052   16,826   16,967   2.5%
Insurance                        
Allcat Claims Service, LLC   First lien senior secured loan 11.53% (S + 6.00%) 7/7/2027  7,717   7,551   7,717   1.1%
    First lien senior secured delayed draw loan 11.53% (S + 6.00%) 7/7/2027  21,605   21,266   21,605   3.2%
    First lien senior secured revolving loan 11.53% (S + 6.00%) 7/7/2027  -   -   -   0.0%
           29,322   28,817   29,322   4.3%
IT services                        
Domain Information Services Inc. (Integris)   First lien senior secured loan 11.29% (S + 5.75%) 9/30/2025  20,444   20,122   20,342   3.0%
Improving Acquisition LLC   First lien senior secured loan 12.22% (S + 6.50%) 7/26/2027  31,650   31,140   31,492   4.6%
    First lien senior secured revolving loan 12.22% (S + 6.50%) 7/26/2027  -   -   -   0.0%
           52,094   51,262   51,834   7.6%
Leisure products                        
BCI Burke Holding Corp.   First lien senior secured loan 11.11% (S + 5.50%) 12/14/2027  15,373   15,219   15,603   2.3%
    First lien senior secured delayed draw loan 11.11% (S + 5.50%) 12/14/2027  578   545   586   0.1%
    First lien senior secured revolving loan 11.11% (S + 5.50%) 6/14/2027  -   -   -   0.0%
VENUplus, Inc. (f/k/a CTM Group, Inc.)   First lien senior secured loan 12.29% (S + 6.75%) 11/30/2026  4,420   4,325   4,398   0.6%
MacNeill Pride Group   First lien senior secured loan 11.86% (S + 6.25%) 4/22/2026  8,254   8,198   8,151   1.2%
    First lien senior secured delayed draw loan 11.86% (S + 6.25%) 4/22/2026  3,277   3,221   3,236   0.5%
    First lien senior secured revolving loan 11.86% (S + 6.25%) 4/22/2026  -   -   -   0.0%
Trademark Global LLC   First lien senior secured loan 12.97% (S +7.50%, 1.50% is PIK) 7/30/2024  11,798   11,776   10,736   1.6%
    First lien senior secured revolving loan 12.97% (S +7.50%, 1.50% is PIK) 7/30/2024  2,630   2,627   2,393   0.3%
           46,330   45,911   45,103   6.6%
Machinery                        
Pennsylvania Machine Works, LLC   First lien senior secured loan 11.61% (S + 6.00%) 3/6/2027  1,908   1,896   1,908   0.3%
PVI Holdings, Inc   First lien senior secured loan 12.16% (S + 6.77%) 1/18/2028  23,895   23,602   24,074   3.5%
Techniks Holdings, LLC / Eppinger Holdings Germany GMBH (6) First lien senior secured loan 12.75% (S + 7.25%) 2/4/2025  24,812   24,468   24,688   3.6%
    First lien senior secured revolving loan 11.80% (S + 6.25%) 2/4/2025  1,050   1,003   1,045   0.2%
           51,665   50,969   51,715   7.6%
Personal care products                        
DRS Holdings III, Inc. (Dr. Scholl’s)   First lien senior secured loan 11.71% (S + 6.25%) 11/1/2025  11,004   10,954   11,004   1.6%
    First lien senior secured revolving loan 11.71% (S + 6.25%) 11/1/2025  -   -   -   0.0%
PH Beauty Holdings III, Inc.   First lien senior secured loan 10.65% (S + 5.00%) 9/28/2025  9,442   9,278   9,183   1.3%
Silk Holdings III Corp. (Suave)   First lien senior secured loan 13.10% (S + 7.75%) 5/1/2029  19,900   19,351   20,298   3.0%
           40,346   39,583   40,485   5.9%
Pharmaceuticals                        
Foundation Consumer Brands   First lien senior secured loan 11.79% (S + 6.25%) 2/12/2027  6,781   6,744   6,832   1.0%
    First lien senior secured revolving loan 11.79% (S + 6.25%) 2/12/2027  -   -   -   0.0%
           6,781   6,744   6,832   1.0%

See accompanying notes to consolidated financial statements.


Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2023

(amounts in 000’s, except number of shares, units)

        Maturity Principal /  Amortized  Fair  Percentage 
Portfolio Company(1) Footnotes Investment(2) Interest Rate Date Par  Cost(3)(4)  Value  of Net Assets 
Professional services                    
4 Over International, LLC   First lien senior secured loan 12.46% (S + 7.00%) 12/7/2026  19,438   18,757   19,438   2.8%
DISA Holdings Corp. (DISA)   First lien senior secured delayed draw loan 10.84% (S + 5.50%) 9/9/2028  3,714   3,578   3,714   0.5%
    First lien senior secured revolving loan 10.84% (S + 5.50%) 9/9/2028  392   347   392   0.1%
    First lien senior secured loan 10.84% (S + 5.50%) 9/9/2028  22,177   21,625   22,177   3.2%
Universal Marine Medical Supply International, LLC (Unimed)   First lien senior secured loan 13.01% (S + 7.50%) 12/5/2027  13,527   13,253   13,527   2.0%
    First lien senior secured revolving loan 13.00% (S + 7.50%) 12/5/2027  2,544   2,494   2,544   0.4%
           61,792   60,054   61,792   9.0%
Software                        
AIDC Intermediate Co 2, LLC (Peak Technologies)   First lien senior secured loan 11.80% (S + 6.25%) 7/22/2027  34,650   33,736   34,650   5.1%
Specialty retail                        
Sundance Holdings Group, LLC (7) First lien senior secured loan 15.03% (S + 9.50%, 1.50% is PIK) 5/1/2024  9,210   9,022   8,911   1.3%
    First lien senior secured delayed draw loan 15.03% (S + 9.50%, 1.50% is PIK) 5/1/2024  -   -   -   0.0%
           9,210   9,022   8,911   1.3%
Textiles, apparel & luxury goods                        
American Soccer Company, Incorporated (SCORE)   First lien senior secured loan 12.75% (S + 7.25%) 7/20/2027  29,816   29,317   29,145   4.3%
    First lien senior secured revolving loan 12.75% (S + 7.25%) 7/20/2027  2,128   2,067   2,080   0.3%
BEL USA, LLC   First lien senior secured loan 12.53% (S + 7.00%) 6/2/2026  5,804   5,774   5,804   0.8%
    First lien senior secured loan 12.53% (S + 7.00%) 6/2/2026  96   95   96   0.0%
YS Garments, LLC   First lien senior secured loan 13.00% (S + 7.50%) 8/9/2026  6,849   6,758   6,729   1.0%
           44,693   44,011   43,854   6.4%
Trading companies & distributors                        
BCDI Meteor Acquisition, LLC (Meteor)   First lien senior secured loan 12.45% (S + 7.00%) 6/29/2028  16,297   15,955   16,297   2.4%
Broder Bros., Co.   First lien senior secured loan 11.61% (S+ 6.00%) 12/4/2025  4,640   4,439   4,640   0.7%
CGI Automated Manufacturing, LLC   First lien senior secured loan 12.61% (S + 7.00%) 12/17/2026  20,510   19,849   20,459   3.0%
    First lien senior secured loan 12.61% (S + 7.00%) 12/17/2026  6,681   6,559   6,664   1.0%
    First lien senior secured delayed draw loan 12.61% (S + 7.00%) 12/17/2026  3,616   3,510   3,607   0.5%

See accompanying notes to consolidated financial statements.


Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2023

(amounts in 000’s, except number of shares, units)

        Maturity Principal /  Amortized  Fair  Percentage 
Portfolio Company(1) Footnotes Investment(2) Interest Rate Date Par  Cost(3)(4)  Value  of Net Assets 
    First lien senior secured revolving loan 12.61% (S + 7.00%) 12/17/2026  327   244   327   0.0%
EIS Legacy, LLC   First lien senior secured loan 11.24% (S + 5.75%) 11/1/2027  18,079   17,838   18,079   2.6%
    First lien senior secured loan 11.27% (S + 5.75%) 11/1/2027  9,666   9,356   9,666   1.4%
    First lien senior secured delayed draw loan 11.24% (S + 5.75%) 4/20/2025  -   -   -   0.0%
    First lien senior secured revolving loan 11.24% (S + 5.75%) 11/1/2027  -   -   -   0.0%
Engineered Fastener Company, LLC (EFC International)   First lien senior secured loan 12.00% (S + 6.50%) 11/1/2027  23,604   23,113   23,899   3.5%
Genuine Cable Group, LLC   First lien senior secured loan 10.96% (S + 5.50%) 11/1/2026  29,057   28,336   28,984   4.2%
    First lien senior secured loan 10.96% (S + 5.50%) 11/1/2026  5,506   5,347   5,492   0.8%
I.D. Images Acquisition, LLC   First lien senior secured loan 11.75% (S + 6.25%) 7/30/2026  13,651   13,538   13,651   2.0%
    First lien senior secured delayed draw loan 11.75% (S + 6.25%) 7/30/2026  2,486   2,450   2,486   0.4%
    First lien senior secured loan 11.70% (S + 6.25%) 7/30/2026  4,522   4,457   4,522   0.7%
    First lien senior secured loan 11.75% (S + 6.25%) 7/30/2026  1,043   1,033   1,043   0.2%
    First lien senior secured revolving loan 11.75% (S + 6.25%) 7/30/2026  -   -   -   0.0%
Krayden Holdings, Inc.   First lien senior secured delayed draw loan 11.20% (S + 5.75%) 3/1/2025  -   -   -   0.0%
    First lien senior secured delayed draw loan 11.20% (S + 5.75%) 3/1/2025  -   -   -   0.0%
    First lien senior secured revolving loan 11.20% (S + 5.75%) 3/1/2029  -   -   -   0.0%
    First lien senior secured loan 11.20% (S + 5.75%) 3/1/2029  9,491   9,099   9,491   1.4%
OAO Acquisitions, Inc. (BearCom)   First lien senior secured loan 11.61% (S + 6.25%) 12/27/2029  21,370   20,979   21,370   3.1%
    First lien senior secured delayed draw loan 11.61% (S + 6.25%) 12/27/2025  -   -   -   0.0%
    First lien senior secured revolving loan 11.61% (S + 6.25%) 12/27/2029  -   -   -   0.0%
United Safety & Survivability Corporation (USSC)   First lien senior secured loan 11.79% (S + 6.25%) 9/30/2027  12,436   12,147   12,436   1.8%
    First lien senior secured loan 11.79% (S + 6.25%) 9/28/2027  1,607   1,490   1,607   0.3%
    First lien senior secured delayed draw loan 11.79% (S + 6.25%) 9/30/2027  3,160   3,110   3,160   0.5%
    First lien senior secured revolving loan 11.79% (S + 6.25%) 9/30/2027  870   860   870   0.1%
           208,619   203,709   208,750   30.6%
Wireless telecommunication services                        
Centerline Communications, LLC   First lien senior secured loan 11.53% (S + 6.00%) 8/10/2027  14,945   14,751   13,936   2.0%
    First lien senior secured delayed draw loan 11.53% (S + 6.00%) 8/10/2027  7,044   6,954   6,568   1.0%
    First lien senior secured delayed draw loan 11.53% (S + 6.00%) 8/10/2027  6,202   6,112   5,783   0.9%
    First lien senior secured revolving loan 11.53% (S + 6.00%) 8/10/2027  1,800   1,778   1,679   0.2%
    First lien senior secured loan 11.53% (S + 6.00%) 8/10/2027  1,020   996   952   0.1%
           31,011   30,591   28,918   4.2%
Total Private Credit Debt Investments          1,353,096   1,327,190   1,346,174   197.1%

See accompanying notes to consolidated financial statements.


Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2023

(amounts in 000’s, except number of shares, units)

  Footnotes Number of
Shares/Units		  Cost  Fair
Value		  Percentage
of Net Assets		 
Equity Investments(9)              
Automobile components              
Vehicle Accessories, Inc. - Class A common (12)  128,250   -   326   0.0%
Vehicle Accessories, Inc. - preferred (12)  250,000   250   292   0.1%
     378,250   250   618   0.1%
Commercial services & supplies                  
American Equipment Holdings LLC- Class A units (13)  426   284   508   0.1%
BLP Buyer, Inc. (Bishop Lifting Products) - Class A common (14)  582,469   652   1,200   0.1%
Arborworks Acquisition LLC – Class A preferred units (10)  21,716   9,179   9,287   1.4%
Arborworks Acquisition LLC – Class B preferred units (10)  21,716   -   -   0.0%
Arborworks Acquisition LLC – Class A common units (10)  2,604   -   -   0.0%
     628,931   10,115   10,995   1.6%
Food products                  
BC CS 2, L.P. (Cuisine Solutions) (6)(11)  2,000,000   2,000   2,611   0.4%
City Line Distributors, LLC - Class A units (15)  418,416   418   418   0.1%
Gulf Pacific Holdings, LLC - Class A common (13)  250   250   189   0.0%
Gulf Pacific Holdings, LLC - Class C common (13)  250   -   -   0.0%
IF&P Foods, LLC (FreshEdge) - Class A preferred (13)  750   750   905   0.1%
IF&P Foods, LLC (FreshEdge) - Class B common (13)  750   -   -   0.0%
Siegel Parent, LLC (16)  250   250   72   0.0%
     2,420,666   3,668   4,195   0.6%
Healthcare equipment & supplies                  
LSL Industries, LLC (LSL Healthcare) (13)  7,500   750   552   0.1%
IT services                  
Domain Information Services Inc. (Integris)    250,000   250   344   0.0%
Specialty retail                  
Sundance Direct Holdings, Inc. - common    21,479   -   -   0.0%
Textiles, apparel & luxury goods                  
American Soccer Company, Incorporated (SCORE) (16)  1,000,000   1,000   620   0.1%
Total Private Equity Investments        16,033   17,324   2.5%
                   
Total Private Investments        1,343,223   1,363,498   199.6%

    Number of     Fair  Percentage 
  Footnotes Shares  Cost  Value  of Net Assets 
Short-Term Investments              
First American Treasury Obligations Fund - Institutional Class Z, 5.21% (17)  12,802,362   12,802   12,802   1.9%
Total Short-Term Investments    12,802,362   12,802   12,802   1.9%
                   
Total Investments       $1,356,025  $1,376,300   201.5%
Liabilities in Excess of Other Assets            (693,244)  (101.5)%
Net Assets           $683,056   100.0%

(1)As of December 31, 2023, all investments are non-controlled, non-affiliated investments. Non-controlled, non-affiliated investments are defined as investments in which the Company owns less than 5% of the portfolio company’s outstanding voting securities and does not have the power to exercise control over the management or policies of such portfolio company.
(2)Debt investments are pledged to the Company’s credit facilities, and a single debt investment may be divided into parts that are individually pledged to separate credit facilities.
(3)The amortized cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.
(4)As of December 31, 2023, the tax cost of the Company’s investments approximates their amortized cost.

See accompanying notes to consolidated financial statements.


Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2023

(amounts in 000’s, except number of shares, units)

(5)Loan contains a variable rate structure, that may be subject to an interest rate floor. Variable rate loans bear interest at a rate that may be determined by reference to either the Secured Overnight Funding Rate (“SOFR” or “S”) (which can include one-, three- or six-month SOFR), or an alternate base rate (which can include the Federal Funds Effective Rate or the Prime Rate or “P”).

(6)Non-qualifying investment as defined by Section 55(a) of the Investment Company Act of 1940.  The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2023, 4.8% of the Company’s total assets were in non-qualifying investments.

(7)The Company may be entitled to receive additional interest as a result of an arrangement with other lenders in the syndication. In exchange for the higher interest rate, the “last-out” portion is at a greater risk of loss.  Certain lenders represent a “first out” portion of the investment and have priority to the “last-out” portion with respect to payments of principal and interest.

(8)

Debt investment on non-accrual status as of December 31, 2023.

(9)Non-income producing investment.

(10)In November 2023, the Company completed a restructure of the investment in Arborworks Acquisition LLC whereby the existing term loan and revolver were restructured to a new term loan and preferred and common equity. KABDC Corp II, LLC, a wholly owned subsidiary of the Company, holds the preferred and common equity of Arborworks Acquisition LLC that the Company owns following this restructure.

(11)The Company has a senior secured loan in an investment vehicle (BC CS 2, L.P.) that is collateralized by a preferred stock investment in Cuisine Solutions, Inc..

(12)The Company owns 0.19% of the common equity and 0.43% of the preferred equity of Vehicle Accessories, Inc.

(13)The Company owns 27.15% of a pass-through, taxable limited liability company, KSCF IV Equity Aggregator Blocker, LLC (the “Aggregator Blocker”), which holds the Company’s equity investments in American Equipment Holdings LLC, Gulf Pacific Holdings, LLC, IF&P Foods, LLC (FreshEdge) and LSL Industries, LLC (LSL Healthcare). Through the Company’s ownership of the Aggregator Blocker, the Company owns the respective units of each company listed above in the Schedule of Investments.

(14)The Company owns 0.53% of the common equity BLP Buyer, Inc. (Bishop Lifting Products).

(15)KABDC Corp, LLC, a wholly owned subsidiary of the Company, owns 0.62% of the common equity of City Line Distributors, LLC.

(16)The Company owns 33.95% of a pass-through limited liability company, KSCF IV Equity Aggregator, LLC (the “Aggregator”), which holds the Company’s equity investments in Siegel Parent, LLC and American Soccer Company, Incorporated (SCORE).  The Aggregator’s ownership of Siegel Parent, LLC is 1.1442%. Through the Company’s ownership of the Aggregator, the Company owns the respective units of each company listed above in the Schedule of Investments.

(17)The indicated rate is the yield as of December 31, 2023.

See accompanying notes to consolidated financial statements. 


Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Note 1. Organization

Organization

Kayne Anderson BDC, Inc. (the “Company”) is an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, the Company intends to elect to be treatedqualify as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

The Company was formed as a Delaware limited liability company in May 2018. Prior to February 5, 2021, the Company was devoting substantially all of its efforts to establishing the business and conducted organizational and marketing efforts, which the Company incurred in the third quarter of 2020. The Company was formedcorporation to make investments in middle-market companies and commenced operations on February 5, 2021. On this same date, prior to the Company’s election to be regulated as a BDC under the 1940 Act, the

The Company completed a conversion from a Delaware limited liability company into a Delaware corporation and Kayne Anderson BDC, Inc. succeeded to the business of Kayne Anderson BDC, LLC. On January 25, 2021, the Company entered into subscription agreements with investors for an aggregate capital commitment of $154,305,000 to purchase shares of the Company’s common stock. On February 5, 2021, the Company sold 5,666,667 shares of its common stock to these investors at a price of $15.00 per share for an aggregate offering price of $85,000,000.

is managed by KA Credit Advisors, LLC (the “Advisor”) is, an indirect controlled subsidiary of Kayne Anderson Capital Advisors, L.P. (“KACALP” or “KayneKayne Anderson”)., a prominent alternative investment management firm. The Advisor is registered with the United States Securities and Exchange Commission (“SEC”(the “SEC”) as an investment advisor under the Investment AdvisoryAdvisers Act of 1940.1940, as amended. Subject to the overall supervision of the Company’s board of directors (the “Board”), the Advisor is responsible for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring investments, determining the value of the investments and monitoring its investments and portfolio companies on an ongoing basis. The Board consists of fiveseven directors, threefour of whom are independent (including the Board’s chairperson).independent.

The Company’s investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through debt investments in middle-market companies.

As of March 31, 2024, the Company has entered into subscription agreements with investors for an aggregate capital commitment of $1,046,928 to purchase shares of the Company’s common stock and has completed its final close of subscription agreements with investors. See Note 11 – Subsequent Events.

The Company conducts private offerings of its Common Stock to investors in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). At the closing of any private offering, each investor will make a capital commitment (a “Capital Commitment”) to purchase shares of its Common Stock (“Shares”)common stock pursuant to a subscription agreement entered into with the Company. Investors will be required to fund drawdowns to purchase Sharesshares of common stock up to the amount of their respective Capital Commitments each time the Company delivers a notice to the investors. Following the initial closing of the private offering (the “Initial Closing”) on February 5, 2021 and prior to any Liquidity Event (as defined below), the Advisor may, in its sole discretion, permit one or more additional closings of the private offering. A “Liquidity Event” is defined as (a) an initial public offering of Sharesshares of common stock (the “Initial Public Offering”) or the listing of Sharesshares of common stock on an exchange (together with the Initial Public Offering, an “Exchange Listing”), (b) the sale of the Company or (c) a disposition of the Company’s investments and distribution of the net proceeds (after repayment of borrowed funds or other forms of leverage) to the Company’s investors.


Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Note 2. Significant Accounting Policies

A. Basis of Presentation—the accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company is an investment company and follows accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 946 — “Financial Services — Investment Companies.” In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair statement of the consolidated financial statements for the periods presented, have been included.

B. Consolidation—As provided under Regulation S-X and ASC Topic 946 – “Financial Services – Investment Companies”, the Company will generally not consolidate its investment in a company other than a wholly-owned investment company or controlled operating company whose business consists of providing services to the Company.

Accordingly, the Company consolidated the accounts of the Company’s wholly-owned subsidiary,subsidiaries, Kayne Anderson BDC Financing, LLC, (“KABDCF”),; Kayne Anderson BDC Financing II, LLC (“KABDCF II”); KABDC Corp, LLC and KABDC Corp II, LLC in its consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation. KABDC Corp, LLC and KABDC Corp II, LLC are Delaware LLCs that have elected to be treated as corporations for U.S. tax purposes and were formed to facilitate compliance with the requirements to be treated as a RIC under the Code by holding (directly or indirectly through a subsidiary) equity or equity related investments in portfolio companies organized as limited liability companies or limited partnerships.

C. Use of Estimates—the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the period. Actual results could differ materially from those estimates.

D. Cash and Cash Equivalents—cash and cash equivalents include short-term, liquid investments with an original maturity of three months or less and include money market fund accounts. Cash equivalents, which are the Company’s investments in money market fund accounts, are presented on the Company’s consolidated schedule of investments, and within investments on the Company’s consolidated statement of assets and liabilities.

E. Investment Valuation, Fair Value—the Company conducts the valuation of its investments consistent with GAAP and the 1940 Act. The Company’s investments will be valued no less frequently than quarterly, in accordance with the terms of Topic 820 of the Financial Accounting Standards Board’s Accounting Standards Codification, Fair Value Measurement and Disclosures (“ASC 820”).

Pursuant to Rule 2a-5 under the 1940 Act, the Board of Directors has designated the Advisor as the “valuation designee” to perform fair value determinations of the Company’s portfolio holdings, subject to oversight by and periodic reporting to the Board. The valuation designee performs fair valuation of the Company’s portfolio holdings in accordance with the Advisor’s Valuation Program, as approved by the Board.

Traded Investments (Level 1 or Level 2)

Investments for which market quotations are readily available will typically be valued at those market quotations. Traded investments such as corporate bonds, preferred stock, bank notes, broadly syndicated loans or loan participations are valued by using the bid price provided by an independent pricing service, by an independent broker, the agent bank, syndicate bank or principal market maker. When price quotes for investments are not available, or such prices are stale or do not represent fair value in the judgment of the Company’s Advisor, fair market value will be determined using the Company’sAdvisor’s valuation process for investments that are privately issued or otherwise restricted as to resale.

The Company may also invest, to a lesser extent, in equity securities purchased in conjunction with debt investments. While the Company anticipates these equity securities to be issued by privately held companies, the Company may hold equity securities that are publicly traded. Equity securities listed on any exchange other than the NASDAQ Stock Market, Inc. (“NASDAQ”) are valued, except as indicated below, at the last sale price on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the most recent bid and ask prices on such day. Securities admitted to trade on the NASDAQ are valued at the NASDAQ official closing price. Equity securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined at the close of the exchange representing the principal market for such securities. Equity securities traded in the over-the-counter market, but excluding securities admitted to trading on the NASDAQ, are valued at the closing bid prices.


 

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Non-Traded Investments (Level 3)

Investments that are privately issued or otherwise restricted as to resale, as well as any security for which (a) reliable market quotations are not available in the judgment of the Company’s Advisor, or (b) the independent pricing service or independent broker does not provide prices or provides a price that in the judgment of the Company’s Advisor is stale or does not represent fair value, shall each be valued in a manner that most fairly reflects fair value of the security on the valuation date. The Company expects that a significant majority of its investments will be Level 3 investments. Unless otherwise determined by the Board,Advisor, the following valuation process is used for the Company’s Level 3 investments:

●Investment Team Valuation Designee. The applicable investments arewill be valued no less frequently than quarterly by senior professionals of Kayne Anderson who are responsible for the portfolio investments.Advisor, with new investments valued at the time such investment was made. The value of each portfolio company orLevel 3 investment will be initially reviewed by the investment professionalspersons responsible for such portfolio company or investment and, for non-traded investments (i.e., illiquid securities/instruments),investment. The Advisor will use a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs will be used to determine a preliminary value. The investmentsAdvisor will be valued no less frequently than quarterly, with new investments valued atspecify the time such investment was made.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements (Unaudited)

●Investment Team Valuation Documentation. Preliminary valuation conclusions will be determined by the Company’s executive officers. Such valuation and supporting documentation is submitted to the Audit Committee (a committeetitles of the Board)persons responsible for determining the fair value of Company investments, including by specifying the particular functions for which they are responsible, and will reasonably segregate fair value determinations from the Board on a quarterly basis.
●Audit Committee. The Audit Committee meets to consider the valuations submitted by our executive officers at the end of each quarter. Between meetings of the Audit Committee, the executive officersportfolio management of the Company are authorizedsuch that the portfolio manager(s) may not determine, or effectively determine by exerting substantial influence on, the fair values ascribed to make valuation determinations. All valuation determinations of the Audit Committee are subject to ratification by the Board at its next regular meeting.
portfolio investments.

●Valuation Firm. Quarterly, a third-party valuation firm engaged by the BoardAdvisor reviews the valuation methodologies and calculations employed for each of the Company’s investments that the CompanyAdvisor has placed on the “watch list” and approximately 25% of itsthe Company’s remaining investments. The third-party valuation firm will review and independently value all of the Level 3 investments at least once per year, on a rolling twelve-month basis. The Company expects the quarterly report issued by the third-party valuation firm will assist the Board in determiningprovide positive assurance on the fair values of the investments reviewed.

●Board DeterminationOversight. The Company’s Board meetshas appointed the Advisor as the valuation designee for the Company for purposes of making determinations of fair value as permitted by Rule 2a-5 under the 1940 Act. The Audit Committee shall aid the Board in overseeing the Advisor’s fair valuation of securities that are not publicly traded or for which current market values are not readily available. The Audit Committee shall meet quarterly to consider the valuations provided by the Company’s executive officers and the Audit Committee and ratify valuations for the applicable investments. The Company’s Board considers the report provided by the third-party valuation firm in reviewing and determining in good faithreview the fair value determinations, processes and written reports of the applicable portfolio investments.Advisor as part of the Board’s oversight responsibilities.

The Board of Directors will be ultimately responsible for the determination,


Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in good faith, of the fair value of our portfolio investments. 000’s, except share and per share amounts)

(Unaudited)

Determination of fair value involves subjective judgments and estimates. Accordingly, the notes to ourthe Company’s financial statements will express the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on ourthe Company’s financial statements.

F. Interest Income Recognition— Interest income is recorded on an accrual basis and includes the accretion of discounts, amortization of premiums and payment-in-kind (“PIK”) interest. Discounts from and premiums to par value on investments purchased are accreted/amortized into interest income over the life of the respective security using the effective yield method. To the extent loans contain PIK provisions, PIK interest, computed at the contractual rate specified in each applicable agreement, is accrued and recorded as interest income and added to the principal balance of the loan. PIK interest income added to the principal balance is generally collected upon repayment of the outstanding principal. The Company does not accrue PIK interest if, in the opinion of the Advisor, the portfolio company valuation indicates that the PIK interest is not likely to be collectible. If the Company believes PIK is not expected to be realized, the investment generating PIK will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest is generally reversed through PIK interest income. Previously capitalized PIK interest is not reversed when an investment is placed on non-accrual status. To maintain the Company’s status as a RIC, this non-cash source of income must be paid out to stockholders in the form of dividends for the year the income was earned, even though the Company has not yet collected the cash. The amortized cost of investments represents the original cost adjusted for any accretion of discounts, amortization of premiums and PIK interest. For the three months ended March 31, 2024 and 2023, the Company had $284 and $165, respectively, of PIK interest included in interest income, which represents 0.6% and 0.5%, respectively, of aggregate interest income.

Loans are generally placed on non-accrual status when it has been determined that a significant impairment in the financial condition and ability of the borrower to repay principal orand interest payments are past due 30 days or more or when therehas occurred and is reasonable doubtexpected to continue such that principal or interest will be collected in full.it is probable the collectability of full amount of the loan (principal and interest) is doubtful. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. InterestIf cash payments are received subsequent to a loan being placed on non-accrual loans maystatus, these payments will first be recognized as income or applied to principal depending uponpreviously accrued but uncollected interest, then to recover the Company’s judgment regarding collectability.principal. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Non-accrual loans are restored to accrual status when past due principal and interest are paid or there is no longer anya reasonable doubt that such principal or interest will be collected in full and, in the Company’s judgment, principal and interest are likely to remain current. The Company may make exceptions to this policy if the loan has sufficient collateral value (i.e., typically measured as enterprise value of the portfolio company) or is in the process of collection. As of March 31, 2024, the Company had one debt investment on non-accrual status, which comprised 0.4% and 0.4%, respectively, of total debt investments at cost and fair value. As of March 31, 2023, the Company did not have any debt investments in portfolio companies on non-accrual status.

G. Debt Issuance Costs—Costs incurred by the Company related to the issuance of its debt (credit facilities) are capitalized and amortized over the period the debt is outstanding. The Company has classified the costs incurred to issue its credit facilities as a deduction from the carrying value of the credit facilities on the Statement of Assets and Liabilities. For the purpose of calculating the Company’s asset coverage ratios pursuant to the 1940 Act, deferred issuance costs are not deducted from the carrying value of debt or preferred stock.

H. Dividends to Common Stockholders—DistributionsDividends to common stockholders are recorded on the record date. The amount to be paid out as a dividend is determined by the Company’s board of directors each quarter and is generally based upon the earnings estimated by management and considers the level of undistributed taxable income carried forward from the prior year for distribution in the current year. Net realized capital gains, if any, are generally distributed, although the Company may decide to retain such capital gains for investment.


Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

I. Organizational Costs—organizational expenses include costs and expenses relating to the formation and organization of the Company. The Company has agreed to reimburse the Advisor for these costs which are expensed as incurred.

J. Offering Costs—offering costs include costs and expenses incurred in connection with the offering of the Company’s common stock. These initial costs are capitalized as deferred offering expenses and included in prepaid expenses and other assets on the Statement of Assets and Liabilities. These costs are amortized over a twelve-month period beginning with the commencement of operations. These expenses consist primarily of legal fees and other costs incurred in connection with the Company’s share offerings, the preparation of the Company’s registration statement and registration fees. The Company has agreed to reimburse the Advisor for these costs.

K. Income Taxes—it is the Company’s intention to continue to be treated as and to qualify each year for special tax treatment afforded a RIC under the Code. As long as the Company meets certain requirements that govern its sources of income, diversification of assets and timely distribution of earnings to stockholders, the Company will not be subject to U.S. federal income tax.

The Company must pay distributions equal to 90% of its investment company taxable income (ordinary income and short-term capital gains) to qualify as a RIC and it must distribute all of its taxable income (ordinary income, short-term capital gains and long-term capital gains) to avoid federal income taxes. The Company will be subject to federal income tax on any undistributed portion of income. For purposes of the distribution test, the Company may elect to treat as paid on the last day of its taxable year all or part of any distributions that are declared after the end of its taxable year if such distributions are declared before the due date of its tax return, including any extensions (September 15th).extensions.

 

All RICs are subject to a non-deductible 4% excise tax on income that is not distributed on a timely basis in accordance with the calendar year distribution requirements. To avoid the tax, the Company must distribute during each calendar year an amount at least equal to the sum of (i) 98% of its ordinary income for the calendar year, (ii) 98.2% of its net capital gains for the one-year period ending on December 31, the last day of our taxable year, and (iii) undistributed amounts from previous years on which the Company paid no U.S. federal income tax. A distribution will be treated as paid during the calendar year if it is paid during the calendar year or declared by the Company in October, November or December of such year, payable to stockholders of record on a date during such months and paid by the Company duringno later than January of the following year. Any such distributions paid during January of the following year will be deemed to be received by stockholders on December 31 of the year the distributions are declared, rather than when the distributions are actually received.

 

The Company does not currently qualify as a “publicly offered regulated investment company,” as defined in the Code. A “publicly offered regulated investment company” is a RIC whose shares are either (i) continuously offered pursuant to a public offering, (ii) regularly traded on an established securities market, or (iii) held by at least 500 persons at all times during the taxable year. The Company cannot determine when it will qualify as a publicly offered RIC. If the Company does not qualify as a publicly offered RIC during the tax year, a non-corporate shareholder’s allocable portion of the Company’s affected expenses, including its management fees, will be treated as an additional distribution to shareholders. A non-corporate shareholder’s allocable portion of these expenses are treated as miscellaneous itemized deductions that are not currently deductible by such shareholders.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are reserved and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof.

L.LIBOR Transition — The U.K. Financial Conduct Authority (“FCA”) has announced that certain London Interbank Offered Rate (“LIBOR”) tenors in certain currencies will cease to be provided at the end of 2021 with all remaining tenors ceasing in June 2023. Alternatives to LIBOR have been established, or are in development, in most major currencies including the Secured Overnight Financing Rate (“SOFR”) that is intended to replace U.S. dollar LIBOR. Markets are slowly developing in response to these new reference rates. Uncertainty exists related to the liquidity impact of the change in rates, and how to appropriately adjust these rates at the time of transition. At this time, it is not possible to predict the full impact of the elimination of LIBOR and the establishment of an alternative reference rate on the Company or its investments.

M.J. Commitments and Contingencies—in the normal course of business, the Company may enter into contracts that provide a variety of general indemnifications. Any exposure to the Company under these arrangements could involve future claims that may be made against the Company. Currently, no such claims exist or are expected to arise and, accordingly, the Company has not accrued any liability in connection with such indemnifications.


Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Note 3. Agreements and Related Party Transactions

A.Administration Agreement—on February 5, 2021, the Company entered into an Administration Agreement with its Advisor, which serves as its Administrator and will provide or oversee the performance of its required administrative services and professional services rendered by others, which will include (but are not limited to), accounting, payment of our expenses, legal, compliance, operations, technology and investor relations, preparation and filing of its tax returns, and preparation of financial reports provided to its stockholders and filed with the SEC. On March 6, 2024, the Board approved an additional one-year term of the Administration Agreement through March 15, 2025.

The Company will reimburse the Administrator for its costs and expenses incurred in performing its obligations under the Administration Agreement, which may include, after completion of our Exchange Listing, its allocable portion of office facilities, overhead, and compensation paid to or compensatory distributions received by its officers (including our Chief Compliance Officer and Chief Financial Officer) and its respective staff who provide services to the Company. As the Company reimburses the Administrator for its expenses, the Company will indirectly bear such cost. The Administration Agreement may be terminated by either party with 60 days’ written notice.

B.Investment Advisory Agreement—on February 5, 2021, the Company entered into an Investment Advisory Agreement with its Advisor. Pursuant to the Investment Advisory Agreement with its Advisor, the Company will pay its Advisor a fee for investment advisory and management services consisting of two components—a base management fee and an incentive fee. The Advisor may, from time-to-time, grant waivers on the Company’s obligations, including waivers of the base management fee and/or incentive fee, under the Investment Advisory Agreement. The Investment Advisory Agreement may be terminated by either party with 60 days’ written notice.

The On March 6, 2024, the Board approved an additional one-year term of the Investment Advisory Agreement from March 16, 2024 to March 15, 2025. In addition, on March 6, 2024, the Board approved an amended and restated investment advisory agreement between the Company has agreed to reimburseand the Advisor, and its affiliates for the third-party costs incurred on its behalf in connection with the formation and thewhich will be effective upon an initial public offering of shares of the Company’s common stock. Amounts shown as payables to affiliates on the Statement of Assets and Liabilities represent organizational expenses and offering costs of the Company that were paid by the Advisor and its affiliates on behalf of the Company.

Base Management Fee

Prior to an Exchange Listing, the base management fee will be calculated at an annual rate of 0.90% of the fair market value of the Company’s investments including, in each case, assets purchased with borrowed funds or other formsborrowings under credit facilities and issuances of leverage,senior unsecured notes, but excluding cash, U.S. government securities and commercial paper instruments maturing within one year of purchase. After an Exchange Listing, the base management fee will be calculated at an annual rate of 1.50% of the fair market value of the Company’s investments. However, following an Exchange Listing, if borrowed funds or other forms of leverage utilized to finance the Company’s investments is greater than a debt-to-equity ratio of 1.0x, the base management fee will be 1.00% of the fair market value of the portion of the Company’s investments financed with borrowed funds or other forms of leverage above a 1.0x debt-to-equity ratio.

The base management fee will beis payable quarterly in arrears and calculated based on the average of the Company’s fair market value of investments, at the end of the two most recently completed calendar quarters, including, in each case, assets purchased with borrowed funds or other formsborrowings under credit facilities and issuances of leverage,senior unsecured notes, but excluding cash, U.S. government securities and commercial paper instruments maturing within one year of purchase. Base management fees for any partial quarter will be appropriately pro-rated.

For the quarterthree months ended March 31, 2021,2024 and 2023, the Company incurred base management fees of $176,043.$3,522 and $2,685, respectively.

Incentive Fee

The Company will also pay the Advisor an incentive fee. The incentive fee will consist of two parts—an incentive fee on income and an incentive fee on capital gains. Described in more detail below, these components of the incentive fee will be largely independent of each other with the result that one component may be payable even if the other is not.


 

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Incentive Fee on Income

The incentive fee based on income (the “income incentive fee”) is determined and paid quarterly in arrears in cash.cash (subject to the limitations described in “Payment of Incentive Fees” below). The Company’s quarterly pre-incentive fee net investment income must exceed a preferred return of 1.50% of the Company’s NAVnet asset value (“NAV”) at the end of the immediately preceding calendar quarter (6.0% annualized but not compounded) (the “Hurdle Amount”) in order for the Company to receive an income incentive fee. ThePrior to an Exchange Listing, the income incentive fee is calculated as follows:


Kayne Anderson BDC, Inc.100% of our pre-incentive fee net investment income for the immediately preceding calendar quarter in excess of 1.50% of the Company’s NAV at the end of the immediately preceding calendar quarter until the Advisor has received 10% of the total pre-incentive fee net income for that calendar quarter and, for pre-incentive fee net investment income in excess of 1.6667%, 10% of all remaining pre-incentive fee net investment income for that quarter.

Notes to Consolidated Financial Statements (Unaudited)

●Prior to an Exchange Listing: 100% of our pre-incentive fee net investment income for the immediately preceding calendar quarter in excess of 1.50% of the Company’s NAV until the Advisor has received 10% of the total pre-incentive fee net income for that calendar quarter and, for pre-incentive fee net investment income in excess of 1.6667%, 10% of all remaining pre-incentive fee net investment income for that quarter.

●After an Exchange Listing: 100% of the Company’s pre-incentive fee net investment income for the immediately preceding calendar quarter in excess of 1.50% of the Company’s NAV until the Advisor has received 15% of the total pre-incentive fee net income for that calendar quarter and, for pre-incentive fee net investment income in excess of 1.7647%, 15% of all remaining pre-incentive fee net investment income for that quarter.

Incentive Fee on Capital Gains

ThePrior to an Exchange Listing, the incentive fee on capital gains (the “capital gains incentive fee”) will be calculated and payable in arrears in cash as follows:10% of the Company’s realized capital gains, if any, on a cumulative basis from formation through (a) the day before an Exchange Listing, (b) upon consummation of a Liquidity Event or (c) upon the termination of the Investment Advisory Agreement, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis. For the purpose of computing the capital gain incentive fee, the calculation methodology will look through derivative financial instruments or swaps as if the Company owned the reference assets directly. 

 

●Prior to an Exchange Listing: 10.0% of the Company’s realized capital gains, if any, on a cumulative basis from formation through (a) the day before an Exchange Listing, (b) upon consummation of a Liquidity Event or (c) upon the termination of the Investment Advisory Agreement, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. For the purpose of computing the capital gain incentive fee, the calculation methodology will look through derivative financial instruments or swaps as if the Company owned the reference assets directly.

●After an Exchange Listing: 15.0% of the Company’s realized capital gains, if any, on a cumulative basis from formation through the end of a given calendar year or upon termination of the Investment Advisory Agreement, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees.

Payment of Incentive Fees

Prior to an Exchange Listing, any incentive fees earned by the Advisor shall accrue as earned but only become payable in cash to the Advisor upon consummation of an Exchange Listing. To the extent the Company does not complete an Exchange Listing, the incentive fees will be payable to the Advisor (a) upon consummation of a sale of the Company or (b) once substantially all the proceeds from a Company Liquidation payable to the Company’s stockholders have been distributed to such stockholders. As of March 31, 2024, the incentive fee payable to the Advisor was $16,826.

For the quarterthree months ended March 31, 2021,2024, the Company did not incur anyincurred incentive feefees on income orof $2,631 and no incentive fees on capital gains. For the three months ended March 31, 2023, the Company incurred incentive fees on income of $2,138 and no incentive fees on capital gains.


Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements (Unaudited)

C. Other—KACALP, an affiliate of the Advisor, made an equity contribution of $10,000 to the Company on December 18, 2018.

On February 5, 2021, the Company purchased its initial portfolio of investments for $103,030,517 from an affiliate of the Company’s Advisor (the “Warehousing Entity”). This purchase of its initial portfolio of investments was funded with a portion of the proceeds from the sale of the Company’s common stock on this same date (5,666,667 shares of our common stock to investors at a price of $15.00(amounts in 000’s, except share and per share for an aggregate offering price of $85,000,000) to investors and with borrowings under the Company’s credit facility.amounts)

(Unaudited)

The initial portfolio purchased from the Warehouse Entity consisted of 18 loans, with an average outstanding balance of $5,876,266, an average purchase price of 97.4% of principal value and an average yield on that date of 8.8%. None of these loans in the initial portfolio were in default or non-accrual status. All of the loans are senior secured and the borrowers are middle and upper middle market companies. The purchase of the initial portfolio was completed before the Company elected to be treated as a business development company under the 1940 Act. This initial acquisition and all related transactions are referred to as the “Formation Transactions.”

Note 4. Investments

The following table presents the composition of the Company’s investment portfolio at amortized cost and fair value as of March 31, 2021:2024 and December 31, 2023.

 March 31, 2021  March 31, 2024  December 31, 2023 
 Amortized Fair  Amortized Fair Amortized Fair 
 Cost Value  Cost  Value  Cost  Value 
First-lien senior secured debt investments $153,232,958  $156,031,005  $1,742,767  $1,765,594  $1,327,190  $1,346,174 
Equity investments  17,052   18,451   16,033   17,324 
Short-term investments  17,377,178   17,377,178   10,868   10,868   12,802   12,802 
Total Investments $170,610,136  $173,408,183  $1,770,687  $1,794,913  $1,356,025  $1,376,300 

As of March 31, 2021, none2024 and December 31, 2023, $186,877 and $68,578, respectively, of the Company’s total assets were in non-qualifying assets, as defined by Section 55(a) of the 1940 Act.

The Company uses Global Industry Classification Standards (GICS), Level 3 – Industry, for classifying the industry groupings of its portfolio companies.

The industry composition of long-term investments based on fair value as of March 31, 20212024 and December 31, 2023 was as follows:

March 31, 2021
Consumer durables and apparel19.5%
Materials16.7%
Capital goods10.8%
Commercial & professional services10.2%
Health care equipment & services9.5%
Food, beverage & tobacco7.2%
Pharmaceuticals, biotech & life sciences6.0%
Retailing6.0%
Household & personal products6.0%
Automobiles & components3.5%
Diversified financials3.4%
Software & services0.7%
Transportation0.3%
Technology hardware & equipment0.1%
Chemicals0.1%
Total100.0%
  March 31,
2024		  December 31,
2023		 
       
Trading companies & distributors  12.3%  15.3%
Food products  9.9%  11.5%
Health care providers & services  7.9%  7.4%
Commercial services & supplies  7.9%  9.4%
Containers & packaging  5.6%  7.2%
Aerospace & defense  5.4%  6.3%
Professional services  5.3%  4.5%
Leisure products  3.9%  3.3%
IT services  3.3%  3.8%
Chemicals  2.9%  3.1%
Machinery  2.8%  3.8%
Textiles, apparel & luxury goods  2.5%  3.3%
Automobile components  2.5%  2.0%
Specialty retail  2.5%  0.7%
Pharmaceuticals  2.3%  0.5%
Personal care products  2.3%  3.0%
Insurance  2.2%  2.2%
Software  2.0%  2.5%
Diversified telecommunication services  1.8%  0.4%
Health care equipment & supplies  1.7%  1.5%
Wireless telecommunication services  1.7%  2.1%
Hotels, restaurants & leisure  1.5%  -%
Building products  1.5%  2.0%
Media  1.5%  -%
Household durables  1.2%  1.5%
Entertainment  1.0%  -%
Semiconductors & semiconductor equipment  1.0%  -%
Household products  0.9%  1.2%
Construction materials  0.8%  -%
Biotechnology  0.7%  0.9%
Electrical equipment  0.5%  -%
Capital markets  0.5%  0.6%
Diversified consumer services  0.2%  -%
Total  100.0%  100.0%


Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Note 5. Fair Value

The Fair Value Measurement Topic of the FASB Accounting Standards Codification (ASC 820) defines fair value as the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants under current market conditions at the measurement date. As required by ASC 820, the Company has performed an analysis of all investments measured at fair value to determine the significance and character of all inputs to their fair value determination. Inputs are the assumptions, along with considerations of risk, that a market participant would use to value an asset or a liability. In general, observable inputs are based on market data that is readily available, regularly distributed and verifiable that the Company obtains from independent, third-party sources. Unobservable inputs are developed by the Company based on its own assumptions of how market participants would value an asset or a liability.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into the following three broad categories.

Level 1 — Valuations based on quoted unadjusted prices for identical instruments in active markets traded on a national exchange to which the Company has access at the date of measurement.

Level 2 — Valuations based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.

Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Company’s own assumptions that market participants would use to price the asset or liability based on the best available information.

Level 1 — Valuations based on quoted unadjusted prices for identical instruments in active markets traded on a national exchange to which the Company has access at the date of measurement.

Level 2 — Valuations based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.

Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Company’s own assumptions that market participants would use to price the asset or liability based on the best available information.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. Assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.


Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following table presentstables present the fair value hierarchy of investments as of March 31, 20212024 and December 31, 2023. Note that the valuation levels below are not necessarily an indication of the risk or liquidity associated with the underlying investment.

  Fair Value Hierarchy as of March 31, 2024 
Investments: Level 1  Level 2  Level 3  Total 
First-lien senior secured debt investments $-  $301,703  $1,463,891  $1,765,594 
Equity investments  -   -   18,451   18,451 
Short-term investments  10,868   -   -   10,868 
Total Investments $10,868  $301,703  $1,482,342  $1,794,913 

 

 Fair Value Hierarchy as of March 31, 2021  Fair Value Hierarchy as of December 31, 2023 
Investments: Level 1  Level 2  Level 3  Total  Level 1  Level 2  Level 3  Total 
First-lien senior secured debt investments $-  $4,073,750  $151,957,255  $156,031,005  $-  $    -  $1,346,174  $1,346,174 
Equity investments  -   -   17,324   17,324 
Short-term investments  17,377,178   -   -   17,377,178   12,802   -   -   12,802 
Total Investments $17,377,178  $4,073,750  $151,957,255  $173,408,183  $12,802  $-  $1,363,498  $1,376,300 


 

For the quarter ended March 31, 2021, the Company did not recognize any transfers

Kayne Anderson BDC, Inc.

Notes to or from Level 3.Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

The following table presentstables present changes in the fair value of investments for which Level 3 inputs were used to determine the fair value as of and for the quarterthree months ended March 31, 2021:2024 and 2023.

 

 For the quarter ended March 31, 2021  First-lien Private    
    senior secured equity    
For the three months ended March 31, 2024 debt investments  investments  Total 
Fair value, beginning of period $-  $1,346,174  $17,324  $1,363,498 
Purchases of investments 149,311,308 
Proceeds from principal payments and sales of investments (304,036)
Purchases of investments, including PIK, if any  142,661   1,019   143,680 
Proceeds from sales of investments and principal repayments  (32,390)  -   (32,390)
Net change in unrealized gain (loss) 2,781,758   4,830   108   4,938 
Net realized gain (loss)  -   -   - 
Net accretion of discount on investments 168,225   2,616   -   2,616 
Transfers into (out of) Level 3  -   -   -   - 
Fair value, end of period $151,957,255  $1,463,891  $18,451  $1,482,342 

 

  First-lien  Private    
  senior secured  equity    
For the three months ended March 31, 2023 debt investments  investments  Total 
Fair value, beginning of period $1,157,971  $7,148  $1,165,119 
Purchases of investments, including PIK, if any  104,245   -   104,245 
Proceeds from sales of investments and principal repayments  (17,245)  -   (17,245)
Net change in unrealized gain (loss)  (66)  191   125 
Net realized gain (loss)  -   -   - 
Net accretion of discount on investments  2,115   -   2,115 
Transfers into (out of) Level 3  -   -   - 
Fair value, end of period $1,247,020  $7,339  $1,254,359 

For the three months ended March 31, 2024 and 2023, the Company did not recognize any transfers to or from Level 3. The increase in unrealized gain (loss) relates to investments that were held during the period. The Company includes these unrealized gains and losses on the Statement of Operations – Net Change in Unrealized Gains (Losses).


Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Valuation Techniques and Unobservable Inputs

Non-traded debt investments are typically valued using either a market yield analysis or an enterprise value analysis and/oranalysis. For debt investments that are not considered to be credit impaired, the Advisor uses a market interest rate yield analysis. The enterprise value analysis is performed to determine if a debt investment is credit impaired.fair value. If the debt investment is considered to be credit impaired we(which is determined by performing an enterprise value analysis), the Advisor will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, the Company uses

To determine fair value using a market yield analysis, to determine fair value. As of March 31, 2021, none of the Company’s investments were determined to be credit impaired, andAdvisor discounts the Company used a market yield analysis to determine fair value.

The Company utilizes the following valuation methodologies to determine the estimated enterprise value of the company: (i) analysis of valuations of publicly traded companies in a similar line of business (“public company analysis”), (ii) analysis of valuations of M&A transaction valuations for companies in a similar line of business (“precedent transaction analysis”), (iii) discountedcontractual cash flows (“DCF analysis”) and (iv) other valuation methodologies.

of each investment at an appropriate discount rate (the market yield). To determine the estimated market yield for ourits debt investments, the CompanyAdvisor analyzes changes in the risk/reward (measured by yields and leverage) of middle market indices as compared to changes in risk/reward for the underlying investment (the “Market Approach”).and estimates the appropriate discount rate for such debt investment. In this context, the discount rate and the fair market value of the investment is impacted by the structure and pricing of the security relative to current market yields and credit spreads for similar investments in similar businesses.businesses as well as the financial performance of such business. In doingperforming this analysis, the CompanyAdvisor considers data sources including, but not limited to: (i) industry publications, such as S&P Global’s High-End Middle Market Lending Review; Thomson Reuter’s Refinitiv Middle Market Monthly Stats; CapitalIQ; Pitchbook News; The Lead Left, and other data sources; (ii) comparable investments reviewed or completed by affiliates of the Advisor, and (iii) information obtained and provided by the Advisor’s independent valuation managers.

To determine if a debt investment is credit impaired, the Advisor estimates the enterprise value of the business and compares such estimate to the outstanding indebtedness of such business. The Advisor utilizes the following valuation methodologies to determine the estimated enterprise value of the company: (i) analysis of valuations of publicly traded companies in a similar line of business (“public company comparable analysis”), (ii) analysis of valuations of M&A transaction valuations for companies in a similar line of business (“precedent transaction analysis”), (iii) discounted cash flows (“DCF analysis”) and (iv) other valuation methodologies.


 

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

In determining the non-traded debt investment valuations, the following factors are considered, where relevant: the nature and realizable value of any collateral; the company’s ability to make interest payments, amortization payments (if any) and other fixed charges; call features, put features and other relevant terms of the debt security; the company’s historical and projected financial results; the markets in which the company does business; changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be valued; and other relevant factors.

Equity investments in private companies are typically valued using one of or a combination of the following valuation techniques: (i) public company comparable analysis, (ii) precedent transaction analysis and (iii) DCF analysis.

Under all of these valuation techniques, the CompanyAdvisor estimates operating results of the companies in which we invest,it invests, including earnings before interest expense, income tax expense, depreciation and amortization (“EBITDA”) and free cash flow. These estimates utilize unobservable inputs such as historical operating results, which may be unaudited, and projected operating results, which will be based on operating assumptions for such company. Investment performance data utilized will be the most recently available as of the measurement date which in many cases may reflect up to a one quarter lag in information. These estimates will be sensitive to changes in assumptions specific to such company as well as general assumptions for the industry. Other unobservable inputs utilized in the valuation techniques outlined above include: discounts for lack of marketability, selection of publicly traded companies, selection of similar precedent transactions, selected ranges for valuation multiples and expected required rates of return (discount rates).

Quantitative Table for Valuation Techniques

The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 investments as of March 31, 2024 and December 31, 2023. The tables are not intended to be all-inclusive but instead capture the significant unobservable inputs relevant to the Advisor’s determination of fair value. The Company calculates weighted average, based on the value of the unobservable input of each investment relative to the fair value of the investment compared to the total fair value of all investments.

 

  As of March 31, 2021 
  Fair Value  Valuation
Technique		 Unobservable
Input		 Range Weighted Average 
First-lien senior secured debt investments $151,957,255  Market Approach – Yield Analysis Credit Spreads 5.00% – 8.50%  6.34%
  As of March 31, 2024 
     Valuation Unobservable   Weighted 
  Fair Value  Technique Input Range Average 
First-lien senior secured debt investments $1,463,891  Discounted cash flow analysis Discount rate 8.4% - 15.0% 10.3%
Preferred equity investment 9,166  Discounted cash flow analysis Discount rate 15.0% 15.0%

Other equity investments

  

750

  

Precedent Transaction Analysis

 

Original cost

 

1.0

  

1.0

 
   8,535 Comparable Multiples EV / EBITDA 7.1 - 17.2  11.4 
  $1,482,342           

 

  As of December 31, 2023 
     Valuation Unobservable   Weighted 
  Fair Value  Technique Input Range Average 
First-lien senior secured debt investments $1,346,174  Discounted cash flow analysis Discount rate 8.3% - 15.0% 10.2%
Preferred equity investment 9,287  Discounted cash flow analysis Original Cost 15.0% 15.0%
Other equity investments  8,037  Comparable Multiples EV/ EBITDA 7.1 - 17.2  11.5 
  $1,363,498           


Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Note 6. Debt

Loan and SecuritySubscription Credit Agreement

On February 5, 2021, Kayne Anderson BDC Financing, LLC (“KABDCF”),As of March 31, 2024, the Company had a newly-formed, wholly-owned, special purposes financing subsidiary, entered into a Loan and Security Agreement$50,000 credit agreement (the “LSA”“Subscription Credit Agreement”) with certain lenders party thereto, administrative agent, andthereto. The Subscription Credit Agreement permits the Advisor as collateral manager. The maximumCompany to elect the commitment amount each quarter to borrow up to $50,000, subject to availability under the borrowing base which is calculated based on the unused capital commitments of the LSA is up to $150,000,000, and, subject to certain conditions, may be increased by $50,000,000 up to two times not to exceed $250,000,000. Advancesinvestors meeting various eligibility requirements. The interest rate under the facility bear an interest rate of LIBORSubscription Credit Agreement is equal to the Secured Overnight Funding Rate (“SOFR”) plus 4.25%2.25% (subject to a 1.00% LIBOR0.275% SOFR floor). The facility hasCompany is also required to pay a termcommitment fee of three years.0.25% per annum on any unused portion of the Subscription Credit Agreement. The Company also pays an extension fee of 0.075% per quarter on the elected commitment amount on the first day of each calendar quarter. See Note 11 – Subsequent Events.

For the quarterthree months ended March 31, 2021,2024 and 2023, the average amount of borrowings outstanding under the LSA was $38,236,364Subscription Credit Agreement were $13,297 and $89,311, respectively, with a weighted average interest rate of 5.25%.7.63% and 6.52%, respectively. As of March 31, 2021,2024, the Company did not have any amounts outstanding under the Subscription Credit Agreement.

Corporate Credit Facility

As of March 31, 2024, the Company had $50,000,000 outstanding under the LSA at a weighted average interest ratesenior secured revolving credit facility (the “Corporate Credit Facility”), that has a total commitment of 5.25%.

Credit Agreement

On February 5, 2021, the$400,000. The Company entered into the Corporate Credit Facility on February 18, 2022. The Corporate Credit Facility’s commitment termination date and the final maturity date are February 18, 2026 and February 18, 2027, respectively. The Corporate Credit Facility also provides for a $75,000,000 credit agreement (the “Credit Agreement”) withfeature that allows the Company, under certain lenders party thereto. Thecircumstances, to increase the overall size of the Corporate Credit Agreement is comprisedFacility to a maximum of two sub-facilities: (i) a capital call facility (the “Subscription Facility”) and (ii) a treasury facility (the “Treasury Facility”).$550,000. The interest rate underon the SubscriptionCorporate Credit Facility is equal to LIBORTerm SOFR (a forward-looking rate based on SOFR futures) plus 1.90% (subjectan applicable spread of 2.35% per annum or an “alternate base rate” (as defined in the agreements governing the Corporate Credit Facility) plus an applicable spread of 1.25%. The Company is also required to pay a 0.35% LIBOR floor)commitment fee of 0.375% per annum on any unused portion of the Corporate Credit Facility.

Under the Corporate Credit Facility, the Company is required to comply with various covenants, reporting requirements and other customary requirements for similar revolving credit facilities, including, without limitation, covenants related to: (a) limitations on the interest rateincurrence of additional indebtedness and liens, (b) limitations on certain investments, (c) limitations on certain restricted payments, (d) maintaining a certain minimum stockholders’ equity, and (e) maintaining a ratio of total assets (less total liabilities not representing indebtedness) to total indebtedness of the Company and its consolidated subsidiaries of not less than 1.5:1.0. These covenants are subject to important limitations and exceptions that are described in the agreements governing the Corporate Credit Facility. Amounts available to borrow under the TreasuryCorporate Credit Facility are subject to compliance with a borrowing base that applies different advance rates to different types of assets (based on their value as determined pursuant to the Corporate Credit Facility) that are pledged as collateral. The Corporate Credit Facility is equal to LIBOR plus 0.20% (with no LIBOR floor). The Subscription Facility will expire on December 31, 2022,secured by certain assets in the Company’s portfolio and the Treasury Facility will expire on September 30, 2021.

The Credit Agreement allows the Company to transfer the commitment amountexcludes investments held by Kayne Anderson BDC Financing LLC (“KABDCF”) under the TreasuryRevolving Funding Facility to the Subscription Facility. On March 2, 2021, $15,000,000 was transferred from the Treasury Facility to the Subscription Facility. As of March 31, 2021, the Subscription Facility and Treasury Facility had commitments of $40,000,000 and $35,000,000, respectively.(as defined below).

For the quarterthree months ended March 31, 2021,2024 and 2023, the average amount of borrowings outstanding under the Corporate Credit AgreementFacility was $15,090,909$229,484 and $289,711, respectively, with a weighted average interest rate of 2.28%.7.69% and 6.81%, respectively. As of March 31, 2021,2024, the Company had $40,000,000$198,000 outstanding under the Corporate Credit AgreementFacility at a weighted average interest rate of 2.25%7.68%.

Revolving Funding Facility

As of March 31, 2024, the Company had a senior secured revolving funding facility (the “Revolving Funding Facility”), that has a total commitment of $455,000. The Revolving Funding Facility is secured by all of the assets held by KABDCF and the Company has agreed that it will not grant or allow a lien on the membership interest of KABDCF. The end of the reinvestment period and the stated maturity date for the Revolving Funding Facility are February 18, 2025 and February 18, 2027, respectively. The interest rate on the Revolving Funding Facility is equal to daily SOFR plus 2.75% per annum. KABDCF is also required to pay a commitment fee of between 0.50% and 1.50% per annum depending on the size of the unused portion of the Revolving Funding Facility. Amounts available to borrow under the Revolving Funding Facility are subject to a borrowing base that applies different advance rates to different types of assets held by KABDCF and is subject to limitations with respect to the loans securing the Revolving Funding Facility, including restrictions on, loan size, industry concentration, payment frequency and status, as well as restrictions on portfolio company leverage, all of which may also affect the borrowing base and therefore amounts available to borrow. The Company and KABDCF are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the agreements governing the Revolving Funding Facility. See Note 11 – Subsequent Events.


 

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

For the three months ended March 31, 2024 and 2023, the average amount of borrowings outstanding under the Revolving Funding Facility was $316,231 and $235,833, respectively, with a weighted average interest rate of 8.07% and 7.20%, respectively. As of March 31, 2024, the Company had $319,000 outstanding under the Revolving Funding Facility at a weighted average interest rate of 8.06%.

Revolving Funding Facility II

As of March 31, 2024, the Company and Kayne Anderson BDC Financing II, LLC (“KABDCF II”), a wholly-owned, special purpose financing subsidiary, had a senior secured revolving credit facility (the “Revolving Funding Facility II”). The Revolving Funding Facility II has an initial commitment of $150,000 which, under certain circumstances, can be increased up to $500,000. The Revolving Funding Facility II is secured by all of the assets held by KABDCF II and the Company has agreed that it will not grant or allow a lien on the membership interest of KABDCF II. The end of the reinvestment period and the stated maturity date for the Revolving Funding Facility II are December 22, 2026, and December 22, 2028, respectively. The interest rate on the Revolving Funding Facility II is equal to 3-month term SOFR plus 2.70% per annum. KABDCF II is also required to pay a commitment fee of 0.50% between December 22, 2023 and September 22, 2024 and 0.75% thereafter on the unused portion of the Revolving Funding Facility II.

Amounts available to borrow under the Revolving Funding Facility II are subject to a borrowing base that has limitations with respect to the loans securing the Revolving Funding Facility II, including limitations on, loan size, payment frequency and status, sector concentrations, as well as restrictions on portfolio company leverage, all of which may also affect the borrowing base and therefore amounts available to borrow. The Company and KABDCF II are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the agreements governing the Revolving Funding Facility II.

For the three months ended March 31, 2024, the average amount of borrowings outstanding under the Revolving Funding Facility II was $69,341, with a weighted average interest rate of 8.03%. As of March 31, 2024, the Company had $67,000 outstanding under the Revolving Funding Facility II at a weighted average interest rate of 8.03%.

Senior Unsecured Notes

As of March 31, 2024, the Company had $75,000 aggregate principal amount of senior unsecured notes (the “Notes”).

The table below sets forth a summary of the key terms of each series of Notes outstanding at March 31, 2024.

  Principal     Estimated  Fixed   
  Outstanding  Unamortized  Fair Value  Interest   
Series March 31, 2024  Issuance Costs  March 31, 2024  Rate  Maturity
A $25,000  $      256  $      26,372   8.65% 6/30/2027
B  50,000   543   53,250   8.74% 6/30/2028
  $75,000  $799  $79,622       

Holders of the Notes are entitled to receive cash interest payments semi-annually (on January 30 and July 30) at the fixed rate. As of March 31, 2024, the weighted average interest rate on the outstanding Notes was 8.71%.

As of March 31, 2024, the Notes were rated “BBB” by Kroll Bond Rating Agency (“KBRA”). The Company is required to maintain a current rating from one rating agency with respect to the Notes. In the event the Company does not maintain a current rating from a rating agency for a specified period of time or the credit rating on the Notes falls below “BBB-” (a “Below Investment Grade Event”), the interest rate per annum on the Notes will increase by 1.0% during the period the Notes are rated below “BBB-”. In the event the Company’s Secured Debt Ratio exceeds 60% (until June 29, 2024) or 55% (on or after June 29, 2024) (a “Secured Debt Ratio Event”), the interest rate per annum on the Notes will increase by 1.5% during the period the ratio is above stated percentage. If a Below Investment Grade Event and a Secured Debt Ratio Event is continuing at the same time the aggregate increase in interest rate per annum will not exceed 2.0%.

The Notes were issued in private placement offerings to institutional investors and are not listed on any exchange or automated quotation system. The Notes contain various covenants related to other indebtedness, liens and limits on the Company’s overall leverage. The Company must maintain a minimum amount of shareholder equity and the Company’s asset coverage ratio must be greater than 150% as of the last business day of each fiscal quarter. The Notes are redeemable in certain circumstances at the option of the Company and may be redeemed under certain circumstances to cure the asset coverage ratio covenant.

The Notes are unsecured obligations of the Company and, upon liquidation, dissolution or winding up of the Company, will rank: (1) senior to all of the Company’s outstanding common shares; (2) on parity with any unsecured creditors of the Company and any unsecured senior securities representing indebtedness of the Company; and (3) junior to any secured creditors of the Company.

At March 31, 2024, the Company was in compliance with all covenants under the Notes agreements.


Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Debt obligations consisted of the following as of March 31, 2021: 2024 and December 31, 2023.

  March 31, 2024 
  Aggregate  Principal Committed  Outstanding Principal  Amount Available(1)  Net Carrying Value(2) 
Notes $75,000  $75,000  $-  $74,201 
Corporate Credit Facility  400,000   198,000   202,000   196,478 
Revolving Funding Facility  455,000   319,000   136,000   317,411 
Revolving Funding Facility II  150,000   67,000   10,114   65,271 
Subscription Credit Agreement  50,000   -   50,000   - 
Total debt $1,130,000  $659,000  $398,114  $653,361 

 

  Aggregate
Principal
Committed		  Outstanding
Principal		  Amount
Available(1)		  Net
Carrying
Value(2)		 
Loan and Security Agreement (LSA) $150,000,000  $50,000,000  $100,000,000  $49,674,062 
Credit Agreement  75,000,000   40,000,000   35,000,000   39,812,532 
Total debt $225,000,000  $90,000,000  $135,000,000  $89,486,594 

(1)The amount available does not reflectunder the Company’s credit facilities reflects the assets held at KABDCF and KABDCF II and any limitations if any, related to the Credit Facility’seach borrowing base.base as of March 31, 2024.

(2)The carrying value of the LSANotes, Corporate Credit Facility, Revolving Funding Facility, Revolving Funding Facility II, and Subscription Credit Agreement are presented net of deferred financing costs totaling $513,406.$5,639.

  December 31, 2023 
  Aggregate Principal Committed  Outstanding Principal  Amount Available(1)  Net Carrying Value(2) 
Notes $75,000  $75,000  $-  $74,149 
Corporate Credit Facility  400,000   234,000   166,000   232,285 
Revolving Funding Facility  455,000   306,000   18,536   303,981 
Revolving Funding Facility II  150,000   70,000   9,716   68,195 
Subscription Credit Agreement  50,000   10,750   39,250   10,709 
Total debt $1,130,000  $695,750  $233,502  $689,319 

(1)The amount available under the Company’s credit facilities reflects the assets held at KABDCF and KABDCF II and any limitations related to each borrowing base as of December 31, 2023.
(2)The carrying value of the Notes, Corporate Credit Facility, Revolving Funding Facility, Revolving Funding Facility II, and Subscription Credit Agreement are presented net of deferred financing costs totaling $6,431.

For the quarterthree months ended March 31, 2021,2024 and 2023, the components of interest expense were as follows:

 

 For the quarter ended 
 March 31, 2021  For the three months ended 
    March 31, 2024  March 31, 2023 
Interest expense $426,423  $14,759  $10,932 
Amortization of debt issuance costs  35,046   897   591 
Total interest expense $461,469  $15,656  $11,523 
Average interest rate  5.7%  8.9%  7.6%
Average borrowings $53,327,273  $703,352  $614,856 


Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Note 7. Share Transactions

On January 25, 2021,Common Stock Issuances

The following table summarizes the number of common stock shares issued and aggregate proceeds received from such issuances related to the Company’s capital call notices pursuant to subscription agreements with investors for the three months ended March 31, 2024. There were no common stock shares issued during the three months ended March 31, 2023 related to the Company’s subscription agreements with investors. See Note 11 – Subsequent Events.

For the three months ended March 31, 2024
  Offering     Aggregate 
  price per  Common stock  offering 
Common stock issue date share  shares issued  amount 
February 14, 2024 $16.74   7,089,771  $118,689 
Total common stock issued      7,089,771  $118,689 

As of March 31, 2024, the Company entered intohad subscription agreements with investors for an aggregate capital commitment of $154,305,000$1,046,928 to purchase shares of common stock. Of this amount, the Company had $269,945 of undrawn commitments at March 31, 2024. See Note 11 – Subsequent Events.


Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Dividends and Dividend Reinvestment

The following tables summarize the dividends declared and payable by the Company for the three months ended March 31, 2024 and 2023. See Note 11 – Subsequent Events.

For the three months ended March 31, 2024
  Dividend Dividend Dividend 
  record payment per 
Dividend declaration date date date share 
March 6, 2024 March 29, 2024 April 17, 2024 $0.40 
Total dividends declared     $0.40 

The dividend declared on March 6, 2024 is considered a regular dividend.

For the three months ended March 31, 2023
  Dividend Dividend Dividend 
  record payment per 
Dividend declaration date date date share 
March 7, 2023 March 31, 2023 April 14, 2023 $0.47 
Total dividends declared     $0.47 

The following tables summarize the amounts received and shares of common stock issued to shareholders pursuant to the Company’s common stock. On February 5, 2021,dividend reinvestment plan (“DRIP”) for the Company sold 5,666,667three months ended March 31, 2024 and 2023. See Note 11 – Subsequent Events.

For the three months ended March 31, 2024
  Dividend DRIP    
  payment shares  DRIP 
Dividend record date date issued  value 
December 29, 2023 January 16, 2024  95,791  $1,573 
     95,791  $1,573 

For the three months ended March 31, 2023
  Dividend DRIP    
  payment shares  DRIP 
Dividend record date date issued  value 
December 29, 2022 January 13, 2023  57,860  $955 
     57,860  $955 

For the dividend declared on March 6, 2024 and paid on April 17, 2024, there were 94,816 shares issued with a DRIP value of its common stock$1,577. These shares are excluded from the table above, as the DRIP shares were issued after March 31, 2024.


Kayne Anderson BDC, Inc.

Notes to these investors at a price of $15.00Consolidated Financial Statements

(amounts in 000’s, except share and per share for an aggregate offering price of $85,000,000.amounts)

(Unaudited)

Note 8. Commitments and Contingencies

The Company had an aggregate of $3,092,391$169,063 and $147,928, respectively, of unfunded commitments to provide debt financing to its portfolio companies as of March 31, 2021. As of March2024 and December 31, 2021, there were no capital calls or draw requests made by the portfolio companies to fund these commitments.2023. Such commitments are generally subject to the satisfaction of certain financial and nonfinancial covenants; involve, to varying degrees, elementscovenants and certain operational metrics. The commitment period for these amounts may be shorter than the maturity date if drawn or funded. These commitments are not reflected in the Company’s consolidated statement of assets and liabilities. Consequently, such commitments result in an element of credit risk in excess of the amount recognized in the Company’s consolidated statementsstatement of assets and liabilities, and are not reflected in the Company’s consolidated statements of assets and liabilities.

A summary of the composition of the unfunded commitments as of March 31, 20212024 and December 31, 2023 is shown in the table below:below.

  As of  As of 
  March 31, 2024  December 31, 2023 
Alcami Corporation (Alcami) $1,565  $2,543 
Allcat Claims Service, LLC  5,370   5,370 
Allentown, LLC  1,020   785 
American Equipment Holdings LLC  3,219   483 
American Soccer Company, Incorporated (SCORE)  1,892   2,601 
Arborworks Acquisition LLC  780   1,872 
Basel U.S. Acquisition Co., Inc. (IAC)  1,622   1,622 
BCI Burke Holding Corp.  4,658   4,659 
OAO Acquisitions, Inc. (BearCom)  6,982   6,982 
BLP Buyer, Inc. (Bishop Lifting Products)  5,911   6,548 
BR PJK Produce, LLC (Keany)  2,870   2,870 
Brightview, LLC  581   - 
Carton Packaging Buyer, Inc.  2,848   2,848 
CCFF Buyer, Inc  17,738   - 
CGI Automated Manufacturing, LLC  1,711   2,390 
City Line Distributors, LLC  2,530   5,322 
Curio Brands, LLC  1,719   1,719 
DISA Holdings Corp. (DISA)  3,456   6,142 
DRS Holdings III, Inc. (Dr. Scholl’s)  310   310 
Eastern Wholesale Fence  142   1,332 
EIS Legacy, LLC  6,922   6,922 
Envirotech Services, LLC  6,704   - 
FCA, LLC (FCA Packaging)  890   2,670 
Foundation Consumer Brands  577   577 
Fralock Buyer LLC  299   300 
Guided Practice Solutions  8,605   10,299 
Gulf Pacific Holdings, LLC  10,153   10,153 
Gusmer Enterprises, Inc.  3,676   3,676 
Home Brands Group Holdings, Inc. (ReBath)  2,099   2,099 
I.D. Images Acquisition, LLC  2,020   2,020 
IF&P Foods, LLC (FreshEdge)  563   1,656 
Improving Acquisition LLC  1,671   1,672 
Krayden Holdings, Inc.  5,437   5,438 
Light Wave Dental Management LLC  -   827 
LSL Industries, LLC (LSL Healthcare)  15,224   15,224 
MacNeill Pride Group  3,278   3,877 
Pixel Intermediate, LLC  2,511   - 
PMFC Holding, LLC  137   137 
Refocus Management Services, LLC  8,799   - 
Regiment Security Partners LLC  103   104 
Ruff Roofers Buyer, LLC  10,966   10,966 
SGA Dental Partners Holdings, LLC  5,087   5,087 
Siegel Egg Co., LLC  537   537 
Sundance Holdings Group, LLC  438   439 
Techniks Holdings, LLC / Eppinger Holdings Germany GMBH  1,450   1,450 
Trademark Global LLC  480   480 
United Safety & Survivability Corporation (USSC)  -   469 
USALCO, LLC  1,049   1,494 
Vehicle Accessories, Inc.  1,376   1,671 
Worldwide Produce Acquisition, LLC  1,088   1,286 
Total unfunded commitments $169,063  $147,928 


 

  As of 
  March 31, 2021 
Foundation Consumer Brands, LLC $576,923 
Fralock Buyer LLC  563,487 
GEON Performance Solutions  517,241 
PMFC Holding, LLC  684,360 
Smile Doctors, LLC  56,438 
Speedstar Holding LLC  693,942 
  Total unfunded commitments $3,092,391 

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

From time to time, the Company may become a party to certain legal proceedings incidental to the normal course of its business. As of March 31, 2021,2024 and December 31, 2023, management was not aware of any material pending or threatened litigation that would require accounting recognition or financial statement disclosure.

Note 9. Earnings Per Share

In accordance with the provisions of ASC Topic 260, Earnings per Share (“ASC 260”), 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 common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. As of March 31, 2021,2024 and 2023, there were no dilutive shares.

The following table sets forth the computation of basic and diluted earnings per share of common stock for the quarterthree months ended March 31, 2021:2024 and 2023.

  For the three months ended 
  March 31, 2024  March 31, 2023 
       
Net increase (decrease) in net assets resulting from operations $27,755  $19,407 
Weighted average shares of common stock   outstanding - basic and diluted  45,345,417   35,929,436 
Earnings (loss) per share of common stock - basic and diluted $0.61  $0.54 

 

  For the quarter ended 
  March 31,
2021		 
    
Net increase (decrease) in net assets resulting from operations $3,445,057 
Weighted average shares of common stock outstanding - basic and diluted  5,667,333 
Earnings (loss) per share of common stock - basic and diluted $0.61 


Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

 

Note 10. Financial Highlights

 

The following per share of common stock data has been derived from information provided in the unaudited financial statements. The following is a schedule of financial highlights for the quarterthree months ended March 31, 2021:2024 and 2023.

 

 For the quarter ended 
 March 31,
2021		  For the three months ended March 31, 
Per Common Share Operating Performance(1)    2024 (amounts in thousands, except share and per share amounts)  2023 (amounts in thousands, except share and per share amounts) 
Net Asset Value, Beginning of Period (2) $14.86 
Net Asset Value, Beginning of Period $16.42  $16.50 
            
Results of Operations:            
Net Investment Income  0.11   0.52   0.54 
Net Realized and Unrealized Gain (Loss) on Investments (3)  0.50 
Net Realized and Unrealized Gain (Loss) on Investments(2)  0.09   - 
Net Increase (Decrease) in Net Assets Resulting from Operations  0.61   0.61   0.54 
        
Dividends to Common Stockholders        
Dividends  (0.40)  (0.47)
Net Decrease in Net Assets Resulting from Dividends  (0.40)  (0.47)
            
Net Asset Value, End of Period $15.47  $16.63  $16.57 
            
Shares Outstanding, End of Period  5,667,333   48,789,228   35,937,151 
            
Ratio/Supplemental Data            
Net assets, end of period $87,646,907  $811,557  $595,513 
Weighted-average shares outstanding  5,667,333   45,345,417   35,929,436 
Total Return(4)  3.1%
Total Return(3)  3.7%  3.3%
Portfolio turnover  3.8%  2.1%  1.4%
Ratio of operating expenses to average net assets(5)  7.5%
Ratio of net investment income (loss) to average net assets(5)  5.9%
Ratio of operating expenses to average net assets(4)  12.2%  11.7%
Ratio of net investment income (loss) to average net assets(4)  12.8%  13.2%

 

(1)The per common share data was derived by using weighted average shares outstanding.


Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

(2)The initial offering price of $15.00 per share less $0.14 per share of organizational costs.
(3)Realized and unrealized gains and losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period and may not reconcile with the aggregate gains and losses in the Consolidated Statement of Operations due to share transactions during the period.

For the three months ended March 31, 2024, such share transactions include the effect of share issuances of $0.01 per share. During the period, shares were issued at prices that reflect the aggregate amount of the Company’s initial organizational and offering expenses. As a result, investors subscribing after the initial capital call are allocated organizational expenses consistently with all stockholders. During the three months ended March 31, 2023, there were no such share transactions including the effect of share issuances.

(4)(3)Total return is calculated as the change in net asset value (“NAV”) per share during the period, plus distributions per share (if any), divided by the beginning NAV per share. The calculation also assumes reinvestment of dividends at actual prices pursuant to the Company’s dividend reinvestment plan. Total return is not annualized.
(5)The ratios reflect an annualized amount, except in the case of non-recurring expenses (e.g., initial organizational expense of $175,465 for the quarter ended March 31, 2021).

 

(4)Ratio is annualized.

Note 11. Subsequent Events

 

The Company’s management has evaluated subsequent events through the date of issuance of the financial statements included herein. There have been no subsequent events that require recognition or disclosure in these financial statements except for the following:as described below.

 

On April 23, 2021,1, 2024, the Company fully repaid all amounts outstanding and terminated the remaining commitment of $50,000 under its Subscription Credit Agreement that was scheduled to mature on December 31, 2024.

On April 2, 2024, the Company sold 3,532,43416,232,415 shares of its common stock in the private placement at a price of $15.57 per share of $16.63, for an aggregate offering price of $55,000,000.$269,945. The Company hassale of such shares of common stock relates to existing subscription agreements that the Company had entered into with investors for an aggregate capital commitment of $285,355,000$1,046,928 to purchase shares of common stock ($145,355,000stock. Following this final capital call and issuance of shares of the commitments are undrawn). The saleCompany’s common stock, the investors’ obligations to purchase additional shares of common stock will be exhausted in the final closing that occurred on April 2, 2024, and the Company will not have any remaining undrawn capital commitments. The capital payable of $29,025 on the Company’s Consolidated Statement of Assets and Liabilities as of March 31, 2024 represents cash received early from investors as of March 31, 2024, which was made pursuantprior to subscription agreements entered into bythe capital call funding date and issuance of the shares on April 2, 2024.

On April 3, 2024, the Company and its stockholders.KABDCF amended their existing Revolving Funding Facility. Under the terms of the subscription agreements, stockholders are requiredthird amendment, the Company and KABDCF increased the commitment amount from $455,000 to fund drawdowns$600,000. The end of the reinvestment period was extended to purchase sharesApril 2, 2027 and the maturity date was extended to April 3, 2029. The interest rate on the Revolving Funding Facility was reduced from daily SOFR plus 2.75% per annum to SOFR plus 2.375% - 2.50% per annum depending on the mix of common stock up toloans securing the amountRevolving Funding Facility. All other terms of their respective capital commitments on an as-needed basis with a minimum of ten days’ prior notice to stockholders.the Revolving Funding Facility remain substantially the same.

 

On May 14, 2021,April 17, 2024, the Company paid its first distributiona regular dividend of $0.15$0.40 per share to each common stockholder of record as of April 20, 2021.March 29, 2024. The total dividend was $19,516 and $1,577 was reinvested into the Company through the issuance of 94,816 shares of common stock.


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 our financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q. Except as otherwise specified, references to “we,” “us,” “our,” or the “Company” refer to Kayne Anderson BDC, Inc.

 

OverviewInvestment Objective, Principal Strategy and Investment Structure

Kayne Anderson BDC, LLCInc. was formed in May 2018 as a Delaware limited liability company. We were formed to make investments in middle-market companies andcorporation that commenced operations on February 5, 2021. On this same date, prior to our election to be regulated as a BDC under the 1940 Act, we completed a conversion from a Delaware limited liability company into a Delaware corporation and Kayne Anderson BDC, Inc. succeeded to the business of Kayne Anderson BDC, LLC. We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the 1940 Act.Act, as amended. In addition, for U.S. federal income tax purposes, we intend to qualify, annually, as a RIC under Subchapter M of the Code.

 

WeOur investment activities are managed by KA Credit Advisors, LLC (the “Advisor”) which is, an indirect controlled subsidiary of Kayne Anderson Capital Advisors, L.P. (“KACALP”Kayne Anderson”), and the Advisor operates within Kayne Anderson’s middle market private credit platform (“KAPC” or “Kayne Anderson”Anderson Private Credit”). The Advisor is an investment advisor registered with the United States Securities and Exchange Commission (“SEC”(the “SEC”) as an investment advisor under the Investment Advisory Act of 1940. Subject to1940, as amended. In accordance with the overall supervisionInvestment Advisers Act of the Company’s board of directors (the “Board”), the1940, as amended, our Advisor is responsible for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring investments, and monitoring itsour investments and portfolio companies on an ongoing basis. The Board consistsAdvisor benefits from the scale and resources of five directors, three of whom are independent.Kayne Anderson and specifically KAPC.

 

On February 5, 2021, we completed our initial private offering of 5.7 million shares of common stock with our initial investors for an aggregate offering price of $85 million.

Our investment objective is to generate current income and, to a lesser extent, capital appreciation primarily throughappreciation. We intend to have nearly all of our debt investments in middle-marketprivate middle market companies. We use “private” to refer to companies that are not traded on a securities exchange and define “middle-market“middle market companies” as U.S.-based companies that, in general, generate between $10 million and $150 million of annual earnings before interest, taxes, depreciation and amortization, or EBITDA. WeFurther, we refer to companies that generate between $10 million and $50 million of annual EBITDA as “core middle-marketmiddle market companies” and companies that generate between $50 million and $150 million of annual EBITDA as “upper middle-marketmiddle market companies.” We typically adjust EBITDA for non-recurring and/or normalizing items to assess the financial performance of our borrowers over time.

 

We intend to achieve our investment objective by investing primarily in first lien senior secured loans, with a secondary focus on unitranche and split-lien loans to privately held middle-marketmiddle market companies. Similar to first lien senior secured loans, unitranche loans typically have a first lien on all assets of the borrower, but provide leverage at levels similar to a combination of first lien and second lien and/or subordinated loans. Split-lien loans are generally loans that otherwise satisfy the criteria of a first lien loan but which have been structured with a credit facility that is senior in right of payment with respect to working capital assets of the borrower. Depending onUnder normal market conditions, we expect that between 80% andat least 90% of our portfolio (including investments purchased with proceeds from borrowings) willborrowings under credit facilities and issuances of senior unsecured notes) to be invested in first lien senior secured, unitranche and split-lien term loans. Our investment decisions are made on a case-by-case basis. We expect that mosta majority of these debt investments will be made in core middle market companies with the remainder in upper middle market companies. The remaining 10%and will generally have stated maturities of three to 20% of our portfolio will be invested in higher-yielding investments, including, but not limited to, second lien loans, last-out or subordinated loans, non-investment grade broadly syndicated first and second lien loans (commonly referred to as “leveraged loans”), high-yield bonds, structured products (including CLO liabilities), real estate related debt securities, equity securities purchased in conjunction with debt investments and other opportunistic investments (collectively “Opportunistic Middle Market Investments”).six years. We expect that the debtloans in which we principally invest will be to companies that have principal business activities in will generally have state termsthe United States. We determine the location of five to six years.a company as being in the United States by (i) such company being organized under the laws of one of the states in the United States; or (ii) during its most recent fiscal year, such company derived at least 50% of its revenues or profits from goods produced or sold, investments made, or services performed in the United States or has at least 50% of its assets in the United States.

 

We intend to implementThe Advisor executes on our investment objective by (1) accessing the established loan sourcing channels developed by Kayne Anderson,KAPC, which includes an extensive network of private equity firms, other middle-marketmiddle market lenders, financial advisors, and intermediaries and experienced management teams, (2) selecting investments within our middle-marketmiddle market company focus, (3) implementing Kayne Anderson’s middle market private credit team’s disciplinedKAPC’s underwriting process and (4) drawing upon theits experience and resources of our Advisor’s investment team and the broader Kayne Anderson network.

We believe our Advisor’s disciplined approach KAPC was established in 2011 and manages (directly and through affiliates) assets under management (“AUM”) of approximately $6.7 billion related to origination,middle market private credit analysis, portfolio construction and risk management should allow us to achieve attractive risk-adjusted returns while preserving investor capital. We anticipate the portfolio will be comprisedas of a broad mix of loans, with diversity among investment size, industry focus and geography. The Advisor’s team of professionals will conduct in-depth due diligence on prospective investments during the underwriting process and will be heavily involved in structuring the loan’s terms. Once an investment has been made, our Advisor will closely monitor portfolio investments and take a proactive approach identifying and addressing sector or company specific risks. The Advisor maintains a regular dialogue with portfolio company management teams (as well as their financial sponsors), reviews detailed operating and financial results on a regular basis (typically monthly or quarterly) and monitors current and projected liquidity needs, in addition to other portfolio management activities. We believe this approach will help us generate more consistent results. 

December 31, 2023.

 


 

Recent Developments 

On April 17, 2024, we paid a regular dividend of $0.40 per share to each common stockholder of record as of March 29, 2024. The total dividend was $19.5 million and $1.6 million was reinvested into the Company through the purchase of 94,816 shares of common stock.

On April 2, 2024, we sold 16,232,415 shares of common stock in the private placement at a price per share of $16.63 for an aggregate offering price of approximately $269.9 million. Following this capital call, we do not have any remaining undrawn capital commitments.  

Portfolio and Investment Activity

 

Prior toOur portfolio is currently comprised of a broad mix of loans, with diversity among investment size and industry focus. The Advisor’s team of professionals conducts due diligence on prospective investments during the underwriting process and is involved in structuring the credit terms of our election to be regulated as a BDC, we acquired our initial portfolio ofprivate middle market loans frominvestments. Once an affiliate ofinvestment has been made, our Advisor (the “Warehousing Entity”).closely monitors that portfolio investment and takes a proactive approach to identify and address sector or company specific risks. The Advisor seeks to maintain a regular dialogue with portfolio company management teams (as well as their owners, the majority of whom are private equity firms, where applicable), reviews detailed operating and financial results on a regular basis (typically monthly or quarterly) and monitors current and projected liquidity needs, in addition to other portfolio management activities. There are no assurances that we will achieve our investment objectives.

 

Our initial portfolio purchased from the Warehouse Entity consisted of 18 loans, with an average outstanding balance of $5.9 million, an average purchase price of 97.4% of principal value and an average yield on that date of 8.8%. None of these loans in the initial portfolio were in default or non-accrual status. Information about the initial portfolio is not intended to indicate our expected investment return on the initial portfolio or the investment performance of our shares of common stock. All of the loans are senior secured and the borrowers are middle and upper middle market companies.

As of March 31, 2021,2024, we had 48 debt investments in 35103 portfolio companies with an aggregate fair value of approximately $156$1,784 million, and an amortized costunfunded commitments to these portfolio companies of $153.2$169.1 million, consistingand our portfolio consisted of 100%97.7% first lien senior secured loans, 1.2% junior debt and 1.1% equity investments.

 

During the three months ended March 31, 2024, and included in the totals above, KBDC purchased $449 million (par value) of debt investments in 34 portfolio companies; of these, $302 million (par value) in 24 portfolio companies were investments in broadly syndicated loans. These investments in broadly syndicated loans were made in anticipation of the receipt of proceeds from our final capital call which closed on April 2, 2024. Prior to these investments, we had not held broadly syndicated loans since 2022. Consistent with our strategy at that time, we expect to rotate out of these investments over coming quarters to invest in private middle market loans consistent with our principal strategy. We have presented certain portfolio-related information below for our private middle market loans and broadly syndicated loans separately and on a combined basis for ease of reference.

As of March 31, 2021,2024, 100% of our debt investments had floating interest rates. Our weighted average yields for debt investments were as follows:

●private middle market loans at fair value and amortized cost weighted average yields were 12.4% and 12.6%, respectively

●broadly syndicated loans at fair value and amortized cost weighted average yields were 8.4% and 8.3%, respectively; and

●total debt and income producing investments at fair value and amortized cost weighted average yields were 11.7% and 11.8%, respectively

As of March 31, 2024, our portfolio was invested across 33 different industries (Global Industry Classification “GICS”, Level 3 – Industry). The largest industries in our portfolio as of March 31, 2024 were Trading Companies & Distributors, Food Products, Health Care Providers & Services and Commercial Services & Supplies, which represented, as a percentage of our portfolio of long-term investments, 12.3%, 9.9%, 7.9% and 7.9%, respectively, based on fair value. We are generalist investors and the mix of industries represented by our portfolio companies will vary over time.

As of March 31, 2024, our average position size based on commitment (at the portfolio company level) was $19.1 million.


As of March 31, 2024, the weighted average and median last twelve months (“LTM”) EBITDA of our portfolio companies were as follows:

●private middle market loans were $53.3 million and $37.0 million, respectively, based on fair value1

●broadly syndicated loans were $2,013.9 million and $1,491.0 million, respectively, based on fair value; and

●total investments were $403.2 million and $52.3 million, respectively, based on fair value1

As of March 31, 2024, the weighted average loan-to-enterprise-value (“LTEV”) of our debt investments at the time of our initial investment was as follows:

●private middle market loans was 43.3%, based on par1

●broadly syndicated loans was 35.0%, based on par

●total investments was 41.8%, based on par; and1

●LTEV represents the total par value of our debt investment relative to our estimate of the enterprise value of the underlying borrower

As of March 31, 2024, we had one debt investment on non-accrual status, which represented 0.4% and 0.4% of total yield to maturity of debt investments at cost and income producing securities at fair value, was 8.0%, andrespectively.

As of March 31, 2024, our portfolio companies’ weighted average total yield to maturityleverage ratios and weighted average interest coverage ratios (the calculations of debt and income producing securities at amortized cost was 8.0%.which are based on the most recent quarter end or latest available information from the portfolio companies) were as follows:

 

●private middle market loans were 4.2x and 2.8x, respectively, based on fair value1

●broadly syndicated loans were 3.4x and 4.2x, respectively, based on fair value; and

●total investments were 4.0x and 3.0x, respectively, based on fair value1

As of March 31, 2024, the percentage of our debt investments including at least one financial maintenance covenant was as follows:

●private middle market loans was 100% based on fair value

●broadly syndicated loans was 0%, based on fair value; and

●total investments was 82.9%, based on fair value

1Excludes investments on watch list, which represent 4.2% of the total fair value of debt investments as of March 31, 2024.


Our investment activity for the quarterthree months ended March 31, 20212024 and 2023 is presented below (information presented herein is at par value unless otherwise indicated).

  For the three months ended
March 31,		 
  2024
($ in millions)		  2023
($ in millions)		 
       
New investments:        
Gross new investments commitments $463.8  $88.5 
Less: investment commitments sold down, exited or repaid(1)  (25.4)  (12.4)
Net investment commitments  438.4   76.1 
         
Principal amount of investments funded(2):        
Private credit investments $146.6  $105.0 
Broadly Syndicated Loans  302.0   - 
Preferred and common equity investments  1.0   - 
Total principal amount of investments funded  449.6   105.0 
         
Principal amount of investments sold / repaid (2):        
Private credit investments  (32.4)  (15.2)
Broadly Syndicated Loans  -   - 
Total principal amount of investments sold or repaid  (32.4)  (15.2)
         
Number of new private credit investment commitments  10   9 
Average new private credit investment commitment amount $16.0  $9.8 
Number of new broadly syndicated loan commitments  24   - 
Average new broadly syndicated loan commitment amount $12.6  $- 
Weighted average maturity for new investment commitments(3)  4.4 years   3.6 years 
Percentage of new debt investment commitments at floating rates  100.0%  100.0%
Percentage of new debt investment commitments at fixed rates  0.0%  0.0%
Weighted average interest rate of new private credit investment commitments(4)  11.4%  11.4%
Weighted average interest rate of new broadly syndicated loan commitments(4)  8.4%  - 
Weighted average interest rate on investments sold or paid down(5)  12.7%  11.1%

 

  For the quarter ended 
  March 31,
2021
($ in millions)		 
    
New investments:   
Gross investments $164.8 
Less: sold investments  (5.0)
Total new investments  159.8 
     
Principal amount of investments funded:    
Private credit investments $153.0 
Liquid credit investments  8.7 
Total principal amount of investments funded  161.7 
     
Principal amount of investments sold:    
Private credit investments  (0.4)
Liquid credit investments  (4.6)
Total principal amount of investments sold or repaid  (5.0)
     
Number of new investment commitments  48 
Average new investment commitment amount  3.3 
Weighted average maturity for new investment commitments   3.5 years 
Percentage of new debt investment commitments at floating rates  99.5%
Percentage of new debt investment commitments at fixed rates  0.5%
Weighted average interest rate of new investment commitments  7.3%
Weighted average spread over LIBOR of new floating rate investment commitments(1)  6.3%
Weighted average interest rate on investment sold or paid down  4.4%
(1)Does not include repayments on revolving loans, which may be redrawn.

(2)Does not include restructured activity.

 

(1)(3)Assumes floating rate commitmentFor undrawn delayed draw term loans, the maturity date used is subject to the greaterthat of the interestassociated term loan.

(4)Based on the rate floor (if applicable) or 3-month LIBOR which was 0.2%in effect at March 31, 2021.2024 per our Consolidated Schedule of Investments for new commitments entered into during the quarter.

 

(5)Based on the underlying rate if still held at March 31, 2024.  For those investments sold or paid down in full during the year, based on the rate in effect at the time of sale or paid down.

Portfolio Internal Performance Ratings

In general, we employ a strategy designed to ensure early detection of potential issues at underlying borrowers, including monthly financial reviews internal tracking memoranda, weekly “watch list” discussions and other like activities. We have designed a risk rating system to aid in our portfolio management efforts where each investment is rated level 1-9, where Level 1 is the “least risky” and Level 9 is the “most risky.” This risk-rating system is quantitative in nature and aggregates criteria such as LTEV, leverage levels and fixed charge coverage ratios (“FCCR”) (each measured at point-in-time and as relates to levels at the close of the investment). 


The table below sets forth our fair value of debt investments and number of portfolio companies, including percentage of each total, that are on watch list as of March 31, 2024 and December 31, 2023. This table excludes equity investments.

As of March 31, 2024  As of December 31, 2023 
Fair Value
($ in millions)		  

 

%

  Number of
Companies		  

 

%

  Fair Value
($ in millions)		  

 

%

  Number of
Companies		  

 

%

 
$74.9   4.2%  5   4.9% $74.0   5.5%  5   6.6%

We use Global Industry Classification Standards (GICS), Level 3 – Industry, for classifying the industry groupings of our portfolio companies. The table below describes long-term investments by industry composition based on fair value as of March 31, 2021:2024 and December 31, 2023.

 

March 31,
2021
Consumer durables and apparel19.5%
Materials16.7%
Capital goods10.8%
Commercial & professional services10.2%
Health care equipment & services9.5%
Food, beverage & tobacco7.2%
Pharmaceuticals, biotech & life sciences6.0%
Retailing6.0%
Household & personal products6.0%
Automobiles & components3.5%
Diversified financials3.4%
Software & services0.7%
Transportation0.3%
Technology hardware & equipment0.1%
Chemicals0.1%
Total100.0%
  March 31,
2024		  December 31,
2023		 
       
Trading companies & distributors  12.3%  15.3%
Food products  9.9%  11.5%
Health care providers & services  7.9%  7.4%
Commercial services & supplies  7.9%  9.4%
Containers & packaging  5.6%  7.2%
Aerospace & defense  5.4%  6.3%
Professional services  5.3%  4.5%
Leisure products  3.9%  3.3%
IT services  3.3%  3.8%
Chemicals  2.9%  3.1%
Machinery  2.8%  3.8%
Textiles, apparel & luxury goods  2.5%  3.3%
Automobile components  2.5%  2.0%
Specialty retail  2.5%  0.7%
Pharmaceuticals  2.3%  0.5%
Personal care products  2.3%  3.0%
Insurance  2.2%  2.2%
Software  2.0%  2.5%
Diversified telecommunication services  1.8%  0.4%
Health care equipment & supplies  1.7%  1.5%
Wireless telecommunication services  1.7%  2.1%
Hotels, restaurants & leisure  1.5%  -%
Building products  1.5%  2.0%
Media  1.5%  -%
Household durables  1.2%  1.5%
Entertainment  1.0%  -%
Semiconductors & semiconductor equipment  1.0%  -%
Household products  0.9%  1.2%
Construction materials  0.8%  -%
Biotechnology  0.7%  0.9%
Electrical equipment  0.5%  -%
Capital markets  0.5%  0.6%
Diversified consumer services  0.2%  -%
Total  100.0%  100.0%

 


Results of Operations

Comparative financial statement tables are not presented as we commenced operations on February 5, 2021.  For the periodthree months ended March 31, 2021,2024 and 2023, our total investment income was derived from our initial portfolio of investments duringinvestments.

The following table represents the quarteroperating results for the three months ended March 31, 2021. All2024 and 2023.

  For the three months ended
March 31,		 
  2024  2023 
  ($ in millions)  ($ in millions) 
Total investment income $46.5  $36.4 
Less: Net expenses  (22.7)  (17.1)
Net investment income  23.8   19.3 
Net realized gains (losses) on investments  -   - 
Net change in unrealized gains (losses) on investments  4.0   0.1 
Net increase (decrease) in net assets resulting from operations $27.8  $19.4 

Investment Income

Investment income for the three months ended March 31, 2024 and 2023 totaled $46.5 million and $36.4 million, respectively, and consisted primarily of interest income on our debt investments. For the three months ended March 31, 2024, and 2023 we had $0.3 million and $0.2 million, respectively, of PIK interest included in interest income. As of March 31, 2024, we had one debt investment on non-accrual status. As of March 31, 2023, all debt investments were income producing, and there were no loans on non-accrual status as of March 31, 2021.status.

 

The following table represents the operating results for the quarter ended March 31, 2021:Expenses

  For the quarter ended 
  March 31,
2021
($ in millions)		 
Total investment income $1.74 
Less: Net expenses  1.12 
Net investment income  0.62 
Net realized gains (losses) on investments  0.03 
Net change in unrealized gains (losses) on investments  2.80 

Net increase (decrease) in net assets resulting from operations 

 $3.45 

 


Investment Income

Investment income for the quarter ended March 31, 2021 totaled $1.7 million and consisted primarily of interest income on our debt investments.

Expenses

Operating expenses for the quarterthree months ended March 31, 2021, was2024 and 2023 were as follows:

 

  For the quarter ended 
  

March 31,
2021

($ in millions)

 
Interest and debt financing expenses $0.46 
Management fees  0.18 
Other operating expenses  0.20 
Initial organization  0.18 
Deferred offering costs  0.04 
Directors fees  0.06 
Total expenses $1.12 
  For the three months ended
March 31,		 
  2024  2023 
  ($ in millions)  ($ in millions) 
Interest and debt financing expenses $15.7  $11.5 
Management fees  3.5   2.7 
Incentive fees  2.6   2.1 
Directors fees  0.1   0.2 
Other operating expenses  0.8   0.6 
Total expenses $22.7  $17.1 

 

Total expenses included $0.18 million of initial organization expenses and $0.04 of deferred offering costs. 


Net Unrealized Gains (Losses) on Investments

We fair value our portfolio investments quarterly and any changes in fair value are recorded as unrealized gains or losses. During the quarterthree months ended March 31, 2021,2024 and 2023, net unrealized gains (losses) on our investment portfolio were comprised of the following:

 

  For the quarter ended 
  

March 31,
2021

($ in millions)

 
Unrealized gains on investments $2.81 
Unrealized (losses) on investments  (0.01)
Net change in unrealized gains (losses) on investments $2.80 
  For the three months ended
March 31,		 
  2024  2023 
  ($ in millions)  ($ in millions) 
Unrealized gains on investments $7.7  $3.6 
Unrealized (losses) on investments  (3.7)  (3.5)
Net change in unrealized gains (losses) on investments $4.0  $0.1 

  

TheFor these three-month periods ended March 31, 2024 and 2023, the top five largest contributors to the change in unrealized appreciation for the quarter ended March 31, 2021 totaled $2.8 million, which primarily related to ourgains and change in unrealized losses on investments are presented in the following table:tables.

  Unrealized
Appreciation
for the
quarter ended		 
  

March 31,
2021

($ in millions)

 
Portfolio Company   
Sundance Holdings Group, LLC $0.31 
OMH-HealthEdge Holdings, LLC  0.28 
Broder Bros., Co.  0.26 
New Era Cap Company, Inc.  0.25 
Advanced Environmental Monitoring  0.25 
WhiteBridge Pet Brands, LLC  0.19 
YS Garments, LLC  0.16 
Fralock Buyer LLC  0.12 
Speedstar Holding LLC  0.11 
Foundation Consumer Brands  0.09 
Other portfolio companies  0.79 
Total Unrealized Appreciation $2.81 

The change in unrealized depreciation for the quarter ended March 31, 2021 totaled $0.10, which was primarily attributable to a reduction in the fair value of Clarios Global LP and RealPage, Inc.

 

  For the three
months ended		 
  March 31,
2024		 
  ($ in millions) 
Portfolio Company   
Envirotech Services, LLC $0.9 
Refocus Management Services, LLC  0.7 
Pixel Intermediate, LLC  0.6 
BC CS 2, L.P. (Cuisine Solutions)  0.6 
CCFF Buyer, LLC (California Custom Fruits & Flavors, LLC)  0.5 
Other portfolio companies unrealized gains  4.4 
Other portfolio companies unrealized (losses)  (2.5)
Siegel Egg Co., LLC  (0.1)
FCA, LLC (FCA Packaging)  (0.2)
Trademark Global LLC  (0.2)
Universal Marine Medical Supply International, LLC (Unimed)  (0.3)
American Soccer Company, Incorporated (SCORE)  (0.4)
Total Change in Unrealized Gain (Loss), net $4.0 

  For the three
months ended		 
  March 31,
2023		 
  ($ in millions) 
Portfolio Company   
Techniks Holdings, LLC / Eppinger Holdings Germany GMBH $0.6 
Engineered Fastener Company, LLC (EFC International)  0.6 
Krayden Holdings, Inc.  0.5 
Pavion Corp.(f/k/a Corbett Technology Solutions, Inc.)  0.4 
BLP Buyer, Inc. (Bishop Lifting Products)  0.2 
Other portfolio companies unrealized gains  1.3 
Other portfolio companies unrealized (losses)  (2.1)
Gusmer Enterprises, Inc.  (0.2)
LSL Industries, LLC (LSL Healthcare)  (0.3)
Genuine Cable Group, LLC  (0.3)
Drew Foam Companies, Inc.  (0.3)
AIDC Intermediate Co 2, LLC (Peak Technologies)  (0.3)
Total Change in Unrealized Gain (Loss), net $0.1 


Financial Condition, Liquidity and Capital Resources

Our liquidity and capital resources are generated primarily from the net proceeds of any offering of our Shares,shares of common stock, proceeds from borrowing on our credit facilities, proceeds from the issuance of senior unsecured notes and from cash flows from interest and fees earned from our investments and principal repayments and proceeds from sales of our investments. Our primary use of cash will be investments in portfolio companies, payments of our expenses, repayments of borrowed amountsborrowings under credit facilities and senior unsecured notes, and payment of cash distributions to our stockholders.

We finance our investments with leverage in the form of borrowings under credit facilities and issuances of senior unsecured notes. We also intend to further borrow under credit facilities and/or issue senior unsecured notes in the future in order to finance our investments. In accordance with the 1940 Act, we are required to meet a coverage ratio of total assets (less total liabilities other than indebtedness) to total borrowings and other senior securities (and any preferred stock that we may issue in the future) of at least 150%. If this ratio declines below 150%, we cannot incur additional leverage and could be required to sell a portion of our investments to repay some leverage when it is disadvantageous to do so. As of March 31, 2021,2024 and December 31, 2023, our asset coverage ratio was 197%.ratios were 223% and 198%, respectively. We currently intend to target asset coverage of 200% to 180% (which equates to a debt-to-equity ratio of 1.0x to 1.25x) but may alter this target based on market conditions.

 

Over the next twelve months, we expect that cash and cash equivalents, taken together with our available capacity under our credit facilities, will be sufficient to conduct anticipated investment activities. Beyond twelve months, we expect that our cash and liquidity needs will continue to be met by cash generated from our ongoing operations as well as financing activities.

As of March 31, 2021,2024, we had $90$75 million Notes outstanding, $584 million borrowed under our credit facilities (the LSA and the Credit Agreement) and cash and cash equivalents of $23.2$44.3 million (including short-term investments). As of May 7, 2024, we had $75 million Notes outstanding, $537 million borrowed under our credit facilities and cash and cash equivalents of $82.0 million (including short-term investments).

 

As of May 14, 2021, we had $50 million borrowed under our LSA; no borrowings outstanding under our Credit Agreement, and cash and cash equivalents of $8.0 million (including short-term investments).

Capital Contributions

During the quarter ended March 31, 2021, the CompanyOn February 14, 2024, we issued and sold 5,667,3337,089,771 shares of our common stock related to capital called at an aggregate purchase price of $85$118.7 million. On April 2, 2024, we issued 16,232,415 shares of our common stock related to capital called at an aggregate purchase price of $269.9 million. During the three months ended March 31, 2023, we did not issue any shares of our common stock related to capital called. As of May 14, 2021,3, 2024, we had aggregatecalled all of our capital commitments of $285.4relating to our $1,046.9 million in existing subscription agreements that we had entered into with investors through a private offering, and we do not have any remaining undrawn capital commitments from investors of $145.4 million ($140 million or 49.1% funded).commitments.

 

Senior Unsecured Notes

As of March 31, 2024, we have $75 million of senior unsecured notes outstanding, with $25 million of 8.65% Series A Notes due June 2027 (the “Series A Notes”) and $50 million of 8.74% Series B Notes due June 2028 (the “Series B Notes”, and collectively with the Series A Notes, the “Notes”).

Credit Facilities

Corporate Credit Facility: As of March 31, 2024, we are party to a senior secured revolving credit facility (the “Corporate Credit Facility”), that has a total commitment of $400 million. The facility’s commitment termination date and the final maturity date are February 18, 2026 and February 18, 2027, respectively. The Corporate Credit Facility also provides for a feature that allows us, under certain circumstances, to increase the overall size of the Corporate Credit Facility to a maximum of $550 million. The interest rate on the Corporate Credit Facility is equal to Term SOFR (a forward-looking rate based on SOFR futures) plus an applicable spread of 2.35% per annum or an “alternate base rate” (as defined in the agreements governing the Corporate Credit Facility) plus an applicable spread of 1.25%. We are also required to pay a commitment fee of 0.375% per annum on any unused portion of the Corporate Credit Facility.


Revolving Funding Facility:On February 5, 2021,April 3, 2024, we and our wholly owned, special purpose financing subsidiary, Kayne Anderson BDC Financing, LLC (“KABDCF”), amended our senior secured revolving funding facility (the “Revolving Funding Facility”). Under the terms of the third amendment, we and KABDCF increased the commitment amount from $455 million to $600 million. The Revolving Funding Facility is secured by all of the assets held by, and the membership interest in, KABDCF. The end of the reinvestment period was extended to April 2, 2027 and the maturity date was extended to April 3, 2029. The interest rate on the Revolving Funding Facility was reduced from daily SOFR plus 2.75% per annum to SOFR plus 2.375% - 2.50% per annum depending on the mix of loans securing the Revolving Funding Facility.

KABDCF is also required to pay a commitment fee of between 0.50% and 1.50% per annum depending on the size of the unused portion of the Revolving Funding Facility.

Revolving Funding Facility II: As of March 31, 2024, we and our wholly owned, special purposespurpose financing subsidiary, entered intoKayne Anderson BDC Financing II, LLC (“KABDCF II”), are party to a Loan and Security Agreementsenior secured revolving credit facility (the “LSA”“Revolving Funding Facility II”) with certain lenders party thereto, administrative agent, and our Advisor as collateral manager.. The maximumRevolving Funding Facility II has an initial commitment of the LSA is$150 million which, under certain circumstances, can be increased up to $150 million,$500 million. The Revolving Funding Facility II is secured by all of the assets held by KABDCF II and subject to certain conditions, may be increased by $50 million up to two timesthe Company has agreed that it will not to exceed $250 million. Advances undergrant or allow a lien on the facility bear anmembership interest of KABDCF II. The end of the reinvestment period and the stated maturity date for the Revolving Funding Facility II are December 22, 2026, and December 22, 2028, respectively. The interest rate on the Revolving Funding Facility II is equal to 3-month term SOFR plus 2.70% per annum. KABDCF II is also required to pay a commitment fee of LIBOR plus 4.25% (subject0.50% between December 22, 2023 and September 22, 2024 and 0.75% thereafter on the unused portion of the Revolving Funding Facility II.

Subscription Credit Agreement: As of March 31, 2024, we are party to a 1.00% LIBOR floor). The facility has a term of three years.

In addition, on February 5, 2021, we entered into a $75 millionsenior secured revolving credit agreement (the “Credit Agreement”) with certain lenders party thereto. The Credit Agreement is comprised of two sub-facilities: (i)that includes a capital call facility (the “Subscription Facility”) and (ii) a treasury facility (the “Treasury Facility”Credit Agreement”). The interest rateSubscription Credit Agreement permits us to elect the commitment amount each quarter to borrow up to $50 million, subject to availability under the borrowing base which is calculated based on the unused capital commitments of the investors meeting various eligibility requirements. The Subscription Facility will be equal to LIBOR plus 1.90% (subject toCredit Agreement has a 0.35% LIBOR floor)maximum commitment of $50 million and the interest rate under the Treasury Facility will befacility is equal to LIBORTerm SOFR plus 0.20% (with no LIBOR2.25% (subject to a 0.275% floor). TheWe are also required to pay a commitment fee of 0.25% per annum on the unused portion of the Subscription Facility will expireCredit Agreement. We also pay an extension fee of 0.075% per quarter on the elected commitment amount on the first day of each calendar quarter. On April 1, 2024, we repaid all amounts outstanding and terminated the remaining commitment of $50 million under the Subscription Credit Agreement that was scheduled to mature on December 31, 2022, and the Treasury Facility will expire on September 30, 2021.2024.

 

The Credit Agreement allows us to transfer the commitment amount under the Treasury FacilityContractual Obligations

A summary of our significant contractual principal payment obligations related to the Subscription Facility. Onrepayment of our outstanding indebtedness at March 2, 2021, $15 million was transferred from the Treasury Facility to the Subscription Facility. 31, 2024 is as follows:

  Payments Due by Period ($ in millions) 
  Total  Less than
1 year		  1-3
years		  3-5
years		  After
5 years		 
Senior Unsecured Notes $75.0  $    -  $-  $75.0  $   - 
Corporate Credit Facility  198.0   -   198.0   -   - 
Revolving Funding Facility  319.0   -   319.0   -   - 
Revolving Funding Facility II  67.0   -   -   67.0   - 
Subscription Credit Agreement  -   -   -   -   - 
Total contractual obligations $659.0  $-  $517.0  $142.0  $- 

Off-Balance Sheet Arrangements

As of March 31, 2021, the Subscription Facility2024 and Treasury FacilityDecember 31, 2023, we had commitments of $40an aggregate $169.1 million and $35$147.9 million, respectively.respectively, of unfunded commitments to provide debt financing to our portfolio companies. Such commitments are generally subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in our financial statements. Other than contractual commitments and other legal contingencies incurred in the normal course of our business, we do not have any other off-balance sheet financings or liabilities.

 

25

Critical Accounting PoliciesEstimates

 

The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies, including those relating to the valuation of our investment portfolio, are described below. The critical accounting policies should be read in conjunction with our risk factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 20202023 and in this Quarterly Report. See Note 2 to our consolidated financial statements for the three months ended March 31, 2021,2024, for more information on our critical accounting policies.

 


Investment Valuation

 

We conduct the valuation of our investments consistent with GAAP and the 1940 Act. Our investments are valued no less frequently than quarterly, in accordance with the terms of Topic 820 of the Financial Accounting Standards Board’s Accounting Standards Codification, Fair Value Measurement and Disclosures (“ASC 820”).

ASC 820 establishes a hierarchal disclosure framework which ranks the observability of inputs used in measuring financial instruments at fair value. The observability of inputs is impacted by a number of factors, including the type of financial instruments and their specific characteristics. Financial instruments with readily available quoted prices, or for which fair value can be measured from quoted prices in active markets, generally will have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into the following three broad categories.

Level 1 — Valuations based on quoted unadjusted prices for identical instruments in active markets traded on a national exchange to which the Company has access at the date of measurement.

Level 2 — Valuations based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.

Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Company’s own assumptions that market participants would use to price the asset or liability based on the best available information.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. Assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

Traded Investments (Level 1 or Level 2)

 

Investments for which market quotations are readily available will typically be valued at those market quotations. Traded investments such as corporate bonds, preferred stock, bank notes, broadly syndicated loans or loan participations are valued by using the bid price provided by an independent pricing service, by an independent broker, the agent bank, syndicate bank or principal market maker. When price quotes for investments are not available, or such prices are stale or do not represent fair value in the judgment of our Advisor, fair market value will be determined using our Advisor’s valuation process for investments that are privately issued or otherwise restricted as to resale.

 

We may also invest, to a lesser extent, in equity securities purchased in conjunction with debt investments. While we anticipate these equity securities to be issued by privately held companies, we may hold equity securities that are publicly traded. Equity securities listed on any exchange other than the NASDAQ Stock Market, Inc. (“NASDAQ”) are valued, except as indicated below, at the last sale price on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the most recent bid and ask prices on such day. Securities admitted to trade on the NASDAQ are valued at the NASDAQ official closing price. Equity securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined at the close of the exchange representing the principal market for such securities. Equity securities traded in the over-the-counter market, but excluding securities admitted to trading on the NASDAQ, are valued at the closing bid prices.

 


Non-Traded Investments (Level 3)

 

Investments that are privately issued or otherwise restricted as to resale, as well as any security for which (a) reliable market quotations are not available in the judgment of our Advisor, or (b) the independent pricing service or independent broker does not provide prices or provides a price that in the judgment of our Advisor is stale or does not represent fair value, shall each be valued in a manner that most fairly reflects fair value of the security on the valuation date. We expect that a significant majority of our investments will be Level 3 investments. Unless otherwise determined by the Board,Advisor, the following valuation process is used for our Level 3 investments:

 

●●Investment Team Valuation Designee. The applicable investments arewill be valued no less frequently than quarterly by senior professionals of Kayne Anderson who are responsible for the portfolio investments.Advisor, with new investments valued at the time such investment was made. The value of each portfolio company orLevel 3 investment will be initially reviewed by the investment professionalspersons responsible for such portfolio company or investment and, for non-traded investments (i.e., illiquid securities/instruments),investment. The Advisor will use a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs will be used to determine a preliminary value. The investmentsAdvisor will be valued no less frequently than quarterly, with new investments valued atspecify the time such investment was made.

●Investment Team Valuation Documentation. Preliminary valuation conclusions will be determined by our executive officers. Such valuation and supporting documentation is submitted to the Audit Committee (a committee of our Board) and our Board on a quarterly basis.

●Audit Committee. The Audit Committee meets to consider the valuations submitted by our executive officers at the end of each quarter. Between meetingstitles of the Audit Committee, our executive officerspersons responsible for determining the fair value of Company investments, including by specifying the particular functions for which they are authorized to make valuation determinations. All valuationresponsible, and will reasonably segregate fair value determinations from the portfolio management of the Audit Committee are subjectCompany such that the portfolio manager(s) may not determine, or effectively determine by exerting substantial influence on, the fair values ascribed to ratification by our Board at its next regular meeting.portfolio investments.

 

●●Valuation Firm. Quarterly, a third-party valuation firm engaged by our Boardthe Advisor reviews the valuation methodologies and calculations employed for each of ourthe Company’s investments that we havethe Advisor has placed on the “watch list” and approximately 25% of ourthe Company’s remaining investments. The third-party valuation firm will review and independently value all of the Level 3 investments at least once per year, on a rolling twelve-month basis. We expect theThe quarterly report issued by the third-party valuation firm will assist the Board in determiningprovide positive assurance on the fair values of the investments reviewed.

 

●●Board DeterminationOversight. OurThe Board meetshas appointed the Advisor as the valuation designee for the Company for purposes of making determinations of fair value as permitted by Rule 2a-5 under the 1940 Act. The Audit Committee shall aid the Board in overseeing the Advisor’s fair valuation of securities that are not publicly traded or for which current market values are not readily available. The Audit Committee shall meet quarterly to consider the valuations provided by our executive officers and the Audit Committee and ratify valuations for the applicable investments. Our Board considers the report provided by the third-party valuation firm in reviewing and determining in good faithreview the fair value determinations, processes and written reports of the applicable portfolio investments.Advisor as part of the Board’s oversight responsibilities.

 

The Board of Directors is ultimately responsibleRefer to Note 5 – Fair Value – for more information on the determination, in good faith, of the fair value of our portfolio investments. Company’s valuation process.

 


Revenue Recognition

 

We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt securities with contractual PIK interest, which represents contractual interest accrued and added to the principal balance, we generally will not accrue PIK interest for accounting purposes if the portfolio company valuation indicates that such PIK interest is not collectible. We do not accrue as a receivable interest on loans and debt securities for accounting purposes if we have reason to doubt our ability to collect such interest. OIDs, market discounts or premiums are accreted or amortized using the effective interest method as interest income. We record prepayment premiums on loans and debt securities as interest income.

 


Contractual Obligations 

A summary of our significant contractual principal payment obligations related to the repayment of our outstanding indebtedness at March 31, 2021 is as follows:

  Payments Due by Period ($ in millions) 
  Total  Less than 1 year  1-3 years  3-5 years  After 5 years 
Loan and Security Agreement (LSA) $50  $          $50  $           $            
Credit Agreement $40  $-  $40  $-  $- 
Total contractual obligations $90  $-  $90  $-  $- 

Off-Balance Sheet Arrangements

Other than contractual commitments and other legal contingencies incurred in the normal course of our business, we do not have any off-balance sheet financings or liabilities. 

Related Party Transactions

Investment Advisory Agreement. On February 5, 2021, we entered into the Investment Advisory Agreement with our Advisor. On March 6, 2024, the Board approved an additional one-year term of the Investment Advisory Agreement from March 16, 2024 to March 15, 2025. In addition, on March 6, 2024, the Board approved an amended and restated investment advisory agreement between the Company and the Advisor, which will be effective upon an initial public offering of shares of common stock. Our Advisor will agree to serve as our investment advisor in accordance with the terms of our Investment Advisory Agreement. Payments under our Investment Advisory Agreement in each reporting period will consist of the base management fee equal to a percentage of the fair market value of investments, including, in each case, assets purchased with borrowed funds or other forms of leverage, but excluding cash, U.S. government securities and commercial paper instruments maturing within one year of purchase as well as an incentive fee based on our performance.

 

For services rendered under the Investment Advisory Agreement, we will pay a base management fee quarterly in arrears to our Advisor based on the of the fair market value of our investments including, in each case, assets purchased with borrowed funds or other forms of leverage, but excluding cash, U.S. government securities and commercial paper instruments maturing within one year of purchase. We will also pay an incentive fee on income and an incentive fee on capital gains to our Advisor.

 

Prior to an Exchange Listing,initial public offering or listing on an exchange of our common stock (an “exchange listing”), any incentive fees earned by the Advisor shall accrue as earned but only become payable in cash to the Advisor upon consummation of an Exchange Listing.exchange listing. To the extent the Company does not complete an Exchange Listing,exchange listing, the incentive fees will be payable to the Advisor (a) upon consummation of a sale of the Company or (b) once substantially all proceeds from a Company Liquidationliquidation payable to the Company’s common stockholders have been distributed to such stockholders.

 

Administration AgreementAgreement. . On February 5, 2021, we entered into anthe Administration Agreement with our Advisor, which serves as our Administrator and will provide or oversee the performance of its required administrative services and professional services rendered by others, which will include (but are not limited to), accounting, payment of our expenses, legal, compliance, operations, technology and investor relations, preparation and filing of its tax returns, and preparation of financial reports provided to its stockholders and filed with the SEC. On March 6, 2024, the Board approved an additional one-year term of the Administration Agreement through March 15, 2025.

We will reimburse the Administrator pursuant to which the Administrator will furnish us with administrative services necessary to conduct our day-to-day operations. The Administrator will be reimbursed for administrativeits costs and expenses it incurs on our behalfincurred in performing its obligations. Such reimbursementobligations under the Administration Agreement, which may be made for ourinclude its allocable portion (subject to the review and approval of our independent directors) of office facilities, overhead, and compensation paid to or compensatory distributions received by ourits officers (including our Chief Compliance Officer and Chief Financial Officer) and theirits respective staff who provide services to us.the Company. As we reimbursethe Company reimburses the Administrator for its expenses, wesuch costs (including the costs of sub-administrators) will indirectly bear such cost.be ultimately borne by common stockholders. The Administrator does not receive compensation from us other than reimbursement of its expenses. The Administration Agreement may be terminated by either party with 60 days’ written notice.

Since the inception of the Company, the Administrator has engaged U.S. Bank Global Fund Services under a sub-administration agreementsub-administrators to assist the Administrator in performing certain of its administrative duties. During this period, the Administrator has not sought reimbursement of its expenses other than expenses incurred by the sub-administrators. On March 28, 2023, the Administrator engaged Ultimus Fund Solutions, LLC under a sub-administration agreement. Under the terms of the sub-administration agreement, Ultimus Fund Solutions, LLC will provide fund administration and fund accounting services. The Company pays fees to Ultimus Fund Solutions, LLC, which constitute reimbursable expenses under the Administration Agreement. The Administrator may enter into additional sub-administration agreements with third-parties to perform other administrative and professional services on behalf of the Administrator.

 

On February 5, 2021, we purchased our initial portfolio of investments for $103 million from an affiliate of our Advisor (the “Warehousing Entity”) with a portion of the proceeds from the sale of common stock together with borrowings under our credit facility.


Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

We are subject to financial market risks, including changes in interest rates and the valuations of our investment portfolio. Uncertainty with respectrates. Interest rate sensitivity refers to the economic effects of the COVID-19 pandemic introduced significant volatilitychange in our earnings that may result from changes in the financial markets, and the effectslevel of this volatility has materially impacted and could continue to materially impact our market risks, including those listed below. 

Valuation Risk. The majority of our portfolio investments take the form of securities for which no market quotations are readily available. The fair value of securities and other investments that are not publicly traded may not be readily determinable, andinterest rates. Because we value these securities at fair value as determined in good faith by our Board of Directors, including to reflect significant events affecting the value of our securities. Mostfund a portion of our investments are classified as Level 3 under ASC Topic 820 which means thatwith borrowings, our portfolio valuations are based on unobservable inputs and our own assumptions about how market participants would price the asset or liability in question. Inputs into the determination of fair value of our portfolio investments require significant management judgment or estimation. Because such valuations are inherently uncertain, they may fluctuate over short periods of time and may be based on estimates. The determination of fair value may differ materially from the values that would have been used if a liquid trading market for these instruments existed. Our net asset value (“NAV”) could be adversely affected if the determinations regarding the fair value of our investments were materially higher than the values that we ultimately realize upon the disposal of such investments.

Interest Rate Risk. Weinvestment income will be subject to financial market risks, including changes in interest rates.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. We may hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates.

 

Assuming that the consolidated statement of assets and liabilities as of March 31, 20212024 were to remain constant and that we took no actions to alter our existing interest rate sensitivity, the following table shows the annualized impact ($ in millions) of hypothetical base rate changes in interest rate (considering interest rate floors for floating rate instruments). We do not include our investments on non-accrual status and non-incoming producing as of March 31, 2024 in this calculation.

 

Change in Interest Rates Increase
(Decrease)
in Interest
Income		  Increase
(Decrease)
in Interest
Expense		  Net
Increase
(Decrease) in Net
Investment
Income		 
Down 25 basis points $- $- $-
Up 100 basis points  0.4   0.4  $0.0 
Up 200 basis points  1.9   1.3  $0.6 
Up 300 basis points  3.4   2.2  $1.2 
Change in Interest Rates Increase
(Decrease)
in Interest
Income		  Increase
(Decrease)
in Interest
Expense		  Net Increase
(Decrease)
in Net
Investment
Income		 
Down 200 basis points $(35.2) $(11.7) $(23.5)
Down 100 basis points $(17.6) $(5.8) $(11.8)
Up 100 basis points $17.6  $5.8  $11.8 
Up 200 basis points $35.2  $11.7  $23.5 

 

The data in the table is based on the Company’s current statement of assets and liabilities.

 

We may hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

As of March 31, 20212024 (the end of the period covered by this report), we, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in RuleRules 13a-15(e) and 15d-15(e) of the Securities Exchange Act)Act of 1934, as amended). Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic United States Securities and Exchange Commission (the “SEC”) filings is recorded, processed, summarized and reported within the time periods specified in the United States Securities and Exchange Commission’sSEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.

 

Internal Control Over Financial Reporting

 

There have been no changes in our internal control over financial reporting 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.


PART II—OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

Neither we nor our Advisor is currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us, or against our Advisor.

 

From time to time, we, or our Advisor, may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. 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 financial condition or results of operations.

 

From time to time we are involved in various legal proceedings, lawsuits and claims incidental to the conduct of our business. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us.

 

Item 1A. Risk Factors.

 

In addition to the other information set forth in this report, you should carefully consider the risk factors described below and in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, including risk factors related to the COVID-19 pandemic,2023, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 20202023 are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.


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

 

ForAs set forth in the period February 5, 2021 (Commencement of Operations) throughtable below (dollars in thousands, except per share and share amounts), during the three months ended March 31, 2021, the Company2024, we issued and sold 5,667,3337,089,771 shares of its common stock at an aggregate purchase priceoffering amount of $85approximately $118.7 million. The issuance of the shares of common stock was exempt from the registration requirements of the Securities Act, of 1933, as amended (the “Securities Act”), pursuant to Section 4 (a)4(a)(2) and Rule 506(b) of Regulation D thereof.thereof and previously reported by us on our current reports on Form 8-K. The Company relied, in part, upon representations from the investors in the subscription agreements that each investor was an accredited investor as defined in Regulation D under the Securities Act. We did not engage in general solicitation or advertising, and did not offer securities to the public in connection with such issuances and sales.

 

  Offering     Aggregate 
  price per  Common stock  offering 
Common stock issue date share  shares issued  amount 
February 14, 2024 $16.74   7,089,771  $118,689 

Item 3. Default Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

None.

 

None.


Item 6. Exhibits.

 

The exhibits required by this item are set forth in the Exhibit Index attached hereto and are filed or incorporated as part of this Report.

 

Exhibit Index

3.1Exhibit Index
3.1Certificate of Formation (3)
3.2
3.2Initial Limited Liability Company Agreement (1)
3.3
3.3Certificate of Conversion (2)
3.4
3.4Certificate of Incorporation (2)
3.5Amended and Restated Bylaws (5)
3.54.1Bylaws (2)
4.1Description of Securities (3)
10.1
10.1Investment Advisory Agreement (1)
10.2Amendment to Investment Advisory Agreement (3)
10.210.3Administration Agreement (1)
10.4
10.3License Agreement (1)
10.5
10.4Indemnification Agreement (1)
10.6
10.5Custody Agreement (1)
10.7
10.6Subscription Agreement (1)
10.8Credit Agreement, dated February 5, 2021, by and between Kayne Anderson BDC, Inc., as borrower, lenders signatories thereto, and agent and the lead arranger (2)
10.710.9Second Amendment to Credit Agreement, dated December 3, 2021, by and between Kayne Anderson BDC, Inc., as borrower, lender signatories thereto, and agent and lead arranger (5)
10.10 Third Amendment to the Credit Agreement, dated December 30, 2022, by and between Kayne Anderson BDC, Inc., as borrower, lenders, and City National Bank as administrative agent for the lenders (7)

10.11

Fourth Amendment to the Credit Agreement, dated December 31, 2023, by and between Kayne Anderson BDC, Inc., as borrower, lenders, and City National Bank as administrative agent for the lenders (10)

10.12

Senior Secured Revolving Credit Agreement (4)
10.13Loan and Security Agreement (4)
10.14First Amendment to Loan and Security Agreement, dated as of February  5, 2021,November 17, 2022, by and between KA Credit Advisors, LLC, as collateral manager, Kayne Anderson BDC Financing, LLC, as borrower, certain lenders thereto, administrative agent for the lenders, and collateral agent for the lenders (2)(6)
10.810.15 CreditSecond Amendment to Loan and Security Agreement, dated February  5, 2021,June 29, 2023, by and between KA Credit Advisors, LLC, as collateral manager, Kayne Anderson BDC Inc.,Financing, LLC, as borrower, certain lenders signatories thereto, administrative agent for the lenders, and collateral agent for the lenders (8)
10.16Third Amendment to Loan and Security Agreement, dated April 3, 2024, by and between KA Credit Advisors, LLC, as collateral manager, Kayne Anderson BDC Financing, LLC, as borrower, certain lenders thereto, administrative agent for the lenders, and collateral agent for the lenders (11)
10.17Loan and Security Agreement, dated December 22, 2023, by and between KA Credit Advisors, LLC, as portfolio manager, Kayne Anderson BDC Financing II, LLC, as borrower, certain lenders thereto, collateral administrator for the lenders, collateral agent for the lenders, securities intermediary party, and administrative agent for the lenders (9)
10.18Notes Purchase Agreement, dated June 29, 2023, by and among the Company and the lead arranger (2)Purchasers party thereto (8)
21.1
21.1Subsidiaries of Kayne Anderson BDC, Inc. (3)
31.1*
31.1*Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*
31.2*Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*
32.1*Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*
32.2*Certification of Chief ExecutiveFinancial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*Inline XBRL Instance Document
99.1101.SCH*Code of Ethics (1)Inline XBRL Taxonomy Extension Schema Document
101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

(1)Incorporated by reference from the Company’s Amendment No. 2 to Form 10, as filed with the Securities and Exchange Commission on November 9, 2020.


(2)Incorporated by reference from the Company’s Form 8-K, as filed with the Securities and Exchange Commission on February 9, 2021.
(3)
(3)Incorporated by reference from the Company’s Form 10-K, as filed with the Securities and Exchange Commission on March 10, 2023.
(4)Incorporated by reference from the Company’s Form 8-K, as filed with the Securities and Exchange Commission on February 26, 2021.25, 2022.
(5)Incorporated by reference from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on August 15, 2022.

*

Filed herewith.

 

(6)Incorporated by reference from the Company’s Form 8-K, as filed with the Securities and Exchange Commission on November 22, 2022.
(7)Incorporated by reference from the Company’s Form 8-K, as filed with the Securities and Exchange Commission on January 6, 2023.
(8)Incorporated by reference from the Company’s Form 8-K, as filed with the Securities and Exchange Commission on July 5, 2023.
(9)Incorporated by reference from the Company’s Form 8-K, as filed with the Securities and Exchange Commission on December 29, 2023.
(10) Incorporated by reference from the Company’s Form 8-K, as filed with the Securities and Exchange Commission on January 5, 2024.
(11) Incorporated by reference from the Company’s Form 8-K, as filed with the Securities and Exchange Commission on April 8, 2024.

32

*Filed herewith.


 

SIGNATURES

 

SIGNATURES

Pursuant to the requirements 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.

 

 Kayne Anderson BDC, Inc.
  
Date: May 17, 20218, 2024/s/ Michael J. Levitt
 Name: Michael J. Levitt/s/ Douglas L. Goodwillie
 

Name: 

Douglas L. Goodwillie
Title: ChiefCo-Chief Executive Officer
(PrincipalCo-Principal Executive Officer)

  
Date: May 17, 20218, 2024
/s/ Kenneth B. Leonard
Name: Kenneth B. Leonard
Title:Co-Chief Executive Officer
(Co-Principal Executive Officer)
Date: May 8, 2024
/s/ Terry A. Hart
 Name:Terry A. Hart
 Title:Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)

 

 

3358

 

NONE 0.52 0.54 0.54 0.61 35929436 45345417 As of December 31, 2023, all investments are non-controlled, non-affiliated investments. Non-controlled, non-affiliated investments are defined as investments in which the Company owns less than 5% of the portfolio company’s outstanding voting securities and does not have the power to exercise control over the management or policies of such portfolio company. Non-qualifying investment as defined by Section 55(a) of the Investment Company Act of 1940. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2023, 4.8% of the Company’s total assets were in non-qualifying investments. Debt investment on non-accrual status as of December 31, 2023. 35929436 45345417 0.54 0.61 Realized and unrealized gains and losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period and may not reconcile with the aggregate gains and losses in the Consolidated Statement of Operations due to share transactions during the period. For the three months ended March 31, 2024, such share transactions include the effect of share issuances of $0.01 per share. During the period, shares were issued at prices that reflect the aggregate amount of the Company’s initial organizational and offering expenses. As a result, investors subscribing after the initial capital call are allocated organizational expenses consistently with all stockholders. During the three months ended March 31, 2023, there were no such share transactions including the effect of share issuances. false --12-31 Q1 0001747172 iso4217:USD xbrli:shares