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 June 30, ~~2021~~2022

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

Commission File Number: ~~000-56201~~814-01363

Kayne Anderson BDC, Inc.

Delaware		83-0531326
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

811 Main Street, 14^th Floor, Houston, TX		77002
(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 class		Trading Symbol(s)		Name of each exchange on which registered
None		None		None

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting 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 August ~~13, 2021,~~11, 2022, the registrant had ~~12,101,184~~31,304,965 shares of common stock, $0.001 par value per share, outstanding. As of August ~~13, 2021,~~11, 2022, there was no public market for the registrant’s shares.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Consolidated Financial Statements ~~(Unaudited)~~	1
	Consolidated Statements of Assets and Liabilities as of June 30, ~~2021~~2022 (Unaudited) and December 31, ~~2020~~2021	1
	Consolidated ~~Statement~~Statements of Operations for the three and six months ended June 30, 2022 and 2021 (Unaudited)	2
	Consolidated Statement of Changes in Net Assets for the three and six months ended June 30, 2022 and 2021 (Unaudited)	3
	Consolidated Statement of Cash Flows for the six months ended June 30, 2022 and 2021 (Unaudited)	4
	Consolidated Schedule of Investments as of June 30, 2022 (Unaudited) and December 31, 2021 ~~(Unaudited)~~	5
	Notes to Consolidated Financial Statements (Unaudited)	1018
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2337
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3148
Item 4.	Controls and Procedures	3148

PART II.	OTHER INFORMATION	3249
Item 1.	Legal Proceedings	3249
Item 1A.	Risk Factors	3249
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3250
Item 3.	Defaults Upon Senior Securities	3250
Item 4.	Mine Safety Disclosures	3250
Item 5.	Other Information	3250
Item 6.	Exhibits	3351

Signatures		3452

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 the Company 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;

●

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 pandemic (“COVID-19 pandemic”);

●

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

●

the ability of (1) the companies in which the Company invests to achieve their objectives ~~including as a result of the current COVID-19 pandemic;~~

●

~~the ability of~~and (2) the Company to continue to effectively manage the business due to ~~the~~ disruptions, both of which are caused by the ~~current~~ongoing 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 ~~current~~risk associated with an economic downturn, 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.

~~Although the Company believes that the assumptions on which these forward-looking statements are~~We 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 statement~~included in this ~~quarterly~~ report on ~~Form 10-Q should not be regarded as a representation by~~information 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 report~~report. 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 duty~~10-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.

PART 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)

June 30,
2022
(Unaudited) December 31,
2021
Assets:
Investments, at fair value:
Long-term investments (amortized cost of $706,326 and $566,616) $ 717,964 $ 578,445
Short-term investments (amortized cost of $8,405 and $3,674) 8,405 3,674
Cash and cash equivalents 3,414 2,035
Deferred offering costs - 29
Receivable for principal payments on investments 333 -
Interest receivable 4,350 2,133
Prepaid expenses and other assets 245 148
Total Assets $ 734,711 $ 586,464

Liabilities:
Corporate Credit Facility (Note 6) $ 78,000 $ -
Unamortized Corporate Credit Facility issuance costs (2,176 ) -
Loan and Security Agreement (Note 6) - 162,000
Unamortized Loan and Security Agreement issuance costs - (247 )
Revolving Funding Facility (Note 6) 150,000 -
Unamortized Revolving Funding Facility issuance costs (2,449 ) -
Subscription Credit Agreement (Note 6) 114,000 105,000
Unamortized Subscription Credit Facility issuance costs (227 ) (425 )
Accrued organizational and offering costs - 6
Distributions payable - 4,615
Management fee payable 1,498 952
Incentive fee payable 1,795 65
Accrued expenses and other liabilities 4,507 2,529
Total Liabilities $ 344,948 $ 274,495

Commitments and contingencies (Note 8)

Net Assets:
Common Shares, $0.001 par value; 100,000,000 shares authorized; 23,550,054 and 19,227,902 as of June 30, 2022 and December 31, 2021, respectively, issued and outstanding $ 24 $ 19
Additional paid-in capital 371,427 300,726
Total distributable earnings (deficit) 18,312 11,224
Total Net Assets $ 389,763 $ 311,969
Total Liabilities and Net Assets $ 734,711 $ 586,464
Net Asset Value Per Common Share $ 16.55 $ 16.22

June 30,
2021
(Unaudited) December 31,
2020
Assets:
Investments, at fair value:
Long-term investments (amortized cost of $215,680) $ 219,701 $ -
Short-term investments (amortized cost of $4,622) 4,622 -
Cash and cash equivalents 3,596 10
Deferred offering costs 180 231
Receivable for sales of investments 2,208 -
Interest receivable 902 -
Prepaid expenses and other assets 109 177
Total Assets $ 231,318 $ 418

Liabilities:
Loan and Security Agreement (Note 6) $ 50,000 $ -
Unamortized Loan and Security Agreement issuance costs (306 ) -
Subscription Credit Facility (Note 6) 31,000 -
Unamortized Subscription Credit Facility issuance costs (163 ) -
Accrued organizational and offering costs 7 141
Payable for investments purchased 4,109 -
Payables to affiliates (Note 3) - 1,075
Management fee payable 422 -
Accrued expenses and other liabilities 761 -
Accrued other general and administrative expenses 462 -
Total Liabilities $ 86,292 $ 1,216

Commitments and contingencies (Note 8)

Net Assets:
Common Shares, $0.001 par value; 100,000,000 shares authorized; 9,201,129 as of June 30, 2021 issued and outstanding $ 9 $ -
Additional paid-in capital 140,022 -
Total distributable earnings (deficit) 4,995 -
Total member’s capital (deficit) - (798 )
Total Net Assets $ 145,026 $ (798 )
Total Liabilities and Net Assets $ 231,318 $ 418
Net Asset Value Per Common Share $ 15.76 n/a
See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.
Consolidated Statements of Operations
(amounts in 000’s, except share and per share amounts)
(Unaudited)

For the
three months
ended For the
six months
ended
June 30,
2021 June 30,
2021
Income:
Investment income from investments:
Interest income $ 3,818 $ 5,555
Total Investment Income 3,818 5,555

Expenses:
Interest expense 928 1,389
Management fees 422 598
Professional fees 185 293
Directors fees 80 145
Offering costs 67 106
Initial organization costs - 175
Other general and administrative expenses 166 264
Total Expenses 1,848 2,970
Net Investment Income (Loss) 1,970 2,585

Realized and unrealized gains (losses) on investments
Net realized gains (losses):
Investments 15 47
Total net realized gains (losses) 15 47
Net change in unrealized gains (losses):
Investments 1,223 4,021
Total net change in unrealized gains (losses) 1,223 4,021
Total realized and unrealized gains (losses) 1,238 4,068

Net Increase (Decrease) in Net Assets Resulting from Operations $ 3,208 $ 6,653

Per Common Share Data:
Basic and diluted net investment income per common share $ 0.24 $ 0.35
Basic and diluted net increase in net assets resulting from operations $ 0.38 $ 0.91
Weighted Average Common Shares Outstanding - Basic and Diluted 8,346,491 7,337,219
For the three months ended
June 30, For the six months ended
June 30,
2022 2021 2022 2021
Income:
Investment income from investments:
Interest income $ 12,991 $ 3,818 24,892 $ 5,555
Total Investment Income 12,991 3,818 24,892 5,555

Expenses:
Management fees 1,498 422 2,824 598
Incentive fees 775 - 1,730 -
Interest expense 3,014 928 5,822 1,389
Professional fees 155 185 300 293
Directors fees 107 80 214 145
Offering costs - 67 29 106
Initial organization costs - - - 175
Other general and administrative expenses 302 166 615 264
Total Expenses 5,851 1,848 11,534 2,970
Net Investment Income (Loss) 7,140 1,970 13,358 2,585

Realized and unrealized gains (losses) on investments
Net realized gains (losses):
Investments - 15 23 47
Total net realized gains (losses) - 15 23 47
Net change in unrealized gains (losses):
Investments 322 1,223 (190 ) 4,021
Total net change in unrealized gains (losses) 322 1,223 (190 ) 4,021
Total realized and unrealized gains (losses) 322 1,238 (167 ) 4,068

Net Increase (Decrease) in Net Assets Resulting from Operations $ 7,462 $ 3,208 13,191 $ 6,653

Per Common Share Data:
Basic and diluted net investment income per common share $ 0.30 $ 0.24 0.58 $ 0.35
Basic and diluted net increase in net assets resulting from operations $ 0.32 $ 0.38 0.57 $ 0.91
Weighted Average Common Shares Outstanding - Basic and Diluted 23,529,376 8,346,491 22,964,415 7,337,219

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 For the
six months
ended For the three months ended
June 30, For the six months ended
June 30,
June 30,
2021 June 30,
2021 2022 2021 2022 2021
Increase (Decrease) in Net Assets Resulting from Operations:
Net investment income (loss) $       1,970 $
2,585
$ 7,140 $ 1,970 $ 13,358 $ 2,585
Net realized gains (losses) on investments 15 47 - 15 23 47
Net change in unrealized gains (losses) on investments
1,223

4,021
322 1,223 (190 ) 4,021
Net Increase (Decrease) in Net Assets Resulting from Operations 3,208 6,653 7,462 3,208 13,191 6,653

Decrease in Net Assets Resulting from Stockholder Distributions
Dividends and distributions to stockholders (850 ) (850 ) (6,103 ) (850 ) (6,103 ) (850 )
Net Decrease in Net Assets Resulting from Stockholder Distributions (850 ) (850 ) (6,103 ) (850 ) (6,103 ) (850 )

Increase in Net Assets Resulting from Capital Share Transactions
Issuance of common shares 55,000 140,000 - 55,000 68,582 140,000
Reinvestment of distributions 21 21 1,222 21 2,124 21
Net Increase in Net Assets Resulting from Capital Share Transactions 55,021 140,021 1,222 55,021 70,706 140,021
Total Increase (Decrease) in Net Assets 57,379 145,824 2,581 57,379 77,794 145,824
Net Assets, Beginning of Period 87,647 (798 ) 387,182 87,647 311,969 (798 )
Net Assets, End of Period $ 145,026 $ 145,026 $ 389,763 $ 145,026 $ 389,763 $ 145,026

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.
Consolidated Statements of Cash Flows
(amounts in 000’s)
(Unaudited)
For the
six months
ended For the six months ended
June 30,
June 30,
2021 2022 2021

Cash Flows from Operating Activities:
Net increase (decrease) in net assets resulting from operations $ 6,653 $ 13,191 $ 6,653
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 (47 ) (23 ) (47 )
Net change in unrealized (gains)/losses on investments
(4,021
) 190 (4,021 )
Net accretion of discount on investments (467 ) (2,011 ) (467 )
Purchases of short-term investments (4,622 )
Purchases of short-term investments, net (4,731 ) (4,622 )
Purchases of portfolio investments (225,182 ) (181,452 ) (225,182 )
Proceeds from sale of portfolio investments
10,095

Proceeds from sales of investments and principal repayments
43,777
10,095
Paid-in-kind interest from portfolio investments (79 ) - (79 )
Amortization of deferred financing cost 86 1,005 86
Increase/(decrease) in operating assets and liabilities:
(Increase)/decrease in receivable for sales of investments (2,208 ) - (2,208 )
(Increase)/decrease in interest and dividends receivable (902 ) (2,217 ) (902 )
(Increase)/decrease in deferred offering costs 51 29 51
(Increase)/decrease in receivable for principal payments on investments (333 ) -
(Increase)/decrease in prepaid expenses and other assets 68 (97 ) 68
Increase/(decrease) in payable for investments purchased 4,109 - 4,109
Increase/(decrease) in management fees payable 422 546 422
Increase/(decrease) in incentive fee payable 1,730 -
Increase/(decrease) in payable to affiliate (1,075 ) - (1,075 )
Increase/(decrease) in accrued organizational and offering costs, net (134 ) (6 ) (134 )
Increase/(decrease) in accrued expense and other liabilities 761
Increase/(decrease) in accrued other general and administrative expenses 462 1,978 1,223
Net cash used in operating activities (216,030 ) (128,424 ) (216,030 )
Cash Flows from Financing Activities:
Borrowings on Loan and Security Agreement, net 50,000
Borrowings on Subscription Credit Facility, net 31,000
Borrowings on Corporate Credit Facility, net 78,000 -
Borrowings on Revolving Funding Facility, net 150,000 -
(Payments)/Borrowings on Loan and Security Agreement, net (162,000 ) 50,000
Borrowings on Subscription and Credit Agreement, net 9,000 31,000
Payments of debt issuance costs (555 ) (5,185 ) (555 )
Distributions paid in cash (829 ) (8,594 ) (829 )
Proceeds from issuance of common shares 140,000 68,582 140,000
Net cash provided by financing activities 219,616 129,803 219,616
Net increase in cash and cash equivalents 3,586 1,379 3,586
Cash and cash equivalents, beginning of period 10 2,035 10
Cash and cash equivalents, end of period $ 3,596 $ 3,414 $ 3,596

Supplemental and Non-Cash Information:
Interest paid during the period $
429
$ 4,654 $ 429
Non-cash financing activities not included herein consisted of reinvestment of dividends $ 21 $ 2,124 $ 21

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.
Consolidated Schedule of Investments
As of June 30, ~~2021~~2022
(amounts in 000’s)
(Unaudited)

Maturity Principal / Amortized Fair Percentage
Portfolio Company⁽¹⁾ Investment Interest Rate Date Par Cost⁽²⁾⁽³⁾ Value 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 $ 5,031 $ 4,924 $ 5,081 3.5 %
First Lien Senior Secured Delayed Draw Loan 8.00% (L + 7.00% 1/22/2027 - - - 0.0 %
5,031 4,924 5,081 3.5 %
Capital goods
Broder Bros., Co.   First Lien Senior Secured Loan 9.75% (L + 8.50%) 12/2/2022 5,430 5,020 5,430 3.7 %
Eastern Wholesale Fence   First Lien Senior Secured Loan 7.50% (L + 6.50%) 10/30/2025 3,325 3,261 3,325 2.3 %
Fastener Distribution Holdings, LLC   First Lien Senior Secured Delayed Draw Loan 8.00% (L + 7.00%) 4/1/2022 2,215 2,200 2,215 1.5 %
First Lien Senior Secured Loan 8.00% (L + 7.00%) 4/1/2022 1,950 1,937 1,950 1.3 %
Friedrich Air Conditioning Co., LTD   First Lien Senior Secured Loan 7.00% (L + 6.00%) 2/7/2023 1,387 1,377 1,387 1.0 %
GEON Performance Solutions   First Lien Senior Secured Loan 7.88% (L + 6.25%) 10/25/2024 4,123 4,085 4,123 2.8 %
First Lien Senior Secured Revolving Loan 7.88% (L + 6.25%) 10/25/2024 - - - 0.0 %
Refrigeration Sales Corp.   First Lien Senior Secured Loan 7.50% (L + 6.50%) 6/22/2026 6,963 6,841 6,963 4.8 %
25,393 24,721 25,393 17.4 %
Commercial & professional services
Advanced Environmental Monitoring   First Lien Senior Secured Loan 7.50% (L + 6.50%) 1/29/2026 7,372 7,137 7,372 5.1 %
Gusmer Enterprises, Inc.   First Lien Senior Secured Delayed Draw Loan 6.50% (L + 5.50%) 5/7/2027 1,368 1,293 1,368 0.9 %
First Lien Senior Secured Revolving Loan 6.50% (L + 5.50%) 5/7/2027 840 789 840 0.6 %
First Lien Senior Secured Loan 6.50% (L + 5.50%) 5/7/2027 3,518 3,449 3,518 2.4 %
PMFC Holding, LLC   First Lien Senior Secured Delayed Draw Loan 8.50% (L + 7.50%) 7/31/2023 2,862 2,838 2,862 2.0 %
First Lien Senior Secured Loan 8.50% (L + 7.50%) 7/31/2023 5,704 5,658 5,704 3.9 %
First Lien Senior Secured Revolving Loan 8.50% (L + 7.50%) 7/31/2023 - - - 0.0 %
21,664 21,164 21,664 14.9 %
Consumer durables and apparel
BEL USA, LLC   First Lien Senior Secured Loan 9.50% (L + 8.00%) 11/2/2023 149 148 147 0.1 %
First Lien Senior Secured Loan 9.50% (L + 8.00%) 11/2/2023 8,951 8,761 8,817 6.1 %
MacNeill Pride Group   First Lien Senior Secured Delayed Draw Loan 7.50% (L + 6.50%) 4/22/2026
-
- - 0.0 %
First Lien Senior Secured Revolving Loan 7.50% (L + 6.50%) 4/22/2026 952 929 952 0.7 %
First Lien Senior Secured Loan 7.50% (L + 6.50%) 4/22/2026 8,750 8,608 8,750 6.0 %
New Era Cap Company, Inc. First Lien Senior Secured Loan 7.50% (L + 6.50%) 9/10/2023 12,789 12,680 12,917 8.9 %
YS Garments, LLC   First Lien Senior Secured Loan 7.00% (L + 6.00%) 8/9/2024 8,051 7,866 8,051 5.6 %
39,642 38,992 39,634 27.4 %
Interest Maturity Principal/ Amortized Fair Percentage
Portfolio Company⁽¹⁾ Investment Rate Date Par Cost⁽²⁾⁽³⁾ Value of Net Assets
Debt and Equity Investments
Private Credit Investments⁽⁴⁾
Aerospace & defense
Fastener Distribution Holdings, LLC First lien senior secured delayed draw loan 9.20% (S + 7.00%) 4/1/2024 $ 2,194 $ 2,178 $ 2,194 0.6 %
First lien senior secured loan 9.20% (S + 7.00%) 4/1/2024 1,931 1,914 1,931 0.5 %
Precinmac (US) Holdings, Inc. First lien senior secured delayed draw loan 7.63% (S + 6.00%) 8/31/2027 1,119 1,098 1,119 0.3 %
First lien senior secured loan 7.63% (S + 6.00%) 8/31/2027 4,842 4,757 4,842 1.2 %
First lien senior secured loan 7.63% (S + 6.00%) 8/31/2027 593 578 593 0.1 %
10,679 10,525 10,679 2.7 %
Asset management & custody banks
Atria Wealth Solutions, Inc. First lien senior secured delayed draw loan 8.32% (S + 6.00%) 2/29/2024 - - - 0.0 %
First lien senior secured loan 8.32% (S + 6.00%) 2/29/2024 5,165 5,086 5,165 1.3 %
5,165 5,086 5,165 1.3 %
Auto components
Speedstar Holding LLC First lien senior secured delayed draw loan 8.24% (L + 7.00%) 1/22/2027 - - - 0.0 %
First lien senior secured loan 8.24% (L + 7.00%) 1/22/2027 4,933 4,844 4,982 1.3 %
Vehicle Accessories, Inc. First lien senior secured loan 8.07% (S + 5.75%) 11/30/2026 21,333 20,995 21,333 5.4 %
First lien senior secured revolving loan 8.07% (S + 5.75%) 11/30/2026 1,078 1,052 1,078 0.3 %
27,344 26,891 27,393 7.0 %
Building products
BCI Burke Holding Corp. First lien senior secured delayed draw loan 7.32% (L + 5.75%) 12/14/2023 - - - 0.0 %
First lien senior secured loan 7.32% (L + 5.75%) 12/14/2027 17,217 16,943 17,217 4.4 %
First lien senior secured revolving loan 7.32% (L + 5.75%) 6/14/2027 70 46 70 0.0 %
Eastern Wholesale Fence First lien senior secured loan 8.58% (L + 7.00%) 10/30/2025 3,288 3,194 3,288 0.9 %
First lien senior secured loan 8.58% (L + 7.00%) 10/30/2025 18,223 17,779 18,223 4.7 %
First lien senior secured revolving loan 8.58% (L + 7.00%) 10/30/2025 1,701 1,673 1,701 0.4 %
40,499 39,635 40,499 10.4 %
Chemicals
Cyalume Technologies Holdings, Inc. First lien senior secured loan 7.25% (L + 5.00%) 10/25/2024 1,334 1,324 1,334 0.3 %
Fralock Buyer LLC First lien senior secured loan 7.17% (L + 5.50%) 4/17/2024 9,251 9,125 9,182 2.4 %
First lien senior secured loan 7.17% (L + 5.50%) 4/17/2024 2,440 2,409 2,422 0.6 %
First lien senior secured revolving loan 7.17% (L + 5.50%) 4/17/2024 - - - 0.0 %
Shrieve Chemical Company, LLC First lien senior secured loan 8.01% (L + 6.00%) 12/2/2024 614 600 614 0.2 %

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.
Consolidated Schedule of Investments
As of June 30, ~~2021~~2022
(amounts in 000’s)
(Unaudited)

Interest Maturity Principal/ Amortized Fair Percentage
Portfolio Company⁽¹⁾ Investment Rate Date Par Cost⁽²⁾⁽³⁾ Value of Net Assets
Debt and Equity Investments
Private Credit Investments⁽⁴⁾

USALCO, LLC First lien senior secured loan 8.25% (L + 6.00%) 10/19/2027 19,278 18,861 19,278 4.9 %
First lien senior secured revolving loan 7.67% (L + 6.00%) 10/19/2026 1,208 1,164 1,208 0.3 %
34,125 33,483 34,038 8.7 %
Commercial services & supplies
Advanced Environmental Monitoring (5) First lien senior secured loan 9.61% (S + 7.50%) 1/29/2026 10,159 9,888 10,159 2.6 %
Allentown, LLC First lien senior secured delayed draw loan 7.60% (S + 6.00%) 10/22/2023 - - - 0.0 %
First lien senior secured loan 7.60% (S + 6.00%) 4/22/2027 7,701 7,627 7,701 2.0 %
First lien senior secured revolving loan 7.60% (S + 6.00%) 4/22/2027 255 245 255 0.1 %
American Equipment Holdings LLC First lien senior secured delayed draw loan 7.94% (S + 6.00%) 11/5/2023 6,335 6,215 6,335 1.6 %
First lien senior secured delayed draw loan 7.94% (S + 6.00%) 11/5/2026 - - - 0.0 %
First lien senior secured loan 7.94% (S + 6.00%) 11/5/2026 1,764 1,731 1,764 0.5 %
First lien senior secured loan 7.94% (S + 6.00%) 11/5/2026 2,117 2,077 2,117 0.5 %
First lien senior secured loan 7.94% (S + 6.00%) 11/5/2026 16,470 16,071 16,470 4.2 %
First lien senior secured revolving loan 7.94% (S + 6.00%) 11/5/2026 - - - 0.0 %
Arborworks Acquisition LLC First lien senior secured loan 8.37% (L + 7.00%) 11/9/2026 20,008 19,656 19,308 5.0 %
First lien senior secured revolving loan 9.00% (L + 7.00%) 11/9/2026 1,875 1,793 1,810 0.5 %
BLP Buyer, Inc. (Bishop Lifting Products) First lien senior secured loan 7.54% (L + 6.25%) 2/1/2027 16,455 16,155 16,455 4.2 %
First lien senior secured revolving loan 7.50% (L + 6.25%) 2/1/2027 604 573 604 0.1 %
Gusmer Enterprises, Inc. First lien senior secured delayed draw loan 8.14% (S + 6.50%) 5/7/2027 6,310 6,200 6,310 1.6 %
First lien senior secured delayed draw loan 8.12% (S + 6.50%) 5/7/2027 1,763 1,729 1,763 0.5 %
First lien senior secured loan 8.11% (S + 6.50%) 5/7/2027 4,819 4,658 4,819 1.2 %
First lien senior secured revolving loan 7.86% (S + 6.50%) 5/7/2027 - - - 0.0 %
Maturity Principal / Amortized Fair Percentage
Portfolio Company⁽¹⁾ Investment Interest Rate Date Par Cost⁽²⁾⁽³⁾ Value of Net Assets
Diversified financials
Atria Wealth Solutions, Inc. First Lien Senior Secured Loan 7.00% (L + 6.00%) 11/30/2022 5,218 5,163 5,218 3.6 %
5,218 5,163 5,218 3.6 %
Food, beverage & tobacco
Pretzels, LLC First Lien Senior Secured Loan 7.00% (L + 6.00%) 10/22/2024 3,238 3,209 3,238 2.2 %
First Lien Senior Secured Delayed Draw Loan 7.00% (L + 6.00%) 10/22/2024 3,361 3,213 3,361 2.3 %
WhiteBridge Pet Brands, LLC First Lien Senior Secured Loan 6.25% (L + 5.25%) 1/24/2025 7,905 7,724 7,905 5.5 %
14,504 14,146 14,504 10.0 %
Healthcare equipment & services
OMH-HealthEdge Holdings, LLC First Lien Senior Secured Loan 6.25% (L + 5.25%) 10/24/2025 12,437 12,175 12,437 8.6 %
Smile Doctors, LLC First Lien Senior Secured Revolving Loan 7.00% (L + 6.00%) 10/6/2022 - - - 0.0 %
First Lien Senior Secured Loan 7.00% (L + 6.00%) 10/6/2022 2,166 2,150 2,166 1.5 %
14,603 14,325 14,603 10.1 %
Household & personal products
DRS Holdings III, Inc. (Dr. Scholl’s) First Lien Senior Secured Revolving Loan
7.25% (L + 6.25%)
11/1/2025 - - - 0.0 %
First Lien Senior Secured Loan 7.25% (L + 6.25%) 11/1/2025 12,190 12,069 12,190 8.4 %
PH Beauty Holdings III, Inc. First Lien Senior Secured Loan 5.14% (L + 5.00%) 9/28/2025 9,691 9,292 9,352 6.5 %
21,881 21,361 21,542 14.9 %
Materials
Cyalume Technologies Holdings, Inc. First Lien Senior Secured Loan 7.50% (L + 6.00%) 8/30/2024 1,893 1,876 1,893 1.3 %
Drew Foam Companies, Inc. First Lien Senior Secured Loan 7.50% (L + 6.50%) 11/5/2025 7,488 7,381 7,488 5.2 %
Fralock Buyer LLC First Lien Senior Secured Loan 6.50% (L + 5.50%) 4/17/2024 9,251 9,060 9,251 6.4 %
First Lien Senior Secured Revolving Loan 6.50% (L + 5.50%) 4/17/2024 - - - 0.0 %
First Lien Senior Secured Loan 6.50% (L + 5.50%) 4/17/2024 2,465 2,417 2,465 1.7 %
Meridian Adhesives Group, Inc. First Lien Senior Secured Loan 6.50% (L + 5.50%) 9/25/2023 5,712 5,663 5,712 3.9 %
First Lien Senior Secured Loan 6.50% (L + 5.50%) 3/31/2027 4,287 4,198 4,287 3.0 %
First Lien Senior Secured Loan 6.50% (L + 5.50%) 9/25/2023 2,469 2,427 2,469 1.7 %
33,565 33,022 33,565 23.2 %
Pharmaceuticals, biotech & life sciences
Foundation Consumer Brands First Lien Senior Secured Loan 7.38% (L + 6.38%) 2/12/2027 9,200 9,111 9,200 6.3 %
First Lien Senior Secured Revolving Loan 7.38% (L + 6.38%) 2/12/2027 - - - 0.0 %
9,200 9,111 9,200 6.3 %
Retailing
Sundance Holdings Group, LLC First Lien Senior Secured Loan 7.00% (L + 6.00%) 5/1/2024 9,522 9,098 9,426 6.5 %
9,522 9,098 9,426 6.5 %
Telecommunication services
Network Connex (f/k/a NTI Connect, LLC) First Lien Senior Secured Loan 6.00% (L + 5.00%) 4/5/2026 5,329 5,227 5,329 3.7 %
5,329 5,227 5,329 3.7 %
Total Private Credit Investments 205,552 201,254 205,159 141.5 %
See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.
Consolidated Schedule of Investments
As of June 30, ~~2021~~2022
(amounts in 000’s)
(Unaudited)

Maturity Principal / Amortized Fair Percentage
Portfolio Company⁽¹⁾ Investment Interest Rate Date Par Cost⁽²⁾⁽³⁾ Value of Net Assets
Liquid Credit Investments⁽⁵⁾
Automobiles & components
Clarios Global LP (4) First Lien Senior Secured Loan 3.35% (L + 3.25%) 4/30/2026 407 407 403 0.3 %
407 407 403 0.3 %
Capital goods
Aegion Corporation (4) First Lien Senior Secured Loan 5.50% (L + 4.75%) 5/17/2028 736 736 742 0.5 %
Columbus McKinnon Corporation (4) First Lien Senior Secured Loan 3.25% (L + 2.75%) 5/14/2028 138 138 138 0.1 %
Kodiak Building Partners Foundation (4) First Lien Senior Secured Loan 4.00% (L + 3.25%) 3/12/2028 672 669 671 0.5 %
LSF11 Skyscraper HoldCo S.a.r.l. (4)(6)(7) First Lien Senior Secured Loan 4.25% (L + 3.50%) 9/29/2027 191 190 192 0.1 %
TAMKO Building Products LLC (4) First Lien Senior Secured Loan 3.10% (L + 3.00%) 5/29/2026 442 439 441 0.3 %
Tiger Acquisition, LLC (d/b/a Sabre Industries, Inc.) (4) First Lien Senior Secured Loan 3.75% (L + 3.25%) 6/1/2028 345 341 344 0.2 %
2,524 2,513 2,528 1.7 %
Chemicals
Tronox Holdings plc Senior Unsecured Bond 4.63 % 3/15/2029 100 100 101 0.1 %
100 100 101 0.1 %
Commercial & professional services
USIC Holdings, Inc. (4) First Lien Senior Secured Loan 4.25% (L + 3.50%) 5/14/2028 193 192 193 0.1 %
193 192 193 0.1 %
Consumer durables & apparel
Conair Holdings, LLC (4)(6) First Lien Senior Secured Loan 4.25% (L + 3.75%) 5/17/2028 517 514 518 0.3 %
Hayward Industries, Inc. (4)(6) First Lien Senior Secured Loan 3.25% (L + 2.75%) 5/28/2028 258 257 258 0.2 %
Hunter Fan Company (4) First Lien Senior Secured Loan 5.75% (L + 5.00%) 5/8/2028 764 756 764 0.5 %
1,539 1,527 �� 1,540 1.0 %
Consumer services
Hilton Grand Vacations Borrower LLC (4)(6) Senior Unsecured Bond 5.00 % 6/1/2029 91 91 93 0.1 %
First Lien Senior Secured Loan 3.50% (L + 3.00%) 7/31/2028 417 415 417 0.3 %
Nielsen Holdings plc Senior Unsecured Bond 4.75 % 7/15/2031 276 276 277 0.2 %
Park Intermediate Holdings, LLC First Lien Senior Secured Bond 4.88 % 5/15/2029 275 275 285 0.2 %
1,059 1,057 1,072 0.8 %
Energy
Blackstone CQP Holdco LP (4)(6) First Lien Senior Secured Loan 4.25% (L + 3.50%) 6/5/2028 1,300 1,293 1,294 0.9 %
DT Midstream, Inc. Senior Unsecured Bond 4.38 % 6/15/2031 248 248 253 0.2 %
1,548 1,541 1,547 1.1 %
Healthcare equipment & services
Boncura Health Solutions (fka, Midwest Physician Administrative Services) (4) First Lien Senior Secured Loan 4.00% (L + 3.25%) 3/13/2028 231 229 230 0.2 %
Pacific Dental Services, LLC (4) First Lien Senior Secured Loan 4.25% (L + 3.50%) 5/5/2028 228 227 229 0.2 %
Pathway Vet Alliance LLC (4) First Lien Senior Secured Loan 3.85% (L + 3.75%) 3/31/2027 227 225 227 0.2 %
686 681 686 0.6 %
Interest Maturity Principal/ Amortized Fair Percentage
Portfolio Company⁽¹⁾ Investment Rate Date Par Cost⁽²⁾⁽³⁾ Value of Net Assets
Debt and Equity Investments
Private Credit Investments⁽⁴⁾

PMFC Holding, LLC First lien senior secured delayed draw loan 7.74% (L + 6.50%) 7/31/2023 2,833 2,821 2,833 0.7 %
First lien senior secured loan 7.74% (L + 6.50%) 7/31/2023 5,647 5,623 5,647 1.4 %
First lien senior secured revolving loan 7.98% (L + 6.50%) 7/31/2023 342 342 342 0.1 %
Regiment Security Partners LLC First lien senior secured delayed draw loan 10.04% (S + 8.00%) 9/15/2023 2,648 2,576 2,648 0.7 %
First lien senior secured loan 10.04% (S + 8.00%) 9/15/2026 6,500 6,385 6,500 1.7 %
First lien senior secured revolving loan 10.04% (S + 8.00%) 9/15/2026 931 904 931 0.2 %
The Kleinfelder Group, Inc. First lien senior secured loan 7.50% (L + 5.25%) 11/29/2024 12,825 12,725 12,729 3.3 %
128,361 125,994 127,500 32.7 %
Containers & packaging
Drew Foam Companies, Inc. First lien senior secured loan 8.25% (L + 6.00%) 11/5/2025 7,413 7,337 7,413 1.9 %
7,413 7,337 7,413 1.9 %
Diversified telecommunication services
Corbett Technology Solutions, Inc. First lien senior secured delayed draw loan 7.10% (L + 5.00%) 4/29/2023 9,482 9,396 9,482 2.4 %
First lien senior secured loan 6.61% (L + 5.00%) 10/29/2027 1,751 1,734 1,751 0.5 %
First lien senior secured loan 6.24% (L + 5.00%) 10/29/2027 13,497 13,237 13,497 3.5 %
First lien senior secured revolving loan 7.03% (L + 5.00%) 10/29/2027 1,525 1,393 1,525 0.4 %
Network Connex (f/k/a NTI Connect, LLC) First lien senior secured loan 7.25% (L + 5.00%) 11/30/2024 5,276 5,193 5,223 1.3 %
31,531 30,953 31,478 8.1 %
Electronic equipment, instruments & components
Process Insights, Inc. First lien senior secured loan 8.85% (S + 7.50%) 10/30/2025 3,059 3,000 3,059 0.8 %
3,059 3,000 3,059 0.8 %
Food products
IF&P Foods, LLC (FreshEdge) First lien senior secured loan 6.75% (L + 5.25%) 8/15/2023 33,800 33,196 33,800 8.7 %
Siegel Egg Co., LLC First lien senior secured loan 6.50% (L + 5.50%) 12/29/2026 15,702 15,438 15,702 4.0 %
First lien senior secured revolving loan 6.92% (L + 5.50%) 12/29/2026 1,476 1,419 1,476 0.4 %
50,978 50,053 50,978 13.1 %
See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.
Consolidated Schedule of Investments
As of June 30, ~~2021~~2022
(amounts in 000’s)
(Unaudited)

Maturity Principal / Amortized Fair Percentage
Portfolio Company⁽¹⁾ Investment Interest Rate Date Par Cost⁽²⁾⁽³⁾ Value of Net Assets
Materials
PQ Performance Chemicals (4)(6) First Lien Senior Secured Loan 4.25% (L + 3.50%) 4/28/2028 362 360 362 0.2 %
362 360 362 0.2 %
Media & entertainment
Univision Communications Inc. First Lien Senior Secured Bond 4.50 % 5/1/2029 225 225 227 0.2 %
225 225 227 0.2 %
Software & services
Atlas CC Acquisition Corp. (4)(6) First Lien Senior Secured Loan 5.00% (L + 4.25%) 5/25/2028 929 919 931 0.6 %
First Lien Senior Secured Loan 5.00% (L + 4.25%) 5/25/2028 189 187 189 0.1 %
Imola Merger Corp. First Lien Senior Secured Bond 4.75 % 5/15/2029 188 188 193 0.1 %
Ingram Micro Inc. (4)(6) First Lien Senior Secured Loan 4.00% (L + 3.50%) 7/2/2028 180 179 181 0.1 %
Orion Advisor Solutions, Inc. (4) First Lien Senior Secured Loan 4.50% (L + 3.75%) 9/24/2027 137 137 137 0.1 %
RealPage, Inc. (4) First Lien Senior Secured Loan 3.75% (L + 3.25%) 4/22/2028 962 960 959 0.7 %
2,585 2,570 2,590 1.7 %
Technology hardware & equipment
Vocus Group Limited (f/k/a Vocus Communications) (4)(6)(7) First Lien Senior Secured Loan 4.00% (L + 3.50%) 7/26/2028 108 107 108 0.1 %
108 107 108 0.1 %
Telecommunication services
Cable One, Inc. (4) First Lien Senior Secured Loan 2.11% (L + 2.00%) 5/3/2028 816 812 812 0.5 %
Lumen Technologies, Inc. Senior Unsecured Bond 5.38 % 6/15/2029 137 137 139 0.1 %
953 949 951 0.6 %
Transportation
American Airlines, Inc. First Lien Senior Secured Bond 5.50 % 4/20/2026 298 298 316 0.2 %
First Lien Senior Secured Bond 5.75 % 4/20/2029 99 99 107 0.1 %
Brown Group Holding, LLC (Signature Aviation US Holdings, Inc.) (4) First Lien Senior Secured Loan 3.25% (L + 2.75%) 6/7/2028 1,334 1,324 1,327 0.9 %
United Airlines Holdings, Inc. (4) First Lien Senior Secured Loan 4.50% (L + 3.75%) 4/21/2028 479 476 484 0.3 %
2,210 2,197 2,234 1.5 %
Total Liquid Credit Investments 14,499 14,426 14,542 10.0 %
Total Debt Investments 220,051 215,680 219,701 151.5 %
Interest Maturity Principal/ Amortized Fair Percentage
Portfolio Company⁽¹⁾ Investment Rate Date Par Cost⁽²⁾⁽³⁾ Value of Net Assets
Debt and Equity Investments
Private Credit Investments⁽⁴⁾

Health care providers & services
Brightview, LLC First lien senior secured delayed draw loan 8.63% (L + 5.75%) 4/12/2024 - - - 0.0 %
First lien senior secured loan 8.63% (L + 5.75%) 4/12/2024 13,067 12,934 13,067 3.4 %
First lien senior secured revolving loan 8.63% (L + 5.75%) 4/12/2024 - - - 0.0 %
Guardian Dentistry Partners First lien senior secured delayed draw loan 7.67% (S + 6.00%) 8/20/2026 4,663 4,449 4,663 1.2 %
First lien senior secured loan 7.67% (S + 6.00%) 8/20/2026 8,180 8,084 8,180 2.1 %
Light Wave Dental Management LLC First lien senior secured delayed draw loan 8.16% (S + 6.50%) 11/11/2023 913 820 913 0.2 %
First lien senior secured delayed draw loan 8.16% (S + 6.50%) 12/31/2023 4,116 4,076 4,116 1.1 %
First lien senior secured delayed draw loan 8.16% (S + 6.50%) 12/31/2023 2,896 2,867 2,896 0.7 %
First lien senior secured loan 8.16% (S + 6.50%) 12/31/2023 8,475 8,386 8,475 2.2 %
First lien senior secured loan 8.16% (S + 6.50%) 12/31/2023 4,533 4,489 4,533 1.2 %
First lien senior secured revolving loan 8.16% (S + 6.50%) 12/31/2023 - - - 0.0 %
OMH-HealthEdge Holdings, LLC First lien senior secured loan 7.50% (L + 6.00%) 10/24/2025 12,312 12,079 12,312 3.1 %
First lien senior secured loan 7.50% (L + 6.00%) 10/24/2025 5,349 5,239 5,349 1.4 %
SGA Dental Partners Holdings, LLC First lien senior secured delayed draw loan 7.65% (S + 5.50%) 12/30/2026 10,233 10,027 10,233 2.6 %
First lien senior secured loan 6.76% (S + 5.50%) 12/30/2026 12,009 11,760 12,009 3.1 %
First lient senior secured revolving loan 6.76% (S + 5.50%) 12/30/2026 - - - 0.0 %
86,746 85,210 86,746 22.3 %
Household durables
Curio Brands, LLC First lien senior secured delayed draw loan 6.92% (L + 5.50%) 12/21/2023 3,296 3,296 3,296 0.9 %
First lien senior secured loan 7.75% (L + 5.50%) 12/21/2027 18,054 17,610 18,054 4.6 %
First lien senior secured revolving loan 7.13% (L + 5.50%) 12/21/2027 1,290 1,290 1,290 0.3 %
22,640 22,196 22,640 5.8 %
See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.
Consolidated Schedule of Investments
As of June 30, ~~2021~~2022
(amounts in 000’s)
(Unaudited)

Number of Fair Percentage
Shares Cost Value of Net Assets
Short-Term Investments
First American Treasury Obligations Fund - Institutional Class Z, 0.01% (8) 937 937 937 0.7 %
First American U.S. Treasury Money Market Fund - Institutional Class Z, 0.01% (8) 3,685 3,685 3,685 2.5 %
Total Short-Term Investments 4,622 4,622 4,622 3.2 %

Total Investments $ 220,302 $ 224,323 154.7 %

Liabilities in Excess of Other Assets (79,297 ) (54.7 )%
Net Assets $ 145,026 100.0 %
Interest Maturity Principal/ Amortized Fair Percentage
Portfolio Company⁽¹⁾ Investment Rate Date Par Cost⁽²⁾⁽³⁾ Value of Net Assets
Debt and Equity Investments
Private Credit Investments⁽⁴⁾
Household products
Home Brands Group Holdings, Inc. (ReBath) First lien senior secured loan 6.67% (L + 5.00%) 11/8/2026 20,253 19,859 20,253 5.2 %
First lien senior secured revolving loan 6.67% (L + 5.00%) 11/8/2026 - - - 0.0 %
20,253 19,859 20,253 5.2 %
IT services
Improving Acquisition LLC First lien senior secured loan 8.01% (L + 5.50%) 7/26/2023 600 597 600 0.2 %
600 597 600 0.2 %
Leisure products
MacNeill Pride Group First lien senior secured delayed draw loan 8.57% (S + 6.25%) 4/22/2026 1,951 1,930 1,951 0.5 %
First lien senior secured delayed draw loan 8.57% (S + 6.25%) 4/22/2026 2,189 2,144 2,189 0.6 %
First lien senior secured loan 8.57% (L + 6.25%) 4/22/2026 8,663 8,568 8,663 2.2 %
First lien senior secured revolving loan 8.57% (S + 6.25%) 4/22/2026 1,378 1,351 1,378 0.4 %
Trademark Global LLC First lien senior secured delayed draw loan 7.92% (L + 6.25%) 7/30/2024 - - - 0.0 %
First lien senior secured loan 7.92% (L + 6.25%) 7/30/2024 11,452 11,366 11,051 2.8 %
First lien senior secured revolving loan 7.92% (L + 6.25%) 7/30/2024 2,880 2,859 2,779 0.7 %
28,513 28,218 28,011 7.2 %
Machinery
Pennsylvania Machine Works, LLC First lien senior secured loan 8.57% (S + 6.25%) 3/6/2027 2,019 2,000 2,019 0.5 %
2,019 2,000 2,019 0.5 %
Personal products
DRS Holdings III, Inc. (Dr. Scholl’s) First lien senior secured loan 7.42% (L + 5.75%) 11/1/2025 11,805 11,710 11,805 3.0 %
First lien senior secured revolving loan 7.42% (L + 5.75%) 11/1/2025 - - - 0.0 %
PH Beauty Holdings III, Inc. First lien senior secured loan 6.57% (L + 5.00%) 9/28/2025 9,592 9,281 9,472 2.5 %
21,397 20,991 21,277 5.5 %
Pharmaceuticals
Foundation Consumer Brands First lien senior secured loan 6.92% (L + 5.50%) 2/12/2027 8,069 8,005 8,069 2.1 %
First lien senior secured revolving loan 6.92% (L + 5.50%) 2/12/2027 - - - 0.0 %
8,069 8,005 8,069 2.1 %
Professional services
4 Over International, LLC First lien senior secured loan 8.25% (L + 6.50%) 12/7/2023 2,475 2,419 2,475 0.6 %
First lien senior secured loan 8.25% (L + 6.50%) 12/7/2023 22,126 21,625 22,126 5.7 %
24,601 24,044 24,601 6.3 %
See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.
Consolidated Schedule of Investments
As of June 30, 2022
(amounts in 000’s)
(Unaudited)

Interest Maturity Principal/ Amortized Fair Percentage
Portfolio Company⁽¹⁾ Investment Rate Date Par Cost⁽²⁾⁽³⁾ Value of Net Assets
Debt and Equity Investments
Private Credit Investments⁽⁴⁾
Software
Peak Technologies First lien senior secured loan 8.58% (S + 6.50%) 4/1/2026 10,532 10,322 10,532 2.7 %
First lien senior secured loan 8.72% (L + 7.05%) 4/1/2026 397 390 397 0.1 %
First lien senior secured loan 8.74% (L + 6.50%) 4/1/2026 659 646 659 0.2 %
First lien senior secured loan 8.62% (L + 6.95%) 4/1/2026 3,742 3,668 3,742 1.0 %
First lien senior secured loan 8.68% (L + 7.09%) 4/1/2026 929 911 929 0.2 %
First lien senior secured loan 8.76% (L + 7.09%) 4/1/2026 12,704 12,594 12,704 3.2 %
28,963 28,531 28,963 7.4 %
Specialty retail
Sundance Holdings Group, LLC (5) First lien senior secured loan 8.11% (L + 6.00%) 5/1/2024 8,871 8,606 8,871 2.3 %
8,871 8,606 8,871 2.3 %
Textiles, apparel & luxury goods
BEL USA, LLC First lien senior secured loan 7.42% (S + 6.00% includes 1.275% PIK) 11/2/2023 114 113 114 0.0 %
First lien senior secured loan 7.42% (S + 6.00%) 11/2/2023 6,928 6,843 6,928 1.8 %
YS Garments, LLC First lien senior secured loan 7.54% (L + 5.50%) 8/9/2024 7,821 7,696 7,821 2.0 %
14,863 14,652 14,863 3.8 %
Trading companies & distributors
Broder Bros., Co. First lien senior secured loan 7.39% (L + 6.00%) 12/2/2022 4,824 4,685 4,824 1.2 %
CGI Automated Manufacturing, LLC First lien senior secured delayed draw loan 8.32% (S + 6.50%) 6/17/2023 3,757 3,652 3,757 1.0 %
First lien senior secured loan 8.32% (S + 6.50%) 12/17/2026 3,293 3,204 3,293 0.8 %
First lien senior secured loan 8.32% (S + 6.50%) 12/17/2026 18,016 17,473 18,016 4.6 %
First lien senior secured revolving loan 8.32% (S + 6.50%) 12/17/2026 - - - 0.0 %
EIS Legacy, LLC First lien senior secured delayed draw loan 7.07% (L + 5.50%) 5/1/2023 - - - 0.0 %
First lien senior secured loan 7.07% (L + 5.50%) 11/1/2026 18,369 17,943 18,369 4.7 %
First lien senior secured revolving loan 7.07% (L + 5.50%) 11/1/2026 - - - 0.0 %
I.D. Images Acquisition, LLC First lien senior secured delayed draw loan 8.50% (L + 6.25%) 1/30/2023 2,621 2,599 2,621 0.7 %
First lien senior secured loan 8.50% (L + 6.25%) 7/30/2026 8,369 8,243 8,369 2.1 %
First lien senior secured loan 8.50% (L + 6.25%) 7/30/2026 1,100 1,083 1,100 0.3 %
First lien senior secured loan 8.50% (L + 6.25%) 7/30/2026 6,023 5,972 6,023 1.6 %
First lien senior secured revolving loan 8.50% (L + 6.25%) 7/30/2026 1,152 1,122 1,152 0.3 %
Refrigeration Sales Corp. First lien senior secured loan 8.60% (L + 6.50%) 6/22/2026 6,910 6,813 6,910 1.8 %
See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.
Consolidated Schedule of Investments
As of June 30, 2022
(amounts in 000’s)
(Unaudited)
Interest Maturity Principal/ Amortized Fair Percentage
Portfolio Company⁽¹⁾ Investment Rate Date Par Cost⁽²⁾⁽³⁾ Value of Net Assets
Debt and Equity Investments
Private Credit Investments⁽⁴⁾

United Safety & Survivability Corporation (USSC) First lien senior secured delayed draw loan 8.50% (L + 6.00%) 9/30/2023 - - - 0.0 %
First lien senior secured loan 8.50% (L + 6.00%) 9/30/2027 12,627 12,405 12,500 3.2 %
First lien senior secured revolving loan 8.50% (L + 6.00%) 9/30/2027 803 783 795 0.2 %
87,864 85,977 87,729 22.5 %
Wireless telecommunication services
Centerline Communications, LLC First lien senior secured delayed draw loan 7.05% (S + 5.50%) 8/10/2023 7,152 7,026 7,152 1.8 %
First lien senior secured delayed draw loan 7.05% (S + 5.50%) 8/10/2023 1,411 1,336 1,411 0.4 %
First lien senior secured loan 7.05% (S + 5.50%) 8/10/2027 9,219 9,051 9,219 2.4 %
First lien senior secured loan 7.05% (S + 5.50%) 8/10/2027 5,955 5,820 5,955 1.5 %
First lien senior secured revolving loan 7.05% (S + 5.50%) 8/10/2027 - - - 0.0 %
23,737 23,233 23,737 6.1 %
Total Private Credit Debt Investments 718,290 705,076 716,581 183.9 %
Number Fair Percentage
of Units Cost Value of Net Assets
Private Equity Investments
Auto components
Vehicle Accessories, Inc. - Class A common (6)(7) 128.250 - - 0.0 %
Vehicle Accessories, Inc. - preferred (6)(7) 250.000 250 258 0.1 %
378.250 250 258 0.1 %
Commercial services & supplies
American Equipment Holdings LLC (6) 250.000 250 250 0.1 %
BLP Buyer, Inc. (Bishop Lifting Products) - Class A common (6)(8) 500.000 500 500 0.1 %
750.000 750 750 0.2 %
Food products
Siegel Parent, LLC (9) 0.250 250 375 0.1 %
Total Private Equity Investments 1,128.500 1,250 1,383 0.4 %

Total Private Investments 706,326 717,964 184.3 %
See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.
Consolidated Schedule of Investments
As of June 30, 2022
(amounts in 000’s)
(Unaudited)
Number of Fair Percentage
Shares Cost Value of Net Assets
Short-Term Investments
First American Treasury Obligations Fund - Institutional Class Z, 1.27% (10) 8,405 8,405 8,405 2.2 %
Total Short-Term Investments 8,405 8,405 8,405 2.2 %

Total Investments $ 714,731 $ 726,369 186.5 %

Liabilities in Excess of Other Assets (336,606 ) (86.5 )%
Net Assets $ 389,763 100.0 %
(1) As of June 30, 2022, 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) 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.
(3) As of June 30, 2022, the tax cost of the Company’s investments approximates their amortized cost.
(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 Offered Rate (“LIBOR” or “L”) (which can include one-, two-, three- or six-month LIBOR), 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).
(5) 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.
(6) Non-income producing security.
(7) The Company owns 0.19% of the common equity and 0.43% of the preferred equity of Vehicle Accessories, Inc.
(8) The Company owns 0.53% of the common equity BLP Buyer, Inc. (Bishop Lifting Products).
(9) The Company owns 50% of a pass-through LLC, KSCF IV Equity Aggregator, LLC (the “Aggregator”), which holds 500 Class A units of Siegel Parent, LLC. The Aggregator’s ownership of Siegel Parent, LLC is 1.14%. Through the Company’s ownership of the Aggregator, the Company owns 250 Class A units of Siegel Parent, LLC.
(10) The indicated rate is the yield as of June 30, 2022.
See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.
Consolidated Schedule of Investments
As of December 31, 2021
(amounts in 000’s)
Portfolio Company⁽¹⁾ Investment Interest
Rate Maturity
Date Principal/
Par Amortized
Cost⁽²⁾⁽³⁾ Fair
Value Percentage
of Net Assets
Debt and Equity Investments
Private Credit Investments⁽⁴⁾
Automobiles & components
Speedstar Holding LLC First lien senior secured loan 8.00% (L + 7.00%) 1/22/2027 $ 5,005 $ 4,906 $ 5,055 1.6 %
First lien senior secured delayed draw loan 8.00% (L + 7.00%) 1/22/2027 - - - 0.0 %
Vehicle Accessories, Inc. First lien senior secured loan 6.50% (L + 5.50%) 11/30/2026 18,382 18,034 18,382 5.9 %
First lien senior secured revolving loan 6.50% (L + 5.50%) 11/30/2026 - - - 0.0 %
23,387 22,940 23,437 7.5 %
Capital goods
Blade (US) Holdings, Inc. First lien senior secured loan 7.00% (L + 6.00%) 8/31/2027 4,866 4,763 4,866 1.6 %
First lien senior secured delayed draw loan 7.00% (L + 6.00%) 3/3/2023 - - - 0.0 %
Broder Bros., Co. First lien senior secured loan 8.00% (L + 7.00%) 12/2/2022 5,369 5,044 5,369 1.7 %
CGI Automated Manufacturing, LLC First lien senior secured loan 6.50% (L + 5.50%) 12/17/2026 18,478 18,020 18,478 5.9 %
First lien senior secured delayed draw loan 6.50% (L + 5.50%) 12/17/2026 - - - 0.0 %
First lien senior secured revolving loan 6.50% (L + 5.50%) 12/17/2026 - - - 0.0 %
Eastern Wholesale Fence First lien senior secured revolving loan 8.00% (L + 7.00%) 10/30/2025 1,035 1,002 1,035 0.3 %
First lien senior secured loan 8.00% (L + 7.00%) 10/30/2025 3,317 3,210 3,317 1.1 %
First lien senior secured loan 8.00% (L + 7.00%) 10/30/2025 18,384 17,873 18,384 5.9 %
EIS Legacy, LLC First lien senior secured loan 6.50% (L + 5.50%) 11/1/2027 18,462 17,998 18,462 5.9 %
First lien senior secured delayed draw loan 6.50% (L + 5.50%) 11/1/2027 - - - 0.0 %
First lien senior secured revolving loan 6.50% (L + 5.50%) 11/1/2027 - - - 0.0 %
Fastener Distribution Holdings, LLC First lien senior secured delayed draw loan 8.00% (L + 7.00%) 4/1/2022 2,205 2,194 2,205 0.7 %
First lien senior secured loan 8.00% (L + 7.00%) 4/1/2022 1,942 1,939 1,942 0.6 %
I.D. Images Acquisition, LLC First lien senior secured delayed draw loan 7.25% (L + 6.25%) 1/30/2023 2,634 2,609 2,634 0.9 %
First lien senior secured revolving loan 7.25% (L + 6.25%) 7/30/2026 450 420 450 0.2 %
First lien senior secured loan 7.25% (L + 6.25%) 7/30/2026 15,570 15,353 15,570 5.0 %
Refrigeration Sales Corp. First lien senior secured loan 7.50% (L + 6.50%) 6/22/2026 6,945 6,835 6,945 2.2 %
United Safety & Survivability Corporation (USSC) First lien senior secured loan 7.00% (L + 6.00%) 9/30/2027 12,690 12,439 12,690 4.1 %
First lien senior secured revolving loan 7.00% (L + 6.00%) 9/30/2027 402 379 402 0.1 %
First lien senior secured delayed draw loan 7.00% (L + 6.00%) 9/30/2023 - - - 0.0 %
112,749 110,078 112,749 36.2 %
Commercial & professional services
4 Over International, LLC First lien senior secured loan 7.50% (L + 6.50%) 10/29/2027 24,875 24,249 24,875 8.0 %
See accompanying notes to consolidated financial statements.
13
Kayne Anderson BDC, Inc.
Consolidated Schedule of Investments
As of December 31, 2021
(amounts in 000’s)
Portfolio Company⁽¹⁾ Investment Interest
Rate Maturity
Date Principal/
Par Amortized
Cost⁽²⁾⁽³⁾ Fair
Value Percentage
of Net Assets
Debt and Equity Investments
Private Credit Investments⁽⁴⁾
Advanced Environmental Monitoring (5) First lien senior secured loan 8.00% (L + 7.00%) 1/29/2026 7,372 7,159 7,372 2.4 %
American Equipment Holdings LLC First lien senior secured delayed draw loan 7.00% (L + 6.00%) 11/3/2026 6,367 6,242 6,367 2.1 %
First lien senior secured revolving loan 7.00% (L + 6.00%) 11/3/2026 425 383 425 0.1 %
First lien senior secured loan 7.00% (L + 6.00%) 11/3/2026 16,511 16,188 16,511 5.3 %
Arborworks Acquisition LLC First lien senior secured revolving loan 7.00% (L + 6.00%) 11/9/2026 1,469 1,378 1,469 0.5 %
First lien senior secured loan 8.00% (L + 7.00%) 11/9/2026 20,312 19,914 20,312 6.5 %
Gusmer Enterprises, Inc. First lien senior secured delayed draw loan 7.00% (L + 6.00%) 5/7/2027 4,737 4,641 4,737 1.5 %
First lien senior secured revolving loan 7.00% (L + 6.00%) 5/7/2027 - - - 0.0 %
First lien senior secured loan 7.00% (L + 6.00%) 5/7/2027 3,500 3,388 3,500 1.1 %
PMFC Holding, LLC First lien senior secured delayed draw loan 7.50% (L + 6.50%) 7/31/2023 2,847 2,829 2,847 0.9 %
First lien senior secured loan 7.50% (L + 6.50%) 7/31/2023 5,676 5,639 5,676 1.8 %
First lien senior secured revolving loan 7.50% (L + 6.50%) 7/31/2023 - - - 0.0 %
Regiment Security Partners LLC First lien senior secured loan 8.00% (L + 7.00%) 9/15/2026 6,539 6,389 6,539 2.1 %
First lien senior secured delayed draw loan 8.00% (L + 7.00%) 9/15/2023 - - - 0.0 %
First lien senior secured revolving loan 8.00% (L + 7.00%) 9/15/2026 - - - 0.0 %
The Kleinfelder Group, Inc. First lien senior secured loan 6.25% (L + 5.25%) 11/15/2027 12,889 12,766 12,889 4.1 %
113,519 111,165 113,519 36.4 %
Consumer durables & apparel
BCI Burke Holding Corp. First lien senior secured loan 6.75% (L + 5.75%) 12/14/2027 17,303 16,997 17,303 5.5 %
First lien senior secured revolving loan 6.75% (L + 5.75%) 6/14/2027 389 360 389 0.1 %
First lien senior secured delayed draw loan 6.75% (L + 5.75%) 12/14/2023 - - - 0.0 %
BEL USA, LLC First lien senior secured loan 9.50% (L + 8.00%) 11/2/2023 148 147 146 0.0 %
First lien senior secured loan 8.50% (L + 7.00%, includes 1.275% PIK) 11/2/2023 8,988 8,835 8,853 2.8 %
Curio Brands, LLC First lien senior secured loan 6.50% (L + 5.50%) 12/21/2027 18,054 17,575 18,054 5.8 %
First lien senior secured delayed draw loan 6.50% (L + 5.50%) 12/21/2023 - - - 0.0 %
First lien senior secured revolving loan 6.50% (L + 5.50%) 12/21/2027 - - - 0.0 %
MacNeill Pride Group First lien senior secured revolving loan 7.50% (L + 6.50%) 4/22/2026 1,429 1,407 1,429 0.5 %
First lien senior secured delayed draw loan 7.50% (L + 6.50%) 4/22/2026 1,961 1,937 1,961 0.6 %
First lien senior secured loan 7.50% (L + 6.50%) 4/22/2026 8,706 8,598 8,706 2.8 %
See accompanying notes to consolidated financial statements.
14
Kayne Anderson BDC, Inc.
Consolidated Schedule of Investments
As of December 31, 2021
(amounts in 000’s)
Portfolio Company⁽¹⁾ Investment Interest
Rate Maturity
Date Principal/
Par Amortized
Cost⁽²⁾⁽³⁾ Fair
Value Percentage
of Net Assets
Debt and Equity Investments
Private Credit Investments⁽⁴⁾
New Era Cap Company, Inc. First lien senior secured loan 7.50% (L + 6.50%) 9/10/2023 12,724 12,624 12,724 4.1 %
Trademark Global LLC First lien senior secured loan 7.00% (L + 6.00%) 7/30/2024 11,510 11,404 11,510 3.7 %
First lien senior secured revolving loan 7.00% (L + 6.00%) 7/30/2024 2,280 2,254 2,280 0.7 %
First lien senior secured delayed draw loan 7.00% (L + 6.00%) 7/30/2023 - - - 0.0 %
YS Garments, LLC First lien senior secured loan 7.00% (L + 6.00%) 8/9/2024 7,936 7,779 7,936 2.6 %
91,428 89,917 91,291 29.2 %
Diversified financials
Atria Wealth Solutions, Inc. First lien senior secured loan 7.00% (L + 6.00%) 11/30/2022 5,191 5,156 5,191 1.7 %
5,191 5,156 5,191 1.7 %

Food & beverage

Siegel Egg Co., LLC First lien senior secured loan 7.00% (L + 6.00%) 12/29/2026 15,742 15,450 15,742 5.1 %
First lien senior secured revolving loan 7.00% (L + 6.00%) 12/29/2026 1,029 966 1,029 0.3 %
16,771 16,416 16,771 5.4 %
Health care equipment & services
Brightview, LLC First lien senior secured loan 6.75% (L + 5.75%) 4/12/2024 13,133 12,956 13,133 4.2 %
First lien senior secured delayed draw loan 6.75% (L + 5.75%) 4/12/2024 - - - 0.0 %
First lien senior secured revolving loan 6.75% (L + 5.75%) 4/12/2024 - - - 0.0 %
Dermatologists of Southwestern Ohio, LLC First lien senior secured loan 9.50% (L + 8.50%) 4/20/2022 1,282 1,270 1,282 0.4 %
Guardian Dentistry Partners First lien senior secured loan 6.75% (L + 5.75%) 8/20/2026 8,222 7,860 8,222 2.6 %
First lien senior secured delayed draw loan 6.75% (L + 5.75%) 8/20/2026 - - - 0.0 %
OMH-HealthEdge Holdings, LLC First lien senior secured loan 6.50% (L + 5.25%) 10/24/2025 12,375 12,138 12,375 4.0 %
SGA Dental Partners Holdings, LLC First lien senior secured loan 6.50% (L + 5.50%) 12/30/2026 12,069 11,681 12,069 3.9 %
First lien senior secured delayed draw loan 6.50% (L + 5.50%) 12/30/2026 - - - 0.0 %
First lien senior secured revolving loan 6.50% (L + 5.50%) 12/30/2026 - - - 0.0 %
West Dermatology Management Holdings, LLC First lien senior secured loan 7.00% (L + 6.00%) 2/11/2025 1,975 1,957 1,975 0.6 %
49,056 47,862 49,056 15.7 %
Household & personal products
DRS Holdings III, Inc. (Dr. Scholl’s) First lien senior secured loan 6.75% (L + 5.75%) 11/1/2025 12,129 12,014 12,129 3.9 %
First lien senior secured revolving loan 6.75% (L + 5.75%) 11/1/2025 - - - 0.0 %
Home Brands Group Holdings, Inc. (ReBath) First lien senior secured loan 6.00% (L + 5.00%) 11/8/2026 20,988 20,537 20,988 6.7 %
First lien senior secured revolving loan 6.00% (L + 5.00%) 11/8/2026 - - - 0.0 %
PH Beauty Holdings III, Inc. First lien senior secured loan 5.18% (L + 5.00%) 9/28/2025 9,642 9,287 9,642 3.1 %
42,759 41,838 42,759 13.7 %
See accompanying notes to consolidated financial statements.
15
Kayne Anderson BDC, Inc.
Consolidated Schedule of Investments
As of December 31, 2021
(amounts in 000’s)
Portfolio Company⁽¹⁾ Investment Interest
Rate Maturity
Date Principal/
Par Amortized
Cost⁽²⁾⁽³⁾ Fair
Value Percentage
of Net Assets
Debt and Equity Investments
Private Credit Investments⁽⁴⁾
Materials
Cyalume Technologies Holdings, Inc. First lien senior secured loan 6.50% (L + 5.50%) 8/30/2024 1,657 1,644 1,657 0.5 %
Drew Foam Companies, Inc. First lien senior secured loan 7.00% (L + 6.00%) 11/5/2025 7,450 7,360 7,450 2.4 %
Fralock Buyer LLC First lien senior secured loan 6.50% (L + 5.50%) 4/17/2024 9,251 9,091 9,251 3.0 %
First lien senior secured loan 6.50% (L + 5.50%) 4/17/2024 2,453 2,413 2,453 0.8 %
First lien senior secured revolving loan 6.50% (L + 5.50%) 4/17/2024 - - - 0.0 %
USALCO, LLC First lien senior secured revolving loan 7.00% (L + 6.00%) 10/19/2026 191 142 191 0.1 %
First lien senior secured loan 7.00% (L + 6.00%) 10/19/2027 19,375 18,918 19,375 6.2 %
40,377 39,568 40,377 13.0 %

Pharmaceuticals, biotech & life sciences

Foundation Consumer Brands First lien senior secured loan 7.38% (L + 6.38%) 2/12/2027 8,485 8,407 8,485 2.7 %
First lien senior secured revolving loan 7.38% (L + 6.38%) 2/12/2027 - - - 0.0 %
8,485 8,407 8,485 2.7 %
Retailing
Sundance Holdings Group, LLC (5) First lien senior secured loan 7.00% (L + 6.00%) 5/1/2024 9,522 9,164 9,522 3.1 %
9,522 9,164 9,522 3.1 %
Software & services
Improving Acquisition LLC First lien senior secured loan 7.50% (L + 6.50%) 7/26/2024 603 598 603 0.2 %
Peak Technologies First lien senior secured loan 8.09% (L + 7.09%) 4/1/2026 12,800 12,678 12,800 4.1 %
First lien senior secured loan 7.50% (L + 6.50%) 4/1/2026 662 649 662 0.2 %
14,065 13,925 14,065 4.5 %
Telecommunication services
Centerline Communications, LLC First lien senior secured loan 6.50% (L + 5.50%) 8/10/2027 9,265 9,082 9,265 3.0 %
First lien senior secured delayed draw loan 6.50% (L + 5.50%) 8/10/2023 5,746 5,622 5,746 1.9 %
First lien senior secured revolving loan 6.50% (L + 5.50%) 8/10/2027 1,200 1,166 1,200 0.4 %
First lien senior secured loan 6.50% (L + 5.50%) 8/10/2027 5,985 5,870 5,985 1.9 %
Corbett Technology Solutions, Inc. First lien senior secured revolving loan 6.00% (L + 5.00%) 10/29/2027 381 248 381 0.1 %
First lien senior secured delayed draw loan 6.00% (L + 5.00%) 4/29/2023 9,530 9,435 9,530 3.1 %
First lien senior secured loan 6.00% (L + 5.00%) 10/27/2027 13,564 13,298 13,564 4.3 %
Network Connex (f/k/a NTI Connect, LLC) First lien senior secured loan 6.00% (L + 5.00%) 4/5/2026 5,302 5,209 5,302 1.7 %
50,973 49,930 50,973 16.4 %
Total Private Credit Debt Investments 578,282 566,366 578,195 185.5 %
See accompanying notes to consolidated financial statements.
16
Kayne Anderson BDC, Inc.
Consolidated Schedule of Investments
As of December 31, 2021
(amounts in 000’s)
Number of
Units Cost Fair
Value Percentage
of Net Assets
Equity Investments
Food & beverage
Siegel Parent, LLC (6) 0.250 250 250 0.1 %
Total Private Equity Investments 0.250 250 250 0.1 %

Total Private Investments $ 566,616 $ 578,445 185.6 %
Number of
Shares Cost Fair
Value Percentage
of Net Assets
Short-Term Investments
First American Treasury Obligations Fund - Institutional Class Z, 0.01% (7) 3,674 3,674 3,674 1.2 %
Total Short-Term Investments 3,674 3,674 3,674 1.2 %

Total Investments $ 570,290 $ 582,119 186.8 %

Liabilities in Excess of Other Assets (270,150 ) (86.8 )%
Net Assets $ 311,969 100.0 %
(1) As of December 31, 2021, 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) 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.
(3) As of ~~June 30,~~December 31, 2021, the tax cost of the Company’s investments approximates their amortized cost.
(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 Offered Rate (“LIBOR” or “L”) (which can include one-, two-, three- or six-month LIBOR) or an alternate base rate (which can include the Federal Funds Effective Rate or the Prime Rate).
(5) ~~Liquid credit investments are traded corporate bonds, loans or loan participations that are valued using~~The Company may be entitled to receive additional interest as a result of an arrangement with other lenders in the ~~bid price provided by an independent pricing service, by an independent broker,~~syndication. In exchange for the ~~agent bank, syndicate bank or~~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 ~~market maker. See Note 5 – Fair Value.~~and interest.
(6) ~~Investments or~~The Company owns 50% of a ~~portion~~pass-through LLC, KSCF IV Equity Aggregator, LLC (the “Aggregator”), which holds 500 Class A units of ~~such investments have yet to settle as~~Siegel Parent, LLC.  The Aggregator’s ownership of ~~June 30, 2021.~~
~~(7)~~ ~~Non-qualifying investment as defined by Section 55(a)~~Siegel Parent, LLC is 1.1442%. Through the Company’s ownership of the ~~Investment~~Aggregator, the Company ~~Act~~owns 250 Class A units 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 June 30, 2021, 0.1% of the Company’s total assets were in non-qualifying investments.  Siegel Parent, LLC.
~~(8)~~(7) The indicated rate is the yield as of ~~June 30,~~December 31, 2021.

See accompanying notes to consolidated financial statements.

17

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 qualify 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. The Company began incurring costs related to these activities in the third quarter of 2020. The Company was formed 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 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. ~~The~~
As of June 30, 2022, the Company has entered into subscription agreements with investors for an aggregate capital commitment of ~~$285,355~~$761,694 to purchase shares of the Company’s common ~~stock.~~stock (including a $13,250 capital commitment that is contingent on the Company meeting certain conditions). See Note 11 – Subsequent Events.

KA Credit Advisors, LLC (the “Advisor”) is an indirect subsidiary of Kayne Anderson Capital Advisors, L.P. (“KACALP” or “Kayne Anderson”). The Advisor is registered with the Securities and Exchange Commission (“SEC”) as an investment advisor under the Investment Advisory Act of 1940. 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 and monitoring its investments and portfolio companies on an ongoing basis. The Board consists of five directors, three of whom are independent (including the Board’s chairperson).

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.

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”) pursuant to a subscription agreement entered into with the Company. Investors will be required to fund drawdowns to purchase Shares 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 Shares (the ~~��Initial~~“Initial Public Offering”) or the listing of Shares 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”), and KABDC Corp, LLC, in its consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation.

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.

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”).

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, 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’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, the following valuation process is used for the Company’s Level 3 investments:

● Investment Team Valuation. The applicable investments are valued by senior professionals of Kayne Anderson who are responsible for the portfolio investments. The value of each portfolio company or investment will be initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments (i.e., illiquid securities/instruments), 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 investments will be valued no less frequently than quarterly, with new investments valued at the time such investment was made.

● 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 committee of the Board) and 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 officers of the Company are authorized to make valuation determinations. All valuation determinations of the Audit Committee are subject to ratification by the Board at its next regular meeting.
● Valuation Firm. Quarterly, third-party valuation firms engaged by the Board review the valuation methodologies and calculations employed for each of the Company’s investments that the Company has placed on the “watch list” and approximately 25% of its remaining investments. These third-party valuation firms will review 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 these third-party valuation firms will assist the Board in determining the fair values of the investments reviewed.
● Board Determination. The Company’s Board meets 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 firms in reviewing and determining in good faith the fair value of the applicable portfolio investments.

Kayne Anderson BDC, Inc.
Notes to Consolidated Financial Statements
(amounts in 000’s, except share and per share amounts)
(Unaudited)

The Board of Directors will be ultimately responsible for the determination, in good faith, of the fair value of our portfolio investments. Determination of fair value involves subjective judgments and estimates. Accordingly, the notes to our financial statements will express the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our 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. 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.

~~Kayne Anderson BDC, Inc.~~
~~Notes to Consolidated Financial Statements~~
~~(amounts in 000’s, except share and per share amounts)~~
~~(Unaudited)~~

Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon the Company’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are paid or there is no longer any 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.

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—Distributions 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.

I. Organizational Costs—organizational expenses include costs and expenses relating to the formation and organization of the Company. The Company has ~~agreed to reimburse~~reimbursed 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~~were capitalized as deferred offering expenses and included in prepaid expenses and other assets on the Statement of Assets and Liabilities. These costs ~~are~~were 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~~reimbursed 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~~(October 15th).

Kayne Anderson BDC, Inc.
Notes to Consolidated Financial Statements
(amounts in 000’s, except share and per share amounts)
(Unaudited)

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, payable to stockholders of record on a date during such months and paid by the Company during 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~~may be treated as an additional distribution to shareholders. A non-corporate shareholder’s allocable portion of these expenses ~~are~~may be 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.

~~Kayne Anderson BDC, Inc.~~
~~Notes to Consolidated Financial Statements~~
~~(amounts in 000’s, except share and per share amounts)~~
~~(Unaudited)~~
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~~ceased 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~~The LIBOR transition has become increasingly well-defined in advance of its anticipated discontinuation, but uncertainty remains 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 fully the ~~full impact~~ultimate outcome of ~~the elimination of LIBOR and the establishment of an alternative reference rate on the Company or its investments.~~these changes.

M. 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.

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 Company has agreed to reimburse the Advisor and its affiliates for the third-party costs incurred on its behalf in connection with the formation and the 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 forms of leverage, 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 be 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 forms of leverage, 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 three ~~and six~~ months ended June 30, 2022 and 2021, the Company incurred base management fees of $1,498 and $422, respectively.
For the six months ended June 30, 2022 and 2021, the Company incurred base management fees of $2,824 and $598, 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. The Company’s quarterly pre-incentive fee net investment income must exceed a preferred return of 1.50% of the Company’s ~~NAV~~net 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. The income incentive fee is calculated as follows:

● 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 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.

● 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 at the end of the immediately preceding calendar quarter 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

The incentive fee on capital gains (the “capital gains incentive fee”) will be calculated and payable in arrears in cash as follows:

● Prior to an Exchange Listing: ~~10.0%~~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, less the aggregate amount of any previously paid capital gain incentive fees.~~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.

● After an Exchange Listing: ~~15.0%~~15% 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.

For the three months ended June 30, 2022, the Company incurred incentive fees on income of $775 (none on capital gains).
For the three months ended June 30, 2021 the Company did not incur any incentive fees on income or capital gains.
For the six months ended June 30, 2022, the Company incurred incentive fees on income of $1,728 and on capital gains of $2 (total of $1,730).
For the six months ended June 30, 2021, the Company did not incur any incentive fee on income or capital gains.

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

On February 5, 2021, the Company purchased its initial portfolio of investments for $103,031 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 per share for an aggregate offering ~~price~~amount of $85,000) to investors and with borrowings under the Company’s credit facility.

The initial portfolio purchased from the ~~Warehouse~~Warehousing Entity consisted of 18 loans, with an average outstanding balance of $5,876, 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.”

Kayne Anderson BDC, Inc.
Notes to Consolidated Financial Statements
(amounts in 000’s, except share and per share amounts)
(Unaudited)

Note 4. Investments

The following table presents the composition of the Company’s investment portfolio at amortized cost and fair value as of June 30, 2022 and December 31, 2021:

June 30,
2021 June 30,
2022 December 31,
2021
Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value
First-lien senior secured debt investments $ 214,828 $ 218,838 $ 705,076 $ 716,581 $ 566,366 $ 578,195
Senior unsecured debt investments 852 863
Equity investments 1,250 1,383 250 250
Short-term investments 4,622 4,622 8,405 8,405 3,674 3,674
Total Investments $ 220,302 $ 224,323 $ 714,731 $ 726,369 $ 570,290 $ 582,119

As of June 30, 2022 and December 31, 2021, ~~$300~~all of the Company’s ~~total assets~~investments were ~~in non-qualifying~~qualifying assets as defined by Section 55(a) of the 1940 Act. ~~These were liquid credit investments in LSF11 Skyscraper HoldCo S.a.r.l. and Vocus Group Limited (f/k/a Vocus Communications).~~
Beginning with the three months ended March 31, 2022, the Company uses Global Industry Classification Standards (GICS), Level 3 – Industry, for classifying the industry groupings of its portfolio companies. As of December 31, 2021, the Company used GICS, Level 2 – Industry Group.

The industry composition of long-term investments based on fair value as of June 30, 2022 and December 31, 2021 was as follows:

June 30,
~~2021~~2022
Commercial services & supplies 17.9 %
~~Consumer durables and apparel~~Trading companies & distributors ~~18.7~~12.2 %
~~Materials~~ ~~15.4~~ %
~~Capital goods~~ ~~12.7~~ %
~~Commercial & professional services~~ ~~9.9~~ %
~~Household & personal products~~ ~~9.8~~ %
~~Healthcare equipment~~Health care providers & services ~~7.0~~12.1 %
Food ~~beverage & tobacco~~products ~~6.6~~7.2 %
~~Retailing~~Building products ~~4.3~~5.6 %
~~Pharmaceuticals, biotech & life sciences~~Chemicals ~~4.2~~4.7 %
~~Telecommunication~~Diversified telecommunication services ~~2.9~~4.4 %
~~Automobiles &~~Software 4.0 %
Leisure products 3.9 %
Auto components ~~2.5~~3.9 %
~~Diversified financials~~Professional services ~~2.4~~3.4 %
~~Software~~Wireless telecommunication services 3.3 %
Household durables 3.2 %
Personal products 3.0 %
Household products 2.8 %
Textiles, apparel & ~~services~~luxury goods 2.1 %
Aerospace & defense 1.5 %
Specialty retail 1.2 %
~~Transportation~~Pharmaceuticals 1.1 %
Containers & packaging 1.0 %
~~Energy~~Asset management & custody banks 0.7 %
~~Consumer~~Electronic equipment, instruments & components 0.4 %
Machinery 0.3 %
IT services ~~0.5~~ %
~~Media & entertainment~~ 0.1 %
~~Technology hardware & equipment~~ ~~0.1~~ %
~~Chemicals~~ ~~0.0~~ %
Total 100.0 %

Kayne Anderson BDC, Inc.
Notes to Consolidated Financial Statements
(amounts in 000’s, except share and per share amounts)
(Unaudited)

December 31,
2021
Commercial & professional services 19.6 %
Capital goods 19.5 %
Consumer durables & apparel 15.8 %
Telecommunication services 8.8 %
Health care equipment & services 8.5 %
Household & personal products 7.4 %
Materials 7.0 %
Automobiles & components 4.1 %
Food & beverage 2.9 %
Software & services 2.4 %
Retailing 1.6 %
Pharmaceuticals, biotech & life sciences 1.5 %
Diversified financials 0.9 %
Total 100.0 %
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 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 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 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.

The following ~~table~~tables presents the fair value hierarchy of investments as of June 30, 2022 and December 31, 2021. 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 June 30, 2021
Investments: Level 1 Level 2 Level 3 Total
First-lien senior secured debt investments $ - $ 13,679 $ 205,159 $ 218,838
Senior unsecured debt investments - 863 - 863
Short-term investments $ 4,622 $ - $ - $ 4,622
Total Investments $ 4,622 $ 14,542 $ 205,159 $ 224,323
~~For the six months ended June 30, 2021, the Company did not recognize any transfers to or from Level 3.~~
Fair Value Hierarchy as of June 30, 2022
Investments: Level 1 Level 2 Level 3 Total
First-lien senior secured debt investments $ - $        - $ 716,581 $ 716,581
Private equity investments - - 1,383 1,383
Short-term investments 8,405 - - 8,405
Total Investments $ 8,405 $ - $ 717,964 $ 726,369

Kayne Anderson BDC, Inc.
Notes to Consolidated Financial Statements
(amounts in 000’s, except share and per share amounts)
(Unaudited)

Fair Value Hierarchy as of December 31, 2021
Investments: Level 1 Level 2 Level 3 Total
First-lien senior secured debt investments $ - $       - $ 578,195 $ 578,195
Private equity investments - - 250 250
Short-term investments 3,674 - - 3,674
Total Investments $ 3,674 $ - $ 578,445 $ 582,119
The following ~~table presents~~tables 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 three and six months ended June 30, 2022 and 2021:

For the three months ended
June 30,
2021

For the three months ended June 30, 2022 First-lien
senior secured
debt
investments Private
equity
investments Total
Fair value, beginning of period $ 151,957 $ 616,067 $ 1,000 $ 617,067
Purchases of investments 55,122 114,678 250 114,928
Proceeds from principal payments and sales of investments (3,344 )
Proceeds from sales of investments and principal repayments (15,615 ) - (15,615 )
Net change in unrealized gain (loss) 1,126 189 133 322
Net realized gain (loss) - - -
Net accretion of discount on investments 298 1,262 - 1,262
Transfers into (out of) Level 3 - - - -
Fair value, end of period $ 205,159 $ 716,581 $ 1,383 $ 717,964

For the six months ended
June 30,
2021

For the three months ended June 30, 2021 First-lien
senior secured
debt investments Private
equity
investments Total
Fair value, beginning of period $ - $ 151,957 $             - $ 151,957
Purchases of investments 204,434 55,122 - 55,122
Proceeds from principal payments and sales of investments (3,649 )
Proceeds from sales of investments and principal repayments (3,344 ) - (3,344 )
Net change in unrealized gain (loss) 3,908 1,126 - 1,126
Net realized gain (loss) - - -
Net accretion of discount on investments 466 298 - 298
Transfers into (out of) Level 3 - - - -
Fair value, end of period $ 205,159 $ 205,159 $ - $ 205,159

Kayne Anderson BDC, Inc.
Notes to Consolidated Financial Statements
(amounts in 000’s, except share and per share amounts)
(Unaudited)
For the six months ended June 30, 2022 First-lien
senior secured
debt investments Private
equity
investments Total
Fair value, beginning of period $ 578,195 $ 250 $ 578,445
Purchases of investments 180,452 1,000 181,452
Proceeds from sales of investments and principal repayments (43,777 ) - (43,777 )
Net change in unrealized gain (loss) (323 ) 133 (190 )
Net realized gain (loss) 23 - 23
Net accretion of discount on investments 2,011 - 2,011
Transfers into (out of) Level 3 - - -
Fair value, end of period $ 716,581 $ 1,383 $ 717,964
For the six months ended June 30, 2021
First-lien
senior secured
debt investments
Private
Equity
investments Total
Fair value, beginning of period $ - $                 - $ -
Purchases of investments 204,434 - 204,434
Proceeds from sales of investments and principal repayments (3,649 ) - (3,649 )
Net change in unrealized gain (loss) 3,908 - 3,908
Net realized gain (loss) - - -
Net accretion of discount on investments 466 - 466
Transfers into (out of) Level 3 - -
Fair value, end of period $ 205,159 $ - $ 205,159

For the three and six months ended June 30, 2022 and 2021, 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
(amounts in 000’s, except share and per share amounts)
(Unaudited)

Valuation Techniques and Unobservable Inputs

Non-traded debt investments are typically valued using either a market yield analysis or an enterprise value analysis. For debt investments that are not determined to be credit impaired, the Company uses a market yield analysis to determine fair value. If the debt investment is credit impaired (which is determined by performing an enterprise value analysis), the Company will use the enterprise value analysis or a liquidation basis analysis to determine fair value. As of June 30, ~~2021,~~2022, none of the Company’s non-traded debt investments were determined to be credit impaired, and the Company used a market yield analysis to determine fair value on these investments.

To determine the estimated market yield for our debt investments, the Company 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 credit spread for such debt investment. In this context, 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 as well as the financial performance of such business. In performing this analysis, the Company 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 Company estimates the enterprise value of the business and compares such estimate to the outstanding indebtedness of such business. 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) discounted cash flows (“DCF analysis”) and (iv) other valuation methodologies.

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 analysis, (ii) precedent transaction analysis and (iii) DCF analysis.
Under all of these valuation techniques, the Company estimates operating results of the companies in which we invest, 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).

Kayne Anderson BDC, Inc.
Notes to Consolidated Financial Statements
(amounts in 000’s, except share and per share amounts)
(Unaudited)
Quantitative Table for Valuation Techniques

As of June 30, 2021
Fair Valuation Unobservable Weighted
Value Technique Input Range Average
First-lien senior secured debt investments $ 205,159 Market Yield Analysis Credit Spreads 5.00% - 8.50% 6.19%
The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 investments as of June 30, 2022 and December 31, 2021. The table is not intended to be all-inclusive but instead captures the significant unobservable inputs relevant to the Company’s determination of fair value.
As of June 30, 2022
Fair
Value Valuation
Technique Unobservable
Input Range Weighted
Average
First-lien senior secured debt investments $ 716,581 Market Approach - Yield Analysis Credit Spreads 5.00% - 8.50% 6.01 %
Private equity investments $ 1,008 Precedent Transaction Analysis Transaction Price 1.0 1.0
$
375

Precedent Transaction Analysis
EBITDA Multiples
9.00% - 9.00%

9.00
%
$ 717,964
As of December 31, 2021
Fair
Value Valuation
Technique Unobservable
Input Range Weighted
Average
First-lien senior secured debt investments $ 578,195 Market Approach - Yield Analysis Credit Spreads 5.00% - 8.50% 6.00 %
Private equity investments $ 250 Precedent Transaction Analysis Transaction Price 1.0 1.0
$ 578,445

Note 6. Debt

~~Loan~~Subscription Credit Agreement
As of June 30, 2022, the Company had a $175,000 credit agreement (the “Subscription Credit Agreement”) with certain lenders party thereto. The Subscription Credit Agreement permits the Company to borrow up to $175,000, subject to availability under the borrowing base which is calculated based on the unused capital commitments of the investors meeting various eligibility requirements. The interest rate under the Subscription Credit Agreement is equal to SOFR plus 1.975% (subject to a 0.275% SOFR floor). The Company is also required to pay a commitment fee of 0.25% per annum on any unused portion of the Subscription Credit Agreement. The Subscription Credit Agreement will expire on December 31, 2022. See Note 11 – Subsequent Events.
For the six months ended June 30, 2022 and ~~Security~~2021, the average amount of borrowings outstanding under the Subscription Credit Agreement was $54,110 and $15,911, respectively, with a weighted average interest rate of 2.50% and 2.26%, respectively. As of June 30, 2022, the Company had $114,000 outstanding under the Subscription Credit Agreement at a weighted average interest rate of 3.40%.

Kayne Anderson BDC, Inc.
Notes to Consolidated Financial Statements
(amounts in 000’s, except share and per share amounts)
(Unaudited)
Corporate Credit Facility

On February ~~5, 2021,~~18, 2022, the Company entered into a senior secured revolving credit facility (the “Corporate Credit Facility”), that has a total commitment of $275,000. 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 feature that allows the Company, under certain circumstances, to increase the overall size of the Corporate Credit Facility to a maximum of $550,000. 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 (which includes a SOFR adjustment spread of 0.10%) 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 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 incurrence 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 Corporate 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 secured by certain assets in the Company’s portfolio and excludes investments held by Kayne Anderson BDC Financing LLC (“KABDCF”), under the Revolving Funding Facility (as defined below).
For the six months ended June 30, 2022, the average amount of borrowings outstanding under the Corporate Credit Facility was $57,315 with a ~~newly-formed, wholly-owned, special purposes financing subsidiary,~~ weighted average interest rate of 2.91%. As of June 30, 2022, the Company had $78,000 outstanding under the Corporate Credit Facility at a weighted average interest rate of 3.20%. See Note 11 – Subsequent Events.
Revolving Funding Facility
On February 18, 2022, the Company and KABDCF entered into a senior secured revolving funding facility (the “Revolving Funding Facility”), that has a total commitment of $250,000. 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 2.35% 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, 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.
For the six months ended June 30, 2022, the average amount of borrowings outstanding under the Revolving Funding Facility was $110,221 with a weighted average interest rate of 2.80%. As of June 30, 2022, the Company had $150,000 outstanding under the Revolving Funding Facility at a weighted average interest rate of 3.79%.
Loan and Security Agreement
On February 18, 2022, the Company and KABDCF established two new credit facilities (described above) and fully repaid the $150,000 outstanding balance on the Loan and Security Agreement (the “LSA”) with certain lenders party thereto, administrative agent, and the Advisor as collateral manager. The maximum commitment of the LSA is up to $150,000, and, subject to certain conditions, may be increased, which was entered into by ~~$50,000 up to two times not to exceed $250,000. The Company did not pay an upfront fee for entering into the LSA.~~KABDCF in February 2021. Advances under ~~the facility bear~~LSA had an interest rate of LIBOR plus 4.25% (subject to a 1.00% LIBOR floor). ~~In addition, if the Company terminates the LSA prior to February 5, 2022, there will be a 2.00% prepayment fee. The facility has a term of three years.~~

For the six months ended ~~June 30, 2021,~~2022, the average amount of borrowings outstanding under the LSA ~~was $45,568~~were $41,105 with ~~a weighted average interest rate of 5.25%. As of June 30, 2021, the Company had $50,000 outstanding under the LSA at~~ a weighted average interest rate of 5.25%.

Kayne Anderson BDC, Inc.
Notes to Consolidated Financial Statements
(amounts in 000’s, except share and per share amounts)
(Unaudited)
~~Credit Agreement~~
On February 5, 2021, the Company entered into a $75,000 credit agreement (the “Credit Agreement”) with certain lenders party thereto. The Credit Agreement is comprised of two sub-facilities: (i) a capital call facility (the “Subscription Facility”) and (ii) a treasury facility (the “Treasury Facility”). The interest rate under the Subscription Facility is equal to LIBOR plus 1.90% (subject to a 0.35% LIBOR floor) and the interest rate under the Treasury Facility is equal to LIBOR plus 0.20% (with no LIBOR floor). The Subscription Facility will expire on December 31, 2022, and the Treasury Facility will expire on September 30, 2021.
The Credit Agreement allows the Company to transfer the commitment amount under the Treasury Facility to the Subscription Facility. On March 2, 2021, $15,000 was transferred from the Treasury Facility to the Subscription Facility. As of June 30, 2021, the Subscription Facility and Treasury Facility had commitments of $40,000 and $35,000, respectively.
For the six months ended through June 30, 2021, the average amount of borrowings outstanding under the Credit Agreement was $15,911 with a weighted average interest rate of 2.26%. As of June 30, 2021, the Company had $31,000 outstanding under the Credit Agreement at a weighted average interest rate of 2.25%.

Debt obligations consisted of the following as of June 30, 2022 and December 31, 2021:

June 30, 2021
Aggregate
Principal Committed Outstanding Principal Amount Available⁽¹⁾ Net Carrying Value⁽²⁾
Loan and Security Agreement (LSA) $ 150,000 $ 50,000 $ 100,000 $ 49,694
Credit Agreement 75,000 31,000 44,000 30,837
Total debt $ 225,000 $ 81,000 $ 144,000 $ 80,531
June 30, 2022
Aggregate Principal Committed Outstanding Principal Amount Available⁽¹⁾ Net Carrying Value⁽²⁾
Corporate Credit Facility $ 275,000 $ 78,000 $ 197,000 $ 75,824
Revolving Funding Facility 250,000 150,000 30,007 147,551
Subscription Credit Agreement 175,000 114,000 61,000 113,773
Total debt $ 700,000 $ 342,000 $ 288,007 $ 337,148

(1) The amount available reflects any limitations related to ~~the Credit Facility’s~~each credit facility’s borrowing ~~base.~~base as of June 30, 2022.
(2)
The carrying value of the ~~LSA~~Corporate Credit Facility, Revolving Funding Facility, and Subscription Credit Agreement are presented net of deferred financing costs totaling ~~$469.~~$4,852.
December 31, 2021
Aggregate
Principal
Committed Outstanding
Principal Amount
Available⁽¹⁾ Net
Carrying
Value⁽²⁾
Loan and Security Agreement (LSA) $ 200,000 $ 162,000 $ 13,685 $ 161,753
Subscription Credit Agreement 150,000 105,000 45,000 104,575
Total debt $ 350,000 $ 267,000 $ 58,685 $ 266,328
(1) The amount available reflects any limitations related to each credit facility’s borrowing base as of December 31, 2021.
(2) The carrying value of the LSA and Subscription Credit Agreement are presented net of deferred financing costs totaling $672.

For the three and six months ended June 30, 2022 and 2021, the components of interest expense were as follows:

For the three months
ended For the six months ended
June 30,
2021 June 30,
2021 For the three months ended
June 30,
2022 June 30,
2021
Interest expense $ 877 $ 1,303 $ 2,528 $ 877
Amortization of debt issuance costs 51 86 486 51
Total interest expense $ 928 $ 1,389 $ 3,014 $ 928
Average interest rate 5.6 % 5.6 % 4.3 % 5.6 %
Average borrowings $ 66,407 $ 61,479 $ 283,637 $ 66,407
For the six months ended
June 30,
2022 June 30,
2021
Interest expense $ 4,817 $ 1,303
Amortization of debt issuance costs 1,005 86
Total interest expense $ 5,822 $ 1,389
Average interest rate 4.5 % 5.6 %
Average borrowings $ 262,751 $ 61,479

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 February 5, 2021,~~Common Stock Issuances
The following table summarizes the ~~Company sold 5,666,667 shares~~number of ~~its~~ 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 ~~at a price of $15.00 per share~~ for ~~an aggregate offering price of $85,000.~~the six months ended June 30, 2022 and 2021.

For the six months ended June 30, 2022
Offering Common Aggregate
price per stock offering
Common stock issue date share shares issued amount
January 24, 2022 $ 16.36 4,191,292 $ 68,582
Total common stock issued 4,191,292 $ 68,582
~~On April 23, 2021, the Company sold 3,532,434 shares of its common stock to investors at a price of $15.57 per share for an aggregate offering price of $55,000.~~
For the six months ended June 30, 2021
Offering Common Aggregate
price per stock offering
Common stock issue date share shares issued amount
February 5, 2021 $ 15.00 5,666,667 $ 85,000
April 23, 2021 $ 15.57 3,532,434 55,000
Total common stock issued 9,199,101 $ 140,000
As of June 30, ~~2021,~~2022, the Company had subscription agreements with investors for an aggregate capital commitment of ~~$285,355~~$761,694 to purchase shares of common stock ~~($145,355~~(including a $13,250 capital commitment that is contingent on the Company meeting certain conditions). Of this amount, the Company had $393,611 of ~~the~~undrawn commitments ~~are undrawn).~~at June 30, 2022. See Note 11 – Subsequent Events.

~~On May 14, 2021,~~Dividends and Dividend Reinvestment
The following table summarizes the dividends declared and payable by the Company ~~paid its first distribution of $0.15 per share to each common stockholder of record as of April 20, 2021. Pursuant to~~for the ~~Company’s dividend reinvestment plan, $21 (1,361 shares of common stock), was reinvested into shares of the Company.~~six months ended June 30, 2022. See Note 11 – Subsequent Events.

Dividend declaration date Dividend
record date Dividend
payment date Dividend
per share
April 19, 2022 April 20, 2022 April 26, 2022 $ 0.26
Total dividends declared $ 0.26
The following table summarizes the dividends declared and payable by the Company for the six months ended June 30, 2021.
Dividend declaration date Dividend
record date Dividend
payment date Dividend
per share
April 23, 2021 April 20, 2021 May 14, 2021 $ 0.15
Total dividends declared $ 0.15
The following table summarizes the amounts received and shares of common stock issued to shareholders pursuant to the Company’s dividend reinvestment plan for the six months ended June 30, 2022. See Note 11 – Subsequent Events.
Dividend DRIP
payment shares DRIP
Dividend record date date issued value
December 29, 2021 January 18, 2022 55,590 $ 902
April 20, 2022 April 26, 2022 75,270 1,222
130,860 $ 2,124

Kayne Anderson BDC, Inc.
Notes to Consolidated Financial Statements
(amounts in 000’s, except share and per share amounts)
(Unaudited)
The following table summarizes the amounts received and shares of common stock issued to shareholders pursuant to the Company’s dividend reinvestment plan for the six months ended June 30, 2021
Dividend DRIP
payment shares DRIP
Dividend record date date issued value
April 20, 2021 May 14, 2021 1,361 $ 21
1,361 $ 21

Note 8. Commitments and Contingencies

The Company had an aggregate of ~~$21,552~~$91,509 and $97,810, respectively, of unfunded commitments to provide debt financing to its portfolio companies as of June 30, 2022 and December 31, 2021. Such commitments are generally subject to the satisfaction of certain financial and nonfinancial covenants and certain operational metrics; involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Company’s consolidated statements of assets and ~~liabilities,~~liabilities; and are not reflected in the Company’s consolidated statements of assets and liabilities. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity.

A summary of the composition of the unfunded commitments as of June 30, 2022 and December 31, 2021 is shown in the table below:

As of As of As of
June 30,
2021 June 30,
2022 December 31,
2021
DRS Holdings III, Inc. (Dr. Scholl’s) $ 310
Allentown, LLC $ 2,142 $ -
American Equipment Holdings LLC 8,241 1,698
Arborworks Acquisition LLC 2,813 3,219
Atria Wealth Solutions, Inc. 3,229 -
BCI Burke Holding Corp. 5,254 4,935
Blade (US) Holdings, Inc. - 1,121
BLP Buyer, Inc. (Bishop Lifting Products) 1,047 -
Brightview, LLC 4,647 4,647
Centerline Communications, LLC 6,661 2,040
CGI Automated Manufacturing, LLC 2,717 6,522
Corbett Technology Solutions, Inc. 381 1,525
Curio Brands, LLC 1,432 6,018
DRS Holdings III, Inc. (Dr. Scholl's) 310 310
EIS Legacy, LLC 6,538 6,538
Eastern Wholesale Fence - 666
Foundation Consumer Brands 577 577 577
Fralock Buyer LLC 749 749 749
GEON Performance Solutions 517
Guardian Dentistry Partners 11,230 15,898
Gusmer Enterprises, Inc. 6,765 3,676 4,220
Home Brands Group Holdings, Inc. (ReBath) 2,099 2,099
I.D. Images Acquisition, LLC 869 1,570
Light Wave Dental Management LLC 9,012 -
MacNeill Pride Group 2,798 2,499 357
PMFC Holding, LLC 684 342 684
Pretzels, LLC 8,402
Smile Doctors, LLC 56
Regiment Security Partners LLC 3,621 7,200
SGA Dental Partners Holdings, LLC 2,681 12,931
Siegel Egg Co., LLC 1,655 2,102
Speedstar Holding LLC 694 694 694
Trademark Global LLC 582 1,182
United Safety & Survivability Corporation (USSC) 3,883 4,285
USALCO, LLC 1,335 2,352
Vehicle Accessories, Inc. 593 1,671
Total unfunded commitments $ 21,552 $ 91,509 $ 97,810

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 June 30, 2022 and December 31, 2021, 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 June 30, 2022 and 2021, there were no dilutive shares.

The following table sets forth the computation of basic and diluted earnings per share of common stock for the three and six months ended June 30, 2022 and 2021:

For the
three months ended For the six months ended
June 30,
2021 June 30,
2021

Net increase (decrease) in net assets resulting from operations $ 3,208 $ 6,653
Weighted average shares of common stock outstanding - basic and diluted 8,346,491 7,337,219
Earnings (loss) per share of common stock - basic and diluted $ 0.38 $ 0.91

~~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 For the six months ended
June 30,
2022 June 30,
2021 June 30,
2022 June 30,
2021
Net increase (decrease) in net assets resulting from operations $ 7,462 $ 3,208 $ 13,191 $ 6,653
Weighted average shares of common stock outstanding - basic and diluted 23,529,376 8,346,491 22,964,415 7,337,219
Earnings (loss) per share of common stock - basic and diluted $ 0.32 $ 0.38 $ 0.57 $ 0.91

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 six months ended June 30, 2022 and 2021:

For the six months ended
June 30,
2021 For the six months ended
June 30,
Per Common Share Operating Performance ⁽¹⁾ 2022 (amounts in thousands, except share and per share amounts) 2021 (amounts in thousands, except share and per share amounts)
Net Asset Value, Beginning of Period⁽²⁾ $ 14.86 $ 16.22 $ 14.86

Results of Operations:
Net Investment Income 0.35 0.58 0.35
Net Realized and Unrealized Gain (Loss) on Investments⁽³⁾ 0.70 0.01 0.70
Net Increase (Decrease) in Net Assets Resulting from Operations 1.05 0.59 1.05

Distributions to Common Stockholders
Distributions from Net Investment Income (0.15 )
Distributions (0.26 ) (0.15 )
Net Decrease in Net Assets Resulting from Distributions (0.15 ) (0.26 ) (0.15 )

Net Asset Value, End of Period $ 15.76 $ 16.55 $ 15.76

Shares Outstanding, End of Period 9,201,129 23,550,054 9,201,129

Ratio/Supplemental Data
Net assets, end of period $ 145,026 $ 389,763 $ 145,026
Weighted-average shares outstanding 7,337,219 22,964,415 7,337,219
Total Return⁽⁴⁾ 6.1 % 3.6 % 6.1 %
Portfolio turnover 6.3 % 6.9 % 6.3 %
Ratio of operating expenses to average net assets⁽⁵⁾ 6.8 % 6.4 % 6.8 %
Ratio of net investment income (loss) to average net assets⁽⁵⁾ 6.4 % 7.4 % 6.4 %

(1) The per common share data was derived by using weighted average shares outstanding.
(2) ~~The~~On February 5, 2021, the initial offering price of $15.00 per share less $0.14 per share of organizational costs.

Kayne Anderson BDC, Inc.
Notes to Consolidated Financial Statements
(amounts in 000’s, except share and per share amounts)
(Unaudited)
(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.
(4) Total return is calculated as the change in net asset value ~~(“NAV”~~("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 for the ~~six months ended~~period February 5, 2021 (commencement of operations) through June 30, 2021).

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 July ~~23, 2021,~~1, 2022, the Company decreased its commitment under the Subscription Credit Facility from $175,000 to $150,000. All other terms of the Subscription Credit Facility remain substantially the same.
On July 19, 2022, the Company increased its Corporate Credit Facility commitment amount from $275,000 to $350,000. All other terms of the Corporate Credit Facility remain substantially the same.
On July 22, 2022, the Company sold ~~2,862,595~~7,666,830 shares of its common stock at a price of ~~$15.72~~$16.30 per share for an aggregate offering ~~price~~amount of ~~$45,000. Just prior to~~$125,000. As of the ~~issuance of shares, the Company entered into subscription agreements with investors for $82,375 of additional capital commitments. Following this capital close,~~same date, the Company has subscription agreements with investors for an aggregate capital commitment of ~~$367,730~~$777,652 (including a $7,900 capital commitment that is contingent on the Company meeting certain conditions) to purchase shares of common stock ($~~182,730~~284,569 of the commitments are undrawn). Under the terms of the subscription agreements, stockholders are required to fund drawdowns to purchase shares of common stock up to the amount of their respective capital commitments on an as-needed basis with a minimum of ten days’ prior notice to stockholders.

On July 27, ~~2021,~~2022, the Company paid a distribution of ~~$0.22~~$0.30 per share to each common stockholder of record as of July 20, ~~2021.~~2022. The total distribution was ~~$2,024~~$7,065 and ~~$584~~$1,431 was reinvested into the Company through the purchase of ~~37,640~~88,081 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.

Overview and Investment Framework

Kayne Anderson BDC, LLC was formed ~~in May 2018~~ as a Delaware limited liability ~~company. We were formed~~company to make investments in middle-market companies and 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. In addition, for U.S. federal income tax purposes, we intend to qualify, annually, as a RIC under Subchapter M of the Code.

We are managed by KA Credit Advisors, LLC (the “Advisor”) which is an indirect subsidiary of Kayne Anderson Capital Advisors, L.P. (“KACALP” or “Kayne Anderson”). The Advisor is registered with the Securities and Exchange Commission (“SEC”) as an investment advisor under the Investment Advisory Act of 1940. 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 and monitoring its investments and portfolio companies on an ongoing basis. The Board consists of five directors, three of whom are independent.

Our investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through debt investments in middle-market companies. We define “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. We refer to companies that generate between $10 million and $50 million of annual EBITDA as “core middle-market companies” and companies that generate between $50 million and $150 million of annual EBITDA as “upper middle-market companies.”

We intend to achieve our investment objective by investing primarily in first lien senior secured, unitranche and split-lien loans (collectively, “secured middle market loans”) to privately held middle-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 and a term loan that is collateralized by all other assets of the borrower. Depending on market conditions, we expect that ~~between 80% and~~at least 90% of our portfolio (including investments purchased with proceeds from borrowings) will be invested in ~~first lien senior~~ secured ~~unitranche and split-lien term~~middle market loans. ~~We expect~~It is anticipated that most of these investments will be in core middle market companies, with the remainder in upper middle market companies. The remaining 10% ~~to 20%~~ of our portfolio ~~will~~may be invested in ~~higher-yielding~~higher-returning 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~~secured middle market loans and other opportunistic investments (collectively “Opportunistic ~~Middle Market~~ Investments”)., including junior debt, real estate debt and infrastructure credit investments. We expect that the ~~debt~~secured middle market loans we invest in will generally have ~~state terms~~stated maturities of ~~five to~~no more than six years.

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

We believe our Advisor’s disciplined approach to origination, 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 comprised 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.~~credit terms of each investment. 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)~~sponsors, 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. ~~We believe this approach will help us generate more consistent results.~~

Recent Developments

On July ~~23, 2021,~~1, 2022, we decreased our commitment under our Subscription Credit Facility from $175 million to $150 million, and on July 19, 2022, we increased our commitment under our Corporate Credit Facility from $275 million to $350 million.
On July 22, 2022, we sold ~~2.9~~7.7 million shares of common stock at a price of ~~$15.72~~$16.30 per share for an aggregate offering ~~price~~amount of ~~$45~~$125.0 million. ~~Just prior to~~As of the ~~issuance of shares, we entered into subscription agreements with investors for $82.4 million of additional capital commitments. Following this capital close,~~same date, we have subscription agreements with investors for an aggregate capital commitment of ~~$367.7~~$777.7 million (including a $7.9 million capital commitment that is contingent on us meeting certain conditions) to purchase shares of common stock ($~~182.7~~284.6 million of the commitments are undrawn).

On ~~June 14, 2021, Michael J. Levitt notified our Board~~July 27, 2022, we paid a distribution of ~~Directors (the “Board”)~~$0.30 per share to each common stockholder of ~~his decision to resign, effective immediately, from his position~~record as ~~our Chief Executive Officer. Mr. Levitt will continue to serve in his role as an interested director~~ of ~~the Company. Mr. Levitt’s decision to resign~~July 20, 2022. The total distribution was ~~not the result of any disagreement with~~$7.1 million and $1.4 million was reinvested into the Company ~~on any matter relating to~~through the ~~Company’s operations, policies or practices.~~purchase of 88,081 shares of common stock.

~~On June 14, 2021, in connection with Mr. Levitt’s resignation, the Board appointed Mr. James C. Baker as Chief Executive Officer, effective immediately.~~
Portfolio and Investment Activity

As of June 30, ~~2021,~~2022, we had 82128 debt investments and 5 equity investments in 6152 portfolio companies with an aggregate fair value of approximately ~~$219.7~~$718.0 million and an amortized cost of ~~$215.7~~$706.3 million consisting of first lien senior secured ~~(99.6%)~~debt ($716.6 million fair value) and ~~senior unsecured (0.4%) debt~~equity ($1.4 million fair value) investments.

As of June 30, ~~2021,~~2022, our weighted average total yield to maturity of debt and income producing securities at fair value was ~~7.7%~~8.4%, and our weighted average total yield to maturity of debt and income producing securities at amortized cost was ~~7.8%~~8.5%.

Our investment activity for the three months ended June 30, 2022 and 2021 is presented below (information presented herein is at par value unless otherwise indicated).

For the
three months ended
June 30,
2021 ($ in millions) For the three months ended
June 30,
2022
($ in millions) 2021
($ in millions)
New investments:
Gross investments $ 86.8
Less: sold investments (5.1 )
Total new investments 81.7
Gross new investment commitments $ 118.3 $ 86.8
Less: investment commitments sold down, exited or repaid ⁽¹⁾ (6.9 ) (5.1 )
Net investment commitments 111.4 81.7

Principal amount of investments funded:
Private credit investments $ 56.2 $ 116.9 $ 56.2
Liquid credit investments 12.2 - 12.2
Preferred equity investments ⁽²⁾ - -
Common equity investments ⁽²⁾ 0.3 -
Total principal amount of investments funded 68.4 117.2 68.4

Principal amount of investments sold:
Private credit investments (3.3 ) (15.3 ) (3.3 )
Liquid credit investments (1.8 ) - (1.8 )
Total principal amount of investments sold or repaid (5.1 ) (15.3 ) (5.1 )

Number of new investment commitments 47 25 47
Average new investment commitment amount $ 1.8 $ 4.7 $ 1.8
Weighted average maturity for new investment commitments 4.8 years

Weighted average maturity for new investment commitments ⁽³⁾ 2.4 years 4.8 years
Percentage of new debt investment commitments at floating rates 98.0 % 100.0 % 98.0 %
Percentage of new debt investment commitments at fixed rates 2.0 % 0.0 % 2.0 %
Weighted average interest rate of new investment commitments 6.6 % 7.7 % 6.6 %
Weighted average spread over LIBOR of new floating rate investment commitments 5.6 %
Weighted average spread over benchmark rate of new floating rate investment commitments 6.1 % 5.6 %
Weighted average interest rate on investment sold or paid down 6.1 % 7.7 % 6.1 %
(1) Does not include repayments on revolving loans, which may be redrawn.
(2) As of June 30, 2022, preferred equity investments and common equity investments were reported in aggregate as equity investments.
(3) For undrawn delayed draw term loans, the maturity date used is that of the associated term loan.
Beginning with the three months ended March 31, 2022, we use Global Industry Classification Standards (GICS), Level 3 – Industry, for classifying the industry groupings of its portfolio companies. As of December 31, 2021, we used GICS, Level 2 – Industry Group.

The ~~table~~tables below ~~describes~~describe long-term investments by industry composition based on fair value as of June 30, 2022 and December 31, 2021:

June 30,
~~2021~~2022

~~Consumer durables and apparel~~Commercial services & supplies ~~18.7~~17.9 %
~~Materials~~Trading companies & distributors ~~15.4~~12.2 %
~~Capital~~Health care providers & services 12.1 %
Food products 7.2 %
Building products 5.6 %
Chemicals 4.7 %
Diversified telecommunication services 4.4 %
Software 4.0 %
Leisure products 3.9 %
Auto components 3.9 %
Professional services 3.4 %
Wireless telecommunication services 3.3 %
Household durables 3.2 %
Personal products 3.0 %
Household products 2.8 %
Textiles, apparel & luxury goods ~~12.7~~2.1 %
Aerospace & defense 1.5 %
Specialty retail 1.2 %
Pharmaceuticals 1.1 %
Containers & packaging 1.0 %
Asset management & custody banks 0.7 %
Electronic equipment, instruments & components 0.4 %
Machinery 0.3 %
IT services 0.1 %
Total 100.0 %
December 31,
2021
Commercial & professional services ~~9.9~~19.6 %
Capital goods 19.5 %
Consumer durables & apparel 15.8 %
Telecommunication services 8.8 %
Health care equipment & services 8.5 %
Household & personal products ~~9.8~~7.4 %
~~Healthcare equipment & services~~Materials 7.0 %
~~Food, beverage~~Automobiles & ~~tobacco~~components ~~6.6~~4.1 %
Food & beverage 2.9 %
Software & services 2.4 %
Retailing ~~4.3~~1.6 %
Pharmaceuticals, biotech & life sciences ~~4.2~~ %
~~Telecommunication services~~ ~~2.9~~ %
~~Automobiles & components~~ ~~2.5~~1.5 %
Diversified financials ~~2.4~~ %
~~Software & services~~ ~~1.2~~ %
~~Transportation~~ ~~1.0~~ %
~~Energy~~ ~~0.7~~ %
~~Consumer services~~ ~~0.5~~ %
~~Media & entertainment~~ ~~0.1~~ %
~~Technology hardware & equipment~~ ~~0.1~~ %
~~Chemicals~~ ~~0.0~~0.9 %
Total 100.0 %

Results of Operations

~~Comparative financial statement tables are not presented as we commenced operations on February 5, 2021.~~ For the three and six months ended June 30, 2022 and 2021, our total investment income was derived from our ~~initial~~ portfolio of ~~investments during these periods.~~investments. All debt investments were income producing, and there were no loans on non-accrual status as of June 30, 2022 or 2021.

The following table represents the operating results for the three and six months ended June 30, 2022 and 2021:

For the
three months
ended For the
six months
ended
June 30,
2021 June 30,
2021
($ in millions) ($ in millions)
Total investment income $ 3.8 $ 5.6
Less: Net expenses 1.8 3.0
Net investment income 2.0 2.6
Net realized gains (losses) on investments 0.0 0.0
Net change in unrealized gains (losses) on investments 1.2 4.0
Net increase (decrease) in net assets resulting from operations $ 3.2 $ 6.6
For the three months ended
June 30, For the six months ended
June 30,
2022 2021 2022 2021
($ in millions) ($ in millions) ($ in millions) ($ in millions)
Total investment income $ 13.0 $ 3.8 $ 24.9 $ 5.6
Less: Net expenses (5.9 ) (1.8 ) (11.5 ) (3.0 )
Net investment income 7.1 2.0 13.4 2.6
Net realized gains (losses) on investments - 0.0 0.0 0.0
Net change in unrealized gains (losses) on investments 0.3 1.2 (0.2 ) 4.0
Net increase (decrease) in net assets resulting from operations $ 7.4 $ 3.2 $ 13.2 $ 6.6

Investment Income

Investment income for the three and six months ended June 30, 2022 totaled $13.0 million and $24.9 million respectively, and consisted primarily of interest income on our debt investments. Investment income for the three and six months ended June 30, 2021 totaled $3.8 million and $5.6 million, respectively, and consisted primarily of interest income on our debt investments.

Expenses

Operating expenses for the three and six months ended June 30, 2022 and 2021 were as follows:

For the three months ended
June 30, For the six months ended
June 30,
For the
three months
ended For the
six months
ended 2022 2021 2022 2021
June 30,
2021
($ in millions) June 30,
2021
($ in millions) ($ in millions) ($ in millions) ($ in millions) ($ in millions)
Interest and debt financing expenses $ 0.9 $ 1.4 $ 3.0 $ 0.9 $ 5.8 $ 1.4
Management fees 0.4 0.6 1.5 0.4 2.8 0.6
Other operating expenses 0.3 0.6
Incentive fees 0.8 - 1.7 -
Directors fees 0.1 0.1 0.2 0.1
Initial organization - 0.2 - - - 0.2
Deferred offering costs 0.1 0.1 - 0.1 - 0.1
Directors fees 0.1 0.1
Other operating expenses 0.5 0.3 1.0 0.6
Total expenses $ 1.8 $ 3.0 $ 5.9 $ 1.8 $ 11.5 $ 3.0

Total expenses for the three and six months ended June 30, 2022 included zero and $0.03 million of deferred offering costs. Total expenses for the three and six months ended June 30, 2021 included zero and $0.2 million of initial organization expenses and $0.07 million and $0.1 million of deferred offering costs, respectively.

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 three and six months ended June 30, 2022 and 2021, net unrealized gains (losses) on our investment portfolio were comprised of the following:

For the three months ended
June 30, For the six months ended
June 30,
For the
three months
ended For the
six months
ended 2022 2021 2022 2021
June 30,
2021
($ in millions) June 30,
2021
($ in millions) ($ in millions) ($ in millions) ($ in millions) ($ in millions)
Unrealized gains on investments $ 1.5 $ 4.0 $ 2.0 $ 1.5 $ 2.8 $ 4.0
Unrealized (losses) on investments (0.3 ) - (1.7 ) (0.3 ) (3.0 ) -
Net change in unrealized gains (losses) on investments $ 1.2 $ 4.0 $ 0.3 $ 1.2 $ (0.2 ) $ 4.0

The change in unrealized appreciation for the three months ended June 30, 2022 and 2021 totaled $2.0 million and $1.5 million, which primarily related to our investments in the following ~~table:~~tables:

For the
three months
ended
June 30,
2021
($ in millions)
Portfolio Company
Gusmer Enterprises, Inc. $ 0.2
MacNeill Pride Group 0.2
Broder Bros., Co. 0.2
DRS Holdings III, Inc. (Dr. Scholl’s) 0.1
Refrigeration Sales Corp. 0.1
Fralock Buyer LLC 0.1
Pretzels, LLC 0.1
Network Connex (f/k/a NTI Connect, LLC) 0.1
Eastern Wholesale Fence 0.1
Other portfolio companies 0.3
Total Unrealized Appreciation $ 1.5
For the
three months
ended
June 30,
2022
($ in millions)
Portfolio Company
IF&P Foods, LLC (FreshEdge) 0.6
Peak Technologies 0.3
Light Wave Dental Management LLC 0.3
Siegel Parent, LLC 0.1
Gusmer Enterprises, Inc. 0.1
Allentown, LLC 0.1
American Equipment Holdings LLC 0.1
Regiment Security Partners LLC 0.1
Advanced Environmental Monitoring 0.1
Process Insights, Inc. 0.1
Other portfolio companies 0.1
Total Unrealized Appreciation $ 2.0

For the
three months
ended
June 30,
2021
($ in millions)
Portfolio Company
Gusmer Enterprises, Inc. $ 0.2
MacNeill Pride Group 0.2
Broder Bros., Co. 0.2
DRS Holdings III, Inc. (Dr. Scholl's) 0.1
Refrigeration Sales Corp. 0.1
Fralock Buyer LLC 0.1
Pretzels, LLC 0.1
Network Connex (f/k/a NTI Connect, LLC) 0.1
Eastern Wholesale Fence 0.1
Other portfolio companies 0.3
Total Unrealized Appreciation $ 1.5

The change in unrealized depreciation for the three months ended June 30, 2022 totaled $1.7 million and related to our investments in the following table. The change in unrealized depreciation for the three months ended June 30, 2021 totaled $0.3 million, which was primarily attributable to accretion of discounts on investments.

For the three months
ended
June 30,
2022
($ in millions)
Portfolio Company
Arborworks Acquisition LLC (0.3 )
Trademark Global LLC (0.2 )
United Safety & Survivability Corporation (USSC) (0.2 )
PH Beauty Holdings III, Inc. (0.1 )
The Kleinfelder Group, Inc. (0.1 )
Other portfolio companies (0.8 )
Total Unrealized Depreciation $ (1.7 )

The change in unrealized appreciation for the six months ended June 30, 2022 and 2021 totaled $2.8 and $4.0 million, which primarily related to our investments in the following ~~table:~~tables:
For the
six months
ended
June 30,
2022
($ in millions)
Portfolio Company
IF&P Foods, LLC (FreshEdge) $ 0.6
BLP Buyer, Inc. (Bishop Lifting Products) 0.3
Peak Technologies 0.3
Light Wave Dental Management LLC 0.3
CGI Automated Manufacturing, LLC 0.3
Siegel Parent, LLC 0.1
OMH-HealthEdge Holdings, LLC 0.1
Gusmer Enterprises, Inc. 0.1
American Equipment Holdings LLC 0.1
Allentown, LLC 0.1
Other portfolio companies 0.5
Total Unrealized Appreciation $ 2.8

For the
six months
ended
June 30,
2021
($ in millions)
Portfolio Company
Broder Bros., Co. $ 0.4
Sundance Holdings Group, LLC 0.3
OMH-HealthEdge Holdings, LLC 0.3
Fralock Buyer LLC 0.2
New Era Cap Company, Inc. 0.2
Advanced Environmental Monitoring 0.2
Gusmer Enterprises, Inc. 0.2
YS Garments, LLC 0.2
WhiteBridge Pet Brands, LLC 0.2
Meridian Adhesives Group, Inc. 0.2
Other portfolio companies 1.6
Total Unrealized Appreciation $ 4.0

For the
six months
ended
June 30,
2021
($ in millions)
Portfolio Company
Broder Bros., Co. $ 0.4
Sundance Holdings Group, LLC 0.3
OMH-HealthEdge Holdings, LLC 0.3
Fralock Buyer LLC 0.2
New Era Cap Company, Inc. 0.2
Advanced Environmental Monitoring 0.2
Gusmer Enterprises, Inc. 0.2
YS Garments, LLC 0.2
WhiteBridge Pet Brands, LLC 0.2
Meridian Adhesives Group, Inc. 0.2
Other portfolio companies 1.6
Total Unrealized Appreciation $ 4.0
The change in unrealized depreciation for the six months ended June 30, 2022 totaled $3.0 million, which primarily related to our investments in the following table. There was no change in unrealized depreciation for the six months ended June 30, 2021.
For the
six months
ended
June 30,
2022
($ in millions)
Portfolio Company
Arborworks Acquisition LLC $ (0.8 )
Trademark Global LLC (0.5 )
United Safety & Survivability Corporation (USSC) (0.2 )
PH Beauty Holdings III, Inc. (0.2 )
Fralock Buyer LLC (0.1 )
The Kleinfelder Group, Inc. (0.1 )
Other portfolio companies(1) (1.1 )
Total Unrealized Depreciation $ (3.0 )
(1) Primarily attributable to accretion of discounts on investments.

Financial Condition, Liquidity and Capital Resources

Our liquidity and capital resources are generated primarily from the net proceeds of any offering of our Shares, proceeds from borrowing on our credit facilities 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 amounts and payment of cash distributions to our stockholders.

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 June 30, 2022 and December 31, 2021, our asset coverage ~~ratio was 279%~~ratios were 214% and 217%. 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 undrawn capital commitments and 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 June 30, ~~2021,~~2022, we had ~~$81~~$342.0 million borrowed under our credit facilities ~~(the LSA and the Credit Agreement)~~ and cash and cash equivalents of ~~$8.2~~$11.8 million (including short-term investments).
As of August ~~12, 2021,~~11, 2022, we had ~~$50~~$394 million borrowed under our ~~LSA; no borrowings outstanding under our Credit Agreement,~~credit facilities and cash and cash equivalents of ~~$22.9~~$3.9 million (including short-term investments).


Capital Contributions

During the six months ended June 30, 2022 and 2021, we issued and sold 4,191,292 and 9,199,767 shares of our common stock, respectively, related to capital called at an aggregate purchase price of $68.6 million and $140 ~~million.~~million, respectively. As of August ~~13, 2021,~~11, 2022, we had aggregate capital commitments of ~~$367.7~~$777.7 million (including a $7.9 million capital commitment that is contingent on us meeting certain conditions) and undrawn capital commitments from investors of ~~$182.7~~$284.6 million ($~~185~~493.1 million or ~~50.3% funded)~~64.1% funded, exclusive of the contingent commitment of $7.9 million).

Credit Facilities

OnFrom February 5, 2021 to February 17, 2022, Kayne Anderson BDC Financing, LLC, (“KABDCF”), our wholly owned, special ~~purposes~~purpose financing subsidiary, ~~entered into~~had a ~~Loan~~senior secured credit facility (the “Loan and Security ~~Agreement (the~~Agreement” or “LSA”) with a maximum commitment amount of up to $200 million. On February 18, 2022, we and KABDCF refinanced the LSA with two new credit facilities described below (the Corporate Credit Facility and the Revolving Funding Facility).
Corporate Credit Facility: We are party to a senior secured revolving credit facility (the “Corporate Credit Facility”), that has a total commitment of $350 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 ~~lenders party thereto, administrative agent,~~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 (which includes a SOFR adjustment spread of 0.10%) 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: We and our ~~Advisor as collateral manager. The maximum~~wholly owned, special purpose financing subsidiary, KABDCF, are party to a senior secured revolving funding facility (the “Revolving Funding Facility”), that has a total commitment of ~~the LSA is up to $150 million, and, subject to certain conditions, may be increased by $50 million up to two times not to exceed~~ $250 million. ~~Advances under~~The Revolving Funding Facility is secured by all of the ~~facility bear an~~assets held by, and the membership interest in, 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 2.35% per annum. KABDCF is also required to pay a commitment fee of ~~LIBOR plus 4.25% (subject to a 1.00% LIBOR floor). The facility has a term~~between 0.50% and 1.50% per annum depending on the size of ~~three years.~~the unused portion of the Revolving Funding Facility.

~~In addition, on February 5, 2021, we entered into~~Subscription Credit Agreement: We are party to a ~~$75 million~~senior 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 rate~~Subscription Credit Agreement permits us to borrow up to $150 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 to~~Credit Agreement has a ~~0.35% LIBOR floor)~~maximum commitment of $150 million and the interest rate under the ~~Treasury Facility will be~~facility is equal to ~~LIBOR~~Term SOFR plus ~~0.20% (with no LIBOR~~1.975% (subject to a 0.275% floor). We are also required to pay a commitment fee of 0.25% per annum on the unused portion of the Subscription Credit Agreement. The Subscription ~~Facility~~Credit Agreement will expire on December 31, ~~2022, and the Treasury Facility will expire on September 30, 2021.~~2022.

~~The Credit Agreement allows us to transfer the commitment amount under the Treasury Facility~~Contractual Obligations
A summary of our significant contractual principal payment obligations related to the ~~Subscription Facility. On March 2, 2021, $15 million was transferred from the Treasury Facility to the Subscription Facility.~~ repayment of our outstanding indebtedness at June 30, 2022 is as follows:
Payments Due by Period ($ in millions)
Total Less than
1 year 1-3 years 3-5 years After 5 years
Corporate Credit Facility $ 78.0 $ - $ - $ 78.0 $ -
Revolving Funding Facility 150.0 - - 150.0 -
Subscription Credit Agreement 114.0 114.0 - - -
Total contractual obligations $ 342.0 $ 114.0 $ - $ 228.0 $ -
Off-Balance Sheet Arrangements
As of June 30, 2022 and December 31, 2021, ~~the Subscription Facility and Treasury Facility~~we had ~~commitments of $40~~an aggregate $91.5 million and ~~$35~~$97.8 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.

Critical Accounting ~~Policies~~Estimates

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, ~~2020~~2021 and in this Quarterly Report. See Note 2 to our consolidated financial statements for the six months ended June 30, ~~2021,~~2022, 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, 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 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, the following valuation process is used for our Level 3 investments:

● Investment Team Valuation. The applicable investments are valued by senior professionals of Kayne Anderson who are responsible for the portfolio investments. The value of each portfolio company or investment will be initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments (i.e., illiquid securities/instruments), 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 investments will be valued no less frequently than quarterly, with new investments valued at 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 meetings of the Audit Committee, our executive officers are authorized to make valuation determinations. All valuation determinations of the Audit Committee are subject to ratification by our Board at its next regular meeting.

● Valuation Firm. Quarterly, third-party valuation firms engaged by our Board review the valuation methodologies and calculations employed for each of our investments that we have placed on the “watch list” and approximately 25% of our remaining investments. These third-party valuation firms will review all of the Level 3 investments at least once per year, on a rolling twelve-month basis. We expect the quarterly report issued by these third-party valuation firms will assist the Board in determining the fair values of the investments reviewed.

● Board Determination. Our Board meets 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 firms in reviewing and determining in good faith the fair value of the applicable portfolio investments.

The Board of Directors is ultimately responsible for the determination, in good faith, of the fair value of our portfolio investments.

Refer to Note 5 – Fair Value – for more information on the 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 June 30, 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) $ 50.0 $              - $ 50.0 $             - $               -
Credit Agreement 31.0 - 31.0 - -
Total contractual obligations $ 81.0 $ - $ 81.0 $ - $ -
~~Off-Balance Sheet Arrangements~~
As of June 30, 2021, we had an aggregate $21.6 million 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.

Related Party Transactions

Investment Advisory Agreement. On February 5, 2021, we entered into the Investment Advisory Agreement with our Advisor. 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, 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 proceeds from a Company Liquidation payable to the Company’s common stockholders have been distributed to such stockholders.

Administration Agreement. On February 5, 2021, we entered into an Administration Agreement with our Advisor, which serves as our 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 administrative expenses it incurs on our behalf in performing its obligations. Such reimbursement may be made for our 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 our officers (including our Chief Compliance Officer and Chief Financial Officer) and their respective staff who provide services to us. As we reimburse the Administrator for its expenses, we will indirectly bear such cost. The Administrator engaged U.S. Bank Global Fund Services under a sub-administration agreement to assist the Administrator in performing certain of its administrative duties. 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 respect~~rates. Interest rate sensitivity refers to the ~~economic effects of the COVID-19 pandemic introduced significant volatility~~change in our earnings that may result from changes in the ~~financial markets, and the effects~~level 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. Most~~fund a portion of our investments ~~are classified as Level 3 under ASC Topic 820 which means that~~with 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 June 30, ~~2021~~2022 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).

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 $ 0.5 $ 0.3 $ 0.2
Up 200 basis points $ 2.6 $ 1.1 $ 1.5
Up 300 basis points $ 4.8 $ 2.0 $ 2.8
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 $ (1.8 ) $ (0.9 ) $ (0.9 )
Up 75 basis points $ 5.4 $ 2.6 $ 2.8
Up 100 basis points $ 7.2 $ 3.4 $ 3.8
Up 200 basis points $ 14.4 $ 6.8 $ 7.6
Up 300 basis points $ 21.5 $ 10.3 $ 11.2

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 June 30, ~~2021~~2022 (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 Rule 13a-15(e) and 15d-15(e) of the Exchange Act). 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 filings is recorded, processed, summarized and reported within the time periods specified in the United States Securities and Exchange Commission’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,~~2021, including risk factors related to the ongoing COVID-19 pandemic, 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, ~~2020~~2021 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.
Global economic, political and market conditions, including uncertainty about the financial stability of the United States, could have a significant adverse effect on our business, financial condition and results of operations.
The current worldwide financial markets situation, as well as various social and political tensions in the United States and around the world (including wars and other forms of conflict, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics), may contribute to increased market volatility, may have long term effects on the United States and worldwide financial markets, and may cause economic uncertainties or deterioration in the United States and worldwide.
For example, the COVID-19 pandemic continues to adversely impact global commercial activity and has contributed to significant volatility in financial markets.
In addition, the continuing conflict between Russia and Ukraine, and resulting market volatility, could adversely affect our business, financial condition or results of operations. In response to the conflict between Russia and Ukraine, the U.S. and other countries have imposed sanctions or other restrictive actions against Russia. The ongoing conflict and the rapidly evolving measures in response could be expected to have a negative impact on the economy and business activity globally and could have a material adverse effect on our portfolio companies and our business, financial condition, cash flows and results of operations. The severity and duration of the conflict and its impact on global economic and market conditions are impossible to predict. In addition, sanctions could also result in Russia taking counter measures or retaliatory actions which could adversely impact our business or the business of our portfolio companies, including, but not limited to, cyberattacks targeting private companies, individuals or other infrastructure upon which our business and the business of our portfolio companies rely.

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

~~For~~As set forth in the table below (dollars in thousands, except per share and share amounts), during the six months ended June 30, ~~2021, the Company~~2022, we issued and sold ~~9,201,129~~4,191,292 shares ~~(including dividend reinvestment)~~ of ~~its~~ common stock at an aggregate ~~purchase price~~offering amount of ~~$140~~approximately $68.6 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.
Common stock issue date Offering
price per
share Common stock
shares issued Aggregate
offering
amount
January 24, 2022 $ 16.36 4,191,292 $ 68,582

Item 3. Default Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

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~~
Exhibit Index
3.1 Certificate of Formation (3)
3.2 Initial Limited Liability Company Agreement (1)
3.3 Certificate of Conversion (2)
3.4 Certificate of Incorporation (2)
~~3.5~~3.5* Amended and Restated Bylaws ~~(2)~~
4.1 Description of Securities (3)
10.1 Investment Advisory Agreement (1)
10.2 Administration Agreement (1)
10.3 License Agreement (1)
10.4 Indemnification Agreement (1)
10.5 Custody Agreement (1)
10.6 Subscription Agreement (1)
10.7 Loan and Security Agreement, dated as of February 5, 2021, 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)
10.8 Credit Agreement, dated February 5, 2021, by and between Kayne Anderson BDC, Inc., as borrower, lenders signatories thereto, and agent and the lead arranger (2)
10.9* Second 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
10.10 Senior Secured Revolving Credit Agreement (4)
10.11 Loan and Security Agreement (4)
21.1 Subsidiaries of Kayne Anderson BDC, Inc. (3)
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* 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* 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* 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
99.1 Code of Ethics (1)

(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) Incorporated by reference from the Company’s Form 10-K, as filed with the Securities and Exchange Commission on February 26, 2021.
(4) Incorporated by reference from the Company’s Form 8-K, as filed with the Securities and Exchange Commission on February 25, 2022.

* Filed herewith.

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: August 15, 2022
~~Date: August 16, 2021~~ /s/ James C. Baker, Jr.
Name: James C. Baker, Jr.
Title: Chief Executive Officer
(Principal Executive Officer)
Date: August 15, 2022
~~Date: August 16, 2021~~ /s/ Terry A. Hart
Name: Terry A. Hart
Title: Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)

34
52

	June 30, 2022 (Unaudited)			December 31, 2021
Assets:
Investments, at fair value:
Long-term investments (amortized cost of $706,326 and $566,616)	$	717,964		$	578,445
Short-term investments (amortized cost of $8,405 and $3,674)		8,405			3,674
Cash and cash equivalents		3,414			2,035
Deferred offering costs		-			29
Receivable for principal payments on investments		333			-
Interest receivable		4,350			2,133
Prepaid expenses and other assets		245			148
Total Assets	$	734,711		$	586,464

Liabilities:
Corporate Credit Facility (Note 6)	$	78,000		$	-
Unamortized Corporate Credit Facility issuance costs		(2,176	)		-
Loan and Security Agreement (Note 6)		-			162,000
Unamortized Loan and Security Agreement issuance costs		-			(247	)
Revolving Funding Facility (Note 6)		150,000			-
Unamortized Revolving Funding Facility issuance costs		(2,449	)		-
Subscription Credit Agreement (Note 6)		114,000			105,000
Unamortized Subscription Credit Facility issuance costs		(227	)		(425	)
Accrued organizational and offering costs		-			6
Distributions payable		-			4,615
Management fee payable		1,498			952
Incentive fee payable		1,795			65
Accrued expenses and other liabilities		4,507			2,529
Total Liabilities	$	344,948		$	274,495

Commitments and contingencies (Note 8)

Net Assets:
Common Shares, $0.001 par value; 100,000,000 shares authorized; 23,550,054 and 19,227,902 as of June 30, 2022 and December 31, 2021, respectively, issued and outstanding	$	24		$	19
Additional paid-in capital		371,427			300,726
Total distributable earnings (deficit)		18,312			11,224
Total Net Assets	$	389,763		$	311,969
Total Liabilities and Net Assets	$	734,711		$	586,464
Net Asset Value Per Common Share	$	16.55		$	16.22

	June 30, 2021 (Unaudited)			December 31, 2020
Assets:
Investments, at fair value:
Long-term investments (amortized cost of $215,680)	$	219,701		$	-
Short-term investments (amortized cost of $4,622)		4,622			-
Cash and cash equivalents		3,596			10
Deferred offering costs		180			231
Receivable for sales of investments		2,208			-
Interest receivable		902			-
Prepaid expenses and other assets		109			177
Total Assets	$	231,318		$	418

Liabilities:
Loan and Security Agreement (Note 6)	$	50,000		$	-
Unamortized Loan and Security Agreement issuance costs		(306	)		-
Subscription Credit Facility (Note 6)		31,000			-
Unamortized Subscription Credit Facility issuance costs		(163	)		-
Accrued organizational and offering costs		7			141
Payable for investments purchased		4,109			-
Payables to affiliates (Note 3)		-			1,075
Management fee payable		422			-
Accrued expenses and other liabilities		761			-
Accrued other general and administrative expenses		462			-
Total Liabilities	$	86,292		$	1,216

Commitments and contingencies (Note 8)

Net Assets:
Common Shares, $0.001 par value; 100,000,000 shares authorized; 9,201,129 as of June 30, 2021 issued and outstanding	$	9		$	-
Additional paid-in capital		140,022			-
Total distributable earnings (deficit)		4,995			-
Total member’s capital (deficit)		-			(798	)
Total Net Assets	$	145,026		$	(798	)
Total Liabilities and Net Assets	$	231,318		$	418
Net Asset Value Per Common Share	$	15.76			n/a

	For the three months ended		For the six months ended
	June 30, 2021		June 30, 2021
Income:
Investment income from investments:
Interest income	$	3,818	$	5,555
Total Investment Income		3,818		5,555

Expenses:
Interest expense		928		1,389
Management fees		422		598
Professional fees		185		293
Directors fees		80		145
Offering costs		67		106
Initial organization costs		-		175
Other general and administrative expenses		166		264
Total Expenses		1,848		2,970
Net Investment Income (Loss)		1,970		2,585

Realized and unrealized gains (losses) on investments
Net realized gains (losses):
Investments		15		47
Total net realized gains (losses)		15		47
Net change in unrealized gains (losses):
Investments		1,223		4,021
Total net change in unrealized gains (losses)		1,223		4,021
Total realized and unrealized gains (losses)		1,238		4,068

Net Increase (Decrease) in Net Assets Resulting from Operations	$	3,208	$	6,653

Per Common Share Data:
Basic and diluted net investment income per common share	$	0.24	$	0.35
Basic and diluted net increase in net assets resulting from operations	$	0.38	$	0.91
Weighted Average Common Shares Outstanding - Basic and Diluted		8,346,491		7,337,219

	For the three months ended June 30,				For the six months ended June 30,
	2022		2021		2022			2021
Income:
Investment income from investments:
Interest income	$	12,991	$	3,818		24,892		$	5,555
Total Investment Income		12,991		3,818		24,892			5,555

Expenses:
Management fees		1,498		422		2,824			598
Incentive fees		775		-		1,730			-
Interest expense		3,014		928		5,822			1,389
Professional fees		155		185		300			293
Directors fees		107		80		214			145
Offering costs		-		67		29			106
Initial organization costs		-		-		-			175
Other general and administrative expenses		302		166		615			264
Total Expenses		5,851		1,848		11,534			2,970
Net Investment Income (Loss)		7,140		1,970		13,358			2,585

Realized and unrealized gains (losses) on investments
Net realized gains (losses):
Investments		-		15		23			47
Total net realized gains (losses)		-		15		23			47
Net change in unrealized gains (losses):
Investments		322		1,223		(190	)		4,021
Total net change in unrealized gains (losses)		322		1,223		(190	)		4,021
Total realized and unrealized gains (losses)		322		1,238		(167	)		4,068

Net Increase (Decrease) in Net Assets Resulting from Operations	$	7,462	$	3,208		13,191		$	6,653

Per Common Share Data:
Basic and diluted net investment income per common share	$	0.30	$	0.24		0.58		$	0.35
Basic and diluted net increase in net assets resulting from operations	$	0.32	$	0.38		0.57		$	0.91
Weighted Average Common Shares Outstanding - Basic and Diluted		23,529,376		8,346,491		22,964,415			7,337,219

			Maturity	Principal /		Amortized		Fair		Percentage
Portfolio Company⁽¹⁾	Investment	Interest Rate	Date	Par		Cost⁽²⁾⁽³⁾		Value		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	$	5,031	$	4,924	$	5,081		3.5	%
	First Lien Senior Secured Delayed Draw Loan	8.00% (L + 7.00%	1/22/2027		-		-		-		0.0	%
					5,031		4,924		5,081		3.5	%
Capital goods
Broder Bros., Co.	First Lien Senior Secured Loan	9.75% (L + 8.50%)	12/2/2022		5,430		5,020		5,430		3.7	%
Eastern Wholesale Fence	First Lien Senior Secured Loan	7.50% (L + 6.50%)	10/30/2025		3,325		3,261		3,325		2.3	%
Fastener Distribution Holdings, LLC	First Lien Senior Secured Delayed Draw Loan	8.00% (L + 7.00%)	4/1/2022		2,215		2,200		2,215		1.5	%
	First Lien Senior Secured Loan	8.00% (L + 7.00%)	4/1/2022		1,950		1,937		1,950		1.3	%
Friedrich Air Conditioning Co., LTD	First Lien Senior Secured Loan	7.00% (L + 6.00%)	2/7/2023		1,387		1,377		1,387		1.0	%
GEON Performance Solutions	First Lien Senior Secured Loan	7.88% (L + 6.25%)	10/25/2024		4,123		4,085		4,123		2.8	%
	First Lien Senior Secured Revolving Loan	7.88% (L + 6.25%)	10/25/2024		-		-		-		0.0	%
Refrigeration Sales Corp.	First Lien Senior Secured Loan	7.50% (L + 6.50%)	6/22/2026		6,963		6,841		6,963		4.8	%
					25,393		24,721		25,393		17.4	%
Commercial & professional services
Advanced Environmental Monitoring	First Lien Senior Secured Loan	7.50% (L + 6.50%)	1/29/2026		7,372		7,137		7,372		5.1	%
Gusmer Enterprises, Inc.	First Lien Senior Secured Delayed Draw Loan	6.50% (L + 5.50%)	5/7/2027		1,368		1,293		1,368		0.9	%
	First Lien Senior Secured Revolving Loan	6.50% (L + 5.50%)	5/7/2027		840		789		840		0.6	%
	First Lien Senior Secured Loan	6.50% (L + 5.50%)	5/7/2027		3,518		3,449		3,518		2.4	%
PMFC Holding, LLC	First Lien Senior Secured Delayed Draw Loan	8.50% (L + 7.50%)	7/31/2023		2,862		2,838		2,862		2.0	%
	First Lien Senior Secured Loan	8.50% (L + 7.50%)	7/31/2023		5,704		5,658		5,704		3.9	%
	First Lien Senior Secured Revolving Loan	8.50% (L + 7.50%)	7/31/2023		-		-		-		0.0	%
					21,664		21,164		21,664		14.9	%
Consumer durables and apparel
BEL USA, LLC	First Lien Senior Secured Loan	9.50% (L + 8.00%)	11/2/2023		149		148		147		0.1	%
	First Lien Senior Secured Loan	9.50% (L + 8.00%)	11/2/2023		8,951		8,761		8,817		6.1	%
MacNeill Pride Group	First Lien Senior Secured Delayed Draw Loan	7.50% (L + 6.50%)	4/22/2026		-		-		-		0.0	%
	First Lien Senior Secured Revolving Loan	7.50% (L + 6.50%)	4/22/2026		952		929		952		0.7	%
	First Lien Senior Secured Loan	7.50% (L + 6.50%)	4/22/2026		8,750		8,608		8,750		6.0	%
New Era Cap Company, Inc.	First Lien Senior Secured Loan	7.50% (L + 6.50%)	9/10/2023		12,789		12,680		12,917		8.9	%
YS Garments, LLC	First Lien Senior Secured Loan	7.00% (L + 6.00%)	8/9/2024		8,051		7,866		8,051		5.6	%
					39,642		38,992		39,634		27.4	%

		Interest	Maturity	Principal/		Amortized		Fair		Percentage
Portfolio Company⁽¹⁾	Investment	Rate	Date	Par		Cost⁽²⁾⁽³⁾		Value		of Net Assets
Debt and Equity Investments
Private Credit Investments⁽⁴⁾
Aerospace & defense
Fastener Distribution Holdings, LLC	First lien senior secured delayed draw loan	9.20% (S + 7.00%)	4/1/2024	$	2,194	$	2,178	$	2,194		0.6	%
	First lien senior secured loan	9.20% (S + 7.00%)	4/1/2024		1,931		1,914		1,931		0.5	%
Precinmac (US) Holdings, Inc.	First lien senior secured delayed draw loan	7.63% (S + 6.00%)	8/31/2027		1,119		1,098		1,119		0.3	%
	First lien senior secured loan	7.63% (S + 6.00%)	8/31/2027		4,842		4,757		4,842		1.2	%
	First lien senior secured loan	7.63% (S + 6.00%)	8/31/2027		593		578		593		0.1	%
					10,679		10,525		10,679		2.7	%
Asset management & custody banks
Atria Wealth Solutions, Inc.	First lien senior secured delayed draw loan	8.32% (S + 6.00%)	2/29/2024		-		-		-		0.0	%
	First lien senior secured loan	8.32% (S + 6.00%)	2/29/2024		5,165		5,086		5,165		1.3	%
					5,165		5,086		5,165		1.3	%
Auto components
Speedstar Holding LLC	First lien senior secured delayed draw loan	8.24% (L + 7.00%)	1/22/2027		-		-		-		0.0	%
	First lien senior secured loan	8.24% (L + 7.00%)	1/22/2027		4,933		4,844		4,982		1.3	%
Vehicle Accessories, Inc.	First lien senior secured loan	8.07% (S + 5.75%)	11/30/2026		21,333		20,995		21,333		5.4	%
	First lien senior secured revolving loan	8.07% (S + 5.75%)	11/30/2026		1,078		1,052		1,078		0.3	%
					27,344		26,891		27,393		7.0	%
Building products
BCI Burke Holding Corp.	First lien senior secured delayed draw loan	7.32% (L + 5.75%)	12/14/2023		-		-		-		0.0	%
	First lien senior secured loan	7.32% (L + 5.75%)	12/14/2027		17,217		16,943		17,217		4.4	%
	First lien senior secured revolving loan	7.32% (L + 5.75%)	6/14/2027		70		46		70		0.0	%
Eastern Wholesale Fence	First lien senior secured loan	8.58% (L + 7.00%)	10/30/2025		3,288		3,194		3,288		0.9	%
	First lien senior secured loan	8.58% (L + 7.00%)	10/30/2025		18,223		17,779		18,223		4.7	%
	First lien senior secured revolving loan	8.58% (L + 7.00%)	10/30/2025		1,701		1,673		1,701		0.4	%
					40,499		39,635		40,499		10.4	%
Chemicals
Cyalume Technologies Holdings, Inc.	First lien senior secured loan	7.25% (L + 5.00%)	10/25/2024		1,334		1,324		1,334		0.3	%
Fralock Buyer LLC	First lien senior secured loan	7.17% (L + 5.50%)	4/17/2024		9,251		9,125		9,182		2.4	%
	First lien senior secured loan	7.17% (L + 5.50%)	4/17/2024		2,440		2,409		2,422		0.6	%
	First lien senior secured revolving loan	7.17% (L + 5.50%)	4/17/2024		-		-		-		0.0	%
Shrieve Chemical Company, LLC	First lien senior secured loan	8.01% (L + 6.00%)	12/2/2024		614		600		614		0.2	%

	Number of				Fair			Percentage
	Shares		Cost		Value			of Net Assets
Short-Term Investments
First American Treasury Obligations Fund - Institutional Class Z, 0.01% (8)		937		937		937			0.7	%
First American U.S. Treasury Money Market Fund - Institutional Class Z, 0.01% (8)		3,685		3,685		3,685			2.5	%
Total Short-Term Investments		4,622		4,622		4,622			3.2	%

Total Investments			$	220,302	$	224,323			154.7	%

Liabilities in Excess of Other Assets						(79,297	)		(54.7	)%
Net Assets					$	145,026			100.0	%

	Number				Fair		Percentage
	of Units		Cost		Value		of Net Assets
Private Equity Investments
Auto components
Vehicle Accessories, Inc. - Class A common (6)(7)		128.250		-		-		0.0	%
Vehicle Accessories, Inc. - preferred (6)(7)		250.000		250		258		0.1	%
		378.250		250		258		0.1	%
Commercial services & supplies
American Equipment Holdings LLC (6)		250.000		250		250		0.1	%
BLP Buyer, Inc. (Bishop Lifting Products) - Class A common (6)(8)		500.000		500		500		0.1	%
		750.000		750		750		0.2	%
Food products
Siegel Parent, LLC (9)		0.250		250		375		0.1	%
Total Private Equity Investments		1,128.500		1,250		1,383		0.4	%

Total Private Investments				706,326		717,964		184.3	%

	(1)	As of June 30, 2022, 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)	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.

(3)	As of June 30, 2022, the tax cost of the Company’s investments approximates their amortized cost.

(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 Offered Rate (“LIBOR” or “L”) (which can include one-, two-, three- or six-month LIBOR), 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).

(5)	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.


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

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

(9)	The Company owns 50% of a pass-through LLC, KSCF IV Equity Aggregator, LLC (the “Aggregator”), which holds 500 Class A units of Siegel Parent, LLC. The Aggregator’s ownership of Siegel Parent, LLC is 1.14%. Through the Company’s ownership of the Aggregator, the Company owns 250 Class A units of Siegel Parent, LLC.

(10)	The indicated rate is the yield as of June 30, 2022.

Portfolio Company⁽¹⁾	Investment	Interest Rate	Maturity Date	Principal/ Par		Amortized Cost⁽²⁾⁽³⁾		Fair Value		Percentage of Net Assets
Debt and Equity Investments
Private Credit Investments⁽⁴⁾
Automobiles & components
Speedstar Holding LLC	First lien senior secured loan	8.00% (L + 7.00%)	1/22/2027	$	5,005	$	4,906	$	5,055		1.6	%
	First lien senior secured delayed draw loan	8.00% (L + 7.00%)	1/22/2027		-		-		-		0.0	%
Vehicle Accessories, Inc.	First lien senior secured loan	6.50% (L + 5.50%)	11/30/2026		18,382		18,034		18,382		5.9	%
	First lien senior secured revolving loan	6.50% (L + 5.50%)	11/30/2026		-		-		-		0.0	%
					23,387		22,940		23,437		7.5	%
Capital goods
Blade (US) Holdings, Inc.	First lien senior secured loan	7.00% (L + 6.00%)	8/31/2027		4,866		4,763		4,866		1.6	%
	First lien senior secured delayed draw loan	7.00% (L + 6.00%)	3/3/2023		-		-		-		0.0	%
Broder Bros., Co.	First lien senior secured loan	8.00% (L + 7.00%)	12/2/2022		5,369		5,044		5,369		1.7	%
CGI Automated Manufacturing, LLC	First lien senior secured loan	6.50% (L + 5.50%)	12/17/2026		18,478		18,020		18,478		5.9	%
	First lien senior secured delayed draw loan	6.50% (L + 5.50%)	12/17/2026		-		-		-		0.0	%
	First lien senior secured revolving loan	6.50% (L + 5.50%)	12/17/2026		-		-		-		0.0	%
Eastern Wholesale Fence	First lien senior secured revolving loan	8.00% (L + 7.00%)	10/30/2025		1,035		1,002		1,035		0.3	%
	First lien senior secured loan	8.00% (L + 7.00%)	10/30/2025		3,317		3,210		3,317		1.1	%
	First lien senior secured loan	8.00% (L + 7.00%)	10/30/2025		18,384		17,873		18,384		5.9	%
EIS Legacy, LLC	First lien senior secured loan	6.50% (L + 5.50%)	11/1/2027		18,462		17,998		18,462		5.9	%
	First lien senior secured delayed draw loan	6.50% (L + 5.50%)	11/1/2027		-		-		-		0.0	%
	First lien senior secured revolving loan	6.50% (L + 5.50%)	11/1/2027		-		-		-		0.0	%
Fastener Distribution Holdings, LLC	First lien senior secured delayed draw loan	8.00% (L + 7.00%)	4/1/2022		2,205		2,194		2,205		0.7	%
	First lien senior secured loan	8.00% (L + 7.00%)	4/1/2022		1,942		1,939		1,942		0.6	%
I.D. Images Acquisition, LLC	First lien senior secured delayed draw loan	7.25% (L + 6.25%)	1/30/2023		2,634		2,609		2,634		0.9	%
	First lien senior secured revolving loan	7.25% (L + 6.25%)	7/30/2026		450		420		450		0.2	%
	First lien senior secured loan	7.25% (L + 6.25%)	7/30/2026		15,570		15,353		15,570		5.0	%
Refrigeration Sales Corp.	First lien senior secured loan	7.50% (L + 6.50%)	6/22/2026		6,945		6,835		6,945		2.2	%
United Safety & Survivability Corporation (USSC)	First lien senior secured loan	7.00% (L + 6.00%)	9/30/2027		12,690		12,439		12,690		4.1	%
	First lien senior secured revolving loan	7.00% (L + 6.00%)	9/30/2027		402		379		402		0.1	%
	First lien senior secured delayed draw loan	7.00% (L + 6.00%)	9/30/2023		-		-		-		0.0	%
					112,749		110,078		112,749		36.2	%
Commercial & professional services
4 Over International, LLC	First lien senior secured loan	7.50% (L + 6.50%)	10/29/2027		24,875		24,249		24,875		8.0	%

	Number of Units		Cost		Fair Value		Percentage of Net Assets
Equity Investments
Food & beverage
Siegel Parent, LLC (6)		0.250		250		250		0.1	%
Total Private Equity Investments		0.250		250		250		0.1	%

Total Private Investments			$	566,616	$	578,445		185.6	%

	Number of Shares		Cost		Fair Value			Percentage of Net Assets
Short-Term Investments
First American Treasury Obligations Fund - Institutional Class Z, 0.01% (7)		3,674		3,674		3,674			1.2	%
Total Short-Term Investments		3,674		3,674		3,674			1.2	%

Total Investments			$	570,290	$	582,119			186.8	%

Liabilities in Excess of Other Assets						(270,150	)		(86.8	)%
Net Assets					$	311,969			100.0	%

	●	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 officers of the Company are authorized to make valuation determinations. All valuation determinations of the Audit Committee are subject to ratification by the Board at its next regular meeting.

	●	Valuation Firm. Quarterly, third-party valuation firms engaged by the Board review the valuation methodologies and calculations employed for each of the Company’s investments that the Company has placed on the “watch list” and approximately 25% of its remaining investments. These third-party valuation firms will review 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 these third-party valuation firms will assist the Board in determining the fair values of the investments reviewed.

	June 30, 2021				June 30, 2022				December 31, 2021
	Amortized		Fair		Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value		Cost		Value
First-lien senior secured debt investments	$	214,828	$	218,838	$	705,076	$	716,581	$	566,366	$	578,195
Senior unsecured debt investments		852		863
Equity investments						1,250		1,383		250		250
Short-term investments		4,622		4,622		8,405		8,405		3,674		3,674
Total Investments	$	220,302	$	224,323	$	714,731	$	726,369	$	570,290	$	582,119

	June 30, ~~2021~~2022
Commercial services & supplies		17.9	%
~~Consumer durables and apparel~~Trading companies & distributors		~~18.7~~12.2	%
~~Materials~~		~~15.4~~	%
~~Capital goods~~		~~12.7~~	%
~~Commercial & professional services~~		~~9.9~~	%
~~Household & personal products~~		~~9.8~~	%
~~Healthcare equipment~~Health care providers & services		~~7.0~~12.1	%
Food ~~beverage & tobacco~~products		~~6.6~~7.2	%
~~Retailing~~Building products		~~4.3~~5.6	%
~~Pharmaceuticals, biotech & life sciences~~Chemicals		~~4.2~~4.7	%
~~Telecommunication~~Diversified telecommunication services		~~2.9~~4.4	%
~~Automobiles &~~Software		4.0	%
Leisure products		3.9	%
Auto components		~~2.5~~3.9	%
~~Diversified financials~~Professional services		~~2.4~~3.4	%
~~Software~~Wireless telecommunication services		3.3	%
Household durables		3.2	%
Personal products		3.0	%
Household products		2.8	%
Textiles, apparel & ~~services~~luxury goods		2.1	%
Aerospace & defense		1.5	%
Specialty retail		1.2	%
~~Transportation~~Pharmaceuticals		1.1	%
Containers & packaging		1.0	%
~~Energy~~Asset management & custody banks		0.7	%
~~Consumer~~Electronic equipment, instruments & components		0.4	%
Machinery		0.3	%
IT services		~~0.5~~	%
~~Media & entertainment~~		0.1	%
~~Technology hardware & equipment~~		~~0.1~~	%
~~Chemicals~~		~~0.0~~	%
Total		100.0	%

	December 31, 2021
Commercial & professional services		19.6	%
Capital goods		19.5	%
Consumer durables & apparel		15.8	%
Telecommunication services		8.8	%
Health care equipment & services		8.5	%
Household & personal products		7.4	%
Materials		7.0	%
Automobiles & components		4.1	%
Food & beverage		2.9	%
Software & services		2.4	%
Retailing		1.6	%
Pharmaceuticals, biotech & life sciences		1.5	%
Diversified financials		0.9	%
Total		100.0	%

	Fair Value Hierarchy as of June 30, 2021
Investments:	Level 1		Level 2		Level 3		Total
First-lien senior secured debt investments	$	-	$	13,679	$	205,159	$	218,838
Senior unsecured debt investments		-		863		-		863
Short-term investments	$	4,622	$	-	$	-	$	4,622
Total Investments	$	4,622	$	14,542	$	205,159	$	224,323

	Fair Value Hierarchy as of June 30, 2022
Investments:	Level 1		Level 2		Level 3		Total
First-lien senior secured debt investments	$	-	$	-	$	716,581	$	716,581
Private equity investments		-		-		1,383		1,383
Short-term investments		8,405		-		-		8,405
Total Investments	$	8,405	$	-	$	717,964	$	726,369

	Fair Value Hierarchy as of December 31, 2021
Investments:	Level 1		Level 2		Level 3		Total
First-lien senior secured debt investments	$	-	$	-	$	578,195	$	578,195
Private equity investments		-		-		250		250
Short-term investments		3,674		-		-		3,674
Total Investments	$	3,674	$	-	$	578,445	$	582,119

	For the three months ended
	June 30, 2021

For the three months ended June 30, 2022				First-lien senior secured debt investments			Private equity investments		Total
Fair value, beginning of period	$	151,957		$	616,067		$	1,000	$	617,067
Purchases of investments		55,122			114,678			250		114,928
Proceeds from principal payments and sales of investments		(3,344	)
Proceeds from sales of investments and principal repayments					(15,615	)		-		(15,615	)
Net change in unrealized gain (loss)		1,126			189			133		322
Net realized gain (loss)					-			-		-
Net accretion of discount on investments		298			1,262			-		1,262
Transfers into (out of) Level 3		-			-			-		-
Fair value, end of period	$	205,159		$	716,581		$	1,383	$	717,964

	For the six months ended
	June 30, 2021

For the three months ended June 30, 2021				First-lien senior secured debt investments			Private equity investments		Total
Fair value, beginning of period	$	-		$	151,957		$	-	$	151,957
Purchases of investments		204,434			55,122			-		55,122
Proceeds from principal payments and sales of investments		(3,649	)
Proceeds from sales of investments and principal repayments					(3,344	)		-		(3,344	)
Net change in unrealized gain (loss)		3,908			1,126			-		1,126
Net realized gain (loss)					-			-		-
Net accretion of discount on investments		466			298			-		298
Transfers into (out of) Level 3		-			-			-		-
Fair value, end of period	$	205,159		$	205,159		$	-	$	205,159

For the six months ended June 30, 2022	First-lien senior secured debt investments			Private equity investments		Total
Fair value, beginning of period	$	578,195		$	250	$	578,445
Purchases of investments		180,452			1,000		181,452
Proceeds from sales of investments and principal repayments		(43,777	)		-		(43,777	)
Net change in unrealized gain (loss)		(323	)		133		(190	)
Net realized gain (loss)		23			-		23
Net accretion of discount on investments		2,011			-		2,011
Transfers into (out of) Level 3		-			-		-
Fair value, end of period	$	716,581		$	1,383	$	717,964

For the six months ended June 30, 2021	First-lien senior secured debt investments			Private Equity investments		Total
Fair value, beginning of period	$	-		$	-	$	-
Purchases of investments		204,434			-		204,434
Proceeds from sales of investments and principal repayments		(3,649	)		-		(3,649	)
Net change in unrealized gain (loss)		3,908			-		3,908
Net realized gain (loss)		-			-		-
Net accretion of discount on investments		466			-		466
Transfers into (out of) Level 3					-		-
Fair value, end of period	$	205,159		$	-	$	205,159

	As of June 30, 2022
	Fair Value		Valuation Technique	Unobservable Input	Range		Weighted Average
First-lien senior secured debt investments	$	716,581	Market Approach - Yield Analysis	Credit Spreads		5.00% - 8.50%		6.01	%
Private equity investments	$	1,008	Precedent Transaction Analysis	Transaction Price		1.0		1.0
	$	375	Precedent Transaction Analysis	EBITDA Multiples		9.00% - 9.00%		9.00	%
	$	717,964

	As of December 31, 2021
	Fair Value		Valuation Technique	Unobservable Input	Range	Weighted Average
First-lien senior secured debt investments	$	578,195	Market Approach - Yield Analysis	Credit Spreads	5.00% - 8.50%		6.00	%
Private equity investments	$	250	Precedent Transaction Analysis	Transaction Price	1.0		1.0
	$	578,445

	June 30, 2021
	Aggregate Principal Committed		Outstanding Principal		Amount Available⁽¹⁾		Net Carrying Value⁽²⁾
Loan and Security Agreement (LSA)	$	150,000	$	50,000	$	100,000	$	49,694
Credit Agreement		75,000		31,000		44,000		30,837
Total debt	$	225,000	$	81,000	$	144,000	$	80,531

	June 30, 2022
	Aggregate Principal Committed		Outstanding Principal		Amount Available⁽¹⁾		Net Carrying Value⁽²⁾
Corporate Credit Facility	$	275,000	$	78,000	$	197,000	$	75,824
Revolving Funding Facility		250,000		150,000		30,007		147,551
Subscription Credit Agreement		175,000		114,000		61,000		113,773
Total debt	$	700,000	$	342,000	$	288,007	$	337,148

	(1)	The amount available reflects any limitations related to ~~the Credit Facility’s~~each credit facility’s borrowing ~~base.~~base as of June 30, 2022.