UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
(Mark One)
 
þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31,June 30, 2020
OR
 
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 1-33901
Oaktree Specialty Lending Corporation

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
DELAWARE
(State or jurisdiction of
incorporation or organization)
 
26-1219283
(I.R.S. Employer
Identification No.)
333 South Grand Avenue, 28th Floor
Los Angeles, CA
(Address of principal executive office)
 
90071
(Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(213) 830-6300


SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each ClassTrading Symbol(s)
Name of Each Exchange

on Which Registered
Common Stock, par value $0.01 per shareOCSL The Nasdaq Stock Market LLC

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  þ     NO  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    YES  ¨   NO  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer  ¨
Accelerated filer  þ
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  þ
The registrant had 140,960,651 shares of common stock outstanding as of May 5,August 6, 2020.



OAKTREE SPECIALTY LENDING CORPORATION
FORM 10-Q FOR THE QUARTER ENDED MARCH 31,JUNE 30, 2020



TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION
Item 1.
Consolidated Financial Statements:
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
Item 4.
Controls and Procedures
PART II — OTHER INFORMATION
Item 1.
Legal Proceedings
Item 1A.
Risk Factors
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.3.
Defaults Upon Senior Securities
Item 4.4.
Mine Safety Disclosures
102
Item 5.
102
Item 6.5.
ExhibitsOther Information
SignaturesItem 6.
103Exhibits
Signatures

 




 






 




 


PART I — FINANCIAL INFORMATION

Item 1.Consolidated Financial Statements.

Oaktree Specialty Lending Corporation
Consolidated Statements of Assets and Liabilities
(in thousands, except per share amounts)
June 30, 2020 (unaudited)September 30, 2019
ASSETS
Investments at fair value:
Control investments (cost June 30, 2020: $255,481; cost September 30, 2019: $224,255)$200,799  $209,178  
Affiliate investments (cost June 30, 2020: $8,367; cost September 30, 2019: $8,449)7,249  9,170  
Non-control/Non-affiliate investments (cost June 30, 2020: $1,432,729; cost September 30, 2019: $1,280,310)1,353,105  1,219,694  
Total investments at fair value (cost June 30, 2020: $1,696,577; cost September 30, 2019: $1,513,014)1,561,153  1,438,042  
Cash and cash equivalents50,728  15,406  
Interest, dividends and fees receivable8,768  11,167  
Due from portfolio companies2,719  2,616  
Receivables from unsettled transactions14,106  4,586  
Deferred financing costs6,383  6,396  
Deferred offering costs67  —  
Deferred tax asset, net766  —  
Derivative assets at fair value870  490  
Other assets2,007  2,335  
Total assets$1,647,567  $1,481,038  
LIABILITIES AND NET ASSETS
Liabilities:
Accounts payable, accrued expenses and other liabilities$903  $1,589  
Base management fee and incentive fee payable12,989  10,167  
Due to affiliate2,213  2,689  
Interest payable4,225  2,296  
Payables from unsettled transactions7,172  59,596  
Deferred tax liability—  704  
Credit facility payable466,825  314,825  
Unsecured notes payable (net of $3,457 and $2,708 of unamortized financing costs as of June 30, 2020 and September 30, 2019, respectively)294,177  158,542  
Total liabilities788,504  550,408  
Commitments and contingencies (Note 14)
Net assets:
Common stock, $0.01 par value per share, 250,000 shares authorized; 140,961 shares issued and outstanding as of June 30, 2020 and September 30, 20191,409  1,409  
Additional paid-in-capital1,487,774  1,487,774  
Accumulated overdistributed earnings(630,120) (558,553) 
Total net assets (equivalent to $6.09 and $6.60 per common share as of June 30, 2020 and September 30, 2019, respectively) (Note 12)859,063  930,630  
Total liabilities and net assets$1,647,567  $1,481,038  
  
March 31, 2020 (unaudited)
 September 30, 2019
ASSETS
Investments at fair value:    
Control investments (cost March 31, 2020: $255,739; cost September 30, 2019: $224,255) $187,267
 $209,178
Affiliate investments (cost March 31, 2020: $10,487; cost September 30, 2019: $8,449) 9,414
 9,170
Non-control/Non-affiliate investments (cost March 31, 2020: $1,362,354; cost September 30, 2019: $1,280,310) 1,195,506
 1,219,694
Total investments at fair value (cost March 31, 2020: $1,628,580; cost September 30, 2019: $1,513,014) 1,392,187
 1,438,042
Cash and cash equivalents 89,509
 15,406
Interest, dividends and fees receivable 6,217
 11,167
Due from portfolio companies 1,774
 2,616
Receivables from unsettled transactions 1,868
 4,586
Deferred financing costs 5,671
 6,396
Deferred offering costs 45
 —
Deferred tax asset, net 821
 —
Derivative assets at fair value 1,268
 490
Other assets 2,267
 2,335
Total assets $1,501,627
 $1,481,038
LIABILITIES AND NET ASSETS
Liabilities: 
  
Accounts payable, accrued expenses and other liabilities $1,750
 $1,589
Base management fee and incentive fee payable 8,739
 10,167
Due to affiliate 2,651
 2,689
Interest payable 1,681
 2,296
Payables from unsettled transactions 35,896
 59,596
Deferred tax liability —
 704
Credit facility payable 404,825
 314,825
Unsecured notes payable (net of $3,645 and $2,708 of unamortized financing costs as of March 31, 2020 and September 30, 2019, respectively) 293,861
 158,542
Total liabilities 749,403
 550,408
Commitments and contingencies (Note 14) 
  
Net assets:    
Common stock, $0.01 par value per share, 250,000 shares authorized; 140,961 shares issued and outstanding as of March 31, 2020 and September 30, 2019 1,409
 1,409
Additional paid-in-capital 1,487,774
 1,487,774
Accumulated overdistributed earnings (736,959) (558,553)
Total net assets (equivalent to $5.34 and $6.60 per common share as of March 31, 2020 and September 30, 2019, respectively) (Note 12) 752,224
 930,630
Total liabilities and net assets $1,501,627
 $1,481,038

See notes to Consolidated Financial Statements.
1

Oaktree Specialty Lending Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three months ended
June 30, 2020		Three months ended
June 30, 2019		Nine months ended
June 30, 2020		Nine months ended
June 30, 2019
Interest income:
Control investments$2,558  $2,859  $7,502  $9,050  
Affiliate investments127  70  379  105  
Non-control/Non-affiliate investments27,406  29,850  80,214  93,248  
Interest on cash and cash equivalents21  131  320  605  
Total interest income30,112  32,910  88,415  103,008  
PIK interest income:
Control investments—  —  —  67  
Non-control/Non-affiliate investments2,183  1,198  5,290  4,243  
Total PIK interest income2,183  1,198  5,290  4,310  
Fee income:
Control investments13  6  27  19  
Affiliate investments5  5  15  14  
Non-control/Non-affiliate investments1,809  1,815  4,906  4,127  
Total fee income1,827  1,826  4,948  4,160  
Dividend income:
Control investments281  735  881  1,711  
Total dividend income281  735  881  1,711  
Total investment income34,403  36,669  99,534  113,189  
Expenses:
Base management fee5,988  5,548  16,890  16,847  
Part I incentive fee3,556  3,787  9,988  11,328  
Part II incentive fee—  607  (5,557) 10,597  
Professional fees545  721  1,854  2,186  
Directors fees143  143  428  428  
Interest expense6,406  7,592  20,156  25,466  
Administrator expense373  384  1,194  1,553  
General and administrative expenses622  645  1,934  1,981  
Total expenses17,633  19,427  46,887  70,386  
Reversal of fees waived / (fees waived)—  634  5,200  (8,831) 
Net expenses17,633  20,061  52,087  61,555  
Net investment income16,770  16,608  47,447  51,634  
Unrealized appreciation (depreciation):
Control investments13,790  3,419  (39,605) 1,467  
Affiliate investments(45) —  (1,839) (181) 
Non-control/Non-affiliate investments87,225  20,744  (19,018) 37,068  
Secured borrowings—  —  —  (95) 
Foreign currency forward contracts(398) (768) 380  (367) 
Net unrealized appreciation (depreciation)100,572  23,395  (60,082) 37,892  
Realized gains (losses):
Control investments—  —  777  —  
Non-control/Non-affiliate investments2,821  (21,112) (18,117) 21,548  
Extinguishment of unsecured notes payable—  —  (2,541) —  
Foreign currency forward contracts—  1,268  (490) 1,783  
Net realized gains (losses)2,821  (19,844) (20,371) 23,331  
Provision for income tax (expense) benefit68  (173) 1,613  (668) 
Net realized and unrealized gains (losses), net of taxes103,461  3,378  (78,840) 60,555  
Net increase (decrease) in net assets resulting from operations$120,231  $19,986  $(31,393) $112,189  
Net investment income per common share — basic and diluted$0.12  $0.12  $0.34  $0.37  
Earnings (loss) per common share — basic and diluted (Note 5)$0.85  $0.14  $(0.22) $0.80  
Weighted average common shares outstanding — basic and diluted140,961  140,961  140,961  140,961  
  Three months ended
March 31, 2020		 Three months ended
March 31, 2019		 Six months ended March 31, 2020 Six months ended
March 31, 2019
Interest income:        
Control investments $2,393
 $2,852
 $4,944
 $6,191
Affiliate investments 138
 22
 252
 35
Non-control/Non-affiliate investments 27,149
 31,231
 52,808
 63,398
Interest on cash and cash equivalents 218
 204
 299
 474
Total interest income 29,898
 34,309
 58,303
 70,098
PIK interest income:        
Control investments —
 —
 —
 67
Non-control/Non-affiliate investments 1,946
 2,280
 3,107
 3,045
Total PIK interest income 1,946
 2,280
 3,107
 3,112
Fee income:        
Control investments 8
 7
 14
 13
Affiliate investments 5
 5
 10
 9
Non-control/Non-affiliate investments 2,037
 1,120
 3,097
 2,312
Total fee income 2,050
 1,132
 3,121
 2,334
Dividend income:        
Control investments 277
 523
 600
 976
Total dividend income 277
 523
 600
 976
Total investment income 34,171
 38,244
 65,131
 76,520
Expenses:        
Base management fee 5,295
 5,731
 10,902
 11,299
Part I incentive fee 3,444
 3,813
 6,432
 7,541
Part II incentive fee (6,608) 8,170
 (5,557) 9,990
Professional fees 669
 499
 1,309
 1,465
Directors fees 142
 142
 285
 285
Interest expense 7,215
 8,970
 13,750
 17,874
Administrator expense 393
 406
 821
 1,169
General and administrative expenses 780
 705
 1,312
 1,336
Total expenses 11,330
 28,436
 29,254
 50,959
Reversal of fees waived / (fees waived) —
 (7,901) 5,200
 (9,465)
Net expenses 11,330
 20,535
 34,454
 41,494
Net investment income 22,841
 17,709
 30,677
 35,026
Unrealized appreciation (depreciation):        
Control investments (55,392) 3,868
 (53,395) (1,952)
Affiliate investments (1,730) (181) (1,794) (181)
Non-control/Non-affiliate investments (108,651) 17,108
 (106,243) 16,324
Secured borrowings —
 (76) —
 (95)
Foreign currency forward contracts 2,240
 753
 778
 401
Net unrealized appreciation (depreciation) (163,533) 21,472
 (160,654) 14,497
Realized gains (losses):        
Control investments 777
 —
 777
 —
Non-control/Non-affiliate investments (24,777) 25,899
 (20,938) 42,660
Extinguishment of unsecured notes payable (2,541) —
 (2,541) —
Foreign currency forward contracts 61
 (686) (490) 515
Net realized gains (losses) (26,480) 25,213
 (23,192) 43,175
Provision for income tax (expense) benefit 1,705
 91
 1,545
 (495)
Net realized and unrealized gains (losses), net of taxes (188,308) 46,776
 (182,301) 57,177
Net increase (decrease) in net assets resulting from operations $(165,467) $64,485
 $(151,624) $92,203
Net investment income per common share — basic and diluted $0.16
 $0.13
 $0.22
 $0.25
Earnings (loss) per common share — basic and diluted (Note 5) $(1.17) $0.46
 $(1.08) $0.65
Weighted average common shares outstanding — basic and diluted 140,961
 140,961
 140,961
 140,961

See notes to Consolidated Financial Statements.

2

Oaktree Specialty Lending Corporation
Consolidated Statements of Changes in Net Assets
(in thousands, except per share amounts)
(unaudited)

Three months ended
June 30, 2020		Three months ended
June 30, 2019		Nine months ended
June 30, 2020		Nine months ended
June 30, 2019
Operations:
Net investment income$16,770  $16,608  $47,447  $51,634  
Net unrealized appreciation (depreciation)100,572  23,395  (60,082) 37,892  
Net realized gains (losses)2,821  (19,844) (20,371) 23,331  
Provision for income tax (expense) benefit
68  (173) 1,613  (668) 
Net increase (decrease) in net assets resulting from operations120,231  19,986  (31,393) 112,189  
Stockholder transactions:
Distributions to stockholders(13,392) (13,392) (40,174) (40,174) 
Net increase (decrease) in net assets from stockholder transactions(13,392) (13,392) (40,174) (40,174) 
Capital share transactions:
Issuance of common stock under dividend reinvestment plan390  332  1,377  1,028  
Repurchases of common stock under dividend reinvestment plan(390) (332) (1,377) (1,028) 
Net increase (decrease) in net assets from capital share transactions—  —  —  —  
Total increase (decrease) in net assets106,839  6,594  (71,567) 72,015  
Net assets at beginning of period752,224  923,456  930,630  858,035  
Net assets at end of period$859,063  $930,050  $859,063  $930,050  
Net asset value per common share$6.09  $6.60  $6.09  $6.60  
Common shares outstanding at end of period140,961  140,961  140,961  140,961  

  Three months ended
March 31, 2020		 Three months ended
March 31, 2019		 Six months ended
March 31, 2020		 Six months ended
March 31, 2019
Operations:        
Net investment income $22,841
 $17,709
 $30,677
 $35,026
Net unrealized appreciation (depreciation) (163,533) 21,472
 (160,654) 14,497
Net realized gains (losses) (26,480) 25,213
 (23,192) 43,175
Provision for income tax (expense) benefit

 1,705
 91
 1,545
 (495)
Net increase (decrease) in net assets resulting from operations (165,467) 64,485
 (151,624) 92,203
Stockholder transactions:        
Distributions to stockholders (13,391) (13,391) (26,782) (26,782)
Net increase (decrease) in net assets from stockholder transactions (13,391) (13,391) (26,782) (26,782)
Capital share transactions:        
Issuance of common stock under dividend reinvestment plan 506
 312
 987
 696
Repurchases of common stock under dividend reinvestment plan (506) (312) (987) (696)
Net increase (decrease) in net assets from capital share transactions —
 —
 —
 —
Total increase (decrease) in net assets (178,858) 51,094
 (178,406) 65,421
Net assets at beginning of period 931,082
 872,362
 930,630
 858,035
Net assets at end of period $752,224
 $923,456
 $752,224
 $923,456
Net asset value per common share $5.34
 $6.55
 $5.34
 $6.55
Common shares outstanding at end of period 140,961
 140,961
 140,961
 140,961




See notes to Consolidated Financial Statements.
3
Oaktree Specialty Lending Corporation
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)





Nine months ended
June 30, 2020		Nine months ended
June 30, 2019
Operating activities:
Net increase (decrease) in net assets resulting from operations$(31,393) $112,189  
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net unrealized (appreciation) depreciation60,082  (37,892) 
Net realized (gains) losses20,371  (23,331) 
PIK interest income(5,290) (4,310) 
Accretion of original issue discount on investments(8,378) (15,942) 
Accretion of original issue discount on unsecured notes payable175  107  
Amortization of deferred financing costs1,565  2,008  
Deferred taxes(1,470) 297  
Purchases of investments(576,866) (351,666) 
Proceeds from the sales and repayments of investments388,338  467,307  
Changes in operating assets and liabilities:
(Increase) decrease in interest, dividends and fees receivable3,267  (622) 
(Increase) decrease in due from portfolio companies(103) (493) 
(Increase) decrease in receivables from unsettled transactions(9,520) 26,756  
(Increase) decrease in other assets328  429  
Increase (decrease) in accounts payable, accrued expenses and other liabilities(686) (2,503) 
Increase (decrease) in base management fee and incentive fee payable2,822  1,764  
Increase (decrease) in due to affiliate(476) 157  
Increase (decrease) in interest payable1,929  (1,098) 
Increase (decrease) in payables from unsettled transactions(52,424) (37,236) 
Increase (decrease) in amounts payable to syndication partners—  (109) 
Net cash provided by (used in) operating activities(207,729) 135,812  
Financing activities:
Distributions paid in cash(38,797) (39,146) 
Borrowings under credit facilities286,000  241,825  
Repayments of borrowings under credit facilities(134,000) (113,000) 
Repayments of unsecured notes(161,250) (228,825) 
Issuance of unsecured notes297,459  —  
Repayments of secured borrowings—  (812) 
Repurchases of common stock under dividend reinvestment plan(1,377) (1,028) 
Deferred financing costs paid(4,835) (2,883) 
Deferred offering costs paid(67) —  
Net cash provided by (used in) financing activities243,133  (143,869) 
Effect of exchange rate changes on foreign currency(82) 205  
Net increase (decrease) in cash and cash equivalents and restricted cash35,322  (7,852) 
Cash and cash equivalents and restricted cash, beginning of period15,406  13,489  
Cash and cash equivalents and restricted cash, end of period$50,728  $5,637  
Supplemental information:
Cash paid for interest$16,487  $24,557  
Non-cash financing activities:
Issuance of shares of common stock under dividend reinvestment plan$1,377  $1,028  
  Six months ended
March 31, 2020		 Six months ended
March 31, 2019
Operating activities:    
Net increase (decrease) in net assets resulting from operations $(151,624) $92,203
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:    
Net unrealized (appreciation) depreciation 160,654
 (14,497)
Net realized (gains) losses 23,192
 (43,175)
PIK interest income (3,107) (3,112)
Accretion of original issue discount on investments (5,454) (13,224)
Accretion of original issue discount on unsecured notes payable 48
 107
Amortization of deferred financing costs 968
 1,545
Deferred taxes (1,525) 291
Purchases of investments (379,169) (270,266)
Proceeds from the sales and repayments of investments 251,499
 329,035
Changes in operating assets and liabilities:    
(Increase) decrease in interest, dividends and fees receivable 4,950
 1,575
(Increase) decrease in due from portfolio companies 842
 (50)
(Increase) decrease in receivables from unsettled transactions 2,718
 24,942
(Increase) decrease in other assets 68
 189
Increase (decrease) in accounts payable, accrued expenses and other liabilities 163
 (2,076)
Increase (decrease) in base management fee and incentive fee payable (1,428) 699
Increase (decrease) in due to affiliate (38) (1,334)
Increase (decrease) in interest payable (615) (1,248)
Increase (decrease) in payables from unsettled transactions (23,700) (27,336)
Increase (decrease) in amounts payable to syndication partners —
 477
Net cash provided by (used in) operating activities (121,558) 74,745
Financing activities:    
Distributions paid in cash (25,795) (26,086)
Borrowings under credit facilities 224,000
 228,825
Repayments of borrowings under credit facilities (134,000) (45,000)
Repayments of unsecured notes (161,250) (228,825)
Issuance of unsecured notes 297,459
 —
Repayments of secured borrowings —
 (692)
Repurchases of common stock under dividend reinvestment plan (987) (696)
Deferred financing costs paid (3,715) (2,608)
Deferred offering costs paid (45) —
Net cash provided by (used in) financing activities 195,667
 (75,082)
Effect of exchange rate changes on foreign currency (6) —
Net increase (decrease) in cash and cash equivalents and restricted cash 74,103
 (337)
Cash and cash equivalents and restricted cash, beginning of period 15,406
 13,489
Cash and cash equivalents and restricted cash, end of period $89,509
 $13,152
Supplemental information:    
Cash paid for interest $13,349
 $17,472
Non-cash financing activities:    
Issuance of shares of common stock under dividend reinvestment plan $987
 $696

See notes to Consolidated Financial Statements.
4
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
March 31,June 30, 2020
(dollar amounts in thousands)
(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Control Investments(8)(9)
C5 Technology Holdings, LLCData Processing & Outsourced Services
829 Common Units$—  $—  (20)
34,984,460.37 Preferred Units34,984  27,638  (20)
34,984  27,638  
Dominion Diagnostics, LLCHealth Care Services
First Lien Term Loan, LIBOR+5.00% cash due 2/28/20246.00 %$27,730  27,730  27,730  (6)(20)
First Lien Revolver, LIBOR+5.00% cash due 2/28/20246.00 %5,260  5,260  5,260  (6)(19)(20)
30,030.8 Common Units in DD Healthcare Services Holdings, LLC18,626  7,667  (20)
51,616  40,657  
First Star Speir Aviation LimitedAirlines(10)
First Lien Term Loan, 9.00% cash due 12/15/202011,510  2,059  11,510  (11)(20)
100% equity interest8,500  3,165  (11)(12)(20)
10,559  14,675  
New IPT, Inc.Oil & Gas Equipment & Services
First Lien Term Loan, LIBOR+5.00% cash due 3/17/20216.00 %2,454  2,454  2,454   (6)(20)
First Lien Revolver, LIBOR+5.00% cash due 3/17/20216.00 %1,009  1,009  1,009   (6)(19)(20)
50.087 Class A Common Units in New IPT Holdings, LLC—  1,173  (20)
3,463  4,636  
Senior Loan Fund JV I, LLCMulti-Sector Holdings(14)
Subordinated Debt, LIBOR+7.00% cash due 12/29/20288.02 %96,250  96,250  96,250  (6)(11)(20)
87.5% LLC equity interest49,322  13,796  (11)(16)(19)
145,572  110,046  
Thruline Marketing, Inc.Advertising
9,073 Class A Units in FS AVI Holdco, LLC9,287  3,147  (20)
9,287  3,147  
 Total Control Investments (23.4% of net assets)$255,481  $200,799  
 Affiliate Investments(17)
Assembled Brands Capital LLCSpecialized Finance
First Lien Delayed Draw Term Loan, LIBOR+6.00% cash due 10/17/20237.00 %$5,504  $5,504  $4,344  (6)(19)(20)
1,609,201 Class A Units764  1,094  (20)
1,019,168.80 Preferred Units, 6%1,019  1,070  (20)
70,424.5641 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029—  —  (20)
7,287  6,508  
Caregiver Services, Inc.Health Care Services
1,080,399 shares of Series A Preferred Stock, 10%1,080  741  (20)
1,080  741  
 Total Affiliate Investments (0.8% of net assets)$8,367  $7,249  
 Non-Control/Non-Affiliate Investments(18)
4 Over International, LLCCommercial Printing
First Lien Term Loan, LIBOR+6.00% cash due 6/7/20227.00 %$5,707  $5,682  $5,387  (6)(20)
First Lien Revolver, LIBOR+6.00% cash due 6/7/20217.00 %2,232  2,214  2,107  (6)(20)
7,896  7,494  
99 Cents Only Stores LLCGeneral Merchandise Stores
First Lien Term Loan, LIBOR+5.00% cash 1.50% PIK due 1/13/20225.30 %19,332  19,079  16,408  (6)
19,079  16,408  
5
Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)
 Cost Fair Value Notes
Control Investments        (8)(9)
C5 Technology Holdings, LLC Data Processing & Outsourced Services       
829 Common Units    $—
 $—
 (20)
34,984,460.37 Preferred Units    34,984
 27,638
 (20)
     34,984
 27,638
  
Dominion Diagnostics, LLC Health Care Services       
First Lien Term Loan, LIBOR+5.00% cash due 2/28/20246.46% $27,799
 27,799
 27,799
 (6)(20)
First Lien Revolver, LIBOR+5.00% cash due 2/28/20246.46% 5,260
 5,260
 5,260
 (6)(19)(20)
30,030.8 Common Units in DD Healthcare Services Holdings, LLC    18,626
 10,115
 (20)
     51,685
 43,174
  
First Star Speir Aviation Limited Airlines      (10)
First Lien Term Loan, 9.00% cash due 12/15/2020  11,510
 2,097
 11,510
 (11)(20)
100% equity interest    8,500
 3,165
 (11)(12)(20)
     10,597
 14,675
  
New IPT, Inc. Oil & Gas Equipment & Services       
First Lien Term Loan, LIBOR+5.00% cash due 3/17/20216.45% 2,605
 2,605
 2,605
  (6)(20)
First Lien Revolver, LIBOR+5.00% cash due 3/17/20216.45% 1,009
 1,009
 1,009
  (6)(19)(20)
50.087 Class A Common Units in New IPT Holdings, LLC    —
 1,596
 (20)
     3,614
 5,210
  
Senior Loan Fund JV I, LLC Multi-Sector Holdings      (14)
Subordinated Debt, LIBOR+7.00% cash due 12/29/20288.73% 96,250
 96,250
 92,171
 (6)(11)(20)
87.5% LLC equity interest    49,322
 —
 (11)(16)(19)
     145,572
 92,171
  
Thruline Marketing, Inc. Advertising      
9,073 Class A Units in FS AVI Holdco, LLC    9,287
 4,399
 (20)
     9,287
 4,399
  
 Total Control Investments (24.9% of net assets)    $255,739
 $187,267
  
          
 Affiliate Investments        (17)
Assembled Brands Capital LLC Specialized Finance       
First Lien Delayed Draw Term Loan, LIBOR+6.00% cash due 10/17/20236.99% $7,623
 $7,623
 $6,115
 (6)(19)(20)
1,609,201 Class A Units    765
 917
 (20)
1,019,168.80 Preferred Units, 6%    1,019
 1,050
 (20)
70,424.5641 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029    —
 —
 (20)
     9,407
 8,082
  
Caregiver Services, Inc. Health Care Services       
1,080,399 shares of Series A Preferred Stock, 10%    1,080
 1,332
 (20)
     1,080
 1,332
  
 Total Affiliate Investments (1.3% of net assets)    $10,487
 $9,414
  
          
 Non-Control/Non-Affiliate Investments        (18)
4 Over International, LLC Commercial Printing       
First Lien Term Loan, LIBOR+6.00% cash due 6/7/20227.45% $5,738
 $5,710
 $5,528
 (6)(20)
First Lien Revolver, LIBOR+6.00% cash due 6/7/20217.45% 2,232
 2,214
 2,150
 (6)(20)
     7,924
 7,678
  
99 Cents Only Stores LLC General Merchandise Stores       
First Lien Term Loan, LIBOR+5.00% cash 1.50% PIK due 1/13/20226.07% 19,380
 19,085
 13,889
 (6)
     19,085
 13,889
  
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
March 31,June 30, 2020
(dollar amounts in thousands)
(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
A.T. Holdings II SÀRLBiotechnology
First Lien Term Loan, 12.00% cash due 4/27/2023$22,619  $22,619  $24,881  (11)(20)
First Lien Delayed Draw Term Loan, 12.00% cash due 4/27/2023—  —  1,131  (11)(19)(20)
22,619  26,012  
Access CIG, LLCDiversified Support Services
Second Lien Term Loan, LIBOR+7.75% cash due 2/27/20267.92 %15,000  14,904  13,075  (6)
14,904  13,075  
Accupac, Inc.Personal Products
First Lien Term Loan, LIBOR+6.00% cash due 1/17/20267.00 %12,518  12,316  12,312  (6)(20)
First Lien Delayed Draw Term Loan, LIBOR+6.00% cash due 1/17/2026—  (38) (39) (6)(19)(20)
First Lien Revolver, LIBOR+6.00% cash due 1/17/20267.00 %1,564  1,539  1,538  (6)(20)
13,817  13,811  
Acquia Inc.Application Software
First Lien Term Loan, LIBOR+7.00% cash due 10/31/20258.00 %20,950  20,577  20,216  (6)(20)
First Lien Revolver, LIBOR+7.00% cash due 10/31/2025—  (41) (78) (6)(19)(20)
20,536  20,138  
Aden & Anais Merger Sub, Inc.Apparel, Accessories & Luxury Goods
51,645 Common Units in Aden & Anais Holdings, Inc.5,165  —  (20)
5,165  —  
AdVenture Interactive, Corp.Advertising
9,073 shares of common stock13,611  13,245  (20)
13,611  13,245  
AI Ladder (Luxembourg) Subco S.a.r.l.Electrical Components & Equipment
First Lien Term Loan, LIBOR+4.50% cash due 7/9/20254.68 %21,468  21,003  19,590  (6)(11)
21,003  19,590  
AI Sirona (Luxembourg) Acquisition S.a.r.l.Pharmaceuticals
Second Lien Term Loan, EURIBOR+7.25% cash due 9/28/20267.25 %€24,838  27,654  26,223  (6)(11)(20)
27,654  26,223  
Airbnb, Inc.Hotels, Resorts & Cruise Lines
First Lien Term Loan, LIBOR+7.50% cash due 4/17/20258.50 %$15,782  15,396  16,492  (6)
15,396  16,492  
AirStrip Technologies, Inc.Application Software
5,715 Common Stock Warrants (exercise price $139.99) expiration date 5/11/202590  —  (20)
90  —  
Aldevron, L.L.C.Biotechnology
First Lien Term Loan, LIBOR+4.25% cash due 10/12/20265.25 %7,980  7,900  7,890  (6)
7,900  7,890  
Algeco Scotsman Global Finance PlcConstruction & Engineering
Fixed Rate Bond, 8.00% cash due 2/15/202313,524  13,254  13,025  (11)
13,254  13,025  
Alvotech Holdings S.A.Biotechnology(13)
Fixed Rate Bond 15% PIK Note A due 12/13/202314,800  18,191  19,368  (11)(20)
Fixed Rate Bond 15% PIK Note B due 12/13/202314,800  18,191  18,425  (11)(20)
36,382  37,793  
Amplify Finco Pty Ltd.Movies & Entertainment
First Lien Term Loan, LIBOR+4.00% cash due 11/26/20264.75 %998  907  873  (6)(11)(20)
Second Lien Term Loan, LIBOR+8.00% cash due 11/26/20278.75 %12,500  12,188  10,188  (6)(11)(20)
13,095  11,061  
6
Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)
 Cost Fair Value Notes
Access CIG, LLC Diversified Support Services       
Second Lien Term Loan, LIBOR+7.75% cash due 2/27/20269.53% $15,000
 $14,900
 $12,863
 (6)
     14,900
 12,863
  
Accupac, Inc. Personal Products       
First Lien Term Loan, LIBOR+6.00% cash due 1/17/20267.84% 12,550
 12,338
 12,330
 (6)(20)
First Lien Delayed Draw Term Loan, LIBOR+6.00% cash due 1/17/2026  —
 (39) (41) (6)(19)(20)
First Lien Revolver, LIBOR+6.00% cash due 1/17/20267.05% 1,564
 1,537
 1,536
 (6)(20)
     13,836
 13,825
  
Acquia Inc. Application Software       
First Lien Term Loan, LIBOR+7.00% cash due 10/31/20258.58% 20,950
 20,559
 19,961
 (6)(20)
First Lien Revolver, LIBOR+7.00% cash due 10/31/2025  —
 (43) (106) (6)(19)(20)
     20,516
 19,855
  
Aden & Anais Merger Sub, Inc. Apparel, Accessories & Luxury Goods       
51,645 Common Units in Aden & Anais Holdings, Inc.    5,165
 —
 (20)
     5,165
 —
  
AdVenture Interactive, Corp. Advertising       
9,073 shares of common stock    13,611
 12,845
 (20)
     13,611
 12,845
  
AI Ladder (Luxembourg) Subco S.a.r.l. Electrical Components & Equipment       
First Lien Term Loan, LIBOR+4.50% cash due 7/9/20255.49% 21,563
 21,072
 18,185
 (6)(11)
     21,072
 18,185
  
AI Sirona (Luxembourg) Acquisition S.a.r.l. Pharmaceuticals       
Second Lien Term Loan, EURIBOR+7.25% cash due 9/28/20267.25% €17,500
 20,035
 14,977
 (6)(11)(20)
     20,035
 14,977
  
AirStrip Technologies, Inc. Application Software       
5,715 Common Stock Warrants (exercise price $139.99) expiration date 5/11/2025    90
 —
 (20)
     90
 —
  
Aldevron, L.L.C. Biotechnology       
First Lien Term Loan, LIBOR+4.25% cash due 10/12/20265.70% $8,000
 7,920
 7,560
 (6)
     7,920
 7,560
  
Algeco Scotsman Global Finance Plc Construction & Engineering       
Fixed Rate Bond, 8.00% cash due 2/15/2023  13,524
 13,232
 10,447
 (11)
     13,232
 10,447
  
Altice France S.A. Integrated Telecommunication Services       
First Lien Term Loan, LIBOR+4.00% cash due 8/14/20264.70% 1,378
 1,202
 1,319
 (6)(11)
     1,202
 1,319
  
Alvotech Holdings S.A. Biotechnology      (13)
Fixed Rate Bond 15% PIK Note A due 12/13/2023  14,800
 17,538
 18,425
 (11)(20)
Fixed Rate Bond 15% PIK Note B due 12/13/2023  14,800
 17,538
 17,997
 (11)(20)
     35,076
 36,422
  
Ancile Solutions, Inc. Application Software       
First Lien Term Loan, LIBOR+7.00% cash due 6/30/20218.45% 8,429
 8,371
 8,218
  (6)(20)
     8,371
 8,218
  
Apptio, Inc. Application Software       
First Lien Term Loan, LIBOR+7.25% cash due 1/10/20258.25% 23,764
 23,380
 22,647
 (6)(20)
First Lien Revolver, LIBOR+7.25% cash due 1/10/2025  —
 (24) (72) (6)(19)(20)
     23,356
 22,575
  
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
March 31,June 30, 2020
(dollar amounts in thousands)
(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Ancile Solutions, Inc.Application Software
First Lien Term Loan, LIBOR+7.00% cash due 6/30/20218.00 %$8,305  $8,261  $8,197   (6)(20)
8,261  8,197  
Apptio, Inc.Application Software
First Lien Term Loan, LIBOR+7.25% cash due 1/10/20258.25 %23,764  23,400  23,229  (6)(20)
First Lien Revolver, LIBOR+7.25% cash due 1/10/2025—  (23) (35) (6)(19)(20)
23,377  23,194  
Ardonagh Midco 3 PLCInsurance Brokers
Fixed Rate Bond, 11.50% cash due 1/15/20272,222  2,200  2,244  (11)
2,200  2,244  
Associated Asphalt Partners, LLCConstruction Materials
First Lien Term Loan, LIBOR+5.25% cash due 4/5/20246.25 %2,561  2,127  1,883  (6)
2,127  1,883  
Asurion, LLCProperty & Casualty Insurance
Second Lien Term Loan, LIBOR+6.50% cash due 8/4/20256.68 %21,274  21,235  21,221  (6)
21,235  21,221  
Athenex, Inc.Pharmaceuticals
First Lien Term Loan, 11.00% cash due 6/19/202629,288  28,007  28,003  (11)(20)
First Lien Delayed Draw Term Loan, 11.00% cash due 6/19/2026—  (508) (508) (11)(19)(20)
266,052 Common Stock Warrants (exercise price $12.63) expiration date 6/19/2027915  915  (11)(20)
28,414  28,410  
Aurora Lux Finco S.À.R.L.Airport Services
First Lien Term Loan, LIBOR+6.00% cash due 12/24/20267.00 %22,943  22,412  21,359  (6)(11)(20)
22,412  21,359  
Blackhawk Network Holdings, Inc.Data Processing & Outsourced Services
Second Lien Term Loan, LIBOR+7.00% cash due 6/15/20267.25 %26,250  26,040  24,117  (6)
26,040  24,117  
Boxer Parent Company Inc.Systems Software
First Lien Term Loan, LIBOR+4.25% cash due 10/2/20254.43 %13,810  13,699  13,119  (6)
13,699  13,119  
BX Commercial Mortgage Trust 2020-VIVADiversified Real Estate Activities
Class D Variable Notes due 3/9/20443.67 %12,556  10,471  11,239  (6)(11)(20)
Class E Variable Notes due 3/9/20443.67 %6,221  4,798  5,299  (6)(11)(20)
15,269  16,538  
California Pizza Kitchen, Inc.Restaurants
First Lien Term Loan, LIBOR+6.00% cash due 8/23/20223,106  3,081  910  (6)(21)
3,081  910  
Chief Power Finance II, LLCIndependent Power Producers & Energy Traders
First Lien Term Loan, LIBOR+6.50% cash due 12/31/20227.50 %22,138  21,700  20,880  (6)(20)
21,700  20,880  
CITGO Holding, Inc.Oil & Gas Refining & Marketing
Fixed Rate Bond, 9.25% cash due 8/1/202410,672  10,672  10,645  
First Lien Term Loan, LIBOR+7.00% cash due 8/1/20238.00 %9,925  9,810  9,501  (6)
20,482  20,146  
7
Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)
 Cost Fair Value Notes
          
Associated Asphalt Partners, LLC Construction Materials       
First Lien Term Loan, LIBOR+5.25% cash due 4/5/20246.25% $2,569
 $2,113
 $1,863
 (6)
     2,113
 1,863
  
Asurion, LLC Property & Casualty Insurance       
First Lien Term Loan, LIBOR+3.00% cash due 11/3/20243.99% 2,098
 1,769
 2,024
 (6)
Second Lien Term Loan, LIBOR+6.50% cash due 8/4/20257.49% 21,274
 21,234
 19,718
 (6)
     23,003
 21,742
  
Atlas Senior Loan Fund XV, Ltd. Multi-Sector Holdings       
Class E Notes, LIBOR+7.54% cash due 10/23/20329.46% 741
 474
 468
 (6)(11)
     474
 468
  
Aurora Lux Finco S.À.R.L. Airport Services       
First Lien Term Loan, LIBOR+6.00% cash due 12/24/20267.00% 23,000
 22,447
 21,623
 (6)(11)(20)
     22,447
 21,623
  
Avantor Inc. Health Care Distributors       
Fixed Rate Bond, 9.00% cash due 10/1/2025  3,000
 2,976
 3,177
  
     2,976
 3,177
  
Avoca Capital CLO X Designated Activity Company Multi-Sector Holdings       
Class ER Notes, EURIBOR+6.05% cash due 1/15/20306.05% €741
 552
 627
 (6)(11)
     552
 627
  
Blackhawk Network Holdings, Inc. Data Processing & Outsourced Services       
Second Lien Term Loan, LIBOR+7.00% cash due 6/15/20267.81% $26,250
 26,031
 21,613
 (6)
     26,031
 21,613
  
Boxer Parent Company Inc. Systems Software       
First Lien Term Loan, LIBOR+4.25% cash due 10/2/20255.24% 13,845
 13,732
 11,642
 (6)
     13,732
 11,642
  
California Pizza Kitchen, Inc. Restaurants       
First Lien Term Loan, LIBOR+6.00% cash due 8/23/2022  3,106
 3,081
 1,571
 (6)(21)
     3,081
 1,571
  
Carlyle US CLO 2019-3, Ltd. Multi-Sector Holdings      
Class D Notes, LIBOR+7.03% cash due 10/20/20329.11% 504
 315
 343
 (6)(11)
     315
 343
  
Chief Power Finance II, LLC Independent Power Producers & Energy Traders       
First Lien Term Loan, LIBOR+6.50% cash due 12/31/20227.95% 22,425
 21,938
 21,151
 (6)(20)
     21,938
 21,151
  
CITGO Holding, Inc. Oil & Gas Refining & Marketing       
Fixed Rate Bond, 9.25% cash due 8/1/2024  10,672
 10,672
 8,778
  
First Lien Term Loan, LIBOR+7.00% cash due 8/1/20238.00% 9,950
 9,825
 8,225
 (6)
     20,497
 17,003
  
CITGO Petroleum Corp. Oil & Gas Refining & Marketing       
First Lien Term Loan, LIBOR+5.00% cash due 3/28/20246.00% 9,900
 9,801
 8,762
 (6)
     9,801
 8,762
  
Commscope, Inc. Communications Equipment       
First Lien Term Loan, LIBOR+3.25% cash due 4/6/20264.24% 1,532
 1,325
 1,456
 (6)(11)
     1,325
 1,456
  
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
March 31,June 30, 2020
(dollar amounts in thousands)
(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
CITGO Petroleum Corp.Oil & Gas Refining & Marketing
First Lien Term Loan, LIBOR+5.00% cash due 3/28/20246.00 %$9,002  $8,912  $8,665  (6)
8,912  8,665  
Connect U.S. Finco LLCAlternative Carriers
First Lien Term Loan, LIBOR+4.50% cash due 12/11/20265.50 %27,961  27,277  26,406  (6)(11)
27,277  26,406  
Continental Intermodal Group LPOil & Gas Storage & Transportation
First Lien Term Loan, LIBOR+8.50% PIK due 1/28/202531,599  31,599  27,687  (6)(20)
31,599  27,687  
Convergeone Holdings, Inc.IT Consulting & Other Services
First Lien Term Loan, LIBOR+5.00% cash due 1/4/20265.18 %14,658  14,183  12,470  (6)
14,183  12,470  
Conviva Inc.Application Software
417,851 Series D Preferred Stock Warrants (exercise price $1.1966) expiration date 2/28/2021105  395  (20)
105  395  
Corrona, LLCHealth Care Services
First Lien Term Loan, LIBOR+5.50% cash due 12/13/20256.50 %10,326  10,161  10,145  (6)(20)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 12/13/2025—  (32) (64) (6)(19)(20)
First Lien Revolver, PRIME+4.50% cash due 12/13/20257.75 %305  276  273  (6)(19)(20)
1,099 Class A2 Common Units in Corrona Group Holdings, L.P.1,038  1,038  (20)
11,443  11,392  
Coyote Buyer, LLCSpecialty Chemicals
First Lien Term Loan, LIBOR+6.00% cash due 2/6/20267.00 %13,156  13,024  13,024  (6)(20)
First Lien Revolver, LIBOR+6.00% cash due 2/6/20257.35 %565  556  556  (6)(19)(20)
13,580  13,580  
Crown Point CLO 7 Ltd.Multi-Sector Holdings
Class E Notes, LIBOR+6.30% cash due 10/20/20317.44 %2,745  1,977  2,127  (6)(11)
1,977  2,127  
CTOS, LLCTrading Companies & Distributors
First Lien Term Loan, LIBOR+4.25% cash due 4/18/20254.44 %10,164  10,259  10,012  (6)
10,259  10,012  
Dealer Tire, LLCDistributors
First Lien Term Loan, LIBOR+4.25% cash due 12/12/20254.43 %4,276  3,732  4,097  (6)
3,732  4,097  
The Dun & Bradstreet CorporationResearch & Consulting Services
First Lien Term Loan, LIBOR+4.00% cash due 2/6/20264.18 %6,286  6,184  6,140  (6)
6,184  6,140  
Eagleview Technology CorporationApplication Software
Second Lien Term Loan, LIBOR+7.50% cash due 8/14/20268.57 %12,000  11,880  10,440  (6)(20)
11,880  10,440  
EHR Canada, LLCFood Retail
First Lien Term Loan, LIBOR+8.00% cash due 9/28/20209.00 %6,861  6,845  6,930  (6)(20)
6,845  6,930  
Elevation CLO 2017-6, Ltd.Multi-Sector Holdings
Class E Notes, LIBOR+6.60% cash due 7/15/20297.82 %500  394  402  (6)(11)
394  402  
8
Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)
 Cost Fair Value Notes
Connect U.S. Finco LLC Alternative Carriers       
First Lien Term Loan, LIBOR+4.50% cash due 12/11/20265.49% $31,378
 $30,608
 $25,299
 (6)(11)
     30,608
 25,299
  
Continental Intermodal Group LP Oil & Gas Storage & Transportation       
First Lien Term Loan, LIBOR+8.50% PIK due 1/28/2025  31,599
 31,599
 29,545
 (6)(15)(20)
     31,599
 29,545
  
Convergeone Holdings, Inc. IT Consulting & Other Services       
First Lien Term Loan, LIBOR+5.00% cash due 1/4/20265.99% 14,696
 14,197
 11,573
 (6)
     14,197
 11,573
  
Conviva Inc. Application Software       
417,851 Series D Preferred Stock Warrants (exercise price $1.1966) expiration date 2/28/2021    105
 395
 (20)
     105
 395
  
Corrona, LLC Health Care Services       
First Lien Term Loan, LIBOR+5.75% cash due 12/13/20256.75% 10,352
 10,180
 10,041
 (6)(20)
First Lien Delayed Draw Term Loan, LIBOR+5.75% cash due 12/13/2025  —
 (32) (110) (6)(19)(20)
First Lien Revolver, PRIME + 4.75% cash due 12/13/20258.00% 1,221
 1,190
 1,166
 (6)(19)(20)
1,099 Class A2 Common Units in Corrona Group Holdings, L.P.    1,099
 1,099
 (20)
     12,437
 12,196
  
Covia Holdings Corporation Oil & Gas Equipment & Services       
First Lien Term Loan, LIBOR+4.00% cash due 6/1/2025  7,860
 7,860
 3,720
 (6)(11)(21)
     7,860
 3,720
  
Coyote Buyer, LLC Specialty Chemicals       
First Lien Term Loan, LIBOR+6.00% cash due 2/6/20267.74% 13,189
 13,057
 13,057
 (6)(20)
First Lien Revolver, LIBOR+6.00% cash due 2/6/20257.74% 39
 35
 35
 (6)(19)(20)
     13,092
 13,092
  
Crown Point CLO 7 Ltd. Multi-Sector Holdings      
Class E Notes, LIBOR+6.30% cash due 10/20/20318.12% 2,745
 1,969
 1,561
 (6)(11)
     1,969
 1,561
  
CTOS, LLC Trading Companies & Distributors       
First Lien Term Loan, LIBOR+4.25% cash due 4/18/20255.00% 10,190
 10,290
 8,789
 (6)
     10,290
 8,789
  
Dealer Tire, LLC Distributors       
First Lien Term Loan, LIBOR+4.25% cash due 12/12/20255.24% 4,010
 3,498
 3,335
 (6)
     3,498
 3,335
  
The Dun & Bradstreet Corporation Research & Consulting Services       
First Lien Term Loan, LIBOR+4.00% cash due 2/6/20264.96% 10,000
 9,831
 9,088
 (6)
Fixed Rate Bond 6.875% cash due 8/15/2026  5,000
 5,000
 5,228
  
     14,831
 14,316
  
Eagleview Technology Corporation Application Software       
Second Lien Term Loan, LIBOR+7.50% cash due 8/14/20268.57% 12,000
 11,880
 10,320
 (6)(20)
     11,880
 10,320
  
EHR Canada, LLC Food Retail       
First Lien Term Loan, LIBOR+8.00% cash due 9/28/20209.45% 6,861
 6,829
 6,909
 (6)(20)
     6,829
 6,909
  
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
March 31,June 30, 2020
(dollar amounts in thousands)
(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Elevation CLO 2018-9, Ltd.Multi-Sector Holdings
Class E Notes, LIBOR+6.30% cash due 7/15/20317.52 %$1,275  $797  $990  (6)(11)
797  990  
EOS Fitness Opco Holdings, LLCLeisure Facilities
487.5 Class A Preferred Units, 12%488  49  (20)
12,500 Class B Common Units—  —  (20)
488  49  
ExamSoft Worldwide, Inc.Application Software
180,707 Class C Units in ExamSoft Investor LLC181  —  (20)
181  —  
Galaxy XXI CLO, Ltd.Multi-Sector Holdings
Class ER Notes, LIBOR+5.25% cash due 4/20/20316.39 %862615  730  (6)(11)
615  730  
GI Chill Acquisition LLCManaged Health Care
First Lien Term Loan, LIBOR+4.00% cash due 8/6/20254.31 %17,685  17,597  16,535  (6)(20)
Second Lien Term Loan, LIBOR+7.50% cash due 8/6/20267.81 %10,000  9,924  9,100  (6)(20)
27,521  25,635  
GKD Index Partners, LLCSpecialized Finance
First Lien Term Loan, LIBOR+7.00% cash due 6/29/20238.00 %21,227  21,100  20,697  (6)(20)
First Lien Revolver, LIBOR+7.00% cash due 6/29/20238.00 %924  915  893  (6)(19)(20)
22,015  21,590  
Global Medical ResponseHealth Care Services
First Lien Term Loan, LIBOR+4.25% cash due 3/14/20255.25 %6,272  6,162  6,018  (6)
6,162  6,018  
Guidehouse LLPResearch & Consulting Services
First Lien Term Loan, LIBOR+4.50% cash due 5/1/20254.68 %4,962  4,917  4,826  (6)
Second Lien Term Loan, LIBOR+8.00% cash due 5/1/20268.18 %20,000  19,927  18,300  (6)(20)
24,844  23,126  
Gulf Operating, LLCOil & Gas Storage & Transportation
First Lien Term Loan, LIBOR+5.25% cash due 8/25/20236.25 %4,803  2,572  3,142  (6)
2,572  3,142  
Houghton Mifflin Harcourt Publishers Inc.Education Services
First Lien Term Loan, LIBOR+6.25% cash due 11/22/20247.25 %6,825  6,579  6,458  (6)(11)
6,579  6,458  
I Drive Safely, LLCEducation Services
125,079 Class A Common Units of IDS Investments, LLC1,000  200  (20)
1,000  200  
IBG Borrower LLCApparel, Accessories & Luxury Goods
First Lien Term Loan, LIBOR+7.00% cash due 8/2/20227.31 %12,909  12,119  11,166  (6)(20)
12,119  11,166  
iCIMs, Inc.Application Software
First Lien Term Loan, LIBOR+6.50% cash due 9/12/20247.50 %16,718  16,478  16,564  (6)(20)
First Lien Revolver, LIBOR+6.50% cash due 9/12/2024—  (16) (8) (6)(19)(20)
16,462  16,556  
Integral Development CorporationOther Diversified Financial Services
1,078,284 Common Stock Warrants (exercise price $0.9274) expiration date 7/10/2024113  —  (20)
113  —  
9
Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)
 Cost Fair Value Notes
Elevation CLO 2013-1, Ltd. Multi-Sector Holdings       
Class D1R2 Notes, LIBOR+7.65% cash due 8/15/20329.34% $1,418
 $1,096
 $949
 (6)(11)
     1,096
 949
  
Elevation CLO 2017-6, Ltd. Multi-Sector Holdings       
Class E Notes, LIBOR+6.60% cash due 7/15/20298.43% 500
 392
 310
 (6)(11)
     392
 310
  
Elevation CLO 2018-10, Ltd. Multi-Sector Holdings       
Class E Notes, LIBOR+6.29% cash due 10/20/20318.12% 1,411
 1,070
 816
 (6)(11)
     1,070
 816
  
Elevation CLO 2018-9, Ltd. Multi-Sector Holdings       
Class E Notes, LIBOR+6.30% cash due 7/15/20318.13% 1,275
 792
 751
 (6)(11)
     792
 751
  
EOS Fitness Opco Holdings, LLC Leisure Facilities       
487.5 Class A Preferred Units, 12%    488
 907
 (20)
12,500 Class B Common Units    —
 492
 (20)
     488
 1,399
  
ExamSoft Worldwide, Inc. Application Software       
180,707 Class C Units in ExamSoft Investor LLC    181
 —
 (20)
     181
 —
  
GI Chill Acquisition LLC Managed Health Care       
First Lien Term Loan, LIBOR+4.00% cash due 8/6/20255.45% 17,730
 17,641
 15,336
 (6)(20)
Second Lien Term Loan, LIBOR+7.50% cash due 8/6/20268.95% 10,000
 9,921
 8,700
 (6)(20)
     27,562
 24,036
  
Global Medical Response Health Care Services       
First Lien Term Loan, LIBOR+4.25% cash due 3/14/20255.86% 6,289
 6,172
 5,675
 (6)
     6,172
 5,675
  
GKD Index Partners, LLC Specialized Finance       
First Lien Term Loan, LIBOR+7.00% cash due 6/29/20238.45% 21,781
 21,640
 21,389
 (6)(20)
First Lien Revolver, LIBOR+7.00% cash due 6/29/20238.12% 924
 914
 902
 (6)(19)(20)
     22,554
 22,291
  
Guidehouse LLP Research & Consulting Services       
First Lien Term Loan, LIBOR+4.50% cash due 5/1/20255.49% 4,975
 4,927
 4,079
 (6)
Second Lien Term Loan, LIBOR+8.00% cash due 5/1/20268.99% 20,000
 19,924
 17,300
 (6)(20)
     24,851
 21,379
  
HealthEdge Software, Inc. Application Software       
482,453 Series A-3 Preferred Stock Warrants (exercise price $1.450918) expiration date 9/30/2023    213
 1,891
 (20)
     213
 1,891
  
HNC Holdings, Inc. Building Products       
First Lien Term Loan, LIBOR+4.00% cash due 10/5/20235.00% 1,734
 1,621
 1,570
 (6)
     1,621
 1,570
  
Houghton Mifflin Harcourt Publishers Inc. Education Services       
First Lien Term Loan, LIBOR+6.25% cash due 11/22/20247.24% 6,913
 6,649
 6,187
 (6)(11)
     6,649
 6,187
  
Hyland Software, Inc. Systems Software       
First Lien Term Loan, LIBOR+3.25% cash due 7/1/20244.24% 836
 749
 785
 (6)
     749
 785
  
I Drive Safely, LLC Education Services       
125,079 Class A Common Units of IDS Investments, LLC    1,000
 200
 (20)
     1,000
 200
  
IBG Borrower LLC Apparel, Accessories & Luxury Goods       
First Lien Term Loan, LIBOR+7.00% cash due 8/2/20228.50% 13,284
 12,374
 11,424
 (6)(20)
     12,374
 11,424
  
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
March 31,June 30, 2020
(dollar amounts in thousands)
(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
L Squared Capital Partners LLCMulti-Sector Holdings
2.00% limited partnership interest$860  $1,980  (11)(16)
860  1,980  
Lanai Holdings III, Inc.Health Care Distributors
First Lien Term Loan, LIBOR+4.75% cash due 8/29/20225.75 %$12,982  12,825  11,668  (6)
12,825  11,668  
Lannett Company, Inc.Pharmaceuticals
First Lien Term Loan, LIBOR+5.00% cash due 11/25/20206.00 %535  536  525  (6)(11)
536  525  
Lift Brands Holdings, Inc.Leisure Facilities
2,000,000 Class A Common Units in Snap Investments, LLC1,399  —  (20)
1,399  —  
Lightbox Intermediate, L.P.Real Estate Services
First Lien Term Loan, LIBOR+5.00% cash due 5/9/20265.18 %39,600  39,100  36,630  (6)(20)
39,100  36,630  
LTI Holdings, Inc.Electronic Components
First Lien Term Loan, LIBOR+4.75% cash due 7/24/20264.93 %1,799  1,505  1,547  (6)
First Lien Term Loan, LIBOR+3.50% cash due 9/6/20253.68 %18,128  14,972  15,503  (6)
Second Lien Term Loan, LIBOR+6.75% cash due 9/6/20266.93 %9,000  9,000  6,381  (6)
25,477  23,431  
Maravai Intermediate Holdings, LLCBiotechnology
First Lien Term Loan, LIBOR+4.25% cash due 8/1/20255.25 %11,790  11,672  11,702  (6)(20)
11,672  11,702  
Mauser Packaging Solutions Holding CompanyMetal & Glass Containers
Fixed Rate Bond, 8.50% cash due 4/15/202411,378  11,268  11,961  
11,268  11,961  
Mayfield Agency Borrower Inc.Property & Casualty Insurance
First Lien Term Loan, LIBOR+4.50% cash due 2/28/20254.68 %28,896  28,073  25,357  (6)
28,073  25,357  
McAfee, LLCSystems Software
Second Lien Term Loan, LIBOR+8.50% cash due 9/29/20259.50 %7,000  7,030  7,007  (6)
7,030  7,007  
MHE Intermediate Holdings, LLCDiversified Support Services
First Lien Term Loan, LIBOR+5.00% cash due 3/8/20246.07 %2,917  2,894  2,839  (6)(20)
2,894  2,839  
Mindbody, Inc.Internet Services & Infrastructure
First Lien Term Loan, LIBOR+7.00% cash 1.5% PIK due 2/14/20258.00 %28,986  28,540  26,783  (6)(20)
First Lien Revolver, LIBOR+8.00% cash due 2/14/20259.07 %3,048  3,001  2,816  (6)(20)
31,541  29,599  
Ministry Brands, LLCApplication Software
First Lien Revolver, LIBOR+5.00% cash due 12/2/20226.00 %575  566  568  (6)(19)(20)
Second Lien Term Loan, LIBOR+9.25% cash due 6/2/202310.25 %7,056  7,009  7,004  (6)(20)
Second Lien Delayed Draw Term Loan, LIBOR+9.25% cash due 6/2/202310.25 %1,944  1,919  1,929  (6)(20)
9,494  9,501  
10
Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)
 Cost Fair Value Notes
iCIMs, Inc. Application Software       
First Lien Term Loan, LIBOR+6.50% cash due 9/12/20247.50% $16,718
 $16,464
 $16,024
 (6)(20)
First Lien Revolver, LIBOR+6.50% cash due 9/12/2024  —
 (17) (37) (6)(19)(20)
     16,447
 15,987
  
Integral Development Corporation Other Diversified Financial Services       
1,078,284 Common Stock Warrants (exercise price $0.9274) expiration date 7/10/2024    113
 —
 (20)
     113
 —
  
Intelsat Jackson Holdings S.A. Alternative Carriers       
First Lien Term Loan, LIBOR+4.50% cash due 1/2/20246.43% 769
 696
 717
 (6)(11)
     696
 717
  
L Squared Capital Partners LLC Multi-Sector Holdings       
2.00% limited partnership interest    864
 2,462
 (11)(16)
     864
 2,462
  
Lanai Holdings III, Inc. Health Care Distributors       
First Lien Term Loan, LIBOR+4.75% cash due 8/29/20226.53% 13,016
 12,840
 9,580
 (6)
     12,840
 9,580
  
Lannett Company, Inc. Pharmaceuticals       
First Lien Term Loan, LIBOR+5.00% cash due 11/25/20206.00% 611
 611
 544
 (6)(11)
     611
 544
  
Lift Brands Holdings, Inc. Leisure Facilities       
2,000,000 Class A Common Units in Snap Investments, LLC    1,399
 1,644
 (20)
     1,399
 1,644
  
Lightbox Intermediate, L.P. Real Estate Services       
First Lien Term Loan, LIBOR+5.00% cash due 5/9/20265.80% 39,700
 39,178
 34,738
 (6)(20)
     39,178
 34,738
  
LTI Holdings, Inc. Auto Parts & Equipment       
First Lien Term Loan, LIBOR+4.75% cash due 7/24/20265.74% 1,317
 1,139
 997
 (6)
First Lien Term Loan, LIBOR+3.50% cash due 9/6/20254.49% 17,815
 14,646
 13,398
 (6)
Second Lien Term Loan, LIBOR+6.75% cash due 9/6/20267.74% 9,000
 9,000
 4,878
 (6)
     24,785
 19,273
  
Maravai Intermediate Holdings, LLC Biotechnology       
First Lien Term Loan, LIBOR+4.25% cash due 8/1/20255.75% 11,820
 11,702
 10,343
 (6)(20)
     11,702
 10,343
  
Mayfield Agency Borrower Inc. Property & Casualty Insurance       
First Lien Term Loan, LIBOR+4.50% cash due 2/28/20255.49% 28,970
 28,100
 23,611
 (6)
     28,100
 23,611
  
McAfee, LLC Systems Software       
First Lien Term Loan, LIBOR+3.75% cash due 9/30/20244.69% 12,433
 12,200
 11,750
 (6)
Second Lien Term Loan, LIBOR+8.50% cash due 9/29/20259.44% 7,000
 7,031
 6,650
 (6)
     19,231
 18,400
  
MHE Intermediate Holdings, LLC Diversified Support Services       
First Lien Term Loan, LIBOR+5.00% cash due 3/8/20246.07% 2,917
 2,900
 2,839
 (6)(20)
     2,900
 2,839
  
Mindbody, Inc. Internet Services & Infrastructure       
First Lien Term Loan, LIBOR+7.00% cash due 2/14/20258.00% 28,952
 28,482
 26,781
 (6)(20)
First Lien Revolver, LIBOR+7.00% cash due 2/14/20258.07% 3,048
 2,998
 2,819
 (6)(20)
     31,480
 29,600
  
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
March 31,June 30, 2020
(dollar amounts in thousands)
(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Mountain View CLO XIV Ltd.Multi-Sector Holdings
Class E Notes, LIBOR+6.71% cash due 4/15/20297.93 %$593  $368  $521  (6)(11)
368  521  
MRI Software LLCApplication Software
First Lien Term Loan, LIBOR+5.50% cash due 2/10/20266.57 %13,944  13,816  13,421  (6)(20)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026—  (6) (39) (6)(19)(20)
First Lien Revolver, LIBOR+5.50% cash due 2/10/2026—  (13) (48) (6)(19)(20)
13,797  13,334  
NuStar Logistics, L.P.Oil & Gas Refining & Marketing
Unsecured Delayed Draw Term Loan, 12.00% cash due 4/19/202335,821  33,560  40,523  (19)(20)
33,560  40,523  
Olaplex, Inc.Personal Products
First Lien Term Loan, LIBOR+6.50% cash due 1/8/20267.50 %35,278  34,629  33,867  (6)(20)
First Lien Revolver, LIBOR+6.50% cash due 1/8/20257.50 %3,834  3,765  3,681  (6)(20)
38,394  37,548  
OmniSYS Acquisition CorporationDiversified Support Services
100,000 Common Units in OSYS Holdings, LLC1,000  641  (20)
1,000  641  
Onvoy, LLCIntegrated Telecommunication Services
Second Lien Term Loan, LIBOR+10.50% cash due 2/10/202511.50 %16,750  16,750  14,915  (6)(20)
19,666.67 Class A Units in GTCR Onvoy Holdings, LLC1,967  —  (20)
13,664.73 Series 3 Class B Units in GTCR Onvoy Holdings, LLC—  —  (20)
18,717  14,915  
OZLM Funding III, Ltd.Multi-Sector Holdings
Class DR Notes, LIBOR+7.77% cash due 1/22/20298.87 %2,312  1,647  1,931  (6)(11)
1,647  1,931  
PaySimple, Inc.Data Processing & Outsourced Services
First Lien Term Loan, LIBOR+5.50% cash due 8/23/20255.69 %37,467  36,820  33,720  (6)(20)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 8/23/20255.69 %11,431  11,209  10,211  (6)(19)(20)
48,029  43,931  
Pingora MSR Opportunity Fund I-A, LPThrifts & Mortgage Finance
1.86% limited partnership interest938  370  (11)(16)(19)
938  370  
PLATO Learning Inc.Education Services
Unsecured Senior PIK Note, 8.50% PIK due 12/9/20213,033  2,434  —  (15)(20)
Unsecured Junior PIK Note, 10.00% PIK due 12/9/202114,636  10,227  —  (15)(20)
Unsecured Revolver, 5.00% cash due 12/9/20212,901  2,631  580  (20)(21)
126,127.80 Class A Common Units of Edmentum126  —  (20)
15,418  580  
ProFrac Services, LLCIndustrial Machinery
First Lien Term Loan, LIBOR+7.50% cash due 9/15/20238.75 %15,444  15,344  11,969  (20)
15,344  11,969  
11
Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)
 Cost Fair Value Notes
          
Ministry Brands, LLC Application Software       
First Lien Revolver, LIBOR+5.00% cash due 12/2/20226.00% $575
 $566
 $568
 (6)(19)(20)
Second Lien Term Loan, LIBOR+9.25% cash due 6/2/202310.51% 7,056
 7,005
 7,004
 (6)(20)
Second Lien Delayed Draw Term Loan, LIBOR+9.25% cash due 6/2/202310.51% 1,944
 1,917
 1,929
 (6)(20)
     9,488
 9,501
  
Mountain View CLO XIV Ltd. Multi-Sector Holdings       
Class E Notes, LIBOR+6.71% cash due 4/15/20298.54% 593
 365
 407
 (6)(11)
     365
 407
  
MRI Software LLC Application Software       
First Lien Term Loan, LIBOR+5.50% cash due 2/10/20266.57% 12,798
 12,676
 11,327
 (6)(20)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026  —
 (13) (255) (6)(19)(20)
First Lien Revolver, LIBOR+5.50% cash due 2/10/20266.57% 636
 623
 490
 (6)(19)(20)
     13,286
 11,562
  
Olaplex, Inc. Personal Products       
First Lien Term Loan, LIBOR+6.50% cash due 1/8/20267.50% 35,500
 34,817
 33,192
 (6)(20)
First Lien Revolver, LIBOR+6.50% cash due 1/8/20257.50% 3,834
 3,761
 3,585
 (6)(20)
     38,578
 36,777
  
OmniSYS Acquisition Corporation Diversified Support Services       
100,000 Common Units in OSYS Holdings, LLC    1,000
 660
 (20)
     1,000
 660
  
Onvoy, LLC Integrated Telecommunication Services       
Second Lien Term Loan, LIBOR+10.50% cash due 2/10/202511.50% 16,750
 16,750
 12,228
 (6)(20)
19,666.67 Class A Units in GTCR Onvoy Holdings, LLC    1,967
 —
 (20)
13,664.73 Series 3 Class B Units in GTCR Onvoy Holdings, LLC    —
 —
 (20)
     18,717
 12,228
  
OZLM Funding III, Ltd. Multi-Sector Holdings       
Class DR Notes, LIBOR+7.77% cash due 1/22/20299.58% 4,517
 3,360
 2,597
 (6)(11)

    3,360
 2,597
  
PaySimple, Inc. Data Processing & Outsourced Services       
First Lien Term Loan, LIBOR+5.50% cash due 8/23/20256.46% 37,561
 36,882
 34,181
 (6)(20)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 8/23/20256.48% 8,256
 8,022
 7,154
 (6)(19)(20)
     44,904
 41,335
  
Petsmart, Inc. Specialty Stores       
First Lien Term Loan, LIBOR+4.00% cash due 3/11/20225.00% 1,629
 1,466
 1,566
 (6)
     1,466
 1,566
  
Pingora MSR Opportunity Fund I-A, LP Thrifts & Mortgage Finance       
1.86% limited partnership interest    938
 355
 (11)(16)(19)
     938
 355
  
PLATO Learning Inc. Education Services       
Unsecured Senior PIK Note, 8.50% PIK due 12/9/2021  2,970
 2,434
 —
 (20)(22)
Unsecured Junior PIK Note, 10.00% PIK due 12/9/2021  14,279
 10,227
 —
 (20)(22)
Unsecured Revolver, 5.00% cash due 12/9/2021  2,865
 2,631
 573
 (20)(21)
126,127.80 Class A Common Units of Edmentum    126
 —
 (20)
     15,418
 573
  
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
March 31,June 30, 2020
(dollar amounts in thousands)
(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Project Boost Purchaser, LLCApplication Software
First Lien Term Loan, LIBOR+3.50% cash due 6/1/20263.68 %$6,948  $6,878  $6,646  (6)
Second Lien Term Loan, LIBOR+8.00% cash due 5/9/20278.18 %3,750  3,750  3,131  (6)(20)
10,628  9,777  
QuorumLabs, Inc.Application Software
64,887,669 Junior-2 Preferred Stock375  —  (20)
375  —  
Refac Optical GroupSpecialty Stores
1,550.9435 Shares of Common Stock in Refac Holdings, Inc.1  —  (20)
550.9435 Series A-2 Preferred Stock in Refac Holdings, Inc., 10%305  —  (20)
1,000 Series A-1 Preferred Stock in Refac Holdings, Inc., 10%999  —  (20)
1,305  —  
Salient CRGT, Inc.Aerospace & Defense
First Lien Term Loan, LIBOR+6.50% cash due 2/28/20227.57 %2,999  2,979  2,699  (6)(20)
2,979  2,699  
Scilex Pharmaceuticals Inc.Pharmaceuticals
Fixed Rate Zero Coupon Bond due 8/15/202615,654  11,837  12,132  (20)
11,837  12,132  
Shackleton 2018-XII CLO, Ltd.Multi-Sector Holdings
Class E Notes, LIBOR+5.90% cash due 7/20/20317.04 %1,443  1,032  1,209  (6)(11)
1,032  1,209  
ShareThis, Inc.Application Software
345,452 Series C Preferred Stock Warrants (exercise price $3.0395) expiration date 3/4/2024367  —  (20)
367  —  
Sorrento Therapeutics, Inc.Biotechnology
37,500 Shares of Common Stock165  236  (11)
697,246 Common Stock Warrants (exercise price $3.28) expiration date 5/7/2029776  3,263  (11)(20)
145,826 Common Stock Warrants (exercise price $3.94) expiration date 11/3/2029—  665  (11)(20)
500,000 Common Stock Warrants (exercise price $3.26) expiration date 6/6/2030—  2,405  (11)(20)
941  6,569  
Supermoose Borrower, LLCApplication Software
First Lien Term Loan, LIBOR+3.75% cash due 8/29/20253.93 %10,222  8,884  9,051  (6)
8,884  9,051  
Surgery Center Holdings, Inc.Health Care Facilities
First Lien Term Loan, LIBOR+3.25% cash due 9/3/20244.25 %3,860  3,098  3,416  (6)(11)
3,098  3,416  
Swordfish Merger Sub LLCAuto Parts & Equipment
Second Lien Term Loan, LIBOR+6.75% cash due 2/2/20267.75 %12,500  12,456  10,450  (6)(20)
12,456  10,450  
Tacala, LLCRestaurants
Second Lien Term Loan, LIBOR+7.50% cash due 2/4/20287.68 %7,276  7,165  6,621  (6)
7,165  6,621  
TerSera Therapeutics LLCPharmaceuticals
Second Lien Term Loan, LIBOR+9.25% cash due 3/30/202410.25 %29,663  29,193  29,371  (6)(20)
668,879 Common Units of TerSera Holdings LLC1,961  3,204  (20)
31,154  32,575  
12
Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)
 Cost Fair Value Notes
ProFrac Services, LLC Industrial Machinery       
First Lien Term Loan, LIBOR+6.25% cash due 9/15/20238.14% $16,175
 $16,063
 $14,153
 (6)(20)
     16,063
 14,153
  
Project Boost Purchaser, LLC Application Software       
First Lien Term Loan, LIBOR+3.50% cash due 6/1/20264.49% 6,965
 6,895
 5,874
 (6)
Second Lien Term Loan, LIBOR+8.00% cash due 5/9/20278.99% 3,750
 3,750
 2,906
 (6)(20)
     10,645
 8,780
  
QuorumLabs, Inc. Application Software       
64,887,669 Junior-2 Preferred Stock    375
 —
 (20)
     375
 —
  
Refac Optical Group Specialty Stores       
1,550.9435 Shares of Common Stock in Refac Holdings, Inc.    1
 —
 (20)
550.9435 Series A-2 Preferred Stock in Refac Holdings, Inc., 10%    305
 —
 (20)
1,000 Series A-1 Preferred Stock in Refac Holdings, Inc., 10%    999
 —
 (20)
     1,305
 —
  
Salient CRGT, Inc. Aerospace & Defense  

 

 
First Lien Term Loan, LIBOR+6.50% cash due 2/28/20227.57% 3,043
 3,019
 2,510
 (6)(20)
     3,019
 2,510
  
Scilex Pharmaceuticals Inc. Pharmaceuticals       
Fixed Rate Zero Coupon Bond due 8/15/2026  15,716
 11,602
 11,394
 (20)
     11,602
 11,394
  
Shackleton 2018-XII CLO, Ltd. Multi-Sector Holdings       
Class E Notes, LIBOR+5.90% cash due 7/20/20317.72% 1,443
 1,028
 824
 (6)(11)
     1,028
 824
  
Shackleton 2019-XIV CLO, Ltd. Multi-Sector Holdings       
Class D Notes, LIBOR+6.48% cash due 7/20/20308.30% 1,097
 666
 579
 (6)(11)
     666
 579
  
ShareThis, Inc. Application Software       
345,452 Series C Preferred Stock Warrants (exercise price $3.0395) expiration date 3/4/2024    367
 —
 (20)
     367
 —
  
Sorrento Therapeutics, Inc. Biotechnology       
First Lien Term Loan, LIBOR+7.00% cash due 11/7/20238.50% 16,116
 15,235
 15,955
 (6)(11)(20)
1,572,246 Common Stock Warrants (exercise price $3.28) expiration date 5/7/2029    1,750
 1,384
 (11)(20)
333,326 Common Stock Warrants (exercise price $3.94) expiration date 11/3/2029    —
 280
 (11)(20)
500,000 Common Stock Warrants (exercise price $3.26) expiration date 6/6/2030    —
 415
 (11)(20)

    16,985
 18,034
  
Sunshine Luxembourg VII SARL Personal Products       
First Lien Term Loan, LIBOR+4.25% cash due 10/1/20265.32% 1,040
 949
 947
 (6)(11)
     949
 947
  
Supermoose Borrower, LLC Application Software       
First Lien Term Loan, LIBOR+3.75% cash due 8/29/20255.20% 7,066
 6,331
 5,695
 (6)
     6,331
 5,695
  
Surgery Center Holdings, Inc. Health Care Facilities       
First Lien Term Loan, LIBOR+3.25% cash due 9/2/20244.25% 4,350
 3,552
 3,373
 (6)(11)
     3,552
 3,373
  
Swordfish Merger Sub LLC Auto Parts & Equipment       
Second Lien Term Loan, LIBOR+6.75% cash due 2/2/20267.75% 12,500
 12,454
 9,844
 (6)(20)
     12,454
 9,844
  
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
March 31,June 30, 2020
(dollar amounts in thousands)
(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
TIBCO Software Inc.Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 3/3/20287.43 %$15,000  $14,925  $14,541  (6)
14,925  14,541  
TigerConnect, Inc.Application Software
299,110 Series B Preferred Stock Warrants (exercise price $1.3373) expiration date 12/8/202460  525  (20)
60  525  
Transact Holdings Inc.Application Software
First Lien Term Loan, LIBOR+4.75% cash due 4/30/20264.93 %6,948  6,843  6,322  (6)(20)
6,843  6,322  
Truck Hero, Inc.Auto Parts & Equipment
Second Lien Term Loan, LIBOR+8.25% cash due 4/21/20259.25 %21,500  21,191  18,813  (6)(20)
21,191  18,813  
Turbocombustor Technology, Inc.Aerospace & Defense
First Lien Term Loan, LIBOR+4.50% cash due 12/2/20205.50 %5,541  5,084  5,100  (6)
5,084  5,100  
U.S. Renal Care, Inc.Health Care Services
First Lien Term Loan, LIBOR+5.00% cash due 6/26/20265.18 %1,124  928  1,085  (6)
928  1,085  
Veritas US Inc.Application Software
First Lien Term Loan, LIBOR+4.50% cash due 1/27/20235.50 %31,723  31,916  29,483  (6)
31,916  29,483  
Verscend Holding Corp.Health Care Technology
First Lien Term Loan, LIBOR+4.50% cash due 8/27/20254.68 %24,562  24,442  23,822  (6)
Fixed Rate Bond, 9.75% cash due 8/15/20267,000  7,021  7,562  
31,463  31,384  
Vertex Aerospace Services Corp.Aerospace & Defense
First Lien Term Loan, LIBOR+4.50% cash due 6/29/20254.68 %10,194  10,157  10,051  (6)
10,157  10,051  
Vitalyst Holdings, Inc.IT Consulting & Other Services
675 Series A Preferred Stock Units675  440  (20)
7,500 Class A Common Stock Units75  —  (20)
750  440  
William Morris Endeavor Entertainment, LLCMovies & Entertainment
First Lien Term Loan, LIBOR+8.50% cash due 5/18/20259.50 %33,382  31,581  32,547  (6)(20)
31,581  32,547  
Windstream Services, LLCIntegrated Telecommunication Services
Fixed Rate Bond, 8.63% cash due 10/31/20251,460  1,396  1,007  (11)(20)(21)
1,396  1,007  
WP CPP Holdings, LLCAerospace & Defense
Second Lien Term Loan, LIBOR+7.75% cash due 4/30/20268.75 %15,000  14,889  11,325  (6)(20)
14,889  11,325  
WPEngine, Inc.Application Software
First Lien Term Loan, LIBOR+6.50% cash due 3/27/20267.63 %14,188  13,848  13,847  (6)(20)
First Lien Delayed Draw Term Loan, LIBOR+6.50% cash due 3/27/2026—  (630) (632) (6)(19)(20)
13,218  13,215  
xMatters, Inc.Application Software
600,000 Common Stock Warrants (exercise price $0.593333) expiration date 2/26/2025709  269  (20)
709  269  
13
Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)
 Cost Fair Value Notes
Tacala, LLC Restaurants       
Second Lien Term Loan, LIBOR+7.50% cash due 2/4/20288.49% $6,196
 $6,181
 $4,848
 (6)
     6,181
 4,848
  
TerSera Therapeutics LLC Pharmaceuticals       
Second Lien Term Loan, LIBOR+9.25% cash due 3/30/202410.70% 29,663
 29,175
 29,241
 (6)(20)
668,879 Common Units of TerSera Holdings LLC    1,961
 2,859
 (20)

    31,136
 32,100
  
Thunder Finco (US), LLC Movies & Entertainment       
Second Lien Term Loan, LIBOR+8.00% cash due 11/26/20278.99% 12,500
 12,188
 9,250
 (6)(11)(20)
     12,188
 9,250
  
TIBCO Software Inc. Application Software       
Second Lien Term Loan, LIBOR+7.25% cash due 3/3/20288.24% 15,000
 14,925
 14,325
 (6)
     14,925
 14,325
  
TigerConnect, Inc. Application Software       
299,110 Series B Preferred Stock Warrants (exercise price $1.3373) expiration date 12/8/2024    60
 525
 (20)
     60
 525
  
Transact Holdings Inc. Application Software       
First Lien Term Loan, LIBOR+4.75% cash due 4/30/20265.74% 6,965
 6,861
 5,398
 (6)(20)
     6,861
 5,398
  
Truck Hero, Inc. Auto Parts & Equipment       
Second Lien Term Loan, LIBOR+8.25% cash due 4/21/20259.25% 21,500
 21,191
 16,663
 (6)(20)
     21,191
 16,663
  
Turbocombustor Technology, Inc. Aerospace & Defense       
First Lien Term Loan, LIBOR+4.50% cash due 12/2/20205.50% 3,490
 3,140
 3,071
 (6)
     3,140
 3,071
  
Uber Technologies, Inc. Application Software       
First Lien Term Loan, LIBOR+4.00% cash due 4/4/20255.00% 5,661
 5,626
 5,326
 (6)(11)
     5,626
 5,326
  
UFC Holdings, LLC Movies & Entertainment       
First Lien Term Loan, LIBOR+3.25% cash due 4/29/20264.25% 1,374
 1,210
 1,225
 (6)
     1,210
 1,225
  
Uniti Fiber Holdings Inc. Specialized REITs       
Fixed Rate Bond, 8.25% cash due 10/15/2023  5,026
 4,779
 3,908
 (11)
Fixed Rate Bond, 7.88% cash due 2/15/2025  19,685
 19,685
 18,454
 (11)
     24,464
 22,362
  
U.S. Renal Care, Inc. Health Care Services       
First Lien Term Loan, LIBOR+5.00% cash due 6/26/20266.00% 1,127
 924
 997
 (6)
     924
 997
  
Veritas US Inc. Application Software       
First Lien Term Loan, LIBOR+4.50% cash due 1/27/20235.95% 31,805
 32,017
 27,551
 (6)
     32,017
 27,551
  
Verscend Holding Corp. Health Care Technology       
First Lien Term Loan, LIBOR+4.50% cash due 8/27/20255.49% 24,625
 24,506
 23,394
 (6)
Fixed Rate Bond, 9.75% cash due 8/15/2026  12,000
 12,021
 12,068
  
     36,527
 35,462
  
Vertex Aerospace Services Corp. Aerospace & Defense       
First Lien Term Loan, LIBOR+4.50% cash due 6/29/20255.49% 15,720
 15,661
 13,657
 (6)
     15,661
 13,657
  
Vitalyst Holdings, Inc. IT Consulting & Other Services       
675 Series A Preferred Stock Units    675
 440
 (20)
7,500 Class A Common Stock Units    75
 —
 (20)
     750
 440
  
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
March 31,June 30, 2020
(dollar amounts in thousands)
(unaudited)

Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Zep Inc.Specialty Chemicals
First Lien Term Loan, LIBOR+4.00% cash due 8/12/20245.07 %$1,960  $1,896  $1,666  (6)
Second Lien Term Loan, LIBOR+8.25% cash due 8/11/20259.32 %30,000  29,903  21,086  (6)(20)
31,799  22,752  
Zephyr Bidco LimitedSpecialized Finance
Second Lien Term Loan, UK LIBOR+7.50% cash due 7/23/20267.60 %£18,000  23,682  20,406  (6)(11)
23,682  20,406  
Total Non-Control/Non-Affiliate Investments (157.5% of net assets)$1,432,729  $1,353,105  
Total Portfolio Investments (181.7% of net assets)$1,696,577  $1,561,153  
Cash and Cash Equivalents
JP Morgan Prime Money Market Fund, Institutional Shares $47,871  $47,871  
Other cash accounts2,857  2,857  
Total Cash and Cash Equivalents (5.9% of net assets)$50,728  $50,728  
Total Portfolio Investments and Cash and Cash Equivalents (187.6% of net assets)$1,747,305  $1,611,881  


Derivative InstrumentNotional Amount to be PurchasedNotional Amount to be SoldMaturity DateCounterpartyCumulative Unrealized Appreciation /(Depreciation)
Foreign currency forward contract$20,537  £15,480  8/18/2020JPMorgan Chase Bank, N.A.$1,404  
Foreign currency forward contract$25,725  €23,348  8/31/2020JPMorgan Chase Bank, N.A.(534) 
$870  

14
Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)
 Cost Fair Value Notes
Windstream Services, LLC Integrated Telecommunication Services       
Fixed Rate Bond, 8.63% cash due 10/31/2025  $1,460
 $1,420
 $1,029
 (11)(20)
     1,420
 1,029
  
WP CPP Holdings, LLC Aerospace & Defense       
Second Lien Term Loan, LIBOR+7.75% cash due 4/30/20269.53% 15,000
 14,884
 10,300
 (6)(20)
     14,884
 10,300
  
WPEngine, Inc. Application Software       
First Lien Term Loan, LIBOR+6.50% cash due 3/27/20267.77% 14,188
 13,834
 13,833
 (6)(20)
First Lien Delayed Draw Term Loan, LIBOR+6.50% cash due 3/27/2026  —
 (657) (659) (6)(19)(20)
     13,177
 13,174
  
xMatters, Inc. Application Software       
600,000 Common Stock Warrants (exercise price $0.593333) expiration date 2/26/2025    709
 269
 (20)
     709
 269
  
Zep Inc. Specialty Chemicals  

 

  
First Lien Term Loan, LIBOR+4.00% cash due 8/12/20245.07% 1,965
 1,897
 1,326
 (6)
Second Lien Term Loan, LIBOR+8.25% cash due 8/11/20259.32% 30,000
 29,898
 19,170
 (6)(20)
     31,795
 20,496
  
Zephyr Bidco Limited Specialized Finance       
Second Lien Term Loan, UK LIBOR+7.50% cash due 7/23/20267.74% £18,000
 23,666
 19,194
 (6)(11)
     23,666
 19,194
  
Total Non-Control/Non-Affiliate Investments (158.9% of net assets)    $1,362,354
 $1,195,506
  
Total Portfolio Investments (185.1% of net assets)    $1,628,580
 $1,392,187
  
Cash and Cash Equivalents         
JP Morgan Prime Money Market Fund, Institutional Shares    $82,928
 $82,928
  
Other cash accounts    6,581
 6,581
  
Total Cash and Cash Equivalents (11.9% of net assets)    $89,509
 $89,509
  
Total Portfolio Investments and Cash and Cash Equivalents (197.0% of net assets)    $1,718,089
 $1,481,696
  



Derivative Instrument Notional Amount to be Purchased Notional Amount to be Sold Maturity Date Counterparty Cumulative Unrealized Appreciation /(Depreciation)
Foreign currency forward contract $19,756
 £14,850
 8/18/2020 JPMorgan Chase Bank, N.A. $1,310
Foreign currency forward contract $14,532
 €13,213
 8/31/2020 JPMorgan Chase Bank, N.A. (42)
          $1,268

Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
March 31,June 30, 2020
(dollar amounts in thousands)
(unaudited)


(1)(1)All debt investments are income producing unless otherwise noted. All equity investments are non-income producing unless otherwise noted.
(2)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.
(3)Equity ownership may be held in shares or units of companies related to the portfolio companies.
(4)Interest rates may be adjusted from period to period on certain term loans and revolvers. These rate adjustments may be either temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements or permanent in nature per loan amendment or waiver documents.
(5)Each of the Company's investments is pledged as collateral under the Credit Facility (as defined in Note 6 to the accompanying notes to the Consolidated Financial Statements).
(6)The interest rate on the principal balance outstanding for all floating rate loans is indexed to the London Interbank Offered Rate ("LIBOR") and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars unless otherwise noted. As of March 31, 2020, the reference rates for the Company's variable rate loans were the 30-day LIBOR at 0.99%, the 60-day LIBOR at 1.26%, the 90-day LIBOR at 1.45%, the 180-day LIBOR at 1.07%, the PRIME at 3.25%, the 30-day UK LIBOR at 0.24% and the 30-day EURIBOR at (0.40)%. Most loans include an interest floor, which generally ranges from 0% to 1%.
(7)Principal includes accumulated payment in kind ("PIK") interest and is net of repayments, if any. “£” signifies the investment is denominated in British Pounds. "€" signifies the investment is denominated in Euros. All other investments are denominated in U.S. dollars.
(8)Control Investments generally are defined by the Investment Company Act of 1940, as amended (the "Investment Company Act"), as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.
(9)As defined in the Investment Company Act, the Company is deemed to be both an "Affiliated Person" of and to "Control" these portfolio companies as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Schedule 12-14 in the accompanying notes to the Consolidated Financial Statements for transactions during the six months ended March 31, 2020 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to control.
(10)First Star Speir Aviation 1 Limited is a wholly-owned holding company formed by the Company in order to facilitate its investment strategy. In accordance with Accounting Standards Update ("ASU") 2013-08, the Company has deemed the holding company to be an investment company under accounting principles generally accepted in the United States ("GAAP") and therefore deemed it appropriate to consolidate the financial results and financial position of the holding company and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding company are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entities.
(11)Investment is not a "qualifying asset" as defined under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of March 31, 2020, qualifying assets represented 77.2% of the Company's total assets and non-qualifying assets represented 22.8% of the Company's total assets.
(12)Income producing through payment of dividends or distributions.
(13)PIK interest income for this investment accrues at an annualized rate of 15%, however, the PIK interest is not contractually capitalized on the investment. As a result, the principal amount of the investment does not increase over time for accumulated PIK interest. As of March 31, 2020, the accumulated PIK interest balance for each of the A notes and the B notes was $3.0 million. The fair value of this investment is inclusive of PIK.
(14)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition.
(15)During the quarter ended March 31, 2020, this portfolio company modified its scheduled interest payment to PIK.
(16)
This investment was valued using net asset value as a practical expedient for fair value. Consistent with Financial Accounting Standards Board ("FASB") guidance under Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), these investments are excluded from the hierarchical levels.
(17)Affiliate Investments generally are defined by the Investment Company Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.
(18)Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.
(19)Investment has undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.
(20)As of March 31, 2020, these investments were categorized as Level 3 within the fair value hierarchy established by ASC 820.


(2)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.
(3)Equity ownership may be held in shares or units of companies related to the portfolio companies.
(4)Interest rates may be adjusted from period to period on certain term loans and revolvers. These rate adjustments may be either temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements or permanent in nature per loan amendment or waiver documents.
(5)Each of the Company's investments is pledged as collateral under the Credit Facility (as defined in Note 6 to the accompanying notes to the Consolidated Financial Statements).
(6)The interest rate on the principal balance outstanding for all floating rate loans is indexed to the London Interbank Offered Rate ("LIBOR") and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars unless otherwise noted. As of June 30, 2020, the reference rates for the Company's variable rate loans were the 30-day LIBOR at 0.18%, the 60-day LIBOR at 0.24%, the 90-day LIBOR at 0.31%, the 180-day LIBOR at 0.36%, the 360-day LIBOR at 0.57%, the PRIME at 3.25%, the 30-day UK LIBOR at 0.10% and the 30-day EURIBOR at (0.48)%. Most loans include an interest floor, which generally ranges from 0% to 1%.
(7)Principal includes accumulated payment in kind ("PIK") interest and is net of repayments, if any. “£” signifies the investment is denominated in British Pounds. "€" signifies the investment is denominated in Euros. All other investments are denominated in U.S. dollars.
(8)Control Investments generally are defined by the Investment Company Act of 1940, as amended (the "Investment Company Act"), as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.
(9)As defined in the Investment Company Act, the Company is deemed to be both an "Affiliated Person" of and to "Control" these portfolio companies as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Schedule 12-14 in the accompanying notes to the Consolidated Financial Statements for transactions during the nine months ended June 30, 2020 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to control.
(10)First Star Speir Aviation 1 Limited is a wholly-owned holding company formed by the Company in order to facilitate its investment strategy. In accordance with Accounting Standards Update ("ASU") 2013-08, the Company has deemed the holding company to be an investment company under accounting principles generally accepted in the United States ("GAAP") and therefore deemed it appropriate to consolidate the financial results and financial position of the holding company and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding company are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entities.
(11)Investment is not a "qualifying asset" as defined under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of June 30, 2020, qualifying assets represented 75.5% of the Company's total assets and non-qualifying assets represented 24.5% of the Company's total assets.
(12)Income producing through payment of dividends or distributions.
(13)PIK interest income for this investment accrues at an annualized rate of 15%, however, the PIK interest is not contractually capitalized on the investment. As a result, the principal amount of the investment does not increase over time for accumulated PIK interest. As of June 30, 2020, the accumulated PIK interest balance for each of the A notes and the B notes was $3.6 million. The fair value of this investment is inclusive of PIK.
(14)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition.
(15)This investment was on PIK non-accrual status as of June 30, 2020. PIK non-accrual status is inclusive of other non-cash income, where applicable.
(16)This investment was valued using net asset value as a practical expedient for fair value. Consistent with Financial Accounting Standards Board ("FASB") guidance under Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), these investments are excluded from the hierarchical levels.
(17)Affiliate Investments generally are defined by the Investment Company Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.
(18)Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.
(19)Investment has undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.
15
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
March 31,June 30, 2020
(dollar amounts in thousands)
(unaudited)


(21)This investment was on cash non-accrual status as of March 31, 2020. Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.
(22)This investment was on PIK non-accrual status as of March 31, 2020. PIK non-accrual status is inclusive of other non-cash income, where applicable.

(20)As of June 30, 2020, these investments were categorized as Level 3 within the fair value hierarchy established by ASC 820.
(21)This investment was on cash non-accrual status as of June 30, 2020. Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.



See notes to Consolidated Financial Statements.
16
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2019
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Control Investments(8)(9)
C5 Technology Holdings, LLCData processing & outsourced services
829 Common Units$—  $—  (20)
34,984,460.37 Preferred Units34,984  34,984  (20)
34,984  34,984  
First Star Speir Aviation LimitedAirlines(10)
First Lien Term Loan, 9.00% cash due 12/15/2020$11,510  2,140  11,510  (11)(20)
100% equity interest8,500  4,630  (11)(12)(20)
10,640  16,140  
New IPT, Inc.Oil & gas equipment services
First Lien Term Loan, LIBOR+5.00% cash due 3/17/20217.10 %3,256  3,256  3,256   (6)(20)
First Lien Revolver, LIBOR+5.00% cash due 3/17/20217.10 %1,009  1,009  1,009   (6)(19)(20)
50.087 Class A Common Units in New IPT Holdings, LLC—  2,903  (20)
4,265  7,168  
Senior Loan Fund JV I, LLCMulti-sector holdings(14)(15)
Subordinated Debt, LIBOR+7.00% cash due 12/29/20289.39 %96,250  96,250  96,250  (6)(11)(20)
87.5% LLC equity interest49,322  30,052  (11)(16)(19)
145,572  126,302  
Thruline Marketing, Inc.Advertising
First Lien Term Loan, LIBOR+7.00% cash due 4/3/20229.10 %18,146  18,146  18,146  (6)(20)
First Lien Revolver, LIBOR+7.75% cash due 4/3/2022—  —  —  (6)(19)(20)
9,073 Class A Units in FS AVI Holdco, LLC10,648  6,438  (20)
28,794  24,584  
 Total Control Investments (22.5% of net assets)$224,255  $209,178  
 Affiliate Investments(17)
Assembled Brands Capital LLCSpecialized finance
First Lien Delayed Draw Term Loan, LIBOR+6.00% cash due 10/17/20238.10 %$5,585  $5,585  $5,585  (6)(19)(20)
1,609,201 Class A Units765  782  (20)
1,019,168.80 Preferred Units, 6%1,019  1,019  (20)
70,424.5641 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029—  —  (20)
7,369  7,386  
Caregiver Services, Inc.Healthcare services
1,080,399 shares of Series A Preferred Stock, 10%1,080  1,784  (20)
1,080  1,784  
 Total Affiliate Investments (1.0% of net assets)$8,449  $9,170  
 Non-Control/Non-Affiliate Investments(18)
4 Over International, LLCCommercial printing
First Lien Term Loan, LIBOR+6.00% cash due 6/7/20228.04 %$5,799  $5,764  $5,688  (6)(20)
First Lien Revolver, PRIME+5.00% cash due 6/7/202110.00 %255  238  212  (6)(19)(20)
6,002  5,900  
99 Cents Only Stores LLCGeneral merchandise stores
First Lien Term Loan, LIBOR+5.00% cash 1.50% PIK due 1/13/20227.10 %19,326  18,946  16,934  (6)
18,946  16,934  
Access CIG, LLCDiversified support services
Second Lien Term Loan, LIBOR+7.75% cash due 2/27/202610.07 %15,000  14,892  15,000  (6)(20)
14,892  15,000  
17
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2019
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Aden & Anais Merger Sub, Inc.Apparel, accessories & luxury goods
51,645 Common Units in Aden & Anais Holdings, Inc.$5,165  $—  (20)
5,165  —  
AdVenture Interactive, Corp.Advertising
9,073 shares of common stock13,611  12,677  (20)
13,611  12,677  
AI Ladder (Luxembourg) Subco S.a.r.l.Electrical components & equipment
First Lien Term Loan, LIBOR+4.50% cash due 7/9/20256.60 %$21,752  21,210  20,032  (6)(11)
21,210  20,032  
AI Sirona (Luxembourg) Acquisition S.a.r.l.Pharmaceuticals
Second Lien Term Loan, EURIBOR+7.25% cash due 7/10/20267.25 %€17,500  20,035  18,673  (6)(11)
20,035  18,673  
Air Medical Group Holdings, Inc.Healthcare services
First Lien Term Loan, LIBOR+4.25% cash due 3/14/20256.29 %$6,321  6,192  5,936  (6)
6,192  5,936  
AirStrip Technologies, Inc.Application software
22,858.71 Series C-1 Preferred Stock Warrants (exercise price $34.99757) expiration date 5/11/202590  —  (20)
90  —  
Airxcel, Inc.Household appliances
First Lien Term Loan, LIBOR+4.50% cash due 4/28/20256.54 %7,900  7,837  7,614  (6)
7,837  7,614  
Aldevron, L.L.C.Biotechnology
First Lien Term Loan, LIBOR+4.25% cash due 9/20/20266.36 %8,000  7,920  8,040  (6)
7,920  8,040  
Algeco Scotsman Global Finance PlcConstruction & engineering
Fixed Rate Bond, 8.00% cash due 2/15/202323,915  23,443  23,982  (11)
23,443  23,982  
Allen Media, LLCMovies & entertainment
First Lien Term Loan, LIBOR+6.50% cash due 8/30/20238.60 %19,238  18,858  18,613  (6)(20)
18,858  18,613  
Altice France S.A.Integrated telecommunication services
Fixed Rate Bond, 8.13% cash due 1/15/20243,000  3,045  3,113  (11)
Fixed Rate Bond, 7.63% cash due 2/15/20252,000  2,012  2,083  (11)
5,057  5,196  
Alvotech Holdings S.A.Biotechnology
Fixed Rate Bond 15% PIK Note A due 12/13/202314,800  16,304  18,089  (11)(13)(20)
Fixed Rate Bond 15% PIK Note B due 12/13/202314,800  16,304  16,609  (11)(13)(20)
32,608  34,698  
Ancile Solutions, Inc.Application software
First Lien Term Loan, LIBOR+7.00% cash due 6/30/20219.10 %8,677  8,591  8,504   (6)(20)
8,591  8,504  
Apptio, Inc.Application software
First Lien Term Loan, LIBOR+7.25% cash due 1/10/20259.56 %23,764  23,340  23,325  (6)(20)
First Lien Revolver, LIBOR+7.25% cash due 1/10/2025—  (27) (28) (6)(19)(20)
23,313  23,297  
Asurion, LLCProperty & casualty insurance
Second Lien Term Loan, LIBOR+6.50% cash due 8/4/20258.54 %22,000  21,954  22,382  (6)
21,954  22,382  
18
Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)
 Cost Fair Value Notes
Aden & Anais Merger Sub, Inc. Apparel, accessories & luxury goods       
51,645 Common Units in Aden & Anais Holdings, Inc.    $5,165
 $—
 (20)
     5,165
 —
  
AdVenture Interactive, Corp. Advertising       
9,073 shares of common stock    13,611
 12,677
 (20)
     13,611
 12,677
  
AI Ladder (Luxembourg) Subco S.a.r.l. Electrical components & equipment       
First Lien Term Loan, LIBOR+4.50% cash due 7/9/20256.60% $21,752
 21,210
 20,032
 (6)(11)
     21,210
 20,032
  
AI Sirona (Luxembourg) Acquisition S.a.r.l. Pharmaceuticals       
Second Lien Term Loan, EURIBOR+7.25% cash due 7/10/20267.25% €17,500
 20,035
 18,673
 (6)(11)
     20,035
 18,673
  
Air Medical Group Holdings, Inc. Healthcare services       
First Lien Term Loan, LIBOR+4.25% cash due 3/14/20256.29% $6,321
 6,192
 5,936
 (6)
     6,192
 5,936
  
AirStrip Technologies, Inc. Application software       
22,858.71 Series C-1 Preferred Stock Warrants (exercise price $34.99757) expiration date 5/11/2025    90
 —
 (20)
     90
 —
  
Airxcel, Inc. Household appliances       
First Lien Term Loan, LIBOR+4.50% cash due 4/28/20256.54% 7,900
 7,837
 7,614
 (6)
     7,837
 7,614
  
Aldevron, L.L.C. Biotechnology       
First Lien Term Loan, LIBOR+4.25% cash due 9/20/20266.36% 8,000
 7,920
 8,040
 (6)
     7,920
 8,040
  
Algeco Scotsman Global Finance Plc Construction & engineering       
Fixed Rate Bond, 8.00% cash due 2/15/2023  23,915
 23,443
 23,982
 (11)
     23,443
 23,982
  
Allen Media, LLC Movies & entertainment       
First Lien Term Loan, LIBOR+6.50% cash due 8/30/20238.60% 19,238
 18,858
 18,613
 (6)(20)
     18,858
 18,613
  
Altice France S.A. Integrated telecommunication services       
Fixed Rate Bond, 8.13% cash due 1/15/2024  3,000
 3,045
 3,113
 (11)
Fixed Rate Bond, 7.63% cash due 2/15/2025  2,000
 2,012
 2,083
 (11)
     5,057
 5,196
  
Alvotech Holdings S.A. Biotechnology       
Fixed Rate Bond 15% PIK Note A due 12/13/2023  14,800
 16,304
 18,089
 (11)(13)(20)
Fixed Rate Bond 15% PIK Note B due 12/13/2023  14,800
 16,304
 16,609
 (11)(13)(20)
     32,608
 34,698
  
Ancile Solutions, Inc. Application software       
First Lien Term Loan, LIBOR+7.00% cash due 6/30/20219.10% 8,677
 8,591
 8,504
  (6)(20)
     8,591
 8,504
  
Apptio, Inc. Application software       
First Lien Term Loan, LIBOR+7.25% cash due 1/10/20259.56% 23,764
 23,340
 23,325
 (6)(20)
First Lien Revolver, LIBOR+7.25% cash due 1/10/2025  —
 (27) (28) (6)(19)(20)
     23,313
 23,297
  
Asurion, LLC Property & casualty insurance       
Second Lien Term Loan, LIBOR+6.50% cash due 8/4/20258.54% 22,000
 21,954
 22,382
 (6)
     21,954
 22,382
  
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2019
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Avantor Inc.Healthcare distributors
Fixed Rate Bond, 9.00% cash due 10/1/2025$3,000  $2,975  $3,379  
2,975  3,379  
Belk Inc.Department stores
First Lien Term Loan, LIBOR+4.75% cash due 12/12/20226.80 %653  585  480  (6)
585  480  
Blackhawk Network Holdings, Inc.Data processing & outsourced services
Second Lien Term Loan, LIBOR+7.00% cash due 6/15/20269.06 %26,250  26,013  26,283  (6)
26,013  26,283  
Boxer Parent Company Inc.Systems software
First Lien Term Loan, LIBOR+4.25% cash due 10/2/20256.29 %13,915  13,798  13,416  (6)
13,798  13,416  
California Pizza Kitchen, Inc.Restaurants
First Lien Term Loan, LIBOR+6.00% cash due 8/23/20228.53 %3,122  3,097  2,800  (6)
3,097  2,800  
Cenegenics, LLCHealthcare services(23)
First Lien Term Loan, 9.75% cash 2.00% PIK due 9/30/201929,781  27,738  —  (20)(21)
First Lien Revolver, 15.00% cash due 9/30/20192,203  2,203  —  (20)(21)
452,914.87 Common Units in Cenegenics, LLC598  —  (20)
345,380.141 Preferred Units in Cenegenics, LLC300  —  (20)
30,839  —  
CITGO Holding, Inc.Oil & gas refining & marketing
Fixed Rate Bond, 9.25% cash due 8/1/202410,672  10,672  11,366  
First Lien Term Loan, LIBOR+7.00% cash due 8/1/202310,000  9,855  10,219  (6)
20,527  21,585  
CITGO Petroleum Corp.Oil & gas refining & marketing
First Lien Term Loan, LIBOR+5.00% cash due 3/28/20247.10 %9,950  9,851  10,012  (6)
9,851  10,012  
Connect U.S. Finco LLCAlternative carriers
First Lien Term Loan, LIBOR+4.50% cash due 9/23/20267.10 %30,000  29,400  29,580  (6)(11)
29,400  29,580  
Convergeone Holdings, Inc.IT consulting & other services
First Lien Term Loan, LIBOR+5.00% cash due 1/4/20267.04 %14,770  14,225  13,352  (6)
14,225  13,352  
Conviva Inc.Application software
417,851 Series D Preferred Stock Warrants (exercise price $1.1966) expiration date 2/28/2021105  411  (20)
105  411  
Covia Holdings CorporationOil & gas equipment services
First Lien Term Loan, LIBOR+4.00% cash due 6/1/20256.31 %7,900  7,900  6,484  (6)(11)
7,900  6,484  
DigiCert, Inc.Internet services & infrastructure
First Lien Term Loan, LIBOR+4.00% cash due 10/31/20246.04 %4,222  4,184  4,221  (6)
4,184  4,221  
Dominion Diagnostics, LLCHealthcare services(23)
Subordinated Term Loan, 11.00% cash 1.00% PIK due 10/18/201920,273  14,281  2,890  (20)(21)
First Lien Term Loan, PRIME+4.00% cash due 4/8/20199.00 %45,691  45,691  45,691  (6)(20)
First Lien Revolver, PRIME+4.00% cash due 4/8/20199.00 %2,090  2,090  2,090  (6)(20)
62,062  50,671  
19
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2019
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
The Dun & Bradstreet CorporationResearch & consulting services
First Lien Term Loan, LIBOR+5.00% cash due 2/6/20267.05 %$10,000  $9,817  $10,074  (6)
Fixed Rate Bond 6.875% cash due 8/15/20265,000  5,000  5,459  
14,817  15,533  
Eagleview Technology CorporationApplication software
Second Lien Term Loan, LIBOR+7.50% cash due 8/14/20269.55 %12,000  11,880  11,520  (6)(20)
11,880  11,520  
EHR Canada, LLCFood retail
First Lien Term Loan, LIBOR+8.00% cash due 9/28/202010.10 %14,611  14,473  14,903  (6)(20)
14,473  14,903  
EOS Fitness Opco Holdings, LLCLeisure facilities
487.5 Class A Preferred Units, 12%488  855  (20)
12,500 Class B Common Units—  934  (20)
488  1,789  
Equitrans Midstream Corp.Oil & gas storage & transportation
First Lien Term Loan, LIBOR+4.50% cash due 1/31/20246.55 %11,910  11,603  11,926  (6)(11)
11,603  11,926  
ExamSoft Worldwide, Inc.Application software
180,707 Class C Units in ExamSoft Investor LLC181  —  (20)
181  —  
GI Chill Acquisition LLCManaged healthcare
First Lien Term Loan, LIBOR+4.00% cash due 8/6/20256.10 %17,820  17,731  17,775  (6)(20)
Second Lien Term Loan, LIBOR+7.50% cash due 8/6/20269.60 %10,000  9,914  10,000  (6)(20)
27,645  27,775  
GKD Index Partners, LLCSpecialized finance
First Lien Term Loan, LIBOR+7.25% cash due 6/29/20239.35 %22,402  22,235  22,108  (6)(20)
First Lien Revolver, LIBOR+7.25% cash due 6/29/2023—  (9) (15) (6)(19)(20)
22,226  22,093  
GoodRx, Inc.Interactive media & services
Second Lien Term Loan, LIBOR+7.50% cash due 10/12/20269.54 %22,222  21,805  22,500  (6)(20)
21,805  22,500  
Guidehouse LLPResearch & consulting services
Second Lien Term Loan, LIBOR+7.50% cash due 5/1/20269.54 %20,000  19,917  19,750  (6)
19,917  19,750  
HealthEdge Software, Inc.Application software
482,453 Series A-3 Preferred Stock Warrants (exercise price $1.450918) expiration date 9/30/2023213  757  (20)
213  757  
I Drive Safely, LLCEducation services
125,079 Class A Common Units of IDS Investments, LLC1,000  200  (20)
1,000  200  
IBG Borrower LLCApparel, accessories & luxury goods
First Lien Term Loan, LIBOR+7.00% cash due 8/2/20229.13 %14,209  13,027  13,286  (6)(20)
13,027  13,286  
iCIMs, Inc.Application software
First Lien Term Loan, LIBOR+6.50% cash due 9/12/20248.56 %16,718  16,436  16,438  (6)(20)
First Lien Revolver, LIBOR+6.50% cash due 9/12/2024—  (15) (15) (6)(19)(20)
16,421  16,423  
20
Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)
 Cost Fair Value Notes
The Dun & Bradstreet Corporation Research & consulting services       
First Lien Term Loan, LIBOR+5.00% cash due 2/6/20267.05% $10,000
 $9,817
 $10,074
 (6)
Fixed Rate Bond 6.875% cash due 8/15/2026  5,000
 5,000
 5,459
  
     14,817
 15,533
  
Eagleview Technology Corporation Application software       
Second Lien Term Loan, LIBOR+7.50% cash due 8/14/20269.55% 12,000
 11,880
 11,520
 (6)(20)
     11,880
 11,520
  
EHR Canada, LLC Food retail       
First Lien Term Loan, LIBOR+8.00% cash due 9/28/202010.10% 14,611
 14,473
 14,903
 (6)(20)
     14,473
 14,903
  
EOS Fitness Opco Holdings, LLC Leisure facilities       
487.5 Class A Preferred Units, 12%    488
 855
 (20)
12,500 Class B Common Units    —
 934
 (20)
     488
 1,789
  
Equitrans Midstream Corp. Oil & gas storage & transportation       
First Lien Term Loan, LIBOR+4.50% cash due 1/31/20246.55% 11,910
 11,603
 11,926
 (6)(11)
     11,603
 11,926
  
ExamSoft Worldwide, Inc. Application software       
180,707 Class C Units in ExamSoft Investor LLC    181
 —
 (20)
     181
 —
  
GI Chill Acquisition LLC Managed healthcare       
First Lien Term Loan, LIBOR+4.00% cash due 8/6/20256.10% 17,820
 17,731
 17,775
 (6)(20)
Second Lien Term Loan, LIBOR+7.50% cash due 8/6/20269.60% 10,000
 9,914
 10,000
 (6)(20)
     27,645
 27,775
  
GKD Index Partners, LLC Specialized finance       
First Lien Term Loan, LIBOR+7.25% cash due 6/29/20239.35% 22,402
 22,235
 22,108
 (6)(20)
First Lien Revolver, LIBOR+7.25% cash due 6/29/2023  —
 (9) (15) (6)(19)(20)
     22,226
 22,093
  
GoodRx, Inc. Interactive media & services       
Second Lien Term Loan, LIBOR+7.50% cash due 10/12/20269.54% 22,222
 21,805
 22,500
 (6)(20)
     21,805
 22,500
  
Guidehouse LLP Research & consulting services       
Second Lien Term Loan, LIBOR+7.50% cash due 5/1/20269.54% 20,000
 19,917
 19,750
 (6)
     19,917
 19,750
  
HealthEdge Software, Inc. Application software       
482,453 Series A-3 Preferred Stock Warrants (exercise price $1.450918) expiration date 9/30/2023    213
 757
 (20)
     213
 757
  
I Drive Safely, LLC Education services       
125,079 Class A Common Units of IDS Investments, LLC    1,000
 200
 (20)
     1,000
 200
  
IBG Borrower LLC Apparel, accessories & luxury goods       
First Lien Term Loan, LIBOR+7.00% cash due 8/2/20229.13% 14,209
 13,027
 13,286
 (6)(20)
     13,027
 13,286
  
iCIMs, Inc. Application software       
First Lien Term Loan, LIBOR+6.50% cash due 9/12/20248.56% 16,718
 16,436
 16,438
 (6)(20)
First Lien Revolver, LIBOR+6.50% cash due 9/12/2024  —
 (15) (15) (6)(19)(20)
     16,421
 16,423
  
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2019
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Integral Development CorporationOther diversified financial services
1,078,284 Common Stock Warrants (exercise price $0.9274) expiration date 7/10/2024$113  $—  (20)
113  —  
Kellermeyer Bergensons Services, LLCEnvironmental & facilities services
Second Lien Term Loan, LIBOR+8.50% cash due 4/29/202210.77 %$6,105  5,940  5,937  (6)(20)
5,940  5,937  
L Squared Capital Partners LLCMulti-sector holdings
2.00% limited partnership interest864  2,237  (11)(16)
864  2,237  
Lanai Holdings III, Inc.Healthcare distributors
First Lien Term Loan, LIBOR+4.75% cash due 8/29/20227.01 %19,892  19,586  18,583  (6)
19,586  18,583  
Lannett Company, Inc.Pharmaceuticals
First Lien Term Loan, LIBOR+5.00% cash due 11/25/20207.04 %762  762  759  (6)(11)
762  759  
Lift Brands Holdings, Inc.Leisure facilities
2,000,000 Class A Common Units in Snap Investments, LLC1,399  3,020  (20)
1,399  3,020  
Lightbox Intermediate, L.P.Real estate services
First Lien Term Loan, LIBOR+5.00% cash due 5/9/20267.05 %39,900  39,332  39,501  (6)(20)
39,332  39,501  
Long's Drugs IncorporatedPharmaceuticals
50 Series A Preferred Shares in Long's Drugs Incorporated385  924  (20)
25 Series B Preferred Shares in Long's Drugs Incorporated210  572  (20)
595  1,496  
LTI Holdings, Inc.Auto parts & equipment
Second Lien Term Loan, LIBOR+6.75% cash due 9/6/20268.79 %9,000  9,000  8,246  (6)
9,000  8,246  
Lytx Holdings, LLCResearch & consulting services
3,500 Class B Units—  2,053  (20)
—  2,053  
Maravai Intermediate Holdings, LLCBiotechnology
First Lien Term Loan, LIBOR+4.25% cash due 8/2/20256.31 %11,880  11,761  11,813  (6)(20)
11,761  11,813  
Mayfield Agency Borrower Inc.Property & casualty insurance
First Lien Term Loan, LIBOR+4.50% cash due 2/28/20256.54 %15,892  15,630  15,481  (6)
Second Lien Term Loan, LIBOR+8.50% cash due 3/2/202610.54 %35,925  35,492  36,285  (6)(20)
51,122  51,766  
McAfee, LLCSystems software
First Lien Term Loan, LIBOR+3.75% cash due 9/30/20245.79 %10,957  10,884  10,995  (6)
Second Lien Term Loan, LIBOR+8.50% cash due 9/29/202510.54 %7,000  7,034  7,093  (6)
17,918  18,088  
21
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2019
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
MHE Intermediate Holdings, LLCDiversified support services
First Lien Term Loan, LIBOR+5.00% cash due 3/8/20247.10 %$2,932  $2,913  $2,874  (6)(20)
2,913  2,874  
Mindbody, Inc.Internet services & infrastructure
First Lien Term Loan, LIBOR+7.00% cash due 2/14/20259.06 %28,952  28,434  28,402  (6)(20)
First Lien Revolver, LIBOR+7.00% cash due 2/15/2025—  (55) (58) (6)(19)(20)
28,379  28,344  
Ministry Brands, LLCApplication software
Second Lien Term Loan, LIBOR+9.25% cash due 6/2/202311.34 %7,056  6,997  7,056  (6)(20)
Second Lien Delayed Draw Term Loan, LIBOR+9.25% cash due 6/2/202311.34 %1,944  1,927  1,944  (6)(20)
First Lien Revolver, LIBOR+5.00% cash due 12/2/20227.04 %200  191  200  (6)(19)(20)
9,115  9,200  
Navicure, Inc.Healthcare technology
Second Lien Term Loan, LIBOR+7.50% cash due 10/31/20259.54 %14,500  14,389  14,573  (6)(20)
14,389  14,573  
Numericable SFR SAIntegrated telecommunication services
Fixed Rate Bond, 7.38% cash due 5/1/20265,000  5,104  5,380  (11)
5,104  5,380  
OmniSYS Acquisition CorporationDiversified support services
100,000 Common Units in OSYS Holdings, LLC1,000  750  (20)
1,000  750  
Onvoy, LLCIntegrated telecommunication services
Second Lien Term Loan, LIBOR+10.50% cash due 2/10/202512.54 %16,750  16,750  13,187  (6)(20)
19,666.67 Class A Units in GTCR Onvoy Holdings, LLC1,967  —  (20)
13,664.73 Series 3 Class B Units in GTCR Onvoy Holdings, LLC—  —  (20)
18,717  13,187  
P2 Upstream Acquisition Co.Application software
First Lien Term Loan, LIBOR+4.00% cash due 10/30/20206.19 %2,976  2,936  2,950  (6)
First Lien Revolver, LIBOR+4.00% cash due 2/1/2020—  —  (79) (6)(19)
2,936  2,871  
PaySimple, Inc.Data processing & outsourced services
First Lien Term Loan, LIBOR+5.50% cash due 8/23/20257.55 %37,750  37,004  37,184  (6)(20)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 8/23/2025—  (242) (184) (6)(19)(20)
36,762  37,000  
Pingora MSR Opportunity Fund I-A, LPThrift & mortgage finance
1.86% limited partnership interest1,217  691  (11)(16)(19)
1,217  691  
PLATO Learning Inc.Education services
Unsecured Senior PIK Note, 8.5% PIK due 12/9/20212,845  2,434  —  (20)(22)
Unsecured Junior PIK Note, 10% PIK due 12/9/202113,577  10,227  —  (20)(22)
Unsecured Revolver, 5.00% cash due 12/9/20212,064  1,885  (184) (19)(20)(21)
126,127.80 Class A Common Units of Edmentum126  —  (20)
14,672  (184) 
22
Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)
 Cost Fair Value Notes
MHE Intermediate Holdings, LLC Diversified support services       
First Lien Term Loan, LIBOR+5.00% cash due 3/8/20247.10% $2,932
 $2,913
 $2,874
 (6)(20)
     2,913
 2,874
  
Mindbody, Inc. Internet services & infrastructure       
First Lien Term Loan, LIBOR+7.00% cash due 2/14/20259.06% 28,952
 28,434
 28,402
 (6)(20)
First Lien Revolver, LIBOR+7.00% cash due 2/15/2025  —
 (55) (58) (6)(19)(20)
     28,379
 28,344
  
Ministry Brands, LLC Application software       
Second Lien Term Loan, LIBOR+9.25% cash due 6/2/202311.34% 7,056
 6,997
 7,056
 (6)(20)
Second Lien Delayed Draw Term Loan, LIBOR+9.25% cash due 6/2/202311.34% 1,944
 1,927
 1,944
 (6)(20)
First Lien Revolver, LIBOR+5.00% cash due 12/2/20227.04% 200
 191
 200
 (6)(19)(20)
     9,115
 9,200
  
Navicure, Inc. Healthcare technology       
Second Lien Term Loan, LIBOR+7.50% cash due 10/31/20259.54% 14,500
 14,389
 14,573
 (6)(20)
     14,389
 14,573
  
Numericable SFR SA Integrated telecommunication services       
Fixed Rate Bond, 7.38% cash due 5/1/2026  5,000
 5,104
 5,380
 (11)
     5,104
 5,380
  
OmniSYS Acquisition Corporation Diversified support services       
100,000 Common Units in OSYS Holdings, LLC    1,000
 750
 (20)
     1,000
 750
  
Onvoy, LLC Integrated telecommunication services       
Second Lien Term Loan, LIBOR+10.50% cash due 2/10/202512.54% 16,750
 16,750
 13,187
 (6)(20)
19,666.67 Class A Units in GTCR Onvoy Holdings, LLC    1,967
 —
 (20)
13,664.73 Series 3 Class B Units in GTCR Onvoy Holdings, LLC    —
 —
 (20)
     18,717
 13,187
  
P2 Upstream Acquisition Co. Application software       
First Lien Term Loan, LIBOR+4.00% cash due 10/30/20206.19% 2,976
 2,936
 2,950
 (6)
First Lien Revolver, LIBOR+4.00% cash due 2/1/2020  —
 —
 (79) (6)(19)
     2,936
 2,871
  
PaySimple, Inc. Data processing & outsourced services       
First Lien Term Loan, LIBOR+5.50% cash due 8/23/20257.55% 37,750
 37,004
 37,184
 (6)(20)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 8/23/2025  —
 (242) (184) (6)(19)(20)
     36,762
 37,000
  
Pingora MSR Opportunity Fund I-A, LP Thrift & mortgage finance       
1.86% limited partnership interest    1,217
 691
 (11)(16)(19)
     1,217
 691
  
PLATO Learning Inc. Education services       
Unsecured Senior PIK Note, 8.5% PIK due 12/9/2021  2,845
 2,434
 —
 (20)(22)
Unsecured Junior PIK Note, 10% PIK due 12/9/2021  13,577
 10,227
 —
 (20)(22)
Unsecured Revolver, 5.00% cash due 12/9/2021  2,064
 1,885
 (184) (19)(20)(21)
126,127.80 Class A Common Units of Edmentum    126
 —
 (20)
     14,672
 (184)  
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2019
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Project Boost Purchaser, LLCApplication software
First Lien Term Loan, LIBOR+3.50% cash due 6/1/20265.54 %$7,000  $6,930  $6,964  (6)
Second Lien Term Loan, LIBOR+8.00% cash due 5/9/202710.14 %3,750  3,750  3,750  (6)(20)
10,680  10,714  
ProFrac Services, LLCIndustrial machinery
First Lien Term Loan, LIBOR+6.25% cash due 9/15/20238.66 %17,192  17,055  16,848  (6)(20)
17,055  16,848  
QuorumLabs, Inc.Application software
64,887,669 Junior-2 Preferred Stock375  —  (20)
375  —  
Refac Optical GroupSpecialty stores
1,550.9435 Shares of Common Stock in Refac Holdings, Inc.1  —  (20)
550.9435 Series A-2 Preferred Stock in Refac Holdings, Inc., 10%305  —  (20)
1,000 Series A-1 Preferred Stock in Refac Holdings, Inc., 10%999  —  (20)
1,305  —  
Salient CRGT, Inc.Aerospace & defense
First Lien Term Loan, LIBOR+6.00% cash due 2/28/20228.05 %3,086  3,056  2,932  (6)(20)
3,056  2,932  
Scilex Pharmaceuticals Inc.Pharmaceuticals
Fixed Rate Zero Coupon Bond due 8/15/202615,879  11,146  11,353  (20)
11,146  11,353  
ShareThis, Inc.Application software
345,452 Series C Preferred Stock Warrants (exercise price $3.0395) expiration date 3/4/2024367  2  (20)
367  2  
Sorrento Therapeutics, Inc.Biotechnology
First Lien Term Loan, LIBOR+7.00% cash due 11/7/20239.13 %30,000  28,132  29,250  (6)(11)(20)
First Lien Delayed Draw Term Loan, LIBOR+7.00% cash due 11/7/2023(62) (69) (6)(11)(19)(20)
Stock Warrants Strike (exercise price $3.28) expiration date 5/7/20291,750  1,667  (11)(20)
Stock Warrants Strike (exercise price $3.94) expiration date 11/3/2029—  320  (11)(20)
29,820  31,168  
Swordfish Merger Sub LLCAuto parts & equipment
Second Lien Term Loan, LIBOR+6.75% cash due 2/2/20268.79 %12,500  12,450  12,135  (6)(20)
12,450  12,135  
TerSera Therapeutics, LLCPharmaceuticals
Second Lien Term Loan, LIBOR+9.25% cash due 3/30/202411.35 %25,463  25,025  25,192  (6)(20)
Second Lien Delayed Draw Term Loan, LIBOR+9.25% cash due 12/31/2020—  (45) (6)(19)(20)
668,879 Common Units of TerSera Holdings LLC1,731  2,629  (20)
26,756  27,776  
TigerText, Inc.Application software
299,110 Series B Preferred Stock Warrants (exercise price $1.3373) expiration date 12/8/202460  560  (20)
60  560  
Transact Holdings Inc.Application software
First Lien Term Loan, LIBOR+4.75% cash due 4/30/20267.01 %7,000  6,895  6,965  (6)
6,895  6,965  
23
Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)
 Cost Fair Value Notes
          
Project Boost Purchaser, LLC Application software       
First Lien Term Loan, LIBOR+3.50% cash due 6/1/20265.54% $7,000
 $6,930
 $6,964
 (6)
Second Lien Term Loan, LIBOR+8.00% cash due 5/9/202710.14% 3,750
 3,750
 3,750
 (6)(20)
     10,680
 10,714
  
ProFrac Services, LLC Industrial machinery       
First Lien Term Loan, LIBOR+6.25% cash due 9/15/20238.66% 17,192
 17,055
 16,848
 (6)(20)
     17,055
 16,848
  
QuorumLabs, Inc. Application software       
64,887,669 Junior-2 Preferred Stock    375
 —
 (20)
     375
 —
  
Refac Optical Group Specialty stores       
1,550.9435 Shares of Common Stock in Refac Holdings, Inc.    1
 —
 (20)
550.9435 Series A-2 Preferred Stock in Refac Holdings, Inc., 10%    305
 —
 (20)
1,000 Series A-1 Preferred Stock in Refac Holdings, Inc., 10%    999
 —
 (20)
     1,305
 —
  
Salient CRGT, Inc. Aerospace & defense       
First Lien Term Loan, LIBOR+6.00% cash due 2/28/20228.05% 3,086
 3,056
 2,932
 (6)(20)
     3,056
 2,932
  
Scilex Pharmaceuticals Inc. Pharmaceuticals       
Fixed Rate Zero Coupon Bond due 8/15/2026  15,879
 11,146
 11,353
 (20)
     11,146
 11,353
  
ShareThis, Inc. Application software       
345,452 Series C Preferred Stock Warrants (exercise price $3.0395) expiration date 3/4/2024    367
 2
 (20)
     367
 2
  
Sorrento Therapeutics, Inc. Biotechnology       
First Lien Term Loan, LIBOR+7.00% cash due 11/7/20239.13% 30,000
 28,132
 29,250
 (6)(11)(20)
First Lien Delayed Draw Term Loan, LIBOR+7.00% cash due 11/7/2023    (62) (69) (6)(11)(19)(20)
Stock Warrants Strike (exercise price $3.28) expiration date 5/7/2029    1,750
 1,667
 (11)(20)
Stock Warrants Strike (exercise price $3.94) expiration date 11/3/2029    —
 320
 (11)(20)
     29,820
 31,168
  
Swordfish Merger Sub LLC Auto parts & equipment       
Second Lien Term Loan, LIBOR+6.75% cash due 2/2/20268.79% 12,500
 12,450
 12,135
 (6)(20)
     12,450
 12,135
  
TerSera Therapeutics, LLC Pharmaceuticals       
Second Lien Term Loan, LIBOR+9.25% cash due 3/30/202411.35% 25,463
 25,025
 25,192
 (6)(20)
Second Lien Delayed Draw Term Loan, LIBOR+9.25% cash due 12/31/2020    —
 (45) (6)(19)(20)
668,879 Common Units of TerSera Holdings LLC    1,731
 2,629
 (20)
     26,756
 27,776
  
TigerText, Inc. Application software       
299,110 Series B Preferred Stock Warrants (exercise price $1.3373) expiration date 12/8/2024    60
 560
 (20)
     60
 560
  
Transact Holdings Inc. Application software       
First Lien Term Loan, LIBOR+4.75% cash due 4/30/20267.01% 7,000
 6,895
 6,965
 (6)
     6,895
 6,965
  
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2019
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Tribe Buyer LLCHuman resource & employment services
First Lien Term Loan, LIBOR+4.50% cash due 2/16/20246.54 %$830  $830  $775  (6)(20)
830  775  
Truck Hero, Inc.Auto parts & equipment
Second Lien Term Loan, LIBOR+8.25% cash due 4/21/202510.29 %21,500  21,191  20,103  (6)(20)
21,191  20,103  
Uber Technologies, Inc.Application software
First Lien Term Loan, LIBOR+4.00% cash due 4/4/20256.03 %5,689  5,652  5,667  (6)
5,652  5,667  
Uniti Group LPSpecialized REITs
First Lien Term Loan, LIBOR+5.00% cash due 10/24/20227.04 %8,403  8,264  8,213  (6)(11)
8,264  8,213  
UOS, LLCTrading companies & distributors
First Lien Term Loan, LIBOR+5.50% cash due 4/18/20237.54 %10,242  10,357  10,370  (6)
10,357  10,370  
Veritas US Inc.Application software
First Lien Term Loan, LIBOR+4.50% cash due 1/27/20236.60 %34,200  34,468  32,413  (6)
34,468  32,413  
Verscend Holding Corp.Healthcare technology
First Lien Term Loan, LIBOR+4.50% cash due 8/27/20256.54 %24,750  24,633  24,879  (6)
Fixed Rate Bond, 9.75% cash due 8/15/202612,000  12,022  12,823  
36,655  37,702  
Vertex Aerospace Services Corp.Aerospace & defense
First Lien Term Loan, LIBOR+4.50% cash due 6/29/20256.54 %15,800  15,735  15,869  (6)
15,735  15,869  
Vitalyst Holdings, Inc.IT consulting & other services
675 Series A Preferred Stock Units675  440  (20)
7,500 Class A Common Stock Units75  —  (20)
750  440  
Windstream Services, LLCIntegrated telecommunication services
Fixed Rate Bond, 8.63% cash due 10/31/20255,000  4,863  5,113  (11)
4,863  5,113  
WP CPP Holdings, LLCAerospace & defense
Second Lien Term Loan, LIBOR+7.75% cash due 4/30/202610.01 %15,000  14,874  14,937  (6)
14,874  14,937  
xMatters, Inc.Application software
600,000 Common Stock Warrants (exercise price $0.593333) expiration date 2/26/2025709  273  (20)
709  273  
Yeti Holdings, Inc.Leisure products
537,629 Shares Yeti Holdings, Inc. Common Stock—  15,054  
—  15,054  
Zep Inc.Specialty chemicals
Second Lien Term Loan, LIBOR+8.25% cash due 8/11/202510.35 %30,000  29,889  21,950  (6)(20)
First Lien Term Loan, LIBOR+4.00% cash due 8/12/20246.04 %1,975  1,899  1,564  (6)
31,788  23,514  
Zephyr Bidco LimitedSpecialized finance
Second Lien Term Loan, UK LIBOR+7.50% cash due 7/23/20268.21 %£18,000  23,632  22,006  (6)(11)
23,632  22,006  
24
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2019
(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5) Cash Interest Rate (6)IndustryPrincipal (7)CostFair ValueNotes
Total Non-Control/Non-Affiliate Investments (131.1% of net assets)$1,280,310  $1,219,694  
Total Portfolio Investments (154.5% of net assets)$1,513,014  $1,438,042  
Cash and Cash Equivalents
JP Morgan Prime Money Market Fund, Institutional Shares $9,611  $9,611  
Other cash accounts5,795  5,795  
Total Cash and Cash Equivalents (1.7% of net assets)$15,406  $15,406  
Total Portfolio Investments and Cash and Cash Equivalents (156.2% of net assets)$1,528,420  $1,453,448  
Derivative InstrumentNotional Amount to be PurchasedNotional Amount to be SoldMaturity DateCounterpartyCumulative Unrealized Appreciation /(Depreciation)
Foreign currency forward contract$22,161  £17,910  10/15/2019JPMorgan Chase Bank, N.A.$76  
Foreign currency forward contract$19,193  €17,150  11/29/2019JPMorgan Chase Bank, N.A.414  
$490  



25
Derivative Instrument Notional Amount to be Purchased Notional Amount to be Sold Maturity Date Counterparty Cumulative Unrealized Appreciation /(Depreciation)
Foreign currency forward contract $22,161
 £17,910
 10/15/2019 JPMorgan Chase Bank, N.A. $76
Foreign currency forward contract $19,193
 €17,150
 11/29/2019 JPMorgan Chase Bank, N.A. 414
          $490



Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2019
(dollar amounts in thousands)


(1)All debt investments are income producing unless otherwise noted. All equity investments are non-income producing unless otherwise noted.
(1)All debt investments are income producing unless otherwise noted. All equity investments are non-income producing unless otherwise noted.
(2)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.
(3)Equity ownership may be held in shares or units of companies related to the portfolio companies.
(4)Interest rates may be adjusted from period to period on certain term loans and revolvers. These rate adjustments may be either temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements or permanent in nature per loan amendment or waiver documents.
(5)With the exception of investments held by the Company’s wholly-owned subsidiaries that each formerly held a license from the SBA to operate as an SBIC, each of the Company's investments is pledged as collateral under the Credit Facility (as defined in Note 6 to the accompanying notes to the Consolidated Financial Statements).
(6)The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars unless otherwise noted. As of September 30, 2019, the reference rates for the Company's variable rate loans were the 30-day LIBOR at 2.04%, the 60-day LIBOR at 2.09%, the 90-day LIBOR at 2.10%, the 180-day LIBOR at 2.06%, the PRIME at 5.00%, the 30-day UK LIBOR at 0.71% and the 30-day EURIBOR at (0.51)%. Most loans include an interest floor, which generally ranges from 0% to 1%.
(7)Principal includes accumulated PIK interest and is net of repayments, if any. “£” signifies the investment is denominated in British Pounds. "€" signifies the investment is denominated in Euros. All other investments are denominated in U.S. dollars.
(8)Control Investments generally are defined by the Investment Company Act, as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.
(9)As defined in the Investment Company Act, the Company is deemed to be both an "Affiliated Person" of and to "Control" this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Schedule 12-14 in the Company's annual report on Form 10-K for the year ended September 30, 2019 for transactions in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to control.
(10)First Star Speir Aviation 1 Limited is a wholly-owned holding company formed by the Company in order to facilitate its investment strategy. In accordance with ASU 2013-08, the Company has deemed the holding company to be an investment company under GAAP and therefore deemed it appropriate to consolidate the financial results and financial position of the holding company and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding company are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entities.
(11)Investment is not a "qualifying asset" as defined under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of September 30, 2019, qualifying assets represented 75.0% of the Company's total assets and non-qualifying assets represented 25.0% of the Company's total assets.
(12)Income producing through payment of dividends or distributions.
(13)PIK interest income for this investment accrues at an annualized rate of 15%, however, the PIK interest is not contractually capitalized on the investment. As a result, the principal amount of the investment does not increase over time for accumulated PIK interest. As of September 30, 2019, the accumulated PIK interest balance for each of the A notes and the B notes was $1.8 million. The fair value of this investment is inclusive of PIK.
(14)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition.
(15)On December 28, 2018, the mezzanine notes issued by SLF Repack Issuer 2016, LLC, a wholly-owned, special purpose issuer subsidiary of Senior Loan Fund JV I, LLC ("SLF JV I"), were redeemed and the Company purchased subordinated notes and LLC equity interests issued by SLF JV I. Prior to December 28, 2018, the mezzanine notes issued by SLF Repack Issuer 2016, LLC consisted of Class A mezzanine secured deferrable floating rate notes and Class B mezzanine secured deferrable fixed rate notes.
(16)This investment was valued using net asset value as a practical expedient for fair value. Consistent with ASC 820, these investments are excluded from the hierarchical levels.
(17)Affiliate Investments generally are defined by the Investment Company Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.
(18)Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.
(19)Investment has undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.
(20)As of September 30, 2019, these investments were categorized as Level 3 within the fair value hierarchy established by ASC 820.
(21)This investment was on cash non-accrual status as of September 30, 2019. Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.
(2)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.
(3)Equity ownership may be held in shares or units of companies related to the portfolio companies.
(4)Interest rates may be adjusted from period to period on certain term loans and revolvers. These rate adjustments may be either temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements or permanent in nature per loan amendment or waiver documents.
(5)With the exception of investments held by the Company’s wholly-owned subsidiaries that each formerly held a license from the SBA to operate as an SBIC, each of the Company's investments is pledged as collateral under the Credit Facility (as defined in Note 6 to the accompanying notes to the Consolidated Financial Statements).
(6)The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars unless otherwise noted. As of September 30, 2019, the reference rates for the Company's variable rate loans were the 30-day LIBOR at 2.04%, the 60-day LIBOR at 2.09%, the 90-day LIBOR at 2.10%, the 180-day LIBOR at 2.06%, the PRIME at 5.00%, the 30-day UK LIBOR at 0.71% and the 30-day EURIBOR at (0.51)%. Most loans include an interest floor, which generally ranges from 0% to 1%.
(7)Principal includes accumulated PIK interest and is net of repayments, if any. “£” signifies the investment is denominated in British Pounds. "€" signifies the investment is denominated in Euros. All other investments are denominated in U.S. dollars.
(8)Control Investments generally are defined by the Investment Company Act, as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.
(9)As defined in the Investment Company Act, the Company is deemed to be both an "Affiliated Person" of and to "Control" this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Schedule 12-14 in the Company's annual report on Form 10-K for the year ended September 30, 2019 for transactions in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to control.
(10)First Star Speir Aviation 1 Limited is a wholly-owned holding company formed by the Company in order to facilitate its investment strategy. In accordance with ASU 2013-08, the Company has deemed the holding company to be an investment company under GAAP and therefore deemed it appropriate to consolidate the financial results and financial position of the holding company and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding company are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entities.
(11)Investment is not a "qualifying asset" as defined under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of September 30, 2019, qualifying assets represented 75.0% of the Company's total assets and non-qualifying assets represented 25.0% of the Company's total assets.
(12)Income producing through payment of dividends or distributions.
(13)PIK interest income for this investment accrues at an annualized rate of 15%, however, the PIK interest is not contractually capitalized on the investment. As a result, the principal amount of the investment does not increase over time for accumulated PIK interest. As of September 30, 2019, the accumulated PIK interest balance for each of the A notes and the B notes was $1.8 million. The fair value of this investment is inclusive of PIK.
(14)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition.
(15)On December 28, 2018, the mezzanine notes issued by SLF Repack Issuer 2016, LLC, a wholly-owned, special purpose issuer subsidiary of Senior Loan Fund JV I, LLC ("SLF JV I"), were redeemed and the Company purchased subordinated notes and LLC equity interests issued by SLF JV I. Prior to December 28, 2018, the mezzanine notes issued by SLF Repack Issuer 2016, LLC consisted of Class A mezzanine secured deferrable floating rate notes and Class B mezzanine secured deferrable fixed rate notes.
(16)This investment was valued using net asset value as a practical expedient for fair value. Consistent with ASC 820, these investments are excluded from the hierarchical levels.
(17)Affiliate Investments generally are defined by the Investment Company Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.
(18)Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.
(19)Investment has undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.
(20)As of September 30, 2019, these investments were categorized as Level 3 within the fair value hierarchy established by ASC 820.
(21)This investment was on cash non-accrual status as of September 30, 2019. Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.
26
Oaktree Specialty Lending Corporation
Consolidated Schedule of Investments
September 30, 2019
(dollar amounts in thousands)


(22)This investment was on PIK non-accrual status as of September 30, 2019. PIK non-accrual status is inclusive of other non-cash income, where applicable.
(23)Payments on this investment were past due as of September 30, 2019.

(22)This investment was on PIK non-accrual status as of September 30, 2019. PIK non-accrual status is inclusive of other non-cash income, where applicable.

(23)Payments on this investment were past due as of September 30, 2019.



See notes to Consolidated Financial Statements.




























27
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Note 1. Organization
Oaktree Specialty Lending Corporation (together with its consolidated subsidiaries, the "Company") is a specialty finance company that looks to provide customized, one-stop credit solutions to companies with limited access to public or syndicated capital markets. The Company was formed in late 2007 and operates as a closed-end, externally managed, non-diversified management investment company that has elected to be regulated as a Business Development Company ("BDC") under the Investment Company Act. The Company has qualified and elected to be treated as a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended (the "Code"), for tax purposes.
The Company seeksCompany's investment objective is to generate current income and capital appreciation by providing companies with flexible and innovative financing solutions, including first and second lien loans, unsecured and mezzanine loans, bonds, preferred equity and certain equity co-investments. The Company may also seek to generate capital appreciation and income through secondary investments at discounts to par in either private or syndicated transactions.
As of March 31, 2020, theThe Company is externally managed by Oaktree Capital Management, L.P.Fund Advisors, LLC (“Oaktree”), a subsidiary of Oaktree Capital Group, LLC (“OCG”), pursuant to an investment advisory agreement between the Company and Oaktree, as amended from time to time (the “Investment Advisory Agreement”). Oaktree is an affiliate of Oaktree Capital Management, L.P. ("OCM"), the Company's external investment adviser from October 17, 2017 through May 3, 2020 and also a subsidiary of OCG. Oaktree Fund Administration, LLC (“Oaktree Administrator”), a subsidiary of Oaktree,OCM, provides certain administrative and other services necessary for the Company to operate pursuant to an administration agreement between the Company and Oaktree Administrator, as amended from time to time (the “Administration Agreement”). See Note 11. In 2019, Brookfield Asset Management Inc. ("Brookfield") acquired a majority economic interest in OCG. OCG operates as an independent business within Brookfield, with its own product offerings and investment, marketing and support teams.

Note 2. Significant Accounting Policies
Basis of Presentation:
The Consolidated Financial Statements of the Company have been prepared in accordance with GAAP and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. In the opinion of management, all adjustments of a normal recurring nature considered necessary for the fair presentation of the Consolidated Financial Statements have been made. All intercompany balances and transactions have been eliminated. Certain prior-period financial information has been reclassified to conform to current period presentation. The Company is an investment company following the accounting and reporting guidance in ASC Topic 946, Financial Services - Investment Companies ("ASC 946").
Use of Estimates:
The preparation of the financial statements in conformity with GAAP requires management to make certain estimates and assumptions affecting amounts reported in the financial statements and accompanying notes. These estimates are based on the information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Changes in the economic and political environments, financial markets and any other parameters used in determining these estimates could cause actual results to differ and such differences could be material. Significant estimates include the valuation of investments and revenue recognition.
Consolidation:
The accompanying Consolidated Financial Statements include the accounts of Oaktree Specialty Lending Corporation and its consolidated subsidiaries. Each consolidated subsidiary is wholly-owned and, as such, consolidated into the Consolidated Financial Statements. Certain subsidiaries that hold investments are treated as pass through entities for tax purposes. The assets of certain of the consolidated subsidiaries are not directly available to satisfy the claims of the creditors of Oaktree Specialty Lending Corporation or any of its other subsidiaries. As of March 31,June 30, 2020, the consolidated subsidiaries were Fifth Street Fund of Funds LLC ("Fund of Funds"), Fifth Street Mezzanine Partners IV, L.P. ("FSMP IV"), Fifth Street Mezzanine Partners V, L.P. ("FSMP V" and together with FSMP IV, the "Excluded Subsidiaries"), FSMP IV GP, LLC, FSMP V GP, LLC, OCSL SRNE, LLC, OCSL AB Blocker, LLC and FSFC Holdings, Inc. ("Holdings"). In addition, the Company consolidates various holding companies held in connection with its equity investments in certain portfolio investments.
As an investment company, portfolio investments held by the Company are not consolidated into the Consolidated Financial Statements but rather are included on the Statements of Assets and Liabilities as investments at fair value.

Fair Value Measurements:
The Company values its investments in accordance with ASC 820, which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A liability's
28
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





date. A liability's fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. ASC 820 prioritizes the use of observable market prices over entity-specific inputs. Where observable prices or inputs are not available or reliable, valuation techniques are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments' complexity.
Hierarchical levels, defined by ASC 820 and directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:
 
•Level 1 — Unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date.
•Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data at the measurement date for substantially the full term of the assets or liabilities.
•Level 3 — Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
If inputs used to measure fair value fall into different levels of the fair value hierarchy, an investment's level is based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. This includes investment securities that are valued using "bid" and "ask" prices obtained from independent third party pricing services or directly from brokers. These investments may be classified as Level 3 because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities or may require adjustments for investment-specific factors or restrictions.
Financial instruments with readily available quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. As such, Oaktree obtains and analyzes readily available market quotations provided by pricing vendors and brokers for all of the Company's investments for which quotations are available. In determining the fair value of a particular investment, pricing vendors and brokers use observable market information, including both binding and non-binding indicative quotations.
The Company seeks to obtain at least two quotations for the subject or similar securities, typically from pricing vendors. If the Company is unable to obtain two quotes from pricing vendors, or if the prices obtained from pricing vendors are not within the Company's set threshold, the Company seeks to obtain a quote directly from a broker making a market for the asset. Oaktree evaluates the quotations provided by pricing vendors and brokers based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated. Oaktree also performs back-testing of valuation information obtained from pricing vendors and brokers against actual prices received in transactions. In addition to ongoing monitoring and back-testing, Oaktree performs due diligence procedures over pricing vendors to understand their methodology and controls to support their use in the valuation process. Generally, the Company does not adjust any of the prices received from these sources.
If the quotations obtained from pricing vendors or brokers are determined to not be reliable or are not readily available, the Company values such investments using any of three different valuation techniques. The first valuation technique is the transaction precedent technique, which utilizes recent or expected future transactions of the investment to determine fair value, to the extent applicable. The second valuation technique is an analysis of the enterprise value ("EV") of the portfolio company. EV means the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time. The EV analysis is typically performed to determine (i) the value of equity investments, (ii) whether there is credit impairment for debt investments and (iii) the value for debt investments that the Company is deemed to control under the Investment Company Act. To estimate the EV of a portfolio company, Oaktree analyzes various factors, including the portfolio company’s historical and projected financial results, macroeconomic impacts on the company and competitive dynamics in the company’s industry. Oaktree also utilizes some or all of the following information based on the individual circumstances of the portfolio company: (i) valuations of comparable public companies, (ii) recent sales of private and public comparable companies in similar industries or having similar business or earnings characteristics, (iii) purchase prices as a multiple of their earnings or cash flow, (iv) the portfolio company’s ability to meet its forecasts and its business prospects, (v) a discounted cash flow analysis, (vi) estimated liquidation or collateral value of the portfolio company's assets and (vii) offers from third parties to buy the portfolio company. The Company may probability weight potential sale outcomes with respect to a portfolio company when uncertainty exists as of the valuation date. The third valuation technique is a market yield technique, which is typically performed for non-credit impaired debt investments. In the market yield technique, a current price is imputed for the investment based upon an assessment of the expected market yield for a similarly structured investment with a similar level of risk, and the Company considers the current contractual interest rate, the capital structure and other terms of the investment relative to risk of the company and the specific investment. A key
29
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





the capital structure and other terms of the investment relative to risk of the company and the specific investment. A key determinant of risk, among other things, is the leverage through the investment relative to the EV of the portfolio company. As debt investments held by the Company are substantially illiquid with no active transaction market, the Company depends on primary market data, including newly funded transactions and industry specific market movements, as well as secondary market data with respect to high yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable.
In accordance with ASC 820-10, certain investments that qualify as investment companies in accordance with ASC 946 may be valued using net asset value as a practical expedient for fair value. Consistent with FASB guidance under ASC 820, these investments are excluded from the hierarchical levels. These investments are generally not redeemable.
The Company estimates the fair value of privately held warrants using a Black Scholes pricing model, which includes an analysis of various factors and subjective assumptions, including the current stock price (by using an EV analysis as described above), the expected period until exercise, expected volatility of the underlying stock price, expected dividends and the risk free rate. Changes in the subjective input assumptions can materially affect the fair value estimates.
The Company's Board of Directors undertakes a multi-step valuation process each quarter in connection with determining the fair value of the Company's investments:
•The quarterly valuation process begins with each portfolio company or investment being initially valued by Oaktree's valuation team in conjunction with Oaktree's portfolio management team and investment professionals responsible for each portfolio investment;
•Preliminary valuations are then reviewed and discussed with management of Oaktree;
•Separately, independent valuation firms engaged by the Board of Directors prepare valuations of the Company's investments, on a selected basis, for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment, and submit the reports to the Company and provide such reports to Oaktree and the Audit Committee of the Board of Directors;
•Oaktree compares and contrasts its preliminary valuations to the valuations of the independent valuation firms and prepares a valuation report for the Audit Committee;
•The Audit Committee reviews the preliminary valuations with Oaktree, and Oaktree responds and supplements the preliminary valuations to reflect any discussions between Oaktree and the Audit Committee;
•The Audit Committee makes a recommendation to the full Board of Directors regarding the fair value of the investments in the Company's portfolio; and
•The Board of Directors discusses valuations and determines the fair value of each investment in the Company's portfolio.
The fair value of the Company's investments as of March 31,June 30, 2020 and September 30, 2019 was determined in good faith by the Board of Directors. The Board of Directors has and will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of a portion of the Company's portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter, and the Board of Directors may reasonably rely on that assistance. However, the Board of Directors is responsible for the ultimate valuation of the portfolio investments at fair value as determined in good faith pursuant to the Company's valuation policy and a consistently applied valuation process.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.
With the exception of the line items entitled "deferred financing costs," "deferred offering costs," "other assets," "deferred tax asset, net," "deferred tax liability," "credit facility payable" and "unsecured notes payable," which are reported at amortized cost, all assets and liabilities approximate fair value on the Consolidated Statements of Assets and Liabilities. The carrying value of the line items titled "interest, dividends and fees receivable," "due from portfolio companies," "receivables from unsettled transactions," "accounts payable, accrued expenses and other liabilities," "base management fee and incentive fee payable," "due to affiliate," "interest payable," "payable to syndication partners"payable" and "payables from unsettled transactions" approximate fair value due to their short maturities.
30
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Foreign Currency Translation:
The accounting records of the Company are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the prevailing foreign exchange rate on the reporting date. The Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. The Company’s investments in foreign securities may involve certain risks, including foreign exchange restrictions, expropriation, taxation or other political, social or economic risks, all of which could affect the market and/or credit risk of the investment. In addition, changes in the relationship of foreign currencies to the U.S. dollar can significantly affect the value of these investments and therefore the earnings of the Company.
Derivative Instruments:
The Company does not utilize hedge accounting and as such values its derivative instruments at fair value with the unrealized gains or losses recorded in “net unrealized appreciation (depreciation)” in the Company’s Consolidated Statements of Operations.
Investment Income:
Interest Income
Interest income, adjusted for accretion of original issue discount ("OID"), is recorded on an accrual basis to the extent that such amounts are expected to be collected. The Company stops accruing interest on investments when it is determined that interest is no longer collectible. Investments that are expected to pay regularly scheduled interest in cash are generally placed on non-accrual status when there is reasonable doubt that principal or interest cash payments will be collected. Cash interest payments received on investments may be recognized as income or a return of capital depending upon management’s judgment. A non-accrual investment is restored to accrual status if past due principal and interest are paid in cash and the portfolio company, in management’s judgment, is likely to continue timely payment of its remaining obligations.
In connection with its investment in a portfolio company, the Company sometimes receives nominal cost equity that is valued as part of the negotiation process with the portfolio company. When the Company receives nominal cost equity, the Company allocates its cost basis in the investment between debt securities and the nominal cost equity at the time of origination. Any resulting discount from recording the loan, or otherwise purchasing a security at a discount, is accreted into interest income over the life of the loan.
For the Company's secured borrowings, the interest earned on the entire loan balance is recorded within interest income and the interest earned by the buyer from the partial sales is recorded within interest expense in the Consolidated Statements of Operations.
PIK Interest Income
The Company's investments in debt securities may contain PIK interest provisions. PIK interest, which generally represents contractually deferred interest added to the loan balance that is generally due at the end of the loan term, is generally recorded on the accrual basis to the extent such amounts are expected to be collected. The Company generally ceases accruing PIK interest if there is insufficient value to support the accrual or if the Company does not expect the portfolio company to be able to pay all principal and interest due. The Company's decision to cease accruing PIK interest on a loan or debt security involves subjective judgments and determinations based on available information about a particular portfolio company, including whether the portfolio company is current with respect to its payment of principal and interest on its loans and debt securities; financial statements and financial projections for the portfolio company; the Company's assessment of the portfolio company's business development success; information obtained by the Company in connection with periodic formal update interviews with the portfolio company's management and, if appropriate, the private equity sponsor; and information about the general economic and market conditions in which the portfolio company operates. The Company's determination to cease accruing PIK interest is generally made well before the Company's full write-down of a loan or debt security. In addition, if it is subsequently determined that the Company will not be able to collect any previously accrued PIK interest, the fair value of the loans or debt securities would be reduced by the amount of such previously accrued, but uncollectible, PIK interest. The accrual of PIK interest on the Company’s debt investments increases the recorded cost bases of these investments in the Consolidated Financial Statements including for purposes of computing the capital gains incentive fee payable by the Company to Oaktree. To maintain its status as a RIC, certain income from PIK interest may be required to be distributed to the Company’s stockholders, even though the Company has not yet collected the cash and may never do so.
31
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Fee Income
Oaktree or its affiliates may provide financial advisory services to portfolio companies and, in return, the Company may receive fees for capital structuring services. These fees are generally nonrecurring and are recognized by the Company upon the investment closing date. The Company may also receive additional fees in the ordinary course of business, including servicing, amendment and prepayment fees, which are classified as fee income and recognized as they are earned or the services are rendered.
The Company has also structured exit fees across certain of its portfolio investments to be received upon the future exit of those investments. These fees are typically paid to the Company upon the earliest to occur of (i) a sale of the borrower or substantially all of the assets of the borrower, (ii) the maturity date of the loan or (iii) the date when full prepayment of the loan occurs. The receipt of such fees is contingent upon the occurrence of one of the events listed above for each of the investments. These fees are included in net investment income over the life of the loan.
Dividend Income
The Company generally recognizes dividend income on the record date. Distributions received from equity investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from equity investments as dividend income unless there are sufficient earnings at the portfolio company prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.
Cash and Cash Equivalents and Restricted Cash:
Cash and cash equivalents and restricted cash consist of demand deposits and highly liquid investments with maturities of three months or less when acquired. The Company places its cash and cash equivalents and restricted cash with financial institutions and, at times, cash held in bank accounts may exceed the Federal Deposit Insurance Corporation ("FDIC") insurance limit. Cash and cash equivalents and restricted cash are included on the Company's Consolidated Schedule of Investments and cash equivalents are classified as Level 1 assets.
Due from Portfolio Companies:
Due from portfolio companies consists of amounts payable to the Company from its portfolio companies, including proceeds from the sale of portfolio companies not yet received or being held in escrow, and excluding those amounts attributable to interest, dividends or fees receivable. These amounts are recognized as they become payable to the Company (e.g., principal payments on the scheduled amortization payment date).
Receivables/Payables from Unsettled Transactions:
Receivables/payables from unsettled transactions consist of amounts receivable to or payable by the Company for transactions that have not settled at the reporting date.
Deferred Financing Costs:
Deferred financing costs consist of fees and expenses paid in connection with the closing or amending of credit facilities and debt offerings. Deferred financing costs in connection with credit facilities are capitalized as an asset when incurred. Deferred financing costs in connection with all other debt arrangements are a direct deduction from the related debt liability when incurred. Deferred financing costs are amortized using the effective interest method over the term of the respective debt arrangement. This amortization expense is included in interest expense in the Company's Consolidated Statements of Operations. Upon early termination or modification of a credit facility, all or a portion of unamortized fees related to such facility may be accelerated into interest expense. For extinguishments of the Company’s unsecured notes payable, any unamortized deferred financing costs are deducted from the carrying amount of the debt in determining the gain or loss from the extinguishment.

Deferred Offering Costs:
Legal fees and other costs incurred in connection with the Company’s shelf registration statement are capitalized as deferred offering costs in the Consolidated Statements of Assets and Liabilities. To the extent any such costs relate to equity offerings, these costs are charged as a reduction of capital upon utilization. To the extent any such costs relate to debt offerings, these costs are treated as deferred financing costs and are amortized over the term of the respective debt arrangement. Any
32
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




deferred offering costs that remain at the expiration of the shelf registration statement or when it becomes probable that an offering will not be completed are expensed.

OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Income Taxes:
The Company has elected to be subject to tax as a RIC under Subchapter M of the Code and operates in a manner so as to qualify for the tax treatment applicable to RICs. In order to be subject to tax as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute dividends to its stockholders of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code and determined without regard to any deduction for dividends paid, for each taxable year. As a RIC, the Company is not subject to federal income tax on the portion of its taxable income and gains distributed currently to stockholders as a dividend. Depending on the level of taxable income earned during a taxable year, the Company may choose to retain taxable income in excess of current year dividend distributions and would distribute such taxable income in the next taxable year. The Company would then incur a 4% excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated current calendar year dividend distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. The Company anticipates timely distribution of its taxable income within the tax rules under Subchapter M of the Code. The Company did not incur a U.S. federal excise tax for calendar years 2018 and 2019.
The Company holds certain portfolio investments through taxable subsidiaries, including Fund of Funds and Holdings. The purpose of the Company's taxable subsidiaries is to permit the Company to hold equity investments in portfolio companies which are "pass through" entities for U.S. federal income tax purposes in order to comply with the RIC tax requirements. The taxable subsidiaries are consolidated for financial reporting purposes, and portfolio investments held by them are included in the Company’s Consolidated Financial Statements as portfolio investments and recorded at fair value. The taxable subsidiaries are not consolidated with the Company for U.S. federal income tax purposes and may generate income tax expense, or benefit, and the related tax assets and liabilities, as a result of their ownership of certain portfolio investments. This income tax expense, if any, would be reflected in the Company's Consolidated Statements of Operations. The Company uses the liability method to account for its taxable subsidiaries' income taxes. Using this method, the Company recognizes deferred tax assets and liabilities for the estimated future tax effects attributable to temporary differences between financial reporting and tax bases of assets and liabilities. In addition, the Company recognizes deferred tax benefits associated with net operating loss carry forwards that it may use to offset future tax obligations. The Company measures deferred tax assets and liabilities using the enacted tax rates expected to apply to taxable income in the years in which it expects to recover or settle those temporary differences.
FASB ASC Topic 740, Accounting for Uncertainty in Income Taxes ("ASC 740"), provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the Company's Consolidated Financial Statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Management's determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including an ongoing analysis of tax laws, regulations and interpretations thereof. The Company recognizes the tax benefits of uncertain tax positions only where the position is "more-likely-than-not" to be sustained assuming examination by tax authorities. Management has analyzed the Company's tax positions and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years 2017, 2018 or 2019. The Company identifies its major tax jurisdictions as U.S. Federal and California, and the Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months. 
Recent Accounting Pronouncements:
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting if certain criteria are met. The guidance is effective from March 12, 2020 through December 31, 2022. As of March 31,June 30, 2020, the guidance did not have a material impact on the Consolidated Financial Statements.

The SEC issued final rules that, among other things, amended the financial disclosure requirements of Regulation S-X for acquired and disposed businesses and the significance tests for a “significant subsidiary” as applicable to BDCs, and amended certain forms used by BDCs. The amendments are intended to assist BDCs in making more meaningful determinations as to whether a subsidiary or an acquired or disposed entity is significant and improve the financial disclosure requirements
33
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





applicable to acquisitions and dispositions of investment companies and BDCs. The Company early adopted the updated rules for the three months ended June 30, 2020 which did not result in any new significant subsidiaries being identified.
Note 3. Portfolio Investments
As of March 31,June 30, 2020, 185.1%181.7% of net assets at fair value, or $1.4$1.6 billion, was invested in 128119 portfolio companies, including $92.2$110.0 million in subordinated notes and limited liability company ("LLC") equity interests of SLF JV I.I, a joint venture through which the Company and Trinity Universal Insurance Company, a subsidiary of Kemper Corporation, co-invest in senior secured loans of middle-market companies and other corporate debt securities. As of March 31,June 30, 2020, 11.9%5.9% of net assets at fair value, or $89.5$50.7 million, was invested in cash and cash equivalents. In comparison, as of September 30, 2019, 154.5% of net assets at fair value, or $1.4 billion, was invested in 104 portfolio investments, including $126.3 million in subordinated notes and LLC equity interests of SLF JV I, and 1.7% of net assets at fair value, or $15.4 million, was invested in cash and cash equivalents. As of March 31,June 30, 2020, 81.9%80.9% of the Company's portfolio at fair value consisted of senior secured debt investments and 12.4%13.4% consisted of subordinated notes,debt investments, including the debt investmentsinvestment in SLF JV I. As of September 30, 2019, 78.6% of the Company's portfolio at fair value consisted of senior secured debt investments and 12.3% consisted of subordinated notes,debt investments, including the debt investmentsinvestment in SLF JV I.
The Company also held equity investments in certain of its portfolio companies consisting of common stock, preferred stock, warrants, limited partnership interests or LLC equity interests. These instruments generally do not produce a current return but are held for potential investment appreciation and capital gain.
During the three and sixnine months ended March 31,June 30, 2020, the Company recorded net realized gains (losses) of $(26.5)$2.8 million and $(23.2)$(20.4) million, respectively. During the three and sixnine months ended March 31,June 30, 2019, the Company recorded net realized gains (losses) of $25.2$(19.8) million and $43.2$23.3 million, respectively. During the three and sixnine months ended March 31,June 30, 2020, the Company recorded net unrealized appreciation (depreciation) of $(163.5)$100.6 million and $(160.7)$(60.1) million, respectively. During the three and sixnine months ended March 31,June 30, 2019, the Company recorded net unrealized appreciation (depreciation) of $21.5$23.4 million and $14.5$37.9 million, respectively.
The composition of the Company's investments as of March 31,June 30, 2020 and September 30, 2019 at cost and fair value was as follows:
 June 30, 2020September 30, 2019
 CostFair ValueCostFair Value
Investments in debt securities$1,441,281  $1,375,572  $1,274,367  $1,212,174  
Investments in equity securities109,724  75,535  93,075  99,566  
Debt investment in SLF JV I96,250  96,250  96,250  96,250  
Equity investment in SLF JV I49,322  13,796  49,322  30,052  
Total$1,696,577  $1,561,153  $1,513,014  $1,438,042  
  March 31, 2020 September 30, 2019
  Cost Fair Value Cost Fair Value
Investments in debt securities $1,373,111
 $1,220,682
 $1,274,367
 $1,212,174
Investments in equity securities 109,897
 79,334
 93,075
 99,566
Debt investments in SLF JV I 96,250
 92,171
 96,250
 96,250
Equity investment in SLF JV I 49,322
 —
 49,322
 30,052
Total $1,628,580
 $1,392,187
 $1,513,014
 $1,438,042
The following table presents the composition of the Company's debt investments as of March 31,June 30, 2020 and September 30, 2019 at fixed rates and floating rates:
 June 30, 2020September 30, 2019
 Fair Value% of Debt
Portfolio		Fair Value% of Debt
Portfolio
Fixed rate debt securities$202,489  13.76 %$132,965  10.16 %
Floating rate debt securities, including the debt investment in SLF JV I1,269,333  86.24  1,175,459  89.84  
Total$1,471,822  100.00 %$1,308,424  100.00 %
34
  March 31, 2020 September 30, 2019
  Fair Value 
% of Debt
Portfolio
 Fair Value 
% of Debt
Portfolio
Fixed rate debt securities $122,988
 9.37% $132,965
 10.16%
Floating rate debt securities, including debt investments in SLF JV I 1,189,865
 90.63
 1,175,459
 89.84
Total $1,312,853
 100.00% $1,308,424
 100.00%
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





The following table presents the financial instruments carried at fair value as of March 31,June 30, 2020 on the Company's Consolidated Statement of Assets and Liabilities for each of the three levels of hierarchy established by ASC 820:
 Level 1 Level 2 Level 3 Measured at Net Asset Value (a) TotalLevel 1Level 2Level 3Measured at Net Asset Value (a)Total
Investments in debt securities (senior secured) $—
 $420,512
 $720,110
 $—
 $1,140,622
Investments in debt securities (senior secured)$—  $444,277  $819,129  $—  $1,263,406  
Investments in debt securities (subordinated, including debt investments in SLF JV I) —
 67,064
 105,167
 —
 172,231
Investments in debt securities (subordinated, including the debt investment in SLF JV I)Investments in debt securities (subordinated, including the debt investment in SLF JV I)—  41,386  167,030  —  208,416  
Investments in equity securities (preferred) —
 —
 31,367
 —
 31,367
Investments in equity securities (preferred)—  —  29,938  —  29,938  
Investments in equity securities (common and warrants, including LLC equity interests of SLF JV I) —
 —
 45,150
 2,817
 47,967
Investments in equity securities (common and warrants, including LLC equity interests of SLF JV I)236  —  43,011  16,146  59,393  
Total investments at fair value —
 487,576
 901,794
 2,817
 1,392,187
Total investments at fair value236  485,663  1,059,108  16,146  1,561,153  
Cash equivalents 82,928
 —
 —
 —
 82,928
Cash equivalents47,871  —  —  —  47,871  
Derivative asset —
 1,268
 —
 —
 1,268
Derivative assetsDerivative assets—  870  —  —  870  
Total assets at fair value
$82,928
 $488,844
 $901,794
 $2,817
 $1,476,383
Total assets at fair value$48,107  $486,533  $1,059,108  $16,146  $1,609,894  
__________ 
(a)In accordance with ASC 820-10, certain investments that are measured using the net asset value per share (or its equivalent) as a practical expedient for fair value have not been classified in the fair value hierarchy. These investments are generally not redeemable. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.
(a)In accordance with ASC 820-10, certain investments that are measured using the net asset value per share (or its equivalent) as a practical expedient for fair value have not been classified in the fair value hierarchy. These investments are generally not redeemable. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.
The following table presents the financial instruments carried at fair value as of September 30, 2019 on the Company's Consolidated Statement of Assets and Liabilities for each of the three levels of hierarchy established by ASC 820:
 Level 1 Level 2 Level 3 Measured at Net Asset Value (a) TotalLevel 1Level 2Level 3Measured at Net Asset Value (a)Total
Investments in debt securities (senior secured) $—
 $477,542
 $653,334
 $—
 $1,130,876
Investments in debt securities (senior secured)$—  $477,542  $653,334  $—  $1,130,876  
Investments in debt securities (subordinated, including debt investments in SLF JV I) —
 67,239
 110,309
 —
 177,548
Investments in debt securities (subordinated, including the debt investment in SLF JV I)Investments in debt securities (subordinated, including the debt investment in SLF JV I)—  67,239  110,309  —  177,548  
Investments in equity securities (preferred) —
 —
 40,578
 —
 40,578
Investments in equity securities (preferred)—  —  40,578  —  40,578  
Investments in equity securities (common and warrants, including LLC equity interests of SLF JV I) 15,054
 —
 41,006
 32,980
 89,040
Investments in equity securities (common and warrants, including LLC equity interests of SLF JV I)15,054  —  41,006  32,980  89,040  
Total investments at fair value 15,054
 544,781
 845,227
 32,980
 1,438,042
Total investments at fair value15,054  544,781  845,227  32,980  1,438,042  
Cash equivalents 9,611
 —
 —
 —
 9,611
Cash equivalents9,611  —  —  —  9,611  
Derivative assets —
 490
 —
 —
 490
Derivative assets—  490  —  —  490  
Total assets at fair value $24,665
 $545,271
 $845,227
 $32,980
 $1,448,143
Total assets at fair value$24,665  $545,271  $845,227  $32,980  $1,448,143  
__________ 
(a)In accordance with ASC 820-10, certain investments that are measured using the net asset value per share (or its equivalent) as a practical expedient for fair value have not been classified in the fair value hierarchy. These investments are generally not redeemable. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.
(a)In accordance with ASC 820-10, certain investments that are measured using the net asset value per share (or its equivalent) as a practical expedient for fair value have not been classified in the fair value hierarchy. These investments are generally not redeemable. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.
When a determination is made to classify a financial instrument within Level 3 of the valuation hierarchy, the determination is based upon the fact that the unobservable factors are significant to the overall fair value measurement. However, Level 3 financial instruments typically have both unobservable or Level 3 components and observable components (i.e. components that are actively quoted and can be validated by external sources). Accordingly, the appreciation (depreciation) in the tables below includes changes in fair value due in part to observable factors that are part of the valuation methodology. Transfers between levels are recognized at the beginning of the reporting period.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




35

The following table provides a roll-forward in the changes in fair value from December 31, 2019 to March 31, 2020 for all investments for which the Company determined fair value using unobservable (Level 3) factors:
  Investments
  Senior Secured Debt Subordinated
Debt (including debt investments in SLF JV I)		 Preferred
Equity		 Common
Equity and Warrants		 Total
Fair value as of December 31, 2019 $697,632
 $108,348
 $38,909
 $44,645
 $889,534
Purchases  142,790
 106
 —
 —
 142,896
Sales and repayments (81,656) (117) —
 (6,535) (88,308)
Transfers in (a)(b) 34,522
 1,405
 —
 18,625
 54,552
Transfers out (a)(b) (18,625) —
 —
 —
 (18,625)
PIK interest income 1,841
 —
 —
 —
 1,841
Accretion of OID 2,139
 313
 —
 —
 2,452
Net unrealized appreciation (depreciation) (29,696) 9,393
 (7,242) (16,160) (43,705)
Net realized gains (losses) (28,837) (14,281) (300) 4,575
 (38,843)
Fair value as of March 31, 2020 $720,110
 $105,167
 $31,367
 $45,150
 $901,794
Net unrealized appreciation (depreciation) relating to Level 3 investments still held as of March 31, 2020 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the three months ended March 31, 2020 $(60,406) $(4,888) $(7,542) $(14,708) $(87,544)
__________
(a) There were transfers into Level 3 from Level 2 for certain investments during the three months ended March 31, 2020 as a result of a decreased number of market quotes available and/or decreased market liquidity.
(b) There was one transfer from senior secured debt to common equity and warrants during the three months ended March 31, 2020 as a result of an investment restructuring, in which $46.5 million of senior secured debt was exchanged for new senior secured debt of $27.9 million and common equity of $18.6 million.

The following table provides a roll-forward in the changes in fair value from December 31, 2018 to March 31, 2019 for all investments and secured borrowings for which the Company determined fair value using unobservable (Level 3) factors:
  Investments Liabilities
  Senior Secured Debt 
Subordinated
Debt (including debt investments in SLF JV I)
 
Preferred
Equity
 
Common
Equity and Warrants
 Total Secured Borrowings
Fair value as of December 31, 2018 $741,372
 $119,953
 $4,988
 $34,107
 $900,420
 $9,302
Purchases  60,800
 1,978
 —
 —
 62,778
 —
Sales and repayments (95,212) (394) —
 (9,995) (105,601) (367)
Transfers in (a) 19,780
 —
 —
 —
 19,780
 —
PIK interest income 420
 26
 —
 —
 446
 —
Accretion of OID 5,486
 292
 —
 —
 5,778
 —
Net unrealized appreciation (depreciation) (13,190) (1,420) 25
 7,073
 (7,512) 76
Net realized gains (losses) 17,499
 —
 —
 7,937
 25,436
 —
Fair value as of March 31, 2019 $736,955
 $120,435
 $5,013
 $39,122
 $901,525
 $9,011
Net unrealized appreciation (depreciation) relating to Level 3 assets & liabilities still held as of March 31, 2019 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the three months ended March 31, 2019 $(8,658) $(1,420) $25
 $7,876
 $(2,177) $76
__________
(a) There were transfers into Level 3 from Level 2 for certain investments during the three months ended March 31, 2019 as a result of a decreased number of market quotes available and/or decreased market liquidity.

OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




The following table provides a roll-forward in the changes in fair value from March 31, 2020 to June 30, 2020 for all investments for which the Company determined fair value using unobservable (Level 3) factors:
Investments
Senior Secured DebtSubordinated
Debt (including debt investment in SLF JV I)		Preferred
Equity		Common
Equity and Warrants		Total
Fair value as of March 31, 2020$720,110  $105,167  $31,367  $45,150  $901,794  
Purchases 95,154  48,663  —  80  143,897  
Sales and repayments(23,010) (93) —  (2,889) (25,992) 
PIK interest income1,316  —  —  —  1,316  
Accretion of OID1,524  473  —  —  1,997  
Net unrealized appreciation (depreciation)24,035  12,820  (1,429) (1,805) 33,621  
Net realized gains (losses)—  —  —  2,475  2,475  
Fair value as of June 30, 2020$819,129  $167,030  $29,938  $43,011  $1,059,108  
Net unrealized appreciation (depreciation) relating to Level 3 investments still held as of June 30, 2020 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the three months ended June 30, 2020$24,794  $12,820  $(1,429) $(127) $36,058  

The following table provides a roll-forward in the changes in fair value from March 31, 2019 to June 30, 2019 for all investments and secured borrowings for which the Company determined fair value using unobservable (Level 3) factors:
InvestmentsLiabilities
Senior Secured DebtSubordinated
Debt (including debt investment in SLF JV I)		Preferred
Equity		Common
Equity and Warrants		TotalSecured Borrowings
Fair value as of March 31, 2019$736,955  $120,435  $5,013  $39,122  $901,525  $9,011  
New investments57,794  160  —  —  57,954  —  
Sales and repayments(90,758) (230) —  (332) (91,320) —  
Transfers out (a)(18,864) —  —  —  (18,864) 
PIK interest income—  27  —  —  27  —  
Accretion of OID2,521  298  —  —  2,819  —  
Net unrealized appreciation (depreciation)20,179  243  503  1,475  22,400  —  
Net realized gains (losses)(22,541) —  —  332  (22,209) —  
Fair value as of June 30, 2019$685,286  $120,933  $5,516  $40,597  $852,332  $9,011  
Net unrealized appreciation (depreciation) relating to Level 3 assets & liabilities still held as of June 30, 2019 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the three months ended June 30, 2019$(749) $243  $503  $1,475  $1,472  $—  
__________
(a) There was a transfer out of Level 3 to Level 2 for one investment during the three months ended June 30, 2019 as a result of an increased number of market quotes available and/or increased market liquidity.

36
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




The following table provides a roll-forward in the changes in fair value from September 30, 2019 to March 31,June 30, 2020 for all investments for which the Company determined fair value using unobservable (Level 3) factors:
 InvestmentsInvestments
 Senior Secured Debt Subordinated
Debt (including debt investments in SLF JV I)		 Preferred
Equity		 Common
Equity and Warrants		 TotalSenior Secured DebtSubordinated
Debt (including debt investment in SLF JV I)		Preferred
Equity		Common
Equity and Warrants		Total
Fair value as of September 30, 2019 $653,334
 $110,309
 $40,578
 $41,006
 $845,227
Fair value as of September 30, 2019$653,334  $110,309  $40,578  $41,006  $845,227  
Purchases  239,185
 1,065
 —
 1,328
 241,578
Purchases 334,339  49,728  —  1,408  385,475  
Sales and repayments (154,948) (3,863) (1,388) (6,574) (166,773)Sales and repayments(177,958) (3,956) (1,388) (9,463) (192,765) 
Transfers in (a)(b) 67,939
 5,113
 —
 18,625
 91,677
Transfers in (a)(b)67,939  5,113  —  18,625  91,677  
Transfers out (a)(b) (33,625) —
 —
 —
 (33,625)Transfers out (a)(b)(33,625) —  —  —  (33,625) 
PIK interest income 2,960
 —
 —
 —
 2,960
PIK interest income4,276  —  —  —  4,276  
Accretion of OID 3,565
 617
 —
 —
 4,182
Accretion of OID5,089  1,090  —  —  6,179  
Net unrealized appreciation (depreciation) (29,397) 6,268
 (8,318) (13,850) (45,297)Net unrealized appreciation (depreciation)(5,362) 19,088  (9,747) (15,655) (11,676) 
Net realized gains (losses) (28,903) (14,342) 495
 4,615
 (38,135)Net realized gains (losses)(28,903) (14,342) 495  7,090  (35,660) 
Fair value as of March 31, 2020 $720,110
 $105,167
 $31,367
 $45,150
 $901,794
Net unrealized appreciation (depreciation) relating to Level 3 investments still held as of March 31, 2020 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the six months ended March 31, 2020 $(58,203) $(5,123) $(7,716) $(12,397) $(83,439)
Fair value as of June 30, 2020Fair value as of June 30, 2020$819,129  $167,030  $29,938  $43,011  $1,059,108  
Net unrealized appreciation (depreciation) relating to Level 3 investments still held as of June 30, 2020 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the nine months ended June 30, 2020Net unrealized appreciation (depreciation) relating to Level 3 investments still held as of June 30, 2020 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the nine months ended June 30, 2020$(33,050) $7,698  $(9,145) $(13,658) $(48,155) 
__________
(a) There were transfers into/out of Level 3 from/to Level 2 for certain investments during the sixnine months ended March 31,June 30, 2020 as a result of a change in the number of market quotes available and/or a change in market liquidity.
(b) There was one transfer from senior secured debt to common equity and warrants during the sixnine months ended March 31,June 30, 2020 as a result of an investment restructuring, in which $46.5 million of senior secured debt was exchanged for new senior secured debt of $27.9 million and common equity of $18.6 million.

The following table provides a roll-forward in the changes in fair value from September 30, 2018 to March 31,June 30, 2019 for all investments and secured borrowings for which the Company determined fair value using unobservable (Level 3) factors:
 Investments LiabilitiesInvestmentsLiabilities
 Senior Secured Debt 
Subordinated
Debt (including debt investments in SLF JV I)
 
Preferred
Equity
 
Common
Equity and Warrants
 Total Secured BorrowingsSenior Secured DebtSubordinated
Debt (including debt investment in SLF JV I)		Preferred
Equity		Common
Equity and Warrants		TotalSecured Borrowings
Fair value as of September 30, 2018 $638,971
 $158,859
 $4,918
 $61,134
 $863,882
 $9,728
Fair value as of September 30, 2018$638,971  $158,859  $4,918  $61,134  $863,882  $9,728  
Purchases  150,799
 2,511
 —
 2,514
 155,824
 —
New investmentsNew investments214,513  2,664  —  2,514  219,691  —  
Sales and repayments (128,235) (16,143) —
 (31,286) (175,664) (812)Sales and repayments(225,549) (16,368) —  (31,618) (273,535) (812) 
Transfers in (a) 23,446
 —
 —
 —
 23,446
 —
Transfers in (a)3,222  —  —  —  3,222  —  
Transfers out (b) —
 (33,150) —
 (12,073) (45,223) —
Transfers out (b)—  (33,150) —  (12,073) (45,223) —  
PIK interest income 1,065
 121
 —
 —
 1,186
 —
PIK interest income1,702  149  —  —  1,851  —  
Accretion of OID 12,080
 663
 —
 —
 12,743
 —
Accretion of OID14,601  961  —  —  15,562  —  
Net unrealized appreciation (depreciation) 21,908
 7,574
 590
 (4,391) 25,681
 95
Net unrealized appreciation (depreciation)43,446  7,818  1,093  (2,915) 49,442  95  
Net realized gains (losses) 16,921
 —
 (495) 23,224
 39,650
 —
Net realized gains (losses)(5,620) —  (495) 23,555  17,440  —  
Fair value as of March 31, 2019 $736,955
 $120,435
 $5,013
 $39,122
 $901,525
 $9,011
Net unrealized appreciation (depreciation) relating to Level 3 assets & liabilities still held as of March 31, 2019 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the six months ended March 31, 2019 $(16,071) $7,577
 $95
 $8,733
 $334
 $95
Fair value as of June 30, 2019Fair value as of June 30, 2019$685,286  $120,933  $5,516  $40,597  $852,332  $9,011  
Net unrealized appreciation (depreciation) relating to Level 3 assets & liabilities still held as of June 30, 2019 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the nine months ended June 30, 2019Net unrealized appreciation (depreciation) relating to Level 3 assets & liabilities still held as of June 30, 2019 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the nine months ended June 30, 2019$(16,905) $7,820  $598  $10,208  $1,721  $95  
__________
(a) There were transferswas a transfer into Level 3 from Level 2 for certain investmentsone investment during the sixnine months ended March 31,June 30, 2019 as a result of a decreased number of market quotes available and/or decreased market liquidity.
(b) There was one transfer from Level 3 to Level 1 during the sixnine months ended March 31,June 30, 2019 as a result of an initial public offering of a portfolio company. There was also one transfer out of Level 3 during the sixnine months ended March 31,June 30, 2019 as a result of an investment restructuring in which debt investments were exchanged for equity investments that are valued using net asset value as a practical expedient.
37
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)






Significant Unobservable Inputs for Level 3 Investments
The following table provides quantitative information related to the significant unobservable inputs for Level 3 investments, which are carried at fair value, as of March 31,June 30, 2020:
Asset Fair Value Valuation Technique Unobservable Input Range 
Weighted
Average (a)
AssetFair ValueValuation TechniqueUnobservable InputRangeWeighted
Average (a)
Senior Secured Debt $419,433
 Market Yield Market Yield (b)6.6%-22.0% 11.4%Senior Secured Debt$423,078  Market YieldMarket Yield(b)6.5%-45.0%13.4%
 15,842
 Enterprise Value EBITDA Multiple (c)1.8x-5.9x 5.0x51,368  Enterprise ValueEBITDA Multiple(c)1.8x-7.0x6.2x
 11,510
 Enterprise Value Asset Multiple (c)0.9x-1.1x 1.0x11,510  Enterprise ValueAsset Multiple(c)0.9x-1.1x1.0x
 26,266
 Transactions Precedent Transaction Price (d)N/A-N/A N/A27,495  Transactions PrecedentTransaction Price(d)N/A-N/AN/A
 247,059
 Broker Quotations Broker Quoted Price (e)N/A-N/A N/A305,678  Broker QuotationsBroker Quoted Price(e)N/A-N/AN/A
Subordinated Debt 11,394
 Market Yield Market Yield (b)15.0%-17.0% 16.0%Subordinated Debt69,193  Market YieldMarket Yield(b)5.0%-13.0%8.8%
 1,602
 Enterprise Value EBITDA Multiple (c)7.7x-7.9x 7.8x1,587  Enterprise ValueEBITDA Multiple(c)8.6x-9.6x9.1x
SLF JV I Debt Investments 92,171
 Enterprise Value N/A (f)N/A-N/A N/A
SLF JV I Debt InvestmentSLF JV I Debt Investment96,250  Enterprise ValueN/A(f)N/A-N/AN/A
Preferred & Common Equity 16,201
 Enterprise Value Revenue Multiple (c)0.8x-8.0x 3.1xPreferred & Common Equity19,945  Enterprise ValueRevenue Multiple(c)0.4x-7.0x2.6x
 50,861
 Enterprise Value EBITDA Multiple (c)1.8x-19.0x 7.2x48,924  Enterprise ValueEBITDA Multiple(c)1.8x-15.0x6.4x
 3,165
 Enterprise Value Asset Multiple (c)0.9x-1.1x 1.0x3,165  Enterprise ValueAsset Multiple(c)0.9x-1.1x1.0x
 6,290
 Transactions Precedent Transaction Price (d)N/A-N/A N/A915  Transactions PrecedentTransaction Price(d)N/A-N/AN/A
Total $901,794
 Total$1,059,108  
__________ 
(a)Weighted averages are calculated based on fair value of investments.
(b)Used when market participants would take into account market yield when pricing the investment.
(c)Used when market participants would use such multiples when pricing the investment.
(d)Used when there is an observable transaction or pending event for the investment.
(e)The Company generally uses prices provided by an independent pricing service which are non-binding indicative prices on or near the valuation date as the primary basis for the fair value determinations for quoted senior secured debt investments. Since these prices are non-binding, they may not be indicative of fair value. The Company evaluates the quotations provided by pricing vendors and brokers based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated. Each quoted price is evaluated by the Audit Committee of the Company's Board of Directors in conjunction with additional information compiled by Oaktree.
(f)The Company determined the value of its subordinated notes of SLF JV I based on the total assets less the total liabilities senior to the subordinated notes held at SLF JV I in an amount not exceeding par under the EV technique.
(a)Weighted averages are calculated based on fair value of investments.
(b)Used when market participants would take into account market yield when pricing the investment.
(c)Used when market participants would use such multiples when pricing the investment.
(d)Used when there is an observable transaction or pending event for the investment.
(e)The Company generally uses prices provided by an independent pricing service which are non-binding indicative prices on or near the valuation date as the primary basis for the fair value determinations for quoted senior secured debt investments. Since these prices are non-binding, they may not be indicative of fair value. The Company evaluates the quotations provided by pricing vendors and brokers based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated. Each quoted price is evaluated by the Audit Committee of the Company's Board of Directors in conjunction with additional information compiled by Oaktree.
(f)The Company determined the value of its subordinated notes of SLF JV I based on the total assets less the total liabilities senior to the subordinated notes held at SLF JV I in an amount not exceeding par under the EV technique.
The following table provides quantitative information related to the significant unobservable inputs for Level 3 investments, which are carried at fair value, as of September 30, 2019:
AssetFair ValueValuation TechniqueUnobservable InputRangeWeighted
Average (a)
Senior Secured Debt$314,026  Market YieldMarket Yield(b)6.7%-18.0%11.2%
17,452  Enterprise ValueEBITDA Multiple(c)1.8x-6.0x5.0x
11,510  Enterprise ValueAsset Multiple(c)0.9x1.1x1.0x
3,750  Transactions PrecedentTransaction Price(d)N/A-N/AN/A
306,596  Broker QuotationsBroker Quoted Price(e)N/A-N/AN/A
Subordinated Debt11,353  Market YieldMarket Yield(b)13.0%-15.0%14.0%
2,706  Enterprise ValueEBITDA Multiple(c)6.5x-8.5x7.5x
SLF JV I Debt Investment96,250  Enterprise ValueN/A(f)N/A-N/AN/A
Preferred & Common Equity4,004  Enterprise ValueRevenue Multiple(c)0.8x-8.9x3.3x
72,950  Enterprise ValueEBITDA Multiple(c)1.8x-17.0x6.9x
4,630  Enterprise ValueAsset Multiple(c)0.9x-1.1x1.0x
Total$845,227  
Asset Fair Value Valuation Technique Unobservable Input Range 
Weighted
Average (a)
Senior Secured Debt $314,026
 Market Yield Market Yield (b)6.7%-18.0% 11.2%
  17,452
 Enterprise Value EBITDA Multiple (c)1.8x-6.0x 5.0x
  11,510
 Enterprise Value Asset Multiple (c)0.9x 1.1x 1.0x
  3,750
 Transactions Precedent Transaction Price (d)N/A-N/A N/A
  306,596
 Broker Quotations Broker Quoted Price (e)N/A-N/A N/A
Subordinated Debt 11,353
 Market Yield Market Yield (b)13.0%-15.0% 14.0%
  2,706
 Enterprise Value EBITDA Multiple (c)6.5x-8.5x 7.5x
SLF JV I Debt Investments 96,250
 Enterprise Value N/A (f)N/A-N/A N/A
Preferred & Common Equity 4,004
 Enterprise Value Revenue Multiple (c)0.8x-8.9x 3.3x
  72,950
 Enterprise Value EBITDA Multiple (c)1.8x-17.0x 6.9x
  4,630
 Enterprise Value Asset Multiple (c)0.9x-1.1x 1.0x
Total $845,227
           
__________ 
(a)Weighted averages are calculated based on fair value of investments.
(b)Used when market participants would take into account market yield when pricing the investment.
(c)Used when market participants would use such multiples when pricing the investment.
(d)Used when there is an observable transaction or pending event for the investment.
(e)The Company generally uses prices provided by an independent pricing service which are non-binding indicative prices on or near the valuation date as the primary basis for the fair value determinations for quoted senior secured debt investments. Since these prices are non-binding, they may not be indicative of fair value. The Company evaluates the quotations provided by pricing vendors and brokers based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated. Each quoted price is evaluated by the Audit Committee of the Company's Board of Directors in conjunction with additional information compiled by Oaktree.
(a)Weighted averages are calculated based on fair value of investments.
(b)Used when market participants would take into account market yield when pricing the investment.
(c)Used when market participants would use such multiples when pricing the investment.
(d)Used when there is an observable transaction or pending event for the investment.
(e)The Company generally uses prices provided by an independent pricing service which are non-binding indicative prices on or near the valuation date as the primary basis for the fair value determinations for quoted senior secured debt investments. Since these prices are non-binding, they may not be indicative of fair value. The Company evaluates the quotations provided by pricing vendors and brokers based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably
38
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




estimated. Each quoted price is evaluated by the Audit Committee of the Company's Board of Directors in conjunction with additional information compiled by Oaktree.
(f)The Company determined the value of its subordinated notes of SLF JV I based on the total assets less the total liabilities senior to the subordinated notes held at SLF JV I in an amount not exceeding par under the EV technique.

(f)The Company determined the value of its subordinated notes of SLF JV I based on the total assets less the total liabilities senior to the subordinated notes held at SLF JV I in an amount not exceeding par under the EV technique.

Under the market yield technique, the significant unobservable input used in the fair value measurement of the Company's investments in debt securities is the market yield. Increases or decreases in the market yield may result in a lower or higher fair value measurement, respectively.
Under the EV technique, the significant unobservable input used in the fair value measurement of the Company's investments in debt or equity securities is the earnings before interest, taxes, depreciation and amortization ("EBITDA"), revenue or asset multiple, as applicable. Increases or decreases in the valuation multiples in isolation may result in a higher or lower fair value measurement, respectively.
 
Financial Instruments Disclosed, But Not Carried, At Fair Value
The following table presents the carrying value and fair value of the Company's financial liabilities disclosed, but not carried, at fair value as of March 31,June 30, 2020 and the level of each financial liability within the fair value hierarchy:
 
 
Carrying
Value
 Fair Value Level 1 Level 2 Level 3Carrying
Value		Fair ValueLevel 1Level 2Level 3
Credit facility payable $404,825
 $404,825
 $—
 $—
 $404,825
Credit facility payable$466,825  $466,825  $—  $—  $466,825  
Unsecured notes payable (net of unamortized financing costs and unaccreted discount) 293,861
 274,500
 —
 274,500
 —
Unsecured notes payable (net of unamortized financing costs and unaccreted discount)294,177  293,295  —  293,295  —  
Total $698,686
 $679,325
 $—
 $274,500
 $404,825
Total$761,002  $760,120  $—  $293,295  $466,825  
The following table presents the carrying value and fair value of the Company's financial liabilities disclosed, but not carried, at fair value as of September 30, 2019 and the level of each financial liability within the fair value hierarchy:
 
Carrying
Value		Fair ValueLevel 1Level 2Level 3
Credit facility payable$314,825  $314,825  $—  $—  $314,825  
Unsecured notes payable (net of unamortized financing costs)158,542  164,966  —  164,966  —  
Total$473,367  $479,791  $—  $164,966  $314,825  
The principal value of the credit facility payable approximates fair value due to its variable interest rate and is included in Level 3 of the hierarchy. As of March 31,June 30, 2020, unsecured notes payable included the 3.500% unsecured notes due 2025 ("2025 Notes"). The Company used market quotes as of the valuation date to estimate the fair value of the 2025 Notes, which are included in Level 2 of the hierarchy. As of September 30, 2019, unsecured notes payable included the 5.875% unsecured notes due 2024 ("2024 Notes") and the 6.125% unsecured notes due 2028 ("2028 Notes"). The Company used the unadjusted quoted price as of the valuation date to calculate the fair value of the 2024 Notes and the 2028 Notes. Although these securities were publicly traded, the market was relatively inactive, and accordingly, these securities were included in Level 2 of the hierarchy.

Portfolio Composition
Summaries of the composition of the Company's portfolio at cost as a percentage of total investments and at fair value as a percentage of total investments and net assets are shown in the following tables:
 June 30, 2020September 30, 2019
Cost: % of Total Investments % of Total Investments
Senior secured debt$1,323,950  78.03 %$1,170,258  77.35 %
Subordinated debt117,331  6.92 %104,109  6.88 %
Debt investment in SLF JV I96,250  5.67 %96,250  6.36 %
Common equity and warrants70,174  4.14 %52,630  3.48 %
LLC equity interests of SLF JV I49,322  2.91 %49,322  3.26 %
Preferred equity39,550  2.33 %40,445  2.67 %
Total$1,696,577  100.00 %$1,513,014  100.00 %
39
  March 31, 2020 September 30, 2019
Cost:    % of Total Investments    % of Total Investments
Senior secured debt $1,269,353
 77.94% $1,170,258
 77.35%
Subordinated debt 103,758
��6.37% 104,109
 6.88%
Debt investments in SLF JV I 96,250
 5.91% 96,250
 6.36%
Common equity and warrants 70,347
 4.32% 52,630
 3.48%
LLC equity interests of SLF JV I 49,322
 3.03% 49,322
 3.26%
Preferred equity 39,550
 2.43% 40,445
 2.67%
Total $1,628,580
 100.00% $1,513,014
 100.00%
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





 June 30, 2020September 30, 2019
Fair Value: % of Total Investments% of Net Assets % of Total Investments% of Net Assets
Senior secured debt$1,263,406  80.93 %147.08 %$1,130,876  78.64 %121.51 %
Subordinated debt112,166  7.18 %13.06 %81,298  5.65 %8.74 %
Debt investment in SLF JV I96,250  6.17 %11.20 %96,250  6.69 %10.34 %
Common equity and warrants45,597  2.92 %5.31 %58,988  4.10 %6.34 %
Preferred equity29,938  1.92 %3.48 %40,578  2.82 %4.36 %
LLC equity interests of SLF JV I13,796  0.88 %1.61 %30,052  2.10 %3.23 %
Total$1,561,153  100.00 %181.74 %$1,438,042  100.00 %154.52 %
  March 31, 2020 September 30, 2019
Fair Value:    % of Total Investments % of Net Assets    % of Total Investments % of Net Assets
Senior secured debt $1,140,622
 81.93% 151.64% $1,130,876
 78.64% 121.51%
Debt investments in SLF JV I 92,171
 6.62% 12.25% 96,250
 6.69% 10.34%
Subordinated debt 80,060
 5.75% 10.64% 81,298
 5.65% 8.74%
Common equity and warrants 47,967
 3.45% 6.38% 58,988
 4.10% 6.34%
Preferred equity 31,367
 2.25% 4.17% 40,578
 2.82% 4.36%
LLC equity interests of SLF JV I —
 —
 —
 30,052
 2.10% 3.23%
Total $1,392,187
 100.00% 185.08% $1,438,042
 100.00% 154.52%

The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company's business. The following tables show the composition of the Company's portfolio by geographic region at cost as a percentage of total investments and at fair value as a percentage of total investments and net assets:
 June 30, 2020September 30, 2019
Cost: % of Total Investments % of Total Investments
Northeast$507,485  29.91 %$394,130  26.05 %
West358,213  21.11 %377,810  24.97 %
Midwest298,100  17.57 %322,651  21.33 %
International220,137  12.98 %171,129  11.31 %
Southeast132,095  7.79 %131,522  8.69 %
Southwest99,992  5.89 %66,781  4.41 %
South45,298  2.67 %13,798  0.91 %
Northwest35,257  2.08 %35,193  2.33 %
Total$1,696,577  100.00 %$1,513,014  100.00 %
  March 31, 2020 September 30, 2019
Cost:    % of Total Investments    % of Total Investments
Northeast $497,883
 30.58% $394,130
 26.05%
West 342,353
 21.02% 377,810
 24.97%
Midwest 286,867
 17.61% 322,651
 21.33%
International 191,624
 11.77% 171,129
 11.31%
Southeast 159,921
 9.82% 131,522
 8.69%
Southwest 69,365
 4.26% 66,781
 4.41%
South 45,331
 2.78% 13,798
 0.91%
Northwest 35,236
 2.16% 35,193
 2.33%
Total $1,628,580
 100.00% $1,513,014
 100.00%
 March 31, 2020 September 30, 2019 June 30, 2020September 30, 2019
Fair Value:    % of Total Investments % of Net Assets    % of Total Investments % of Net AssetsFair Value: % of Total Investments% of Net Assets % of Total Investments% of Net Assets
Northeast $409,356
 29.41% 54.43% $358,328
 24.93% 38.50%Northeast$445,350  28.53 %51.85 %$358,328  24.93 %38.50 %
West 308,880
 22.19% 41.06% 350,660
 24.38% 37.68%West344,807  22.09 %40.14 %350,660  24.38 %37.68 %
Midwest 227,951
 16.37% 30.30% 297,433
 20.68% 31.97%Midwest252,461  16.17 %29.39 %297,433  20.68 %31.97 %
International 172,965
 12.42% 22.99% 175,687
 12.22% 18.88%International218,794  14.01 %25.47 %175,687  12.22 %18.88 %
Southeast 136,601
 9.81% 18.16% 125,306
 8.71% 13.46%Southeast120,311  7.71 %14.00 %125,306  8.71 %13.46 %
Southwest 62,352
��4.48% 8.29% 82,395
 5.73% 8.85%Southwest104,990  6.73 %12.22 %82,395  5.73 %8.85 %
South 41,187
 2.96% 5.48% 13,416
 0.93% 1.44%South40,806  2.61 %4.75 %13,416  0.93 %1.44 %
Northwest 32,895
 2.36% 4.37% 34,817
 2.42% 3.74%Northwest33,634  2.15 %3.92 %34,817  2.42 %3.74 %
Total $1,392,187
 100.00% 185.08% $1,438,042
 100.00% 154.52%Total$1,561,153  100.00 %181.74 %$1,438,042  100.00 %154.52 %
 
The following tables show the composition of the Company's portfolio by industry at cost as a percentage of total investments and at fair value as a percentage of total investments and net assets as of March 31,June 30, 2020 and September 30, 2019:
40
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





June 30, 2020September 30, 2019
Cost: % of Total Investments % of Total Investments
Application Software$192,108  11.34 %$132,051  8.73 %
Multi-Sector Holdings (1)153,262  9.03  146,436  9.67  
Data Processing & Outsourced Services109,053  6.43  97,759  6.46  
Pharmaceuticals99,595  5.87  59,294  3.92  
Biotechnology79,514  4.69  82,109  5.43  
Health Care Services71,229  4.20  100,173  6.62  
Oil & Gas Refining & Marketing62,954  3.71  30,378  2.01  
Specialized Finance52,984  3.12  53,227  3.52  
Personal Products52,211  3.08  —  —  
Property & Casualty Insurance49,308  2.91  73,076  4.83  
Specialty Chemicals45,379  2.67  31,788  2.10  
Movies & Entertainment44,676  2.63  18,858  1.25  
Real Estate Services39,100  2.30  39,332  2.60  
Oil & Gas Storage & Transportation34,171  2.01  11,603  0.77  
Auto Parts & Equipment33,647  1.98  42,641  2.82  
Aerospace & Defense33,109  1.95  33,665  2.23  
Internet Services & Infrastructure31,541  1.86  32,563  2.15  
Health Care Technology31,463  1.85  51,044  3.37  
Research & Consulting Services31,028  1.83  34,734  2.30  
Managed Health Care27,521  1.62  27,645  1.83  
Alternative Carriers27,277  1.61  29,400  1.94  
Electronic Components25,477  1.50  —  —  
Education Services22,997  1.36  15,672  1.04  
Advertising22,898  1.35  42,405  2.80  
Airport Services22,412  1.32  —  —  
Independent Power Producers & Energy Traders21,700  1.28  —  —  
Electrical Components & Equipment21,003  1.24  21,210  1.40  
Systems Software20,729  1.22  31,716  2.10  
Integrated Telecommunication Services20,113  1.19  33,741  2.23  
General Merchandise Stores19,079  1.12  18,946  1.25  
Diversified Support Services18,798  1.11  18,805  1.24  
Apparel, Accessories & Luxury Goods17,284  1.02  18,192  1.20  
Hotels, Resorts & Cruise Lines15,396  0.91  —  —  
Industrial Machinery15,344  0.90  17,055  1.13  
Diversified Real Estate Activities15,269  0.90  —  —  
IT Consulting & Other Services14,933  0.88  14,975  0.99  
Construction & Engineering13,254  0.78  23,443  1.55  
Health Care Distributors12,825  0.76  22,561  1.49  
Metal & Glass Containers11,268  0.66  —  —  
Airlines10,559  0.62  10,640  0.70  
Trading Companies & Distributors10,259  0.60  10,357  0.68  
Restaurants10,246  0.60  3,097  0.20  
Commercial Printing7,896  0.47  6,002  0.40  
Food Retail6,845  0.40  14,473  0.96  
Distributors3,732  0.22  —  —  
Oil & Gas Equipment & Services3,463  0.20  12,165  0.80  
Health Care Facilities3,098  0.18  —  —  
Insurance Brokers2,200  0.13  —  —  
Construction Materials2,127  0.13  —  —  
Leisure Facilities1,887  0.11  1,887  0.12  
Specialty Stores1,305  0.08  1,305  0.09  
Thrifts & Mortgage Finance938  0.06  1,217  0.08  
Other Diversified Financial Services113  0.01  113  0.01  
Interactive Media & Services—  —  21,805  1.44  
Specialized REITs—  —  8,264  0.55  
Household Appliances—  —  7,837  0.52  
Environmental & Facilities Services—  —  5,940  0.39  
Human Resource & Employment Services—  —  830  0.05  
Department Stores—  —  585  0.04  
Total$1,696,577  100.00 %$1,513,014  100.00 %
41
  March 31, 2020 September 30, 2019
Cost:    % of Total Investments    % of Total Investments
Application Software $195,026
 11.97% $132,051
 8.73%
Multi-Sector Holdings (1) 158,515
 9.73
 146,436
 9.67
Data Processing & Outsourced Services 105,919
 6.50
 97,759
 6.46
Health Care Services 72,298
 4.44
 100,173
 6.62
Biotechnology 71,683
 4.40
 82,109
 5.43
Pharmaceuticals 63,384
 3.89
 59,294
 3.92
Auto Parts & Equipment 58,430
 3.59
 42,641
 2.82
Specialized Finance 55,627
 3.42
 53,227
 3.52
Personal Products 53,363
 3.28
 —
 —
Property & Casualty Insurance 51,103
 3.14
 73,076
 4.83
Specialty Chemicals 44,887
 2.76
 31,788
 2.10
Research & Consulting Services 39,682
 2.44
 34,734
 2.30
Real Estate Services 39,178
 2.41
 39,332
 2.60
Aerospace & Defense 36,704
 2.25
 33,665
 2.23
Health Care Technology 36,527
 2.24
 51,044
 3.37
Systems Software 33,712
 2.07
 31,716
 2.10
Oil & Gas Storage & Transportation 31,599
 1.94
 11,603
 0.77
Internet Services & Infrastructure 31,480
 1.93
 32,563
 2.15
Alternative Carriers 31,304
 1.92
 29,400
 1.94
Oil & Gas Refining & Marketing 30,298
 1.86
 30,378
 2.01
Managed Health Care 27,562
 1.69
 27,645
 1.83
Specialized REITs 24,464
 1.50
 8,264
 0.55
Education Services 23,067
 1.42
 15,672
 1.04
Advertising 22,898
 1.41
 42,405
 2.80
Airport Services 22,447
 1.38
 —
 —
Independent Power Producers & Energy Traders 21,938
 1.35
 —
 —
Integrated Telecommunication Services 21,339
 1.31
 33,741
 2.23
Electrical Components & Equipment 21,072
 1.29
 21,210
 1.40
General Merchandise Stores 19,085
 1.17
 18,946
 1.25
Diversified Support Services 18,800
 1.15
 18,805
 1.24
Apparel, Accessories & Luxury Goods 17,539
 1.08
 18,192
 1.20
Industrial Machinery 16,063
 0.99
 17,055
 1.13
Health Care Distributors 15,816
 0.97
 22,561
 1.49
IT Consulting & Other Services 14,947
 0.92
 14,975
 0.99
Movies & Entertainment 13,398
 0.82
 18,858
 1.25
Construction & Engineering 13,232
 0.81
 23,443
 1.55
Oil & Gas Equipment & Services 11,474
 0.70
 12,165
 0.80
Airlines 10,597
 0.65
 10,640
 0.70
Trading Companies & Distributors 10,290
 0.63
 10,357
 0.68
Restaurants 9,262
 0.57
 3,097
 0.20
Commercial Printing 7,924
 0.49
 6,002
 0.40
Food Retail 6,829
 0.42
 14,473
 0.96
Health Care Facilities 3,552
 0.22
 —
 —
Distributors 3,498
 0.21
 —
 —
Specialty Stores 2,771
 0.17
 1,305
 0.09
Construction Materials 2,113
 0.13
 —
 —
Leisure Facilities 1,887
 0.12
 1,887
 0.12
Building Products 1,621
 0.10
 —
 —
Communications Equipment 1,325
 0.08
 —
 —
Thrifts & Mortgage Finance 938
 0.06
 1,217
 0.08
Other Diversified Financial Services 113
 0.01
 113
 0.01
Interactive Media & Services —
 —
 21,805
 1.44
Household Appliances —
 —
 7,837
 0.52
Environmental & Facilities Services —
 —
 5,940
 0.39
Human Resource & Employment Services —
 —
 830
 0.05
Department Stores —
 —
 585
 0.04
Total $1,628,580
 100.00% $1,513,014
 100.00%
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





 March 31, 2020 September 30, 2019June 30, 2020September 30, 2019
Fair Value:    % of Total Investments % of Net Assets    % of Total Investments % of Net AssetsFair Value: % of Total Investments% of Net Assets % of Total Investments% of Net Assets
Application Software $181,347
 13.02% 24.08% $129,577
 9.00% 13.94%Application Software$184,938  11.86 %21.52 %$129,577  9.00 %13.94 %
Multi-Sector Holdings (1) 104,865
 7.53
 13.94
 128,539
 8.94
 13.81
Multi-Sector Holdings (1)119,936  7.68  13.96  128,539  8.94  13.81  
PharmaceuticalsPharmaceuticals99,865  6.40  11.62  60,057  4.18  6.45  
Data Processing & Outsourced Services 90,586
 6.51
 12.04
 98,267
 6.83
 10.56
Data Processing & Outsourced Services95,686  6.13  11.14  98,267  6.83  10.56  
Biotechnology 72,359
 5.20
 9.62
 85,719
 5.96
 9.21
Biotechnology89,966  5.76  10.47  85,719  5.96  9.21  
Oil & Gas Refining & MarketingOil & Gas Refining & Marketing69,334  4.44  8.07  31,597  2.20  3.40  
Health Care Services 63,374
 4.55
 8.42
 58,391
 4.06
 6.27
Health Care Services59,893  3.84  6.97  58,391  4.06  6.27  
Pharmaceuticals 59,015
 4.24
 7.85
 60,057
 4.18
 6.45
Personal Products 51,549
 3.70
 6.85
 —
 —
 —
Personal Products51,359  3.29  5.98  —  —  —  
Specialized Finance 49,567
 3.56
 6.59
 51,485
 3.58
 5.53
Specialized Finance48,504  3.11  5.65  51,485  3.58  5.53  
Auto Parts & Equipment 45,780
 3.29
 6.09
 40,484
 2.82
 4.35
Property & Casualty Insurance 45,353
 3.26
 6.03
 74,148
 5.16
 7.97
Property & Casualty Insurance46,578  2.98  5.42  74,148  5.16  7.97  
Research & Consulting Services 35,695
 2.56
 4.75
 37,336
 2.60
 4.01
Health Care Technology 35,462
 2.55
 4.71
 52,275
 3.64
 5.62
Movies & EntertainmentMovies & Entertainment43,608  2.79  5.08  18,613  1.29  2.00  
Real Estate Services 34,738
 2.50
 4.62
 39,501
 2.75
 4.24
Real Estate Services36,630  2.35  4.26  39,501  2.75  4.24  
Specialty Chemicals 33,588
 2.41
 4.47
 23,514
 1.64
 2.53
Specialty Chemicals36,332  2.33  4.23  23,514  1.64  2.53  
Systems Software 30,827
 2.21
 4.10
 31,504
 2.19
 3.39
Health Care TechnologyHealth Care Technology31,384  2.01  3.65  52,275  3.64  5.62  
Oil & Gas Storage & TransportationOil & Gas Storage & Transportation30,829  1.97  3.59  11,926  0.83  1.28  
Internet Services & Infrastructure 29,600
 2.13
 3.93
 32,565
 2.26
 3.50
Internet Services & Infrastructure29,599  1.90  3.45  32,565  2.26  3.50  
Oil & Gas Storage & Transportation 29,545
 2.12
 3.93
 11,926
 0.83
 1.28
Research & Consulting ServicesResearch & Consulting Services29,266  1.87  3.41  37,336  2.60  4.01  
Auto Parts & EquipmentAuto Parts & Equipment29,263  1.87  3.41  40,484  2.82  4.35  
Aerospace & Defense 29,538
 2.12
 3.93
 33,738
 2.35
 3.63
Aerospace & Defense29,175  1.87  3.40  33,738  2.35  3.63  
Alternative Carriers 26,016
 1.87
 3.46
 29,580
 2.06
 3.18
Alternative Carriers26,406  1.69  3.07  29,580  2.06  3.18  
Oil & Gas Refining & Marketing 25,765
 1.85
 3.43
 31,597
 2.20
 3.40
Managed Health Care 24,036
 1.73
 3.20
 27,775
 1.93
 2.98
Managed Health Care25,635  1.64  2.98  27,775  1.93  2.98  
Specialized REITs 22,362
 1.61
 2.97
 8,213
 0.57
 0.88
Electronic ComponentsElectronic Components23,431  1.50  2.73  —  —  —  
Airport Services 21,623
 1.55
 2.87
 —
 —
 —
Airport Services21,359  1.37  2.49  —  —  —  
Independent Power Producers & Energy Traders 21,151
 1.52
 2.81
 —
 —
 —
Independent Power Producers & Energy Traders20,880  1.34  2.43  —  —  —  
Systems SoftwareSystems Software20,126  1.29  2.34  31,504  2.19  3.39  
Electrical Components & Equipment 18,185
 1.31
 2.42
 20,032
 1.39
 2.15
Electrical Components & Equipment19,590  1.25  2.28  20,032  1.39  2.15  
Diversified Support ServicesDiversified Support Services16,555  1.06  1.93  18,624  1.30  2.00  
Diversified Real Estate ActivitiesDiversified Real Estate Activities16,538  1.06  1.93  —  —  —  
Hotels, Resorts & Cruise LinesHotels, Resorts & Cruise Lines16,492  1.06  1.92  —  —  —  
General Merchandise StoresGeneral Merchandise Stores16,408  1.05  1.91  16,934  1.18  1.82  
Advertising 17,244
 1.24
 2.29
 37,261
 2.59
 4.00
Advertising16,392  1.05  1.91  37,261  2.59  4.00  
Diversified Support Services 16,362
 1.18
 2.18
 18,624
 1.30
 2.00
Integrated Telecommunication ServicesIntegrated Telecommunication Services15,922  1.02  1.85  28,876  2.01  3.10  
Airlines 14,675
 1.05
 1.95
 16,140
 1.12
 1.73
Airlines14,675  0.94  1.71  16,140  1.12  1.73  
Integrated Telecommunication Services 14,576
 1.05
 1.94
 28,876
 2.01
 3.10
Construction & EngineeringConstruction & Engineering13,025  0.83  1.52  23,982  1.67  2.58  
IT Consulting & Other ServicesIT Consulting & Other Services12,910  0.83  1.50  13,792  0.96  1.48  
Industrial Machinery 14,153
 1.02
 1.88
 16,848
 1.17
 1.81
Industrial Machinery11,969  0.77  1.39  16,848  1.17  1.81  
General Merchandise Stores 13,889
 1.00
 1.85
 16,934
 1.18
 1.82
Metal & Glass ContainersMetal & Glass Containers11,961  0.77  1.39  —  —  —  
Health Care Distributors 12,757
 0.92
 1.70
 21,962
 1.53
 2.36
Health Care Distributors11,668  0.75  1.36  21,962  1.53  2.36  
IT Consulting & Other Services 12,013
 0.86
 1.60
 13,792
 0.96
 1.48
Apparel, Accessories & Luxury Goods 11,424
 0.82
 1.52
 13,286
 0.92
 1.43
Apparel, Accessories & Luxury Goods11,166  0.72  1.30  13,286  0.92  1.43  
Movies & Entertainment 10,475
 0.75
 1.39
 18,613
 1.29
 2.00
Construction & Engineering 10,447
 0.75
 1.39
 23,982
 1.67
 2.58
Oil & Gas Equipment & Services 8,930
 0.64
 1.19
 13,652
 0.95
 1.47
Trading Companies & Distributors 8,789
 0.63
 1.17
 10,370
 0.72
 1.11
Trading Companies & Distributors10,012  0.64  1.17  10,370  0.72  1.11  
RestaurantsRestaurants7,531  0.48  0.88  2,800  0.19  0.30  
Commercial Printing 7,678
 0.55
 1.02
 5,900
 0.41
 0.63
Commercial Printing7,494  0.48  0.87  5,900  0.41  0.63  
Education Services 6,960
 0.50
 0.93
 16
 —
 —
Education Services7,238  0.46  0.84  16  —  —  
Food Retail 6,909
 0.50
 0.92
 14,903
 1.04
 1.60
Food Retail6,930  0.44  0.81  14,903  1.04  1.60  
Restaurants 6,419
 0.46
 0.85
 2,800
 0.19
 0.30
Oil & Gas Equipment & ServicesOil & Gas Equipment & Services4,636  0.30  0.54  13,652  0.95  1.47  
DistributorsDistributors4,097  0.26  0.48  —  —  —  
Health Care Facilities 3,373
 0.24
 0.45
 —
 —
 —
Health Care Facilities3,416  0.22  0.40  —  —  —  
Distributors 3,335
 0.24
 0.44
 —
 —
 —
Insurance BrokersInsurance Brokers2,244  0.14  0.26  —  —  —  
Construction MaterialsConstruction Materials1,883  0.12  0.22  —  —  —  
Thrifts & Mortgage FinanceThrifts & Mortgage Finance370  0.02  0.04  691  0.05  0.07  
Leisure Facilities 3,043
 0.22
 0.40
 4,809
 0.33
 0.52
Leisure Facilities49  —  0.01  4,809  0.33  0.52  
Construction Materials 1,863
 0.13
 0.25
 —
 —
 —
Building Products 1,570
 0.11
 0.21
 —
 —
 —
Specialty Stores 1,566
 0.11
 0.21
 —
 —
 —
Communications Equipment 1,456
 0.10
 0.19
 —
 —
 —
Thrifts & Mortgage Finance 355
 0.03
 0.05
 691
 0.05
 0.07
Interactive Media & Services —
 —
 —
 22,500
 1.56
 2.42
Interactive Media & Services—  —  —  22,500  1.56  2.42  
Leisure Products —
 —
 —
 15,054
 1.05
 1.62
Leisure Products—  —  —  15,054  1.05  1.62  
Specialized REITsSpecialized REITs—  —  —  8,213  0.57  0.88  
Household Appliances —
 —
 —
 7,614
 0.53
 0.82
Household Appliances—  —  —  7,614  0.53  0.82  
Environmental & Facilities Services —
 —
 —
 5,937
 0.41
 0.64
Environmental & Facilities Services—  —  —  5,937  0.41  0.64  
Human Resource & Employment Services —
 —
 —
 775
 0.05
 0.08
Human Resource & Employment Services—  —  —  775  0.05  0.08  
Department Stores —
 —
 —
 480
 0.03
 0.05
Department Stores—  —  —  480  0.03  0.05  
Total $1,392,187
 100.00% 185.08% $1,438,042
 100.00% 154.52%Total$1,561,153  100.00 %181.74 %$1,438,042  100.00 %154.52 %
___________________

(1)This industry includes the Company's investments in SLF JV I, collateral loan obligations and certain limited partnership interests.
(1)This industry includes the Company's investments in SLF JV I, collateral loan obligations and certain limited partnership interests.

42
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





As of March 31,June 30, 2020 and September 30, 2019, the Company had no single investment that represented greater than 10% of the total investment portfolio at fair value. Income, consisting of interest, dividends, fees, other investment income and realization of gains or losses, may fluctuate and in any given period can be highly concentrated among several investments.

Senior Loan Fund JV I, LLC
In May 2014, the Company entered into an LLC agreement with Trinity Universal Insurance Company, a subsidiary of Kemper Corporation ("Kemper"), to form SLF JV I. The Company co-invests in senior secured loans of middle-market companies and other corporate debt securities with Kemper through its investment in SLF JV I. SLF JV I is managed by a four person Board of Directors, two of whom are selected by the Company and two of whom are selected by Kemper. All portfolio decisions and investment decisions in respect of SLF JV I must be approved by the SLF JV I investment committee, which consists of one representative selected by the Company and one representative selected by Kemper (with approval from a representative of each required). Since the Company does not have a controlling financial interest in SLF JV I, the Company does not consolidate SLF JV I.
SLF JV I is capitalized pro rata with LLC equity interests as transactions are completed and may be capitalized with additional subordinated notes issued to the Company and Kemper by SLF JV I. On December 28, 2018, the Company and Kemper directed the redemption of their holdings of mezzanine notes issued by SLF Repack Issuer 2016, LLC, a wholly-owned, special purpose issuer subsidiary of SLF JV I. Upon such redemption, the assets collateralizing the mezzanine notes, which consisted of equity interests of SLF JV I Funding LLC (the "Equity Interests"), were distributed in-kind to each of the Company and Kemper, based upon their respective holdings of mezzanine notes. Upon such distribution, the Company and Kemper each then directed that a portion of their respective Equity Interests holdings be contributed to SLF JV I in exchange for LLC equity interests of SLF JV I and the remainder be applied as payment for the subordinated notes of SLF JV I.  SLF Repack Issuer 2016, LLC was dissolved following the foregoing redemption and liquidation. The subordinated notes issued by SLF JV I (the "SLF JV 1 Subordinated Notes") and the mezzanine notes issued by SLF Repack Issuer 2016, LLC (the "SLF Repack Notes") collectively are referred to as the SLF JV I Notes. Prior to the redemption on December 28, 2018, the SLF Repack Notes consisted of Class A mezzanine secured deferrable floating rate notes and Class B mezzanine secured deferrable fixed rate notes. The SLF JV I Subordinated Notes are (and the SLF Repack Notes were, prior to their redemption) senior in right of payment to SLF JV I LLC equity interests and subordinated in right of payment to SLF JV I’s secured debt. As of March 31,June 30, 2020 and September 30, 2019, the Company and Kemper owned, in the aggregate, 87.5% and 12.5%, respectively, of the LLC equity interests of SLF JV I and the outstanding SLF JV I Subordinated Notes.
SLF JV I has a senior revolving credit facility with Deutsche Bank AG, New York Branch (as amended, the "Deutsche Bank I Facility"), which permitted up to $250.0 million of borrowings (subject to borrowing base and other limitations) as of March 31,June 30, 2020 and September 30, 2019. Borrowings under the Deutsche Bank I Facility are secured by all of the assets of SLF JV I Funding LLC, a special purpose financing subsidiary of SLF JV I. As of March 31,June 30, 2020, the reinvestment period of the Deutsche Bank I Facility was scheduled to expire June 28, 2021 and the maturity date for the Deutsche Bank I Facility was June 29, 2026. As of March 31,June 30, 2020, borrowings under the Deutsche Bank I Facility accrued interest at a rate equal to 3-month LIBOR plus 1.85% per annum during the reinvestment period and 3-month LIBOR plus 2.00% per annum during the amortization period. Under the Deutsche Bank I Facility, $193.9$173.9 million and $170.2 million of borrowings were outstanding as of March 31,June 30, 2020 and September 30, 2019, respectively.
On July 10, 2020, SLF JV I amended the Deutsche Bank I Facility to (a) establish a waiver period beginning on July 10, 2020 and ending 180 days thereafter (the “Waiver Period”), during which the facility agent is restricted from revaluing certain collateral obligations where the change in valuation is caused by or results from a business disruption due primarily to the COVID-19 pandemic and (b) modify the minimum utilization percentage from 75% to 50% until 90 days after the end of the Waiver Period.
As of March 31,June 30, 2020 and September 30, 2019, SLF JV I had total assets of $329.6$315.4 million and $360.9 million, respectively. SLF JV I's portfolio primarily consisted of senior secured loans to 53 and 51 portfolio companies, as of March 31,June 30, 2020 and September 30, 2019, respectively. The portfolio companies in SLF JV I are in industries similar to those in which the Company may invest directly. As of March 31,June 30, 2020, the Company's investment in SLF JV I consisted of LLC equity interests and Subordinated Notes of $92.2$110.0 million, at fair value. As of September 30, 2019, the Company's investment in SLF JV I consisted of LLC equity interests and Subordinated Notes of $126.3 million, at fair value.
As of each of March 31,June 30, 2020 and September 30, 2019, the Company and Kemper had funded approximately $165.5 million to SLF JV I, of which $144.8 million was from the Company. As of March 31,June 30, 2020 and September 30, 2019, the Company and Kemper had the option to fund additional SLF JV I Notes, subject to additional equity funding to SLF JV I. As of each of March 31,
43
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




June 30, 2020 and September 30, 2019, the Company had commitments to fund LLC equity interests in SLF JV I of $17.5 million, of which $1.3 million was unfunded.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Below is a summary of SLF JV I's portfolio, followed by a listing of the individual loans in SLF JV I's portfolio as of March 31,June 30, 2020 and September 30, 2019:
June 30, 2020September 30, 2019
Senior secured loans (1)$306,759$340,960
Weighted average interest rate on senior secured loans (2)5.43%6.57%
Number of borrowers in SLF JV I5351
Largest exposure to a single borrower (1)$10,515$10,835
Total of five largest loan exposures to borrowers (1)$49,198$50,510
  March 31, 2020 September 30, 2019
Senior secured loans (1) $337,016 $340,960
Weighted average interest rate on senior secured loans (2) 5.54% 6.57%
Number of borrowers in SLF JV I 53 51
Largest exposure to a single borrower (1) $10,686 $10,835
Total of five largest loan exposures to borrowers (1) $51,441 $50,510
__________
(1) At principal amount.
(2) Computed using the weighted average annual interest rate on accruing senior secured loans at fair value.

44
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





SLF JV I Portfolio as of March 31,June 30, 2020
Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Access CIG, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 2/27/20253.92 %Diversified Support Services$9,229  $9,192  $8,816  
AdVenture Interactive, Corp.927 shares of common stockAdvertising1,390  1,353  (4)
AI Convoy (Luxembourg) S.À.R.L.First Lien Term Loan, LIBOR+3.50% cash due 1/18/20274.65 %Aerospace & Defense5,647  5,619  5,414  
AI Ladder (Luxembourg) Subco S.a.r.l.First Lien Term Loan, LIBOR+4.50% cash due 7/9/20254.68 %Electrical Components & Equipment6,064  5,933  5,534  (4)
Airbnb, Inc.First Lien Term Loan, LIBOR+7.50% cash due 4/17/20258.50 %Hotels, Resorts & Cruise Lines3,059  2,984  3,197  (4)
Altice France S.A.First Lien Term Loan, LIBOR+4.00% cash due 8/14/20264.18 %Integrated Telecommunication Services4,655  4,453  4,494  
Alvogen Pharma US, Inc.First Lien Term Loan, LIBOR+5.25% cash due 12/31/20236.32 %Pharmaceuticals9,879  9,603  9,237  
Amplify Finco Pty Ltd.First Lien Term Loan, LIBOR+4.00% cash due 11/26/20264.75 %Movies & Entertainment7,980  7,900  6,983  (4)
Anastasia Parent, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/11/2025Personal Products2,835  2,317  1,003  (6)
Apptio, Inc.First Lien Term Loan, LIBOR+7.25% cash due 1/10/20258.25 %Application Software4,615  4,546  4,512  (4)
First Lien Revolver, LIBOR+7.25% cash due 1/10/2025Application Software—  (6) (9) (4)(5)
Total Apptio, Inc.4,540  4,503  
Aurora Lux Finco S.À.R.L.First Lien Term Loan, LIBOR+6.00% cash due 12/24/20267.00 %Airport Services6,484  6,334  6,036  (4)
Blackhawk Network Holdings, Inc.First Lien Term Loan, LIBOR+3.00% cash due 6/15/20253.18 %Data Processing & Outsourced Services9,800  9,783  9,073  
Boxer Parent Company Inc.First Lien Term Loan, LIBOR+4.25% cash due 10/2/20254.43 %Systems Software7,552  7,466  7,174  (4)
Brazos Delaware II, LLCFirst Lien Term Loan, LIBOR+4.00% cash due 5/21/20254.19 %Oil & Gas Equipment & Services7,350  7,324  5,053  
C5 Technology Holdings, LLC171 Common UnitsData Processing & Outsourced Services—  —  (4)
7,193,539.63 Preferred UnitsData Processing & Outsourced Services7,194  5,683  (4)
Total C5 Technology Holdings, LLC7,194  5,683  
Carrols Restaurant Group, Inc.First Lien Term Loan, LIBOR+6.25% cash due 4/30/20267.25 %Restaurants4,000  3,800  3,840  
CITGO Petroleum Corp.First Lien Term Loan, LIBOR+5.00% cash due 3/28/20246.00 %Oil & Gas Refining & Marketing7,202  7,130  6,932  (4)
Clear Channel Outdoor Holdings, Inc.First Lien Term Loan, LIBOR+3.50% cash due 8/21/20264.26 %Advertising331  289  302  
Connect U.S. Finco LLCFirst Lien Term Loan, LIBOR+4.50% cash due 12/11/20265.50 %Alternative Carriers7,456  7,274  7,041  (4)
Curium Bidco S.à.r.l.First Lien Term Loan, LIBOR+4.00% cash due 7/9/20265.07 %Biotechnology5,955  5,910  5,851  
Dcert Buyer, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/16/20264.18 %Internet Services & Infrastructure7,980  7,960  7,744  
Dealer Tire, LLCFirst Lien Term Loan, LIBOR+4.25% cash due 12/12/20254.43 %Distributors945  903  906  (4)
Ellie Mae, Inc.First Lien Term Loan, LIBOR+3.75% cash due 4/17/20264.06 %Application Software4,963  4,938  4,830  
eResearch Technology, Inc.First Lien Term Loan, LIBOR+4.50% cash due 2/4/20275.50 %Application Software7,500  7,425  7,371  
Frontier Communications CorporationFirst Lien Term Loan, PRIME+2.75% cash due 6/15/20246.00 %Integrated Telecommunication Services3,939  3,901  3,853  
Gigamon, Inc.First Lien Term Loan, LIBOR+4.25% cash due 12/27/20245.25 %Systems Software7,801  7,750  7,479  
45
Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipal Cost Fair Value (3)Notes
Access CIG, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 2/27/20255.53%Diversified Support Services$9,253
 $9,213
 $7,622
 
AdVenture Interactive, Corp.927 shares of common stock Advertising  1,390
 1,312
(4)
AI Convoy (Luxembourg) S.À.R.L.First Lien Term Loan, LIBOR+3.50% cash due 1/18/20275.34%Aerospace & Defense9,200
 9,154
 8,257
 
AI Ladder (Luxembourg) Subco S.a.r.l.First Lien Term Loan, LIBOR+4.50% cash due 7/9/20255.49%Electrical Components & Equipment6,092
 5,953
 5,137
(4)
Altice France S.A.First Lien Term Loan, LIBOR+4.00% cash due 8/14/20264.70%Integrated Telecommunication Services9,709
 9,398
 9,296
(4)
Alvogen Pharma US, Inc.First Lien Term Loan, LIBOR+5.25% cash due 12/31/20236.32%Pharmaceuticals9,879
 9,586
 8,594
 
Anastasia Parent, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/11/20255.20%Personal Products2,843
 2,360
 1,658
 
Apptio, Inc.First Lien Term Loan, LIBOR+7.25% cash due 1/10/20258.25%Application Software4,615
 4,542
 4,398
(4)
 First Lien Revolver, LIBOR+7.25% cash due 1/10/2025 Application Software—
 (6) (18)(4)(5)
Total Apptio, Inc.     4,536
 4,380
 
Aurora Lux Finco S.À.R.L.First Lien Term Loan, LIBOR+6.00% cash due 12/24/20267.00%Airport Services6,500
 6,344
 6,111
(4)
Blackhawk Network Holdings, Inc.First Lien Term Loan, LIBOR+3.00% cash due 6/15/20253.99%Data Processing & Outsourced Services9,825
 9,807
 8,134
 
Boxer Parent Company Inc.First Lien Term Loan, LIBOR+4.25% cash due 10/2/20255.24%Systems Software7,571
 7,483
 6,366
(4)
Brazos Delaware II, LLCFirst Lien Term Loan, LIBOR+4.00% cash due 5/21/20254.92%Oil & Gas Equipment & Services7,369
 7,342
 3,887
 
C5 Technology Holdings, LLC171 Common Units Data Processing & Outsourced Services  —
 —
(4)
 7,193,539.63 Preferred Units Data Processing & Outsourced Services  7,194
 5,683
(4)
Total C5 Technology Holdings, LLC     7,194
 5,683
 
CITGO Petroleum Corp.First Lien Term Loan, LIBOR+5.00% cash due 3/28/20246.00%Oil & Gas Refining & Marketing7,920
 7,841
 7,009
(4)
Connect U.S. Finco LLCFirst Lien Term Loan, LIBOR+4.50% cash due 12/11/20265.49%Alternative Carriers8,367
 8,162
 6,746
(4)
Curium Bidco S.à.r.l.First Lien Term Loan, LIBOR+4.00% cash due 7/9/20265.07%Biotechnology5,970
 5,925
 5,672
 
Dcert Buyer, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/16/20264.99%Internet Services & Infrastructure8,000
 7,980
 7,193
 
Dealer Tire, LLCFirst Lien Term Loan, LIBOR+4.25% cash due 12/12/20255.24%Distributors948
 904
 788
(4)
Delta 2 (Lux) S.à.r.l.First Lien Term Loan, LIBOR+2.50% cash due 2/1/20243.50%Movies & Entertainment5,167
 4,649
 4,665
 
Ellie Mae, Inc.First Lien Term Loan, LIBOR+3.75% cash due 4/17/20265.20%Application Software4,974
 4,950
 4,372
 
eResearch Technology, Inc.First Lien Term Loan, LIBOR+4.50% cash due 2/4/20275.95%Application Software7,500
 7,425
 6,653
 
Frontier Communications CorporationFirst Lien Term Loan, LIBOR+3.75% cash due 6/15/20245.21%Integrated Telecommunication Services7,162
 7,068
 6,846
 
GFL Environmental, Inc.First Lien Term Loan, LIBOR+3.00% cash due 5/30/20254.00%Environmental & Facilities Services718
 663
 700
 
Gigamon, Inc.First Lien Term Loan, LIBOR+4.25% cash due 12/27/20245.25%Systems Software7,820
 7,767
 6,726
 
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Guidehouse LLPSecond Lien Term Loan, LIBOR+8.00% cash due 5/1/20268.18 %Research & Consulting Services$6,000  $5,978  $5,490  (4)
Helios Software Holdings, Inc.First Lien Term Loan, LIBOR+4.25% cash due 10/24/20255.32 %Systems Software3,980  3,940  3,852  
Intelsat Jackson Holdings S.A.First Lien Term Loan, PRIME+4.75% cash due 11/27/20238.00 %Alternative Carriers3,568  3,539  3,565  
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 7/13/20216.50 %Alternative Carriers971  798  1,006  (5)
Total Intelsat Jackson Holdings S.A.4,337  4,571  
KIK Custom Products Inc.First Lien Term Loan, LIBOR+4.00% cash due 5/15/20235.00 %Household Products8,000  7,978  7,645  
Mindbody, Inc.First Lien Term Loan, LIBOR+7.00% cash 1.5% PIK due 2/14/20258.00 %Internet Services & Infrastructure4,529  4,459  4,185  (4)
First Lien Revolver, LIBOR+8.00% cash due 2/14/20259.07 %Internet Services & Infrastructure476  469  440  (4)
Total Mindbody, Inc.4,928  4,625  
MRI Software LLCFirst Lien Term Loan, LIBOR+5.50% cash due 2/10/20266.57 %Application Software3,716  3,682  3,577  (4)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026Application Software—  (2) (10) (4)(5)
First Lien Revolver, LIBOR+5.50% cash due 2/10/2026Application Software—  (3) (13) (4)(5)
Total MRI Software LLC3,677  3,554  
Navicure, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/22/20264.18 %Health Care Technology5,985  5,955  5,761  
New IPT, Inc.First Lien Term Loan, LIBOR+5.00% cash due 3/17/20216.00 %Oil & Gas Equipment & Services1,072  1,072  1,072  (4)
21.876 Class A Common Units in New IPT Holdings, LLCOil & Gas Equipment & Services—  512  (4)
Total New IPT, Inc.1,072  1,584  
Northern Star Industries Inc.First Lien Term Loan, LIBOR+4.50% cash due 3/31/20255.57 %Electrical Components & Equipment6,843  6,819  6,329  
Northwest Fiber, LLCFirst Lien Term Loan, LIBOR+5.50% cash due 6/5/20275.67 %Integrated Telecommunication Services2,406  2,316  2,394  
Novetta Solutions, LLCFirst Lien Term Loan, LIBOR+5.00% cash due 10/17/20226.00 %Application Software5,946  5,922  5,832  
OEConnection LLCFirst Lien Term Loan, LIBOR+4.00% cash due 9/25/20265.07 %Application Software7,253  7,216  6,890  
First Lien Delayed Draw Term Loan, LIBOR+4.00% cash due 9/25/2026Application Software—  (3) (35) (5)
Total OEConnection LLC7,213  6,855  
Olaplex, Inc.First Lien Term Loan, LIBOR+6.50% cash due 1/8/20267.50 %Personal Products4,969  4,877  4,770  (4)
First Lien Revolver, LIBOR+6.50% cash due 1/8/20257.50 %Personal Products540  530  518  (4)
Total Olaplex, Inc.5,407  5,288  
PG&E CorporationFirst Lien Term Loan, LIBOR+4.50% cash due 6/23/20255.50 %Electric Utilities6,000  5,910  5,904  
Sabert CorporationFirst Lien Term Loan, LIBOR+4.50% cash due 12/10/20265.50 %Metal & Glass Containers4,339  4,296  4,241  
Salient CRGT, Inc.First Lien Term Loan, LIBOR+6.50% cash due 2/28/20227.57 %Aerospace & Defense2,142  2,127  1,928  (4)
SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.00% cash due 10/27/20226.00 %Footwear8,354  8,341  5,555  
Signify Health, LLCFirst Lien Term Loan, LIBOR+4.50% cash due 12/23/20245.50 %Health Care Services9,775  9,711  9,237  
Sirva Worldwide, Inc.First Lien Term Loan, LIBOR+5.50% cash due 8/4/20255.68 %Diversified Support Services4,809  4,736  3,558  
Star US Bidco LLCFirst Lien Term Loan, LIBOR+4.25% cash due 3/17/20275.25 %Industrial Machinery3,728  3,534  3,423  
Sunshine Luxembourg VII SARLFirst Lien Term Loan, LIBOR+4.25% cash due 10/1/20265.32 %Personal Products7,960  7,920  7,650  
46
Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipal Cost Fair Value (3)Notes
GoodRx, Inc.First Lien Term Loan, LIBOR+2.75% cash due 10/10/20253.74%Interactive Media & Services$8,592
 $8,470
 $8,119
 
Guidehouse LLPSecond Lien Term Loan, LIBOR+8.00% cash due 5/1/20268.99%Research & Consulting Services6,000
 5,977
 5,190
(4)
Helios Software Holdings, Inc.First Lien Term Loan, LIBOR+4.25% cash due 10/24/20255.32%Systems Software3,990
 3,950
 3,438
 
Intelsat Jackson Holdings S.A.First Lien Term Loan, LIBOR+3.75% cash due 11/27/20235.68%Alternative Carriers10,686
 10,563
 9,905
 
KIK Custom Products Inc.First Lien Term Loan, LIBOR+4.00% cash due 5/15/20235.00%Household Products8,000
 7,976
 7,237
 
Mindbody, Inc.First Lien Term Loan, LIBOR+7.00% cash due 2/14/20258.00%Internet Services & Infrastructure4,524
 4,450
 4,185
(4)
 First Lien Revolver, LIBOR+7.00% cash due 2/14/20258.07%Internet Services & Infrastructure476
 468
 440
(4)
Total Mindbody, Inc.     4,918
 4,625
 
MRI Software LLCFirst Lien Term Loan, LIBOR+5.50% cash due 2/10/20266.57%Application Software3,411
 3,379
 3,019
(4)
 First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026 Application Software—
 (4) (68)(4)(5)
 First Lien Revolver, LIBOR+5.50% cash due 2/10/20266.57%Application Software169
 166
 130
(4)(5)
Total MRI Software LLC     3,541
 3,081
 
Navicure, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/22/20264.99%Health Care Technology6,000
 5,970
 5,565
 
New IPT, Inc.First Lien Term Loan, LIBOR+5.00% cash due 3/17/20216.45%Oil & Gas Equipment & Services1,138
 1,138
 1,138
(4)
 21.876 Class A Common Units in New IPT Holdings, LLC Oil & Gas Equipment & Services  —
 697
(4)
Total New IPT, Inc.     1,138
 1,835
 
Northern Star Industries Inc.First Lien Term Loan, LIBOR+4.50% cash due 3/31/20255.57%Electrical Components & Equipment6,860
 6,835
 5,831
 
Novetta Solutions, LLCFirst Lien Term Loan, LIBOR+5.00% cash due 10/17/20226.00%Application Software5,962
 5,935
 5,315
 
OEConnection LLCFirst Lien Term Loan, LIBOR+4.00% cash due 9/25/20265.45%Application Software7,271
 7,234
 5,871
 
 First Lien Delayed Draw Term Loan, LIBOR+4.00% cash due 9/25/2026 Application software—
 (3) (133)(5)
Total OEConnection LLC     7,231
 5,738
 
Olaplex, Inc.First Lien Term Loan, LIBOR+6.50% cash due 1/8/20267.50%Personal Products5,000
 4,904
 4,675
(4)
 First Lien Revolver, LIBOR+6.50% cash due 1/8/20257.50%Personal Products540
 530
 505
(4)
Total Olaplex, Inc.     5,434
 5,180
 
Quikrete Holdings, Inc.First Lien Term Loan, LIBOR+2.50% cash due 2/1/20273.49%Construction Materials2,280
 2,106
 2,109
 
Sabert CorporationFirst Lien Term Loan, LIBOR+4.50% cash due 12/10/20265.50%Metal & Glass Containers4,350
 4,307
 4,046
 
Salient CRGT, Inc.First Lien Term Loan, LIBOR+6.50% cash due 2/28/20227.57%Aerospace & Defense2,173
 2,156
 1,793
(4)
Scientific Games International, Inc.First Lien Term Loan, LIBOR+2.75% cash due 8/14/20243.74%Casinos & Gaming6,483
 6,461
 5,262
 
SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.00% cash due 10/27/20226.78%Footwear8,376
 8,362
 6,575
 
Signify Health, LLCFirst Lien Term Loan, LIBOR+4.50% cash due 12/23/20245.95%Health Care Services9,800
 9,732
 8,232
 
Sirva Worldwide, Inc.First Lien Term Loan, LIBOR+5.50% cash due 8/4/20256.49%Diversified Support Services4,844
 4,771
 3,633
 
Star US Bidco LLCFirst Lien Term Loan, LIBOR+4.25% cash due 3/17/20275.94%Industrial Machinery2,973
 2,943
 2,587
 
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipal Cost Fair Value (3)NotesPortfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Sunshine Luxembourg VII SARLFirst Lien Term Loan, LIBOR+4.25% cash due 10/1/20265.32%Personal Products$7,980
 $7,940
 $7,262
(4)
Supermoose Borrower, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/29/20255.20%Application Software4,913
 4,566
 3,960
(4)Supermoose Borrower, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/29/20253.93 %Application Software$4,901  $4,571  $4,339  (4)
Surgery Center Holdings, Inc.First Lien Term Loan, LIBOR+3.25% cash due 9/2/20244.25%Health Care Facilities4,987
 4,966
 3,868
(4)Surgery Center Holdings, Inc.First Lien Term Loan, LIBOR+3.25% cash due 9/3/20244.25 %Health Care Facilities4,974  4,954  4,402  (4)
Thruline Marketing, Inc.927 Class A Units in FS AVI Holdco, LLC Advertising  949
 449
(4)Thruline Marketing, Inc.927 Class A Units in FS AVI Holdco, LLCAdvertising949  322  (4)
Thunder Finco (US), LLCFirst Lien Term Loan, LIBOR+4.25% cash due 11/26/20265.24%Movies & Entertainment8,000
 7,920
 6,260
 
Uber Technologies, Inc.First Lien Term Loan, LIBOR+4.00% cash due 4/4/20255.00%Application Software10,509
 10,440
 9,887
(4)Uber Technologies, Inc.First Lien Term Loan, LIBOR+4.00% cash due 4/4/20255.00 %Application Software8,005  7,947  7,718  
UFC Holdings, LLCFirst Lien Term Loan, LIBOR+3.25% cash due 4/29/20264.25%Movies & Entertainment4,831
 4,787
 4,306
(4)UFC Holdings, LLCFirst Lien Term Loan, LIBOR+3.25% cash due 4/29/20264.25 %Movies & Entertainment4,819  4,777  4,622  
Veritas US Inc.First Lien Term Loan, LIBOR+4.50% cash due 1/27/20235.95%Application Software6,859
 6,826
 5,941
(4)Veritas US Inc.First Lien Term Loan, LIBOR+4.50% cash due 1/27/20235.50 %Application Software6,841  6,812  6,358  (4)
Verscend Holding Corp.First Lien Term Loan, LIBOR+4.50% cash due 8/27/20255.49%Health Care Technology4,133
 4,099
 3,926

Verscend Holding Corp.First Lien Term Loan, LIBOR+4.50% cash due 8/27/20254.68 %Health Care Technology4,122  4,090  3,998  (4)
VM Consolidated, Inc.First Lien Term Loan, LIBOR+3.25% cash due 2/28/20254.24%Data Processing & Outsourced Services10,542
 10,554
 9,593
(4)VM Consolidated, Inc.First Lien Term Loan, LIBOR+3.25% cash due 2/28/20253.56 %Data Processing & Outsourced Services10,515  10,525  10,068  
WideOpenWest Finance, LLCFirst Lien Term Loan, LIBOR+3.25% cash due 8/18/20234.25%Cable & Satellite962
 867
 897
 
WP CPP Holdings, LLCSecond Lien Term Loan, LIBOR+7.75% cash due 4/30/20269.53%Aerospace & Defense6,000
 5,953
 4,120
(4)WP CPP Holdings, LLCSecond Lien Term Loan, LIBOR+7.75% cash due 4/30/20268.75 %Aerospace & Defense6,000  5,955  4,530  (4)
   $337,016
 $341,737
 $299,572
 $306,759  $312,009  $291,335  
__________
(1) Represents the interest rate as of March 31,June 30, 2020. All interest rates are payable in cash, unless otherwise noted.
(2) The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All the LIBOR shown above is in U.S. dollars. As of March 31,June 30, 2020, the reference rates for SLF JV I's variable rate loans were the 30-day LIBOR at 0.99%0.18%, the 60-day LIBOR at 1.26%0.24%, the 90-day LIBOR at 1.45% and0.31%, the 180-day LIBOR at 1.07%0.36% and the PRIME at 3.25%. Most loans include an interest floor, which generally ranges from 0% to 1%.
(3) Represents the current determination of fair value as of March 31,June 30, 2020 utilizing a similar technique as the Company in accordance with ASC 820. However, the determination of such fair value is not included in the Company's Board of Directors' valuation process described elsewhere herein.
(4) This investment was held by both the Company and SLF JV I as of March 31,June 30, 2020.
(5) Investment had undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.
(6) This investment was on cash non-accrual status as of June 30, 2020. Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.



47
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





SLF JV I Portfolio as of September 30, 2019
Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Access CIG, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 2/27/20256.07 %Diversified support services$9,300  $9,256  $9,201  
AdVenture Interactive, Corp.927 shares of common stockAdvertising1,390  1,295  (4)
AI Ladder (Luxembourg) Subco S.a.r.l.First Lien Term Loan, LIBOR+4.50% cash due 7/9/20256.60 %Electrical components & equipment6,145  5,992  5,659  (4)
Air Newco LPFirst Lien Term Loan, LIBOR+4.75% cash due 5/31/20246.79 %IT consulting & other services9,900  9,875  9,916  
AL Midcoast Holdings LLCFirst Lien Term Loan, LIBOR+5.50% cash due 8/1/20257.60 %Oil & gas storage & transportation9,900  9,801  9,764  
Altice France S.A.First Lien Term Loan, LIBOR+4.00% cash due 8/14/20266.03 %Integrated telecommunication services7,444  7,282  7,439  
Alvogen Pharma US, Inc.First Lien Term Loan, LIBOR+4.75% cash due 4/1/20226.79 %Pharmaceuticals7,656  7,656  6,963  
Apptio, Inc.First Lien Term Loan, LIBOR+7.25% cash due 1/10/20259.56 %Application software4,615  4,534  4,530  (4)
First Lien Revolver, LIBOR+7.25% cash due 1/10/2025Application software—  (7) (7) (4)(5)
Total Apptio, Inc.4,527  4,523  
Blackhawk Network Holdings, Inc.First Lien Term Loan, LIBOR+3.00% cash due 6/15/20255.04 %Data processing & outsourced services9,875  9,855  9,858  
Boxer Parent Company Inc.First Lien Term Loan, LIBOR+4.25% cash due 10/2/20256.29 %Systems software7,609  7,518  7,336  (4)
Brazos Delaware II, LLCFirst Lien Term Loan, LIBOR+4.00% cash due 5/21/20256.05 %Oil & gas equipment & services7,406  7,376  6,855  
C5 Technology Holdings, LLC171 Common UnitsData Processing & Outsourced Services—  —  (4)
7,193,539.63 Preferred UnitsData Processing & Outsourced Services7,194  7,194  (4)
Total C5 Technology Holdings, LLC7,194  7,194  
Cast & Crew Payroll, LLCFirst Lien Term Loan, LIBOR+4.00% cash due 2/9/20266.05 %Application software4,975  4,925  5,018  
CITGO Petroleum Corp.First Lien Term Loan, LIBOR+5.00% cash due 3/28/20247.10 %Oil & gas refining & marketing7,960  7,880  8,010  (4)
Connect U.S. Finco LLCFirst Lien Term Loan, LIBOR+4.50% cash due 9/23/20267.10 %Alternative Carriers8,000  7,840  7,888  (4)
Curium Bidco S.à r.l.First Lien Term Loan, LIBOR+4.00% cash due 7/9/20266.10 %Biotechnology6,000  5,955  6,030  
Dcert Buyer, Inc.First Lien Term Loan, LIBOR+4.00% cash due 8/8/20266.26 %Internet services & infrastructure8,000  7,980  7,985  
DigiCert, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/31/20246.04 %Internet services & infrastructure8,250  8,148  8,249  (4)
Ellie Mae, Inc.First Lien Term Loan, LIBOR+4.00% cash due 4/17/20266.04 %Application software5,000  4,975  5,015  
Everi Payments Inc.First Lien Term Loan, LIBOR+3.00% cash due 5/9/20245.04 %Casinos & gaming4,764  4,742  4,776  
Falmouth Group Holdings Corp.First Lien Term Loan, LIBOR+6.75% cash due 12/14/20218.95 %Specialty chemicals4,938  4,909  4,910  
Frontier Communications CorporationFirst Lien Term Loan, LIBOR+3.75% cash due 6/15/20245.80 %Integrated telecommunication services6,473  6,400  6,471  
Gentiva Health Services, Inc.First Lien Term Loan, LIBOR+3.75% cash due 7/2/20255.81 %Healthcare services7,920  7,801  7,974  
Gigamon, Inc.First Lien Term Loan, LIBOR+4.25% cash due 12/27/20246.29 %Systems software7,860  7,801  7,644  
GoodRx, Inc.First Lien Term Loan, LIBOR+2.75% cash due 10/10/20254.81 %Interactive media & services7,852  7,835  7,862  
Guidehouse LLPSecond Lien Term Loan, LIBOR+7.50% cash due 5/1/20269.54 %Research & consulting services6,000  5,975  5,925  (4)
48
Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipal Cost Fair Value (3)Notes
Access CIG, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 2/27/20256.07%Diversified support services$9,300
 $9,256
 $9,201
 
AdVenture Interactive, Corp.927 shares of common stock Advertising  1,390
 1,295
(4)
AI Ladder (Luxembourg) Subco S.a.r.l.First Lien Term Loan, LIBOR+4.50% cash due 7/9/20256.60%Electrical components & equipment6,145
 5,992
 5,659
(4)
Air Newco LPFirst Lien Term Loan, LIBOR+4.75% cash due 5/31/20246.79%IT consulting & other services9,900
 9,875
 9,916
 
AL Midcoast Holdings LLCFirst Lien Term Loan, LIBOR+5.50% cash due 8/1/20257.60%Oil & gas storage & transportation9,900
 9,801
 9,764
 
Altice France S.A.First Lien Term Loan, LIBOR+4.00% cash due 8/14/20266.03%Integrated telecommunication services7,444
 7,282
 7,439
 
Alvogen Pharma US, Inc.First Lien Term Loan, LIBOR+4.75% cash due 4/1/20226.79%Pharmaceuticals7,656
 7,656
 6,963
 
Apptio, Inc.First Lien Term Loan, LIBOR+7.25% cash due 1/10/20259.56%Application software4,615
 4,534
 4,530
(4)
 First Lien Revolver, LIBOR+7.25% cash due 1/10/2025 Application software—
 (7) (7)(4)(5)
Total Apptio, Inc.     4,527
 4,523
 
Blackhawk Network Holdings, Inc.First Lien Term Loan, LIBOR+3.00% cash due 6/15/20255.04%Data processing & outsourced services9,875
 9,855
 9,858
 
Boxer Parent Company Inc.First Lien Term Loan, LIBOR+4.25% cash due 10/2/20256.29%Systems software7,609
 7,518
 7,336
(4)
Brazos Delaware II, LLCFirst Lien Term Loan, LIBOR+4.00% cash due 5/21/20256.05%Oil & gas equipment & services7,406
 7,376
 6,855
 
C5 Technology Holdings, LLC171 Common Units Data Processing & Outsourced Services  —
 —
(4)
 7,193,539.63 Preferred Units Data Processing & Outsourced Services  7,194
 7,194
(4)
Total C5 Technology Holdings, LLC     7,194
 7,194
 
Cast & Crew Payroll, LLCFirst Lien Term Loan, LIBOR+4.00% cash due 2/9/20266.05%Application software4,975
 4,925
 5,018
 
CITGO Petroleum Corp.First Lien Term Loan, LIBOR+5.00% cash due 3/28/20247.10%Oil & gas refining & marketing7,960
 7,880
 8,010
(4)
Connect U.S. Finco LLCFirst Lien Term Loan, LIBOR+4.50% cash due 9/23/20267.10%Alternative Carriers8,000
 7,840
 7,888
(4)
Curium Bidco S.à r.l.First Lien Term Loan, LIBOR+4.00% cash due 7/9/20266.10%Biotechnology6,000
 5,955
 6,030
 
Dcert Buyer, Inc.First Lien Term Loan, LIBOR+4.00% cash due 8/8/20266.26%Internet services & infrastructure8,000
 7,980
 7,985
 
DigiCert, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/31/20246.04%Internet services & infrastructure8,250
 8,148
 8,249
(4)
Ellie Mae, Inc.First Lien Term Loan, LIBOR+4.00% cash due 4/17/20266.04%Application software5,000
 4,975
 5,015
 
Everi Payments Inc.First Lien Term Loan, LIBOR+3.00% cash due 5/9/20245.04%Casinos & gaming4,764
 4,742
 4,776
 
Falmouth Group Holdings Corp.First Lien Term Loan, LIBOR+6.75% cash due 12/14/20218.95%Specialty chemicals4,938
 4,909
 4,910
 
Frontier Communications CorporationFirst Lien Term Loan, LIBOR+3.75% cash due 6/15/20245.80%Integrated telecommunication services6,473
 6,400
 6,471
 
Gentiva Health Services, Inc.First Lien Term Loan, LIBOR+3.75% cash due 7/2/20255.81%Healthcare services7,920
 7,801
 7,974
 
Gigamon, Inc.First Lien Term Loan, LIBOR+4.25% cash due 12/27/20246.29%Systems software7,860
 7,801
 7,644
 
GoodRx, Inc.First Lien Term Loan, LIBOR+2.75% cash due 10/10/20254.81%Interactive media & services7,852
 7,835
 7,862
 
Guidehouse LLPSecond Lien Term Loan, LIBOR+7.50% cash due 5/1/20269.54%Research & consulting services6,000
 5,975
 5,925
(4)
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Indivior Finance S.a.r.l.First Lien Term Loan, LIBOR+4.50% cash due 12/19/20226.76 %Pharmaceuticals$7,898  $7,797  $7,272  
Intelsat Jackson Holdings S.A.First Lien Term Loan, LIBOR+3.75% cash due 11/27/20235.80 %Alternative Carriers10,000  9,891  10,042  
KIK Custom Products Inc.First Lien Term Loan, LIBOR+4.00% cash due 5/15/20236.26 %Household products8,000  7,972  7,610  
McDermott Technology (Americas), Inc.First Lien Term Loan, LIBOR+5.00% cash due 5/9/20257.10 %Oil & gas equipment & services4,187  4,119  2,676  
Mindbody, Inc.First Lien Term Loan, LIBOR+7.00% cash due 2/14/20259.06 %Internet services & infrastructure4,524  4,443  4,438  (4)
First Lien Revolver, LIBOR+7.00% cash due 2/15/2025Internet services & infrastructure—  (9) (9) (4)(5)
Total Mindbody, Inc.4,434  4,429  
Navicure, Inc.First Lien Term Loan, LIBOR+3.75% cash due 9/18/20266.13 %Healthcare technology6,000  5,970  6,008  
New IPT, Inc.First Lien Term Loan, LIBOR+5.00% cash due 3/17/20217.10 %Oil & gas equipment & services1,422  1,422  1,422  (4)
21.876 Class A Common Units in New IPT Holdings, LLCOil & gas equipment & services—  1,268  (4)
Total New IPT, Inc.1,422  2,690  
Northern Star Industries Inc.First Lien Term Loan, LIBOR+4.50% cash due 3/31/20256.56 %Electrical components & equipment6,895  6,868  6,792  
Novetta Solutions, LLCFirst Lien Term Loan, LIBOR+5.00% cash due 10/17/20227.05 %Application software5,993  5,961  5,882  
OCI Beaumont LLCFirst Lien Term Loan, LIBOR+4.00% cash due 3/13/20256.10 %Commodity chemicals7,880  7,872  7,890  
OEConnection LLCFirst Lien Term Loan, LIBOR+4.00% cash due 9/24/20266.13 %Application software7,312  7,275  7,298  
First Lien Delayed Draw Term Loan, LIBOR+4.00% cash due 9/24/2026Application software—  (3) (1) (5)
Total OEConnection LLC7,272  7,297  
Red Ventures, LLCFirst Lien Term Loan, LIBOR+3.00% cash due 11/8/20245.04 %Interactive media & services3,990  3,971  4,011  
Salient CRGT, Inc.First Lien Term Loan, LIBOR+6.00% cash due 2/28/20228.05 %Aerospace & defense2,205  2,183  2,094  (4)
Scientific Games International, Inc.First Lien Term Loan, LIBOR+2.75% cash due 8/14/20244.79 %Casinos & gaming6,516  6,491  6,470  
SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.00% cash due 10/27/20227.26 %Footwear8,420  8,403  7,999  
Signify Health, LLCFirst Lien Term Loan, LIBOR+4.50% cash due 12/23/20246.60 %Healthcare services9,850  9,775  9,838  
Sirva Worldwide, Inc.First Lien Term Loan, LIBOR+5.50% cash due 8/4/20257.54 %Diversified support services4,906  4,833  4,759  
Sunshine Luxembourg VII SARLFirst Lien Term Loan, LIBOR+4.25% cash due 9/25/20266.59 %Personal products8,000  7,960  8,048  
Thruline Marketing, Inc.First Lien Term Loan, LIBOR+7.00% cash due 4/3/20229.10 %Advertising1,854  1,851  1,854  (4)
927 Class A Units in FS AVI Holdco, LLCAdvertising1,088  658  (4)
Total Thruline Marketing, Inc.2,939  2,512  
Triple Royalty Sub LLCFixed Rate Bond 144A 9.0% Toggle PIK cash due 4/15/2033Pharmaceuticals5,000  5,000  5,175  
Uber Technologies, Inc.First Lien Term Loan, LIBOR+4.00% cash due 4/4/20256.03 %Application software9,875  9,836  9,836  (4)
UFC Holdings, LLCFirst Lien Term Loan, LIBOR+3.25% cash due 4/29/20265.30 %Movies & entertainment4,489  4,489  4,506  
Uniti Group LPFirst Lien Term Loan, LIBOR+5.00% cash due 10/24/20227.04 %Specialized REITs6,401  6,221  6,256  (4)
Valeant Pharmaceuticals International Inc.First Lien Term Loan, LIBOR+2.75% cash due 11/27/20254.79 %Pharmaceuticals1,772  1,764  1,778  
Veritas US Inc.First Lien Term Loan, LIBOR+4.50% cash due 1/27/20236.60 %Application software6,894  6,856  6,534  (4)
Verra Mobility, Corp.First Lien Term Loan, LIBOR+3.75% cash due 2/28/20255.79 %Data processing & outsourced services10,835  10,849  10,894  
WP CPP Holdings, LLCSecond Lien Term Loan, LIBOR+7.75% cash due 4/30/202610.01 %Aerospace & defense6,000  5,949  5,974  (4)
$340,960  $347,985  $345,032  
49
Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipal Cost Fair Value (3)Notes
Indivior Finance S.a.r.l.First Lien Term Loan, LIBOR+4.50% cash due 12/19/20226.76%Pharmaceuticals$7,898
 $7,797
 $7,272
 
Intelsat Jackson Holdings S.A.First Lien Term Loan, LIBOR+3.75% cash due 11/27/20235.80%Alternative Carriers10,000
 9,891
 10,042
 
KIK Custom Products Inc.First Lien Term Loan, LIBOR+4.00% cash due 5/15/20236.26%Household products8,000
 7,972
 7,610
 
McDermott Technology (Americas), Inc.First Lien Term Loan, LIBOR+5.00% cash due 5/9/20257.10%Oil & gas equipment & services4,187
 4,119
 2,676
 
Mindbody, Inc.First Lien Term Loan, LIBOR+7.00% cash due 2/14/20259.06%Internet services & infrastructure4,524
 4,443
 4,438
(4)
 First Lien Revolver, LIBOR+7.00% cash due 2/15/2025 Internet services & infrastructure—
 (9) (9)(4)(5)
Total Mindbody, Inc.     4,434
 4,429
 
Navicure, Inc.First Lien Term Loan, LIBOR+3.75% cash due 9/18/20266.13%Healthcare technology6,000
 5,970
 6,008
 
New IPT, Inc.First Lien Term Loan, LIBOR+5.00% cash due 3/17/20217.10%Oil & gas equipment & services1,422
 1,422
 1,422
(4)
 21.876 Class A Common Units in New IPT Holdings, LLC Oil & gas equipment & services  —
 1,268
(4)
Total New IPT, Inc.     1,422
 2,690
 
Northern Star Industries Inc.First Lien Term Loan, LIBOR+4.50% cash due 3/31/20256.56%Electrical components & equipment6,895
 6,868
 6,792
 
Novetta Solutions, LLCFirst Lien Term Loan, LIBOR+5.00% cash due 10/17/20227.05%Application software5,993
 5,961
 5,882
 
OCI Beaumont LLCFirst Lien Term Loan, LIBOR+4.00% cash due 3/13/20256.10%Commodity chemicals7,880
 7,872
 7,890
 
OEConnection LLCFirst Lien Term Loan, LIBOR+4.00% cash due 9/24/20266.13%Application software7,312
 7,275
 7,298
 
 First Lien Delayed Draw Term Loan, LIBOR+4.00% cash due 9/24/2026 Application software—
 (3) (1)(5)
Total OEConnection LLC     7,272
 7,297
 
Red Ventures, LLCFirst Lien Term Loan, LIBOR+3.00% cash due 11/8/20245.04%Interactive media & services3,990
 3,971
 4,011
 
Salient CRGT, Inc.First Lien Term Loan, LIBOR+6.00% cash due 2/28/20228.05%Aerospace & defense2,205
 2,183
 2,094
(4)
Scientific Games International, Inc.First Lien Term Loan, LIBOR+2.75% cash due 8/14/20244.79%Casinos & gaming6,516
 6,491
 6,470
 
SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.00% cash due 10/27/20227.26%Footwear8,420
 8,403
 7,999
 
Signify Health, LLCFirst Lien Term Loan, LIBOR+4.50% cash due 12/23/20246.60%Healthcare services9,850
 9,775
 9,838
 
Sirva Worldwide, Inc.First Lien Term Loan, LIBOR+5.50% cash due 8/4/20257.54%Diversified support services4,906
 4,833
 4,759
 
Sunshine Luxembourg VII SARLFirst Lien Term Loan, LIBOR+4.25% cash due 9/25/20266.59%Personal products8,000
 7,960
 8,048
 
Thruline Marketing, Inc.First Lien Term Loan, LIBOR+7.00% cash due 4/3/20229.10%Advertising1,854
 1,851
 1,854
(4)
 927 Class A Units in FS AVI Holdco, LLC Advertising  1,088
 658
(4)
Total Thruline Marketing, Inc.     2,939
 2,512
 
Triple Royalty Sub LLCFixed Rate Bond 144A 9.0% Toggle PIK cash due 4/15/2033 Pharmaceuticals5,000
 5,000
 5,175
 
Uber Technologies, Inc.First Lien Term Loan, LIBOR+4.00% cash due 4/4/20256.03%Application software9,875
 9,836
 9,836
(4)
UFC Holdings, LLCFirst Lien Term Loan, LIBOR+3.25% cash due 4/29/20265.30%Movies & entertainment4,489
 4,489
 4,506
 
Uniti Group LPFirst Lien Term Loan, LIBOR+5.00% cash due 10/24/20227.04%Specialized REITs6,401
 6,221
 6,256
(4)
Valeant Pharmaceuticals International Inc.First Lien Term Loan, LIBOR+2.75% cash due 11/27/20254.79%Pharmaceuticals1,772
 1,764
 1,778
 
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipal Cost Fair Value (3)Notes
Veritas US Inc.First Lien Term Loan, LIBOR+4.50% cash due 1/27/20236.60%Application software$6,894
 $6,856
 $6,534
(4)
Verra Mobility, Corp.First Lien Term Loan, LIBOR+3.75% cash due 2/28/20255.79%Data processing & outsourced services10,835
 10,849
 10,894
 
WP CPP Holdings, LLCSecond Lien Term Loan, LIBOR+7.75% cash due 4/30/202610.01%Aerospace & defense6,000
 5,949
 5,974
(4)
    $340,960
 $347,985
 $345,032
 
__________
(1) Represents the interest rate as of September 30, 2019. All interest rates are payable in cash, unless otherwise noted.
(2) The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All the LIBOR shown above is in U.S. dollars. As of September 30, 2019, the reference rates for SLF JV I's variable rate loans were the 30-day LIBOR at 2.04%, the 60-day LIBOR at 2.09%, the 90-day LIBOR at 2.10%, the 180-day LIBOR at 2.06%, and the PRIME at 5.00%. Most loans include an interest floor, which generally ranges from 0% to 1%.
(3) Represents the current determination of fair value as of September 30, 2019 utilizing a similar technique as the Company in accordance with ASC 820. However, the determination of such fair value is not included in the Company's Board of Directors' valuation process described elsewhere herein.
(4) This investment was held by both the Company and SLF JV I as of September 30, 2019.
(5) Investment had undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.

The cost and fair value of the Company's debt investment in SLF JV I were $96.3 million and $92.2 million, respectively, as of March 31, 2020. Both the cost and fair value of the Company's debt investment in SLF JV I were $96.3 million as of each of June 30, 2020 and September 30, 2019. The Company earned interest income of $2.1$2.0 million and $4.3$6.3 million on its debt investment in the SLF JV I for the three and sixnine months ended March 31,June 30, 2020, respectively. The Company earned interest income of $2.3 million and $5.1$7.4 million on its investments in the SLF JV I Notes for the three and sixnine months ended March 31,June 30, 2019, respectively. The Company's debt investment in SLF JV I bears interest at a rate of one-month LIBOR plus 7.0% per annum and matures on December 29, 2028.
The cost and fair value of the LLC equity interests in SLF JV I held by the Company were $49.3 million and $0.0$13.8 million, respectively, as of March 31,June 30, 2020, and $49.3 million and $30.1 million, respectively, as of September 30, 2019. The Company did not earn dividend income for the three and sixnine months ended March 31,June 30, 2020 and 2019, with respect to its investment in the LLC equity interests of SLF JV I. The LLC equity interests of SLF JV I are generally dividend producing to the extent SLF JV I has residual cash to be distributed on a quarterly basis.
Below is certain summarized financial information for SLF JV I as of March 31,June 30, 2020 and September 30, 2019 and for the three and sixnine months ended March 31,June 30, 2020 and 2019:
June 30, 2020September 30, 2019
Selected Balance Sheet Information:
Investments at fair value (cost June 30, 2020: $312,009; cost September 30, 2019: $347,985)$291,335  $345,032  
Cash and cash equivalents10,112  3,674  
Restricted cash4,038  5,242  
Other assets9,888  6,912  
Total assets$315,373  $360,860  
Senior credit facility payable$173,910  $170,210  
Debt securities payable at fair value (proceeds June 30, 2020: $110,000; proceeds September 30, 2019: $110,000)110,000  110,000  
Other liabilities15,623  46,303  
Total liabilities$299,533  $326,513  
Members' equity15,840  34,347  
Total liabilities and members' equity$315,373  $360,860  
  March 31, 2020 September 30, 2019
Selected Balance Sheet Information:    
Investments at fair value (cost March 31, 2020: $341,737; cost September 30, 2019: $347,985) $299,572
 $345,032
Cash and cash equivalents 14,039
 3,674
Restricted cash 5,242
 5,242
Other assets 10,783
 6,912
Total assets $329,636
 $360,860
     
Senior credit facility payable $193,910
 $170,210
Debt securities payable at fair value (proceeds March 31, 2020: $110,000; proceeds September 30, 2019: $110,000) 105,339
 110,000
Other liabilities 30,387
 46,303
Total liabilities $329,636
 $326,513
Members' equity —
 34,347
Total liabilities and members' equity $329,636
 $360,860

OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





 Three months ended March 31, 2020 Three months ended March 31, 2019 Six months ended March 31, 2020 Six months ended March 31, 2019Three months ended June 30, 2020Three months ended June 30, 2019Nine months ended June 30, 2020Nine months ended June 30, 2019
Selected Statements of Operations Information:        Selected Statements of Operations Information:
Interest income $5,546
 $5,551
 $10,939
 $10,989
Interest income$4,419  $5,864  $15,358  $16,853  
Other income 291
 80
 297
 89
Other income—  —  297  89  
Total investment income 5,837
 5,631
 11,236
 11,078
Total investment income4,419  5,864  15,655  16,942  
Interest expense 4,493
 4,709
 9,134
 9,863
Interest expense4,076  4,999  13,210  14,862  
Other expenses 64
 276
 131
 326
Other expenses47  26  178  352  
Total expenses (1) 4,557
 4,985
 9,265
 10,189
Total expenses (1)4,123  5,025  13,388  15,214  
Net unrealized appreciation (depreciation) (37,491) 4,576
 (34,550) 1,120
Net unrealized appreciation (depreciation)16,829  (370) (17,721) 750  
Net realized gains (losses) (615) 19
 (1,767) (4,986)Net realized gains (losses)(1,285) 111  (3,052) (4,875) 
Net income (loss) $(36,826) $5,241
 $(34,346) $(2,977)Net income (loss)$15,840  $580  $(18,506) $(2,397) 
 __________
(1) There are no management fees or incentive fees charged at SLF JV I.
50

SLF JV I has elected to fair value the debt securities issued to the Company and Kemper under FASB ASC Topic 825, Financial Instruments - Fair Value Option. The debt securities are valued based on the total assets less the total liabilities senior to the subordinated notes of SLF JV I in an amount not exceeding par under the EV technique.
During the sixnine months ended March 31,June 30, 2020 and 2019, the Company did not sell any debt investments to SLF JV I.

Note 4. Fee Income
For the three and sixnine months ended March 31,June 30, 2020, the Company recorded total fee income of $2.1$1.8 million and $3.1$4.9 million, respectively, of which $0.2 million and $0.4$0.5 million, respectively, was recurring in nature. For the three and sixnine months ended March 31,June 30, 2019, the Company recorded total fee income of $1.1$1.8 million and $2.3$4.2 million, respectively, of which $0.1 million and $0.3$0.4 million, respectively, was recurring in nature. Recurring fee income primarily consisted of servicing fees and exit fees.

Note 5. Share Data and Net Assets
Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share, pursuant to ASC Topic 260-10, Earnings per Share, for the three and sixnine months ended March 31,June 30, 2020 and 2019:
(Share amounts in thousands)Three months ended
June 30, 2020		Three months ended
June 30, 2019		Nine months ended
June 30, 2020		Nine months
ended
June 30, 2019
Earnings (loss) per common share — basic and diluted:
Net increase (decrease) in net assets resulting from operations$120,231  $19,986  $(31,393) $112,189  
Weighted average common shares outstanding — basic and diluted140,961  140,961  140,961  140,961  
Earnings (loss) per common share — basic and diluted$0.85  $0.14  $(0.22) $0.80  
51
(Share amounts in thousands) Three months ended
March 31, 2020		 Three months ended
March 31, 2019		 Six months ended
March 31, 2020		 Six months
ended
March 31, 2019
Earnings (loss) per common share — basic and diluted:        
Net increase (decrease) in net assets resulting from operations $(165,467) $64,485
 $(151,624) $92,203
Weighted average common shares outstanding — basic and diluted 140,961
 140,961
 140,961
 140,961
Earnings (loss) per common share — basic and diluted $(1.17) $0.46
 $(1.08) $0.65
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Changes in Net Assets

The following table presents the changes in net assets for the three and sixnine months ended March 31,June 30, 2020:
Common Stock
SharesPar ValueAdditional paid-in-capitalAccumulated Overdistributed EarningsTotal Net Assets
Balance at September 30, 2019140,961  $1,409  $1,487,774  $(558,553) $930,630  
Net investment income—  —  —  7,836  7,836  
Net unrealized appreciation (depreciation)—  —  —  2,879  2,879  
Net realized gains (losses)—  —  —  3,288  3,288  
Provision for income tax (expense) benefit—  —  —  (160) (160) 
Distributions to stockholders—  —  —  (13,391) (13,391) 
Issuance of common stock under dividend reinvestment plan88  1  480  —  481  
Repurchases of common stock under dividend reinvestment plan(88) (1) (480) —  (481) 
Balance at December 31, 2019140,961  $1,409  $1,487,774  $(558,101) $931,082  
Net investment income—  $—  $—  $22,841  $22,841  
Net unrealized appreciation (depreciation)—  —  —  (163,533) (163,533) 
Net realized gains (losses)—  —  —  (26,480) (26,480) 
Provision for income tax (expense) benefit—  —  —  1,705  1,705  
Distributions to stockholders—  —  —  (13,391) (13,391) 
Issuance of common stock under dividend reinvestment plan158  2  504  —  506  
Repurchases of common stock under dividend reinvestment plan(158) (2) (504) —  (506) 
Balance at March 31, 2020140,961  $1,409  $1,487,774  $(736,959) $752,224  
Net investment income—  $—  $—  $16,770  $16,770  
Net unrealized appreciation (depreciation)—  —  —  100,572  100,572  
Net realized gains (losses)—  —  —  2,821  2,821  
Provision for income tax (expense) benefit—  —  —  68  68  
Distributions to stockholders—  —  —  (13,392) (13,392) 
Issuance of common stock under dividend reinvestment plan87  1  389  —  390  
Repurchases of common stock under dividend reinvestment plan(87) (1) (389) —  (390) 
Balance at June 30, 2020140,961  $1,409  $1,487,774  $(630,120) $859,063  
  Common Stock      
  Shares Par Value Additional paid-in-capital Accumulated Overdistributed Earnings Total Net Assets
Balance at September 30, 2019 140,961
 $1,409
 $1,487,774
 $(558,553) $930,630
Net investment income —
 —
 —
 7,836
 7,836
Net unrealized appreciation (depreciation) —
 —
 —
 2,879
 2,879
Net realized gains (losses) —
 —
 —
 3,288
 3,288
Provision for income tax (expense) benefit —
 —
 —
 (160) (160)
Distributions to stockholders —
 —
 —
 (13,391) (13,391)
Issuance of common stock under dividend reinvestment plan 88
 1
 480
 —
 481
Repurchases of common stock under dividend reinvestment plan (88) (1) (480) —
 (481)
Balance at December 31, 2019 140,961
 $1,409
 $1,487,774
 $(558,101) $931,082
Net investment income —
 $—
 $—
 $22,841
 $22,841
Net unrealized appreciation (depreciation) —
 —
 —
 (163,533) (163,533)
Net realized gains (losses) —
 —
 —
 (26,480) (26,480)
Provision for income tax (expense) benefit —
 —
 —
 1,705
 1,705
Distributions to stockholders —
 —
 —
 (13,391) (13,391)
Issuance of common stock under dividend reinvestment plan 158
 2
 504
 —
 506
Repurchases of common stock under dividend reinvestment plan (158) (2) (504) —
 (506)
Balance at March 31, 2020 140,961
 $1,409
 $1,487,774
 $(736,959) $752,224


The following table presents the changes in net assets for the three and six months ended March 31, 2019:
52
  Common Stock      
  Shares Par Value Additional paid-in-capital Accumulated Overdistributed Earnings Total Net Assets
Balance at September 30, 2018 140,961
 $1,409
 $1,492,739
 $(636,113) $858,035
Net investment income —
 —
 —
 17,317
 17,317
Net unrealized appreciation (depreciation) —
 —
 —
 (6,975) (6,975)
Net realized gains (losses) —
 —
 —
 17,962
 17,962
Provision for income tax (expense) benefit —
 —
 —
 (586) (586)
Distributions to stockholders —
 —
 —
 (13,391) (13,391)
Issuance of common stock under dividend reinvestment plan 87
 1
 383
 —
 384
Repurchases of common stock under dividend reinvestment plan (87) (1) (383) —
 (384)
Balance at December 31, 2018 140,961
 $1,409
 $1,492,739
 $(621,786) $872,362
Net investment income —
 $—
 $—
 $17,709
 $17,709
Net unrealized appreciation (depreciation) —
 —
 —
 21,472
 21,472
Net realized gains (losses) —
 —
 —
 25,213
 25,213
Provision for income tax (expense) benefit —
 —
 —
 91
 91
Distributions to stockholders —
 —
 —
 (13,391) (13,391)
Issuance of common stock under dividend reinvestment plan 60
 1
 311
 —
 312
Repurchases of common stock under dividend reinvestment plan (60) (1) (311) —
 (312)
Balance at March 31, 2019 140,961
 $1,409
 $1,492,739
 $(570,692) $923,456

OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




The following table presents the changes in net assets for the three and nine months ended June 30, 2019:
Common Stock
SharesPar ValueAdditional paid-in-capitalAccumulated Overdistributed EarningsTotal Net Assets
Balance at September 30, 2018140,961  $1,409  $1,492,739  $(636,113) $858,035  
Net investment income—  —  —  17,317  17,317  
Net unrealized appreciation (depreciation)—  —  —  (6,975) (6,975) 
Net realized gains (losses)—  —  —  17,962  17,962  
Provision for income tax (expense) benefit—  —  —  (586) (586) 
Distributions to stockholders—  —  —  (13,391) (13,391) 
Issuance of common stock under dividend reinvestment plan87  1  383  —  384  
Repurchases of common stock under dividend reinvestment plan(87) (1) (383) —  (384) 
Balance at December 31, 2018140,961  $1,409  $1,492,739  $(621,786) $872,362  
Net investment income—  $—  $—  $17,709  $17,709  
Net unrealized appreciation (depreciation)—  —  —  21,472  21,472  
Net realized gains (losses)—  —  —  25,213  25,213  
Provision for income tax (expense) benefit—  —  —  91  91  
Distributions to stockholders—  —  —  (13,391) (13,391) 
Issuance of common stock under dividend reinvestment plan60  1  311  —  312  
Repurchases of common stock under dividend reinvestment plan(60) (1) (311) —  (312) 
Balance at March 31, 2019140,961  $1,409  $1,492,739  $(570,692) $923,456  
Net investment income—  $—  $—  $16,608  $16,608  
Net unrealized appreciation (depreciation)—  —  —  23,395  23,395  
Net realized gains (losses)—  —  —  (19,844) (19,844) 
Provision for income taxes—  —  —  (173) (173) 
Distributions to stockholders—  —  —  (13,392) (13,392) 
Issuance of common stock under dividend reinvestment plan61  1  331  —  332  
Repurchases of common stock under dividend reinvestment program(61) (1) (331) —  (332) 
Balance at June 30, 2019140,961  $1,409  $1,492,739  $(564,098) $930,050  

Distributions
Distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend is determined by the Board of Directors and is based on management’s estimate of the Company’s annual taxable income. Net realized capital gains, if any, may be distributed to stockholders or retained for reinvestment.
The Company has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of any distributions the Company declares in cash on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, if the Company’s Board of Directors declares a cash distribution, then the Company’s stockholders who have not “opted out” of the Company’s DRIP will have their cash distribution automatically reinvested in additional shares of the Company’s common stock, rather than receiving the cash distribution. If the Company’s shares are trading at a premium to net asset value, the Company typically issues new shares to implement the DRIP with such shares issued at the greater of the most recently computed net asset value per share of common stock or 95% of the current market price per share of common stock on the payment date for such distribution. If the Company’s shares are trading at a discount to net asset value, the Company typically purchases shares in the open market in connection with the Company’s obligations under the DRIP.
For income tax purposes, the Company has reported its distributions for the 2019 calendar year as ordinary income. The character of such distributions was appropriately reported to the Internal Revenue Service and stockholders for the 2019 calendar year. To the extent the Company’s taxable earnings for a fiscal and taxable year fall below the amount of distributions paid for the fiscal and taxable year, a portion of the total amount of the Company’s distributions for the fiscal and taxable year is deemed a return of capital for tax purposes to the Company’s stockholders.
53
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




The following table reflects the distributions per share that the Company has paid, including shares issued under the DRIP, on its common stock during the sixnine months ended March 31,June 30, 2020 and 2019:
Date Declared Record Date Payment Date 
Amount
per Share
 
Cash
Distribution
 
DRIP Shares
Issued (1)
 
DRIP Shares
Value
Date DeclaredRecord DatePayment DateAmount
per Share		Cash
Distribution		DRIP Shares
Issued (1)		DRIP Shares
Value
November 12, 2019 December 13, 2019 December 31, 2019 $0.095
 $ 12.9 million 87,747
 $ 0.5 millionNovember 12, 2019December 13, 2019December 31, 2019$0.095  $ 12.9 million87,747  $ 0.5 million
January 31, 2020 March 13, 2020 March 31, 2020 0.095
 12.9 million 157,523
 0.5 millionJanuary 31, 2020March 13, 2020March 31, 20200.095  12.9 million157,523  0.5 million
Total for the six months ended March 31, 2020 $0.190
 $ 25.8 million 245,270
 $ 1.0 million
April 30, 2020April 30, 2020June 15, 2020June 30, 20200.095  13.0 million87,351  0.4 million
Total for the nine months ended June 30, 2020Total for the nine months ended June 30, 2020$0.285  $ 38.8 million332,621  $ 1.4 million
Date Declared Record Date Payment Date 
Amount
per Share
 
Cash
Distribution
 
DRIP Shares
Issued (1)
 
DRIP Shares
Value
Date DeclaredRecord DatePayment DateAmount
per Share		Cash
Distribution		DRIP Shares
Issued (1)		DRIP Shares
Value
November 19, 2018 December 17, 2018 December 28, 2018 $0.095
 $ 13.0 million 87,429
 $ 0.4 millionNovember 19, 2018December 17, 2018December 28, 2018$0.095  $ 13.0 million87,429  $ 0.4 million
February 1, 2019 March 15, 2019 March 29, 2019 0.095
 13.1 million 59,603
  0.3 millionFebruary 1, 2019March 15, 2019March 29, 20190.095  13.1 million59,603   0.3 million
Total for the six months ended March 31, 2019 $0.190
 $ 26.1 million 147,032
 $ 0.7 million
May 3, 2019May 3, 2019June 14, 2019June 28, 20190.095  13.1 million61,093  0.3 million
Total for the nine months ended June 30, 2019Total for the nine months ended June 30, 2019$0.285  $ 39.2 million208,125  $ 1.0 million
 __________
(1) Shares were purchased on the open market and distributed.

Common Stock Offering
There were no common stock offerings during the sixnine months ended March 31,June 30, 2020 and 2019.

Note 6. Borrowings
Credit Facility

On November 30, 2017, the Company entered into a senior secured revolving credit facility (as amended and restated, the “Credit Facility”) pursuant to a Senior Secured Revolving Credit Agreement with the lenders party thereto, ING Capital LLC, as administrative agent, ING Capital LLC, JPMorgan Chase Bank, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint lead arrangers and joint bookrunners, and JPMorgan Chase Bank, N.A. and Bank of America, N.A., as syndication agents. The Credit Facility provides that the Company may use the proceeds of the loans and issuances of letters of credit under the Credit Facility for general corporate purposes, including acquiring and funding leveraged loans, mezzanine loans, high-yield securities, convertible securities, preferred stock, common stock and other investments. The Credit Facility further allows the Company to request letters of credit from ING Capital LLC, as the issuing bank.

OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





As of March 31,June 30, 2020, and September 30, 2019, (i) the size of the Credit Facility was $700 million (with an “accordion” feature that permits the Company, under certain circumstances, to increase the size of the facility to up to $1.02 billion)the greater of $800 million and the Company’s net worth (as defined in the Credit Facility) on the date of such increase), (ii) the period during which the Company may make drawings will expire on February 25, 2023 and the maturity date is February 25, 2024 and (iii) the interest rate margin for (a) LIBOR loans (which may be 1-, 2-, 3- or 6-month, at the Company’s option) was 2.00% (which can be increased up to 2.25%) and (b) alternate base rate loans was 1.00% (which can be increased up to 1.25%),; provided that the interest margin will increase to 2.75% and 1.75% for LIBOR loans and alternative base rate loans, respectively, if the Company’s stockholders’ equity is below $700 million, each depending on the Company’s senior debt coverage ratio.

On December 13, 2019, the Company amended the Credit Facility to (1) reduce the required ratio of total assets (less total liabilities) to total indebtedness of the Company and its subsidiaries (subject to certain exceptions), from 1.65 to 1.00 to 1.50 to 1.00 and (2) modify the definition of Advance Rate to reference asset coverage of 1.50 to 1.00, rather than 1.65 to 1.00.

The Credit Facility is secured by substantially all of the Company’s assets (excluding, among other things, investments held in and by certain subsidiaries of the Company or investments in certain portfolio companies of the Company) and guaranteed by certain subsidiaries of the Company. As of March 31,June 30, 2020, except for assets that were held by the Excluded Subsidiaries and certain other immaterial subsidiaries, substantially all of the Company's assets are pledged as collateral under the Credit Facility.

The Credit Facility requires the Company to, among other things, (i) make representations and warranties regarding the collateral as well as each of the Company’s portfolio companies’ businesses, (ii) agree to certain indemnification obligations, and (iii) comply with various affirmative and negative covenants, reporting requirements and other customary requirements for similar revolving credit facilities, including covenants related to: (A) limitations on the incurrence of additional indebtedness and liens, (B) limitations on certain investments, (C) limitations on certain asset transfers and restricted payments, (D) maintaining a certain minimum stockholders’ equity, (E) maintaining a ratio of total assets (less total liabilities) to total indebtedness, of the Company and its subsidiaries (subject to certain exceptions), of not less than 1.50 to 1.00, (F) maintaining a ratio of consolidated EBITDA to consolidated interest expense, of the Company and its subsidiaries (subject to certain
54
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




exceptions), of not less than 2.25 to 1.00, (G) maintaining a minimum liquidity and net worth, and (H) limitations on the creation or existence of agreements that prohibit liens on certain properties of the Company and certain of its subsidiaries. The Credit Facility also includes usual and customary default provisions such as the failure to make timely payments under the facility, the occurrence of a change in control, and the failure by the Company to materially perform under the agreements governing the facility, which, if not complied with, could accelerate repayment under the facility. As of March 31,June 30, 2020, the Company was in compliance with all financial covenants under the Credit Facility. In addition to the asset coverage ratio described above, borrowings under the Credit Facility (and the incurrence of certain other permitted debt) are subject to compliance with a borrowing base that will apply different advance rates to different types of assets in the Company’s portfolio. Each loan or letter of credit originated or assumed under the Credit Facility is subject to the satisfaction of certain conditions.

As of March 31,June 30, 2020 and September 30, 2019, the Company had $404.8$466.8 million and $314.8 million of borrowings outstanding under the Credit Facility, respectively, which had a fair value of $404.8$466.8 million and $314.8 million, respectively. The Company's borrowings under the Credit Facility bore interest at a weighted average interest rate of 3.806%3.325% and 4.688%4.615% for the sixnine months ended March 31,June 30, 2020 and 2019, respectively. For the three and sixnine months ended March 31,June 30, 2020, the Company recorded interest expense (inclusive of fees) of $4.2$3.5 million and $8.2$11.7 million, respectively, related to the Credit Facility. For the three and sixnine months ended March 31,June 30, 2019, the Company recorded interest expense (inclusive of fees) of $4.3$5.1 million and $7.5$12.7 million in the aggregate, related to the Credit Facility.

2025 Notes
On February 25, 2020, the Company issued $300.0 million in aggregate principal amount of the 2025 Notes for net proceeds of $293.8 million after deducting OID of $2.5 million, underwriting commissions and discounts of $3.0 million and offering costs of $0.7 million. The OID on the 2025 Notes is amortized based on the effective interest method over the term of the 2025 Notes.
The 2025 Notes were issued pursuant to an indenture, dated April 30, 2012, as supplemented by the fifth supplemental indenture, dated February 25, 2020 (collectively, the "2025 Notes Indenture"), between the Company and Deutsche Bank Trust Company Americas (the "Trustee"). The 2025 Notes are the Company's general unsecured obligations that rank senior in right of payment to all of the Company's existing and future indebtedness that is expressly subordinated in right of payment to the 2025 Notes. The 2025 Notes rank equally in right of payment with all of the Company's existing and future liabilities that are not so subordinated. The 2025 Notes effectively rank junior to any of the Company's secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness. The 2025 Notes rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company's subsidiaries, financing vehicles or similar facilities. 
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Interest on the 2025 Notes is paid semi-annually on February 25 and August 25 at a rate of 3.500% per annum. The 2025 Notes mature on February 25, 2025 and may be redeemed in whole or in part at any time or from time to time at the Company's option prior to maturity at par plus a “make-whole” premium, if applicable.
The 2025 Notes Indenture contains certain covenants, including covenants requiring the Company's compliance with the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment Company Act or any successor provisions (but giving effect to any exemptive relief granted to the Company by the U.S. Securities and Exchange Commission ("SEC")), as well as covenants requiring the Company to provide financial information to the holders of the 2025 Notes and the Trustee if the Company ceases to be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended. These covenants are subject to limitations and exceptions that are described in the 2025 Notes Indenture. The Company may repurchase the 2025 Notes in accordance with the Investment Company Act and the rules promulgated thereunder. In addition, holders of the 2025 Notes can require the Company to repurchase the 2025 Notes at 100% of their principal amount upon the occurrence of certain change of control events as described in the 2025 Notes Indenture. The 2025 Notes were issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. During the three months ended March 31,From issuance through June 30, 2020, the Company did not repurchase any of the 2025 Notes in the open market.
For each of the three and sixnine months ended March 31,June 30, 2020, the Company recorded interest expense (inclusive of fees) of $1.1$2.9 million and $4.0 million, respectively, related to the 2025 Notes.
As of March 31,June 30, 2020, there were $300.0 million of 2025 Notes outstanding, which had a carrying value and fair value of $293.9$294.2 million and $274.5$293.3 million, respectively. The carrying value represents the aggregate principal amount outstanding less unamortized deferred financing costs and the unaccreted discount recorded upon the issuance of the 2025 Notes. As March 31,of June 30, 2020, the total unamortized deferred financing costs and the net unaccreted discount were $3.6$3.5 million and $2.5$2.4 million, respectively.
55
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




2019 Notes
On February 26, 2014, the Company issued $250.0 million in aggregate principal amount of its 4.875% unsecured notes due 2019 (the "2019 Notes") for net proceeds of $244.4 million after deducting OID of $1.4 million, underwriting commissions and discounts of $3.7 million and offering costs of $0.5 million.  The OID on the 2019 Notes was amortized based on the effective interest method over the term of the notes. The 2019 Notes were issued pursuant to an indenture, dated April 30, 2012, as supplemented by the third supplemental indenture, dated February 26, 2014, between the Company and the Trustee.
Interest on the 2019 Notes was paid semi-annually on March 1 and September 1 at a rate of 4.875% per annum. As of March 31,June 30, 2020 and September 30, 2019, there were no 2019 Notes outstanding. The 2019 Notes matured on March 1, 2019 and were fully repaid during the three months ended March 31, 2019. For the three and sixnine months ended March 31,June 30, 2019, the Company recorded interest expense of $2.1 million and $5.1 million (inclusive of fees), respectively, related to the 2019 Notes.
2024 Notes
On October 18, 2012, the Company issued $75.0 million in aggregate principal amount of its 5.875% unsecured 2024 Notes for net proceeds of $72.5 million after deducting underwriting commissions of $2.2 million and offering costs of $0.3 million. The 2024 Notes were issued pursuant to an indenture, dated April 30, 2012, as supplemented by the first supplemental indenture, dated October 18, 2012, between the Company and the Trustee.
Interest on the 2024 Notes was paid quarterly in arrears on January 30, April 30, July 30 and October 30 at a rate of 5.875% per annum. On March 2, 2020, the Company redeemed 100%, or $75.0 million aggregate principal amount, of the issued and outstanding 2024 Notes, following which they were delisted from the New York Stock Exchange. The redemption price per 2024 Note was $25 plus accrued and unpaid interest. The Company recognized a loss of $1.0 million in connection with the redemption of the 2024 Notes during each of the three and sixnine months ended March 31,June 30, 2020.
For the three and sixnine months ended March 31,June 30, 2020, the Company recorded interest expense of $0.8 million and $1.9 million (inclusive of fees), respectively, related to the 2024 Notes. For the three and sixnine months ended March 31,June 30, 2019, the Company recorded interest expense of $1.2 million and $2.3$3.5 million (inclusive of fees), respectively, related to the 2024 Notes.
As of March 31,June 30, 2020, there were no 2024 Notes outstanding. As of September 30, 2019, there were $75.0 million of 2024 Notes outstanding, which had a carrying value and fair value of $73.9 million and $77.4 million, respectively.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





2028 Notes
In April and May 2013, the Company issued $86.3 million in aggregate principal amount of its 6.125% unsecured 2028 Notes for net proceeds of $83.4 million after deducting underwriting commissions of $2.6 million and offering costs of $0.3 million. The 2028 Notes were issued pursuant to an indenture, dated April 30, 2012, as supplemented by the second supplemental indenture, dated April 4, 2013, between the Company and the Trustee.
Interest on the 2028 Notes was paid quarterly in arrears on January 30, April 30, July 30 and October 30 at a rate of 6.125% per annum. On March 13, 2020, the Company redeemed 100%, or $86.3 million aggregate principal amount, of the issued and outstanding 2028 Notes, following which they were delisted from the Nasdaq Global Select Market. The redemption price per 2028 Note was $25 plus accrued and unpaid interest. The Company recognized a loss of $1.5 million in connection with the redemption of the 2028 Notes during each of the three and sixnine months ended March 31,June 30, 2020.
For the three and sixnine months ended March 31,June 30, 2020, the Company recorded interest expense of $1.1 million and $2.5 million (inclusive of fees), respectively, related to the 2028 Notes. For the three and sixnine months ended March 31,June 30, 2019, the Company recorded interest expense of $1.4 million and $2.7$4.1 million (inclusive of fees), respectively, related to the 2028 Notes.
As of March 31,June 30, 2020, there were no 2028 Notes outstanding. As of September 30, 2019, there were $86.3 million of 2028 Notes outstanding, which had a carrying value and fair value of $84.6 million and $87.6 million, respectively.


56
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




Note 7. Interest and Dividend Income
 
As of each of March 31,June 30, 2020 and September 30, 2019, there were three investments on which the Company had stopped accruing cash and/or PIK interest or OID income. The percentages of the Company's debt investments at cost and fair value by accrual status as of March 31,June 30, 2020 and September 30, 2019 were as follows: 
 March 31, 2020 September 30, 2019 June 30, 2020September 30, 2019
 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost% of Debt
Portfolio		Fair
Value		% of Debt
Portfolio		Cost% of Debt
Portfolio		Fair
Value		% of Debt
Portfolio
Accrual $1,443,128
 98.22% $1,306,989
 99.55% $1,311,849
 95.72% $1,305,718
 99.79%Accrual$1,517,762  98.72 %$1,469,325  99.83 %$1,311,849  95.72 %$1,305,718  99.79 %
PIK non-accrual (1) 12,661
 0.86
 —
 —
 12,661
 0.92
 —
 —
PIK non-accrual (1)12,661  0.82  —  —  12,661  0.92  —  —  
Cash non-accrual (2) 13,572
 0.92
 5,864
 0.45
 46,107
 3.36
 2,706
 0.21
Cash non-accrual (2)7,108  0.46  2,497  0.17  46,107  3.36  2,706  0.21  
Total $1,469,361
 100.00% $1,312,853
 100.00% $1,370,617
 100.00% $1,308,424
 100.00%Total$1,537,531  100.00 %$1,471,822  100.00 %$1,370,617  100.00 %$1,308,424  100.00 %
 ___________________
(1)PIK non-accrual status is inclusive of other non-cash income, where applicable.
(2)Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.

(1)PIK non-accrual status is inclusive of other non-cash income, where applicable.
(2)Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.

 Note 8. Taxable/Distributable Income and Dividend Distributions
Taxable income differs from net increase (decrease) in net assets resulting from operations primarily due to: (1) unrealized appreciation (depreciation) on investments, secured borrowings and foreign currency, as gains and losses are not included in taxable income until they are realized; (2) origination and exit fees received in connection with investments in portfolio companies; (3) organizational costs; (4) income or loss recognition on exited investments; (5) recognition of interest income on certain loans; and (6) investments in controlled foreign corporations.
As of September 30, 2019, the Company had net capital loss carryforwards of $515.8 million to offset net capital gains that will not expire, to the extent available and permitted by U.S. federal income tax law, of which $109.2 million are available to offset future short-term capital gains and $406.6 million are available to offset future long-term capital gains.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Listed below is a reconciliation of "net increase (decrease) in net assets resulting from operations" to taxable income for the three and sixnine months ended March 31,June 30, 2020 and 2019.
 Three months ended
March 31, 2020		 Three months
ended
March 31, 2019		 Six months ended
March 31, 2020		 Six months
ended
March 31, 2019		Three months ended
June 30, 2020		Three months ended
June 30, 2019		Nine months ended
June 30, 2020		Nine months ended
June 30, 2019
Net increase (decrease) in net assets resulting from operations $(165,467) $64,485
 $(151,624) $92,203
Net increase (decrease) in net assets resulting from operations$120,231  $19,986  $(31,393) $112,189  
Net unrealized (appreciation) depreciation 163,533
 (21,472) 160,654
 (14,497)Net unrealized (appreciation) depreciation(100,572) (23,395) 60,082  (37,892) 
Book/tax difference due to organizational costs (21) (11) (43) (21)Book/tax difference due to organizational costs(22) (10) (65) (31) 
Book/tax difference due to interest income on certain loans —
 —
 —
 878
Book/tax difference due to interest income on certain loans—  2,219  —  3,097  
Book/tax difference due to capital losses not recognized / (recognized) 23,958
 (26,738) 19,981
 (44,440)Book/tax difference due to capital losses not recognized / (recognized)(3,465) 15,111  16,516  (29,329) 
Other book/tax differences (8,002) (296) (2,858) 290
Other book/tax differences(1,269) (2,741) (4,127) (2,451) 
Taxable/Distributable Income (1) $14,001
 $15,968
 $26,110
 $34,413
Taxable/Distributable Income (1)$14,903  $11,170  $41,013  $45,583  
 __________
(1) The Company's taxable income for the three and sixnine months ended March 31,June 30, 2020 is an estimate and will not be finally determined until the Company files its tax return for the fiscal year ending September 30, 2020. Therefore, the final taxable income may be different than the estimate.
The Company uses the liability method to account for its taxable subsidiaries' income taxes. Using this method, the Company recognizes deferred tax assets and liabilities for the estimated future tax effects attributable to temporary differences between financial reporting and tax bases of assets and liabilities. In addition, the Company recognizes deferred tax benefits associated with net loss carry forwards that it may use to offset future tax obligations. The Company measures deferred tax assets and liabilities using the enacted tax rates expected to apply to taxable income in the years in which it expects to recover or settle those temporary differences.
When assessing the realizability of deferred tax assets, the Company considers whether it is probable that some or all of the deferred tax assets will not be realized. In determining whether the deferred tax assets are realizable, the Company considers the period of expiration of the tax asset, historical and projected taxable income, and tax liabilities for the tax jurisdiction in which the tax asset is located. The deferred tax asset recognized by the Company, as it relates to the higher tax basis in the
57
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




carrying value of certain assets compared to the book basis of those assets, will be recognized in future years by these taxable entities. Deferred tax assets are based on the amount of the tax benefit that the Company’s management has determined is more likely than not to be realized in future periods. In determining the realizability of this tax benefit, management considered numerous factors that will give rise to pre-tax income in future periods. Among these are the historical and expected future book and tax basis pre-tax income of the Company and unrealized gains in the Company’s assets at the determination date. Based on these and other factors, the Company determined that, as of March 31,June 30, 2020, $3.0$3.7 million of $3.8$4.5 million net deferred tax assets would not more likely than not be realized in future periods. As of March 31,June 30, 2020, the Company recorded a deferred tax asset of $0.8 million on the Consolidated Statements of Assets and Liabilities.
For the three months ended March 31,June 30, 2020, the Company recognized a total provision for income tax benefit of $1.7$0.1 million, which was comprised of (i) a current income tax expensebenefit of approximately $0.1$0.2 million primarily as a result of penalties and interest incurred,return to provision adjustments, and (ii) a deferred income tax benefitexpense of approximately $1.8$0.1 million, which resulted from unrealized depreciationappreciation on investments held by the Company’s wholly-owned taxable subsidiaries.
For the sixnine months ended March 31,June 30, 2020, the Company recognized a total provision for income tax benefit of $1.5$1.6 million, which was comprised of (i) a current income tax benefit of approximately $0.1 million primarily as a result of return to provision adjustments and a reversal of penalties and interest previously incurred, partially offset by current tax expense incurred from realized gains on investments held at the Company's wholly-owned taxable subsidiaries and (ii) a deferred income tax benefit of approximately $1.5 million, which resulted from unrealized depreciation on investments held by the Company’s wholly-owned taxable subsidiaries.
As of September 30, 2019, the Company's last tax year end, the components of accumulated overdistributed earnings on a tax basis were as follows:
Undistributed ordinary income, net$10,699
Net realized capital losses(515,800)
Unrealized losses, net(53,451)
Undistributed ordinary income, net$10,699 
Net realized capital losses(515,800)
Unrealized losses, net(53,451)
The aggregate cost of investments for income tax purposes was $1.5 billion as of September 30, 2019. As of September 30, 2019, the aggregate gross unrealized appreciation for all investments in which there was an excess of value over cost for income tax purposes was $202.2 million. As of September 30, 2019, the aggregate gross unrealized depreciation for all investments in which there was an
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





excess of cost for income tax purposes over value was $255.6 million. Net unrealized depreciation based on the aggregate cost of investments for income tax purposes was $53.4 million.
Note 9. Realized Gains or Losses and Net Unrealized Appreciation or Depreciation
Realized Gains or Losses
Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption and the cost basis of the investment without regard to unrealized appreciation or depreciation previously recognized, and include investments written-off during the period, net of recoveries. Realized losses may also be recorded in connection with the Company's determination that certain investments are considered worthless securities and/or meet the conditions for loss recognition per the applicable tax rules.
During the three months ended March 31,June 30, 2020, the Company recorded net realized losses of $26.5 million, which consisted of the following:
($ in millions) 
Portfolio CompanyNet Realized Gain (Loss)
 Cenegenics, LLC$(29.2)
 Dominion Diagnostics, LLC(15.6)
 YETI Holdings, Inc.14.2
 Lytx Holdings, LLC5.2
 Other, net(1.1)
Total, net$(26.5)
During the three months ended March 31, 2019, the Company recorded net realized gains of $25.2$2.8 million, which consisted of the following:
($ in millions) 
Portfolio CompanyNet Realized Gain (Loss)
 Maverick Healthcare Group, LLC$17.5
 Comprehensive Pharmacy Services LLC7.5
 Other, net0.2
Total, net$25.2

During the six months ended March 31, 2020, the Company recorded net realized losses of $23.2 million, which consisted of the following:
($ in millions)
Portfolio CompanyNet Realized Gain (Loss)
HealthEdge Software, Inc.$1.7 
Sorrento Therapeutics, Inc.1.4 
Covia Holdings Corporation(3.3)
Other, net3.0 
Total, net$2.8 
58
($ in millions) 
Portfolio CompanyNet Realized Gain (Loss)
 Cenegenics, LLC$(29.2)
 Dominion Diagnostics, LLC(15.6)
 YETI Holdings, Inc.17.6
 Lytx Holdings, LLC5.2
 Other, net(1.2)
Total, net$(23.2)





OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





During the sixthree months ended March 31,June 30, 2019, the Company recorded net realized losses of $19.8 million, which consisted of the following:
($ in millions)
Portfolio CompanyNet Realized Gain (Loss)
Advanced Pain Management$(22.5)
Weatherford International(3.3)
YETI Holdings, Inc.2.6 
Other, net3.4 
Total, net$(19.8)

During the nine months ended June 30, 2020, the Company recorded net realized losses of $20.4 million, which consisted of the following:
($ in millions)
Portfolio CompanyNet Realized Gain (Loss)
Cenegenics, LLC$(29.2)
Dominion Diagnostics, LLC(15.6)
Covia Holdings Corporation(3.3)
YETI Holdings, Inc.17.6 
Lytx Holdings, LLC5.2 
HealthEdge Software, Inc.1.7 
Sorrento Therapeutics, Inc.1.4 
Other, net1.8 
Total, net$(20.4)
During the nine months ended June 30, 2019, the Company recorded net realized gains of $43.2$23.3 million, which consisted of the following:
($ in millions)
Portfolio CompanyNet Realized Gain (Loss)
 Maverick Healthcare Group, LLC$17.5 
 BeyondTrust Holdings LLC12.4 
 Comprehensive Pharmacy Services LLC7.5 
 InMotion Entertainment Group, LLC3.0 
 YETI Holdings, Inc.5.3 
 Advanced Pain Management(22.5)
 Weatherford International(3.3)
 Other, net3.4 
Total, net$23.3 
($ in millions) 
Portfolio CompanyNet Realized Gain (Loss)
 Maverick Healthcare Group, LLC$17.5
 BeyondTrust Holdings LLC12.4
 Comprehensive Pharmacy Services LLC7.5
 InMotion Entertainment Group, LLC2.7
 YETI Holdings, Inc.2.7
 Other, net0.4
Total, net$43.2

Net Unrealized Appreciation or Depreciation
Net unrealized appreciation or depreciation reflects the net change in the valuation of the portfolio pursuant to the Company's valuation guidelines and the reclassification of any prior period unrealized appreciation or depreciation.
During the three months ended March 31,June 30, 2020 and 2019, the Company recorded net unrealized appreciation of $100.6 million and $23.4 million, respectively. For the three months ended June 30, 2020, this consisted of $85.2 million of net unrealized appreciation on debt investments, $11.8 million of net unrealized appreciation on equity investments and $3.9 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses), partially offset by $0.4 million of net unrealized depreciation of foreign currency forward contracts. For the three months ended June 30, 2019, this consisted of $23.8 million of net unrealized appreciation related to exited investments (a portion of which results in a reclassification to realized losses) and $2.5 million of net unrealized appreciation on debt
59
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




investments, partially offset by $2.1 million of net unrealized depreciation on equity investments and$0.8 million of net unrealized depreciation of foreign currency forward contracts.
During the nine months ended June 30, 2020 and 2019, the Company recorded net unrealized appreciation (depreciation) of $(163.5)$(60.1) million and $21.5$37.9 million, respectively. For the threenine months ended March 31,June 30, 2020, this consisted of $(139.8)$42.5 million of net unrealized depreciation on debt investments and $(54.4)$39.3 million of net unrealized depreciation on equity investments, partially offset by $28.4$21.3 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses) and $2.2$0.4 million of net unrealized appreciation of foreign currency forward contracts. For the threenine months ended March 31,June 30, 2019, this consisted of $22.3 million of net unrealized appreciation on equity investments, $3.6 million of net unrealized appreciation on debt investments and $0.8 million of net unrealized appreciation of foreign currency forward contracts, partially offset by $(5.2) million of net unrealized depreciation related to exited investments (a portion of which results in a reclassification to realized gains).
During the six months ended March 31, 2020 and 2019, the Company recorded net unrealized appreciation (depreciation) of $(160.7) million and $14.5 million, respectively. For the six months ended March 31, 2020, this consisted of $(134.0) million of net unrealized depreciation on debt investments and $(50.0) million of net unrealized depreciation on equity investments, partially offset by $22.5 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses) and $0.8 million of net unrealized appreciation of foreign currency forward contracts. For the six months ended March 31, 2019, this consisted of $24.2$44.3 million of net unrealized appreciation related to exited investments (a portion of which results in a reclassification to realized losses), $14.0 and $11.8 million of net unrealized appreciation on equity investments, and $0.4 million of net unrealized appreciation of foreign currency forward contracts, partially offset by $(24.1)$17.8 million of net unrealized depreciation on debt investments.investments and $0.4 million of net unrealized depreciation of foreign currency forward contracts.
Note 10. Concentration of Credit Risks
The Company deposits its cash with financial institutions and at times such balances may be in excess of the FDIC insurance limit. The Company limits its exposure to credit loss by depositing its cash with high credit quality financial institutions and monitoring their financial stability.
Note 11. Related Party Transactions

As of March 31,June 30, 2020 and September 30, 2019, the Company had a liability on its Consolidated Statements of Assets and Liabilities in the amount of $8.7$13.0 million and $10.2 million, respectively, reflecting the unpaid portion of the base management fees and incentive fees payable to Oaktree. Oaktree and OCM. OCM has voluntarily deferred the payment of Part I incentive fees earned during the three months ended March 31, 2020. The Company expects to settle this payment in the fourth fiscal quarter of 2020.
Investment Advisory Agreement
The Company is party to the Investment Advisory Agreement. Under the Investment Advisory Agreement, the Company pays Oaktree a fee for its services under the Investment Advisory Agreement consisting of two components: a base management fee and an incentive fee. The cost of both the base management fee payable to Oaktree and any incentive fees earned by Oaktree is ultimately borne by common stockholders of the Company.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except shareFrom October 17, 2017 through May 3, 2020, the Company was externally managed by OCM pursuant to an investment advisory agreement. On May 4, 2020, OCM effected the novation of such investment advisory agreement to Oaktree. Immediately following such novation, the Company and per share amounts, percentagesOaktree entered into a new investment advisory agreement with the same terms, including fee structure, as the investment advisory agreement with OCM. The term “Investment Advisory Agreement” refers collectively to the agreements with Oaktree and, as otherwise indicated)





prior to its novation, with OCM. Prior to October 17, 2017, the Company was externally managed by Fifth Street Management LLC (the "Former Adviser”), an indirect, partially-owned subsidiary of Fifth Street Asset Management Inc., pursuant to an investment advisory agreement between the Company and the Former Adviser (the "Former Investment Advisory Agreement"), which was terminated on October 17, 2017.
Unless earlier terminated as described below, the Investment Advisory Agreement will remain in effect until September 30, 2021 and thereafter from year-to-year if approved annually by the Board of Directors of the Company or by the affirmative vote of the holders of a majority of the Company’s outstanding voting securities, including, in either case, approval by a majority of the directors of the Company who are not interested persons. The Investment Advisory Agreement will automatically terminate in the event of its assignment. The Investment Advisory Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other. The Investment Advisory Agreement may also be terminated, without penalty, upon the vote of a majority of the outstanding voting securities of the Company.
Base Management Fee

Under the Investment Advisory Agreement, the base management fee is calculated at an annual rate of 1.50% of total gross assets, including any investment made with borrowings, but excluding cash and cash equivalents. The base management fee is payable quarterly in arrears and the fee for any partial month or quarter is appropriately prorated. Effective May 3, 2019, the base management fee on the Company’s gross assets, including any investments made with borrowings, but excluding any cash and cash equivalents, that exceed the product of (A) 200% and (B) the Company’s net asset value will be 1.00%. For the avoidance of doubt, the 200% will be calculated in accordance with the Investment Company Act and will give effect to
60
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




exemptive relief the Company received from the SEC with respect to debentures issued by a small business investment company subsidiary.
For the three and sixnine months ended March 31,June 30, 2020, the base management fee incurred under the Investment Advisory Agreement was $5.3$6.0 million and $10.9$16.9 million, respectively. For the three and sixnine months ended March 31,June 30, 2019, the base management fee (net of waivers) incurred under the Investment Advisory Agreement was $5.7$5.5 million and $11.2$16.7 million, respectively.
Incentive Fee

The incentive fee consists of two parts. Under the Investment Advisory Agreement, the first part of the incentive fee (the “incentive fee on income” or "Part I incentive fee") is calculated and payable quarterly in arrears based upon the “pre-incentive fee net investment income” of the Company for the immediately preceding quarter. The payment of the incentive fee on income is subject to payment of a preferred return to investors each quarter (i.e., a “hurdle rate”), expressed as a rate of return on the value of the Company’s net assets at the end of the most recently completed quarter, of 1.50%, subject to a “catch up” feature.
For this purpose, “pre-incentive fee net investment income” means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies, other than fees for providing managerial assistance) accrued during the fiscal quarter, minus the Company’s operating expenses for the quarter (including the base management fee, expenses payable under the Administration Agreement and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as OID debt, instruments with PIK interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

Under the Investment Advisory Agreement, the calculation of the incentive fee on income for each quarter is as follows:

•No incentive fee is payable to Oaktree in any quarter in which the Company’s pre-incentive fee net investment income does not exceed the preferred return rate of 1.50% (the “preferred return”) on net assets;
•100% of the Company’s pre-incentive fee net investment income, if any, that exceeds the preferred return but is less than or equal to 1.8182% in any fiscal quarter is payable to Oaktree. This portion of the incentive fee on income is referred to as the “catch-up” provision, and it is intended to provide Oaktree with an incentive fee of 17.5% on all of the Company’s pre-incentive fee net investment income when the Company’s pre-incentive fee net investment income exceeds 1.8182% on net assets in any fiscal quarter; and
•For any quarter in which the Company’s pre-incentive fee net investment income exceeds 1.8182% on net assets, the incentive fee on income is equal to 17.5% of the amount of the Company’s pre-incentive fee net investment income, as the preferred return and catch-up will have been achieved.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)






There is no accumulation of amounts on the hurdle rate from quarter to quarter and accordingly there is no clawback of amounts previously paid if subsequent quarters are below the quarterly hurdle.

For the three and sixnine months ended March 31,June 30, 2020, the first part of the incentive fee (incentive fee on income) incurred under the Investment Advisory Agreement was $3.4$3.6 million and $6.4$10.0 million, respectively. For the three and sixnine months ended March 31,June 30, 2019, the first part of the incentive fee (incentive fee on income) incurred under the Investment Advisory Agreement was $3.8 million and $7.5$11.3 million (prior to waivers), respectively. Oaktree hasOCM voluntarily deferred the payment of Part I incentive fees earned during the three months ended March 31, 2020. The Company expects to settle this payment in the fourth fiscal quarter of 2020.

Under the Investment Advisory Agreement, the second part of the incentive fee (the "capital gains incentive fee") is determined and payable in arrears as of the end of each fiscal year (or upon termination of the Investment Advisory Agreement, as of the termination date) commencing with the fiscal year ended September 30, 2019 and equals 17.5% of the Company’s realized capital gains, if any, on a cumulative basis from the beginning of the fiscal year ended September 30, 2019 through the end of each subsequent fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees under the Investment Advisory Agreement. Any realized capital gains, realized capital losses, unrealized capital appreciation and unrealized capital depreciation with respect to the Company’s portfolio as of the end of the fiscal year ended September 30, 2018 are excluded
61
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




from the calculations of the second part of the incentive fee. For the year ended September 30, 2019, the Company incurred $4.6 million of capital gains incentive fees under the Investment Advisory Agreement (prior to waivers).

GAAP requires that the capital gains incentive fee accrual consider the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized on a theoretical "liquidation basis." A fee so calculated and accrued would not be payable under applicable law and may never be paid based upon the computation of capital gains incentive fees in subsequent periods. Amounts ultimately paid under the Investment Advisory Agreement will be consistent with the formula reflected in the Investment Advisory Agreement. This GAAP accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital depreciation included in the calculation of the capital gains incentive fee plus the aggregate cumulative unrealized capital appreciation. Any realized capital gains and losses and cumulative unrealized capital appreciation and depreciation with respect to the Company’s portfolio as of the end of the fiscal year ended September 30, 2018 are excluded from the GAAP accrual. If such amount is positive at the end of a period, then GAAP requires the Company to record a capital gains incentive fee equal to 17.5% of such cumulative amount, less the aggregate amount of actual capital gains incentive fees payable or capital gains incentive fees accrued under GAAP in all prior periods. The resulting accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. There can be no assurance that such unrealized capital appreciation will be realized in the future or any accrued capital gains incentive fee will become payable under the Investment Advisory Agreement. For the three and sixnine months ended March 31,June 30, 2020, the Company reversed $6.6$0.0 million and $5.6 million of previously accrued capital gains incentive fees, respectively. For the three and sixnine months ended March 31,June 30, 2019, the Company recorded a $8.2$0.6 million and $10.0$10.6 million capital gains incentive fee accrual (prior to waivers), respectively. The Company did not have any cumulative accrued capital gains incentive fees payable as of March 31,June 30, 2020.

To ensure compliance with Section 15(f) of the Investment Company Act, OaktreeOCM entered into a two-year contractual fee waiver with the Company, which ended on October 17, 2019, pursuant to which OaktreeOCM waived any management or incentive fees payable under the Investment Advisory Agreement that exceeded what would have been paid to the Former Adviser in the aggregate under the Former Investment Advisory Agreement. The contractual amount of fees permanently waived at the end of the two-year period was $3.9 million. Prior to the end of the two-year period, amounts potentially subject to waiver under the two-year contractual fee waiver were accrued quarterly based on a theoretical “liquidation basis.” As of September 30, 2019, the Company had accrued cumulative fee waivers of $9.1 million. During the three months ended December 31, 2019, the Company reversed $5.2 million of
previously accrued fee waivers since the two-year fee waiver period has ended.

OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





The following table provides a roll-forward of the accrued waiver balance and illustrates the impact of the end of the two-year contractual fee waiver period:
($ in millions) 
Accrued fee waivers as of September 30, 2019 (1)$9.1
Reversal of previously accrued fee waivers (2)(5.2)
Contractual fees waived under the Investment Advisory Agreement (3)(3.9)
Accrued fee waivers as of March 31, 2020$—
(1)($ in millions)Calculated in accordance with GAAP
Accrued fee waivers as of September 30, 2019 and is based on a hypothetical liquidation basis.
(1)$9.1 
(2)Reflects the reversalReversal of previously accrued fee waivers that were previously accrued based on a hypothetical liquidation basis when the two-year contractual fee waiver was in effect. This reversal was recognized in connection with the expiration of the two-year contractual fee waiver, which ended on October 17, 2019, and is reflected in reversal of(2)(5.2)
Contractual fees waived inunder the Consolidated Statement of Operations for the six months ended March 31, 2020.
Investment Advisory Agreement (3)(3.9)
(3)Accrued fee waivers as of June 30, 2020Reflects the amount of fees permanently waived pursuant to the two-year contractual fee waiver.$— 
(1)Calculated in accordance with GAAP as of September 30, 2019 and is based on a hypothetical liquidation basis.
(2)Reflects the reversal of fee waivers that were previously accrued based on a hypothetical liquidation basis when the two-year contractual fee waiver was in effect. This reversal was recognized in connection with the expiration of the two-year contractual fee waiver, which ended on October 17, 2019, and is reflected in reversal of fees waived in the Consolidated Statement of Operations for the nine months ended June 30, 2020.
(3)Reflects the amount of fees permanently waived pursuant to the two-year contractual fee waiver.

As of September 30, 2019, the capital gains incentive fee payable under the Investment Advisory Agreement (net of waivers) was $0.8 million as shown below:
($ in millions) September 30, 2019 (1)
Capital gains incentive fee payable under the Investment Advisory Agreement (prior to waivers)$4.6
Contractual fees waived(3.9)
Capital gains incentive fee payable under the Investment Advisory Agreement (net of waivers)$0.8
($ in millions) September 30, 2019 (1)
Amounts may not sum dueCapital gains incentive fee payable under the Investment Advisory Agreement (prior to rounding.waivers)$4.6 
Contractual fees waived(3.9)
Capital gains incentive fee payable under the Investment Advisory Agreement (net of waivers)$0.8 
(1)Amounts may not sum due to rounding.
62
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Indemnification

The Investment Advisory Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of their respective duties or by reason of the reckless disregard of their respective duties and obligations, Oaktree and its officers, managers, partners, members (and their members, including the owners of their members), agents, employees, controlling persons and any other person or entity affiliated with it, are entitled to indemnification from the Company for any damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in settlement) arising from the rendering of Oaktree's services under the Investment Advisory Agreement or otherwise as investment adviser.
Administrative Services
The Company is party to the Administration Agreement with Oaktree Administrator. Pursuant to the Administration Agreement, Oaktree Administrator provides administrative services to the Company necessary for the operations of the Company, which include providing office facilities, equipment, clerical, bookkeeping and record keeping services at such facilities and such other services as Oaktree Administrator, subject to review by the Company’s Board of Directors, shall from time to time deem to be necessary or useful to perform its obligations under the Administration Agreement. Oaktree Administrator may, on behalf of the Company, conduct relations and negotiate agreements with custodians, trustees, depositories, attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable. Oaktree Administrator makes reports to the Company’s Board of Directors of its performance of obligations under the Administration Agreement and furnishes advice and recommendations with respect to such other aspects of the Company’s business and affairs, in each case, as it shall determine to be desirable or as reasonably required by the Company’s Board of Directors; provided that Oaktree Administrator shall not provide any investment advice or recommendation.
Oaktree Administrator also provides portfolio collection functions for interest income, fees and warrants and is responsible for the financial and other records that the Company is required to maintain and prepares, prints and disseminates reports to the Company’s stockholders and all other materials filed with the SEC. In addition, Oaktree Administrator assists the Company in determining and publishing the Company’s net asset value, overseeing the preparation and filing of the Company’s tax returns, and generally overseeing the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others. Oaktree Administrator may also offer to provide, on the Company’s behalf, managerial assistance to the Company’s portfolio companies.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





For providing these services, facilities and personnel, the Company reimburses Oaktree Administrator the allocable portion of overhead and other expenses incurred by Oaktree Administrator in performing its obligations under the Administration Agreement, including the Company’s allocable portion of the rent of the Company’s principal executive offices (which are located in a building owned by a Brookfield affiliate) at market rates and the Company’s allocable portion of the costs of compensation and related expenses of its Chief Financial Officer, Chief Compliance Officer, their staffs and other non-investment professionals at Oaktree that perform duties for the Company. Such reimbursement is at cost, with no profit to, or markup by, Oaktree Administrator. The Administration Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other. The Administration Agreement may also be terminated, without penalty, upon the vote of a majority of the Company’s outstanding voting securities.
For the three months ended March 31,June 30, 2020, the Company accrued administrative expenses of $0.5$0.4 million, including $0.1 million of general and administrative expenses. For the sixnine months ended March 31,June 30, 2020, the Company accrued administrative expenses of $1.0$1.4 million, including $0.1$0.2 million of general and administrative expenses. For the three months ended March 31,June 30, 2019, the Company accrued administrative expenses of $0.5 million, including $0.1 million of general and administrative expenses. For the sixnine months ended March 31,June 30, 2019, the Company accrued administrative expenses of $1.3$1.8 million, including $0.2 million of general and administrative expenses.
As of each of March 31,June 30, 2020 and September 30, 2019, $2.2 million and $2.7 million, respectively, was included in “Due to affiliate” in the Consolidated Statements of Assets and Liabilities, reflecting the unpaid portion of administrative expenses and other reimbursable expenses payable to Oaktree Administrator.

63
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Note 12. Financial Highlights
(Share amounts in thousands) Three months ended
March 31, 2020		 Three months ended
March 31, 2019		  Six months ended
March 31, 2020		 Six months ended
March 31, 2019		(Share amounts in thousands)Three months ended
June 30, 2020		Three months ended
June 30, 2019		 Nine months ended
June 30, 2020		Nine months ended
June 30, 2019
Net asset value per share at beginning of period $6.61 $6.19 $6.60 $6.09Net asset value per share at beginning of period$5.34$6.55$6.60$6.09
Net investment income (1) 0.16 0.13 0.22 0.25Net investment income (1)0.120.120.340.37
Net unrealized appreciation (depreciation) (1) (1.15) 0.15 (1.14) 0.10Net unrealized appreciation (depreciation) (1)0.710.17(0.43)0.27
Net realized gains (losses) (1) (0.19) 0.18 (0.16) 0.30Net realized gains (losses) (1)0.02(0.14)(0.14)0.16
Provision for income tax (expense) benefit (1) 0.01 — 0.01 —Provision for income tax (expense) benefit (1)——0.01—
Distributions to stockholders (0.10) (0.10) (0.19) (0.19)Distributions to stockholders(0.10)(0.10)(0.29)(0.29)
Net asset value per share at end of period $5.34 $6.55 $5.34 $6.55Net asset value per share at end of period$6.09$6.60$6.09$6.60
Per share market value at beginning of period $5.46 $4.23 $5.18 $4.96Per share market value at beginning of period$3.24$5.18$5.18$4.96
Per share market value at end of period $3.24 $5.18 $3.24 $5.18Per share market value at end of period$4.47$5.42$4.47$5.42
Total return (2) (38.91)% 24.68% (34.49)% 8.63%Total return (2)40.90%6.46%(7.69)%15.65%
Common shares outstanding at beginning of period 140,961 140,961 140,961 140,961Common shares outstanding at beginning of period140,961140,961140,961140,961
Common shares outstanding at end of period 140,961 140,961 140,961 140,961Common shares outstanding at end of period140,961140,961140,961140,961
Net assets at beginning of period $931,082 $872,362 $930,630 $858,035Net assets at beginning of period$752,224$923,456$930,630$858,035
Net assets at end of period $752,224 $923,456 $752,224 $923,456Net assets at end of period$859,063$930,050$859,063$930,050
Average net assets (3) $846,610 $901,507 $891,012 $885,507Average net assets (3)$810,793$931,204$864,370$900,739
Ratio of net investment income to average net assets (4) 10.82% 7.97% 6.87% 7.93%Ratio of net investment income to average net assets (4)8.30%7.15%7.31%7.66%
Ratio of total expenses to average net assets (4) 5.37% 12.79% 6.55% 11.54%Ratio of total expenses to average net assets (4)8.72%8.37%7.23%10.45%
Ratio of net expenses to average net assets (4) 5.37% 9.24% 7.71% 9.40%Ratio of net expenses to average net assets (4)8.72%8.64%8.03%9.14%
Ratio of portfolio turnover to average investments at fair value 10.80% 7.26% 17.56% 18.18%Ratio of portfolio turnover to average investments at fair value9.27%4.92%26.51%23.78%
Weighted average outstanding debt (5) $623,696 $610,891 $556,264 $612,649Weighted average outstanding debt (5)$738,891$560,733$616,917$595,264
Average debt per share (1) $4.42 $4.33 $3.95 $4.35Average debt per share (1)$5.24$3.98$4.38$4.22
Asset coverage ratio at end of period (6) 205.85% 254.12% 205.85% 254.12%Asset coverage ratio at end of period (6)211.27%270.44%211.27%270.44%
 __________
(1)Calculated based upon weighted average shares outstanding for the period.
(2)Total return equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming dividend reinvestment prices obtained under the Company's DRIP. Total return does not include sales load.
(3)Calculated based upon the weighted average net assets for the period.
(4)Interim periods are annualized.
(5)Calculated based upon the weighted average of debt outstanding for the period.
(6)Based on outstanding senior securities of $704.8$766.8 million and $597.6$542.6 million as of March 31,June 30, 2020 and 2019, respectively.


64
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)




Note 13. Derivative Instruments
The Company enters into forward currency contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies.
In order to better define its contractual rights and to secure rights that will help the Company mitigate its counterparty risk, the Company entered into an International Swaps and Derivatives Association, Inc. Master Agreement ("ISDA Master Agreement") with its derivative counterparty, JPMorgan Chase Bank, N.A. The ISDA Master Agreement permits a single net payment in the event of a default or similar event. NoAs of June 30, 2020, no cash collateral has been pledged to cover obligations and no cash collateral has been received from the counterparty with respect to the Company's forward currency contracts.
Net unrealized gains or losses on foreign currency contracts are included in “net unrealized appreciation (depreciation)” and net realized gains or losses on forward currency contracts are included in “net realized gains (losses)” in the accompanying Consolidated Statements of Operations. Forward currency contracts are considered undesignated derivative instruments.
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Certain information related to the Company’s foreign currency forward contracts is presented below as of March 31,June 30, 2020.
Description Notional Amount to be Purchased Notional Amount to be Sold Maturity Date Gross Amount of Recognized Assets Gross Amount of Recognized Liabilities Balance Sheet Location of Net AmountsDescriptionNotional Amount to be PurchasedNotional Amount to be SoldMaturity DateGross Amount of Recognized AssetsGross Amount of Recognized LiabilitiesBalance Sheet Location of Net Amounts
Foreign currency forward contract $19,756
 £14,850
 8/18/2020 $1,310
 $—
 Derivative assetForeign currency forward contract$20,537  £15,480  8/18/2020$1,404  $—  Derivative asset
Foreign currency forward contract $14,532
 €13,213
 8/31/2020 $—
 $(42) Derivative assetForeign currency forward contract$25,725  €23,348  8/31/2020$—  $(534) Derivative asset
     $1,310
 $(42) $1,404  $(534) 
Certain information related to the Company’s foreign currency forward contracts is presented below as of September 30, 2019.
DescriptionNotional Amount to be PurchasedNotional Amount to be SoldMaturity DateGross Amount of Recognized AssetsGross Amount of Recognized LiabilitiesBalance Sheet Location of Net Amounts
Foreign currency forward contract$22,161  £17,910  10/15/2019$76  $—  Derivative asset
Foreign currency forward contract$19,193  €17,150  11/29/2019$414  $—  Derivative asset
$490  $—  

Note 14. Commitments and Contingencies
Off-Balance Sheet Arrangements
The Company may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of its companies. As of March 31,June 30, 2020, the Company's only off-balance sheet arrangements consisted of $91.6$154.6 million of unfunded commitments, which was comprised of $86.7$149.8 million to provide debt financing to certain of its portfolio companies, $1.3 million to provide equity financing to SLF JV I and $3.5 million related to unfunded limited partnership interests. As of September 30, 2019, the Company's only off-balance sheet arrangements consisted of $88.3 million of unfunded commitments, which was comprised of $83.5 million to provide debt financing to certain of its portfolio companies, $1.3 million to provide equity financing to SLF JV I and $3.5 million related to unfunded limited partnership interests. Such commitments are subject to the portfolio companies' satisfaction of certain financial and nonfinancial covenants and may involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Company's Consolidated Statements of Assets and Liabilities.
65
OAKTREE SPECIALTY LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





A list of unfunded commitments by investment (consisting of revolvers, term loans with delayed draw components, SLF JV I LLC subordinated notes and LLC equity interests and limited partnership interests) as of March 31,June 30, 2020 and September 30, 2019 is shown in the table below:
June 30, 2020September 30, 2019
 March 31, 2020 September 30, 2019
Athenex, Inc.Athenex, Inc.$36,610  $—  
Assembled Brands Capital LLC $33,143
 $35,182
Assembled Brands Capital LLC33,143  35,182  
WPEngine, Inc. 26,348
 —
WPEngine, Inc.26,348  —  
NuStar Logistics, L.P.NuStar Logistics, L.P.17,911  —  
A.T. Holdings II SÀRLA.T. Holdings II SÀRL11,311  —  
Dominion Diagnostics, LLC 5,887
 —
Dominion Diagnostics, LLC5,887  —  
Corrona, LLC 4,273
 —
Corrona, LLC5,189  —  
PaySimple, Inc. 3,985
 12,250
Pingora MSR Opportunity Fund I-A, LP 3,500
 3,500
Pingora MSR Opportunity Fund I-A, LP3,500  3,500  
Accupac, Inc.Accupac, Inc.2,346  —  
MRI Software LLC 2,857
 —
MRI Software LLC2,315  —  
Accupac, Inc. 2,346
 —
Acquia Inc. 2,240
 —
Acquia Inc.2,240  —  
New IPT, Inc. 2,229
 2,229
New IPT, Inc.2,229  2,229  
Apptio, Inc. 1,538
 1,538
Apptio, Inc.1,538  1,538  
Senior Loan Fund JV I, LLC 1,328
 1,328
Senior Loan Fund JV I, LLC1,328  1,328  
iCIMs, Inc. 882
 882
iCIMs, Inc.882  882  
PaySimple, Inc.PaySimple, Inc.762  12,250  
Ministry Brands, LLC 425
 800
Ministry Brands, LLC425  800  
Coyote Buyer, LLC 352
 —
Coyote Buyer, LLC377  —  
GKD Index Partners, LLC 231
 1,156
GKD Index Partners, LLC231  1,156  
P2 Upstream Acquisition Co. —
 9,000
P2 Upstream Acquisition Co.—  9,000  
Sorrento Therapeutics, Inc. —
 7,500
Sorrento Therapeutics, Inc.—  7,500  
4 Over International, LLC —
 1,977
TerSera Therapeutics, LLCTerSera Therapeutics, LLC—  4,200  
Mindbody, Inc. —
 3,048
Mindbody, Inc.—  3,048  
Thruline Marketing, Inc. —
 3,000
Thruline Marketing, Inc.—  3,000  
TerSera Therapeutics, LLC —
 4,200
4 Over International, LLC4 Over International, LLC—  1,977  
PLATO Learning Inc. (1) —
 746
PLATO Learning Inc. (1)—  746  
Total $91,564
 $88,336
Total$154,572  $88,336  
 ___________ 
(1) This investment was on cash or PIK non-accrual status as of March 31,June 30, 2020 and September 30, 2019.

Note 15. Subsequent Events
The Company’s management evaluated subsequent events through the date of issuance of the Consolidated Financial Statements. There have been no subsequent events that occurred during such period that would require disclosure in, or would be required to be recognized in the Consolidated Financial Statements as of and for the three and sixnine months ended March 31,June 30, 2020, except as discussed below:
Distribution Declaration
On April 30,July 31, 2020, the Company’s Board of Directors declared a quarterly distribution of $0.095$0.105 per share, payable in cash on JuneSeptember 30, 2020 to stockholders of record on JuneSeptember 15, 2020.
Investment Advisory Agreement
On May 4, 2020, Oaktree effected the novation of the Investment Advisory Agreement to Oaktree Fund Advisors, LLC, a registered investment adviser under common control with Oaktree. Immediately following such novation, the Company and Oaktree Fund Advisors, LLC entered into a new investment advisory agreement with the same terms, including fee structure, as the Investment Advisory Agreement.




OAKTREE SPECIALTY LENDING CORPORATION
66
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts, percentages and as otherwise indicated)





Credit Facility Amendment
On May 6, 2020, the Company amended its revolving credit facility (i) to reduce the minimum shareholders' equity covenant from $700 million to $550 million, (ii) to increase the interest rate margin up to 2.75% on LIBOR loans or 1.75% on alternative base rate loans if the Company's minimum shareholders' equity is below $700 million depending on its senior coverage ratio and (iii) to reduce the maximum size of the facility under the "accordion" feature to the greater of $800 million or the Company's net worth on the date of such increase.


Schedule 12-14
Oaktree Specialty Lending Corporation
Schedule of Investments in and Advances to Affiliates
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
SixNine months ended March 31,June 30, 2020
(unaudited)
Portfolio Company/Type of Investment (1) Cash Interest RateIndustryPrincipalNet Realized Gain (Loss)Amount of
Interest,
Fees or
Dividends
Credited in
Income (2)		Fair Value
at October 1,
2019		Gross
Additions (3)		Gross
Reductions (4)		Fair Value
at June 30, 2020		% of Total Net Assets
Control Investments
C5 Technology Holdings, LLCData Processing & Outsourced Services
829 Common Units$—  $—  $—  $—  $—  $—  — %
34,984,460.37 Preferred Units—  —  34,984  —  (7,346) 27,638  3.2 %
Dominion Diagnostics, LLCHealth Care Services
First Lien Term Loan, LIBOR+5.00% cash due 2/28/20246.00 %$27,730  —  639  —  27,869  (139) 27,730  3.2 %
First Lien Revolver, LIBOR+5.00% cash due 2/28/20246.00 %5,260  —  128  —  5,260  —  5,260  0.6 %
30,030.8 Common Units in DD Healthcare Services Holdings, LLC—  —  —  18,627  (10,960) 7,667  0.9 %
 First Star Speir Aviation Limited (5)Airlines
First Lien Term Loan, 9.00% cash due 12/15/202011,510  —  881  11,510  81  (81) 11,510  1.3 %
100% equity interest—  —  4,630  —  (1,465) 3,165  0.4 %
New IPT, Inc.Oil & Gas Equipment & Services
First Lien Term Loan, LIBOR+5.00% cash due 3/17/20216.00 %2,454  —  154  3,256  —  (802) 2,454  0.3 %
First Lien Revolver, LIBOR+5.00% cash due 3/17/20216.00 %1,009  —  58  1,009  —  —  1,009  0.1 %
50.087 Class A Common Units in New IPT Holdings, LLC—  —  2,903  —  (1,730) 1,173  0.1 %
 Senior Loan Fund JV I, LLC (6)Multi-Sector Holdings
Subordinated Debt, LIBOR+7.00% cash due 12/29/20288.02 %96,250  —  6,292  96,250  —  —  96,250  11.2 %
87.5% LLC equity interest—  —  30,052  —  (16,256) 13,796  1.6 %
 Thruline Marketing, Inc.Advertising
First Lien Term Loan, LIBOR+7.00% cash due 4/3/2022—  —  257  18,146  —  (18,146) —  — %
First Lien Revolver, LIBOR+7.75% cash due 4/3/2022—  —  1  —  —  —  —  — %
 9,073 Class A Units in FS AVI Holdco, LLC—  —  6,438  —  (3,291) 3,147  0.4 %
Total Control Investments$144,213  $—  $8,410  $209,178  $51,837  $(60,216) $200,799  23.4 %
Affiliate Investments
 Assembled Brands Capital LLCSpecialized Finance
First Lien Delayed Draw Term Loan, LIBOR+6.00% cash due 10/17/20237.00 %$5,504  $—  $394  $5,585  $2,038  $(3,279) $4,344  0.5 %
1,609,201 Class A Units—  —  782  312  —  1,094  0.1 %
1,019,168.80 Preferred Units, 6%—  —  1,019  51  —  1,070  0.1 %
70,424.5641 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029—  —  —  —  —  —  — %
Caregiver Services, Inc.Health Care Services
1,080,399 shares of Series A Preferred Stock, 10%—  —  —  1,784  —  (1,043) 741  0.1 %
Total Affiliate Investments$5,504  $—  $394  $9,170  $2,401  $(4,322) $7,249  0.8 %
Total Control & Affiliate Investments$149,717  $—  $8,804  $218,348  $54,238  $(64,538) $208,048  24.2 %


67
Portfolio Company/Type of Investment (1)  Cash Interest Rate Industry Principal Net Realized Gain (Loss) 
Amount of
Interest,
Fees or
Dividends
Credited in
Income (2)
 
Fair Value
at October 1,
2019
 
Gross
Additions (3)
 
Gross
Reductions (4)
 
Fair Value
at March 31, 2020
 % of Total Net Assets
Control Investments                    
C5 Technology Holdings, LLC   Data Processing & Outsourced Services                
829 Common Units       $—
 $—
 $—
 $—
 $—
 $—
 —%
34,984,460.37 Preferred Units       —
 —
 34,984
 —
 (7,346) 27,638
 3.7%
Dominion Diagnostics, LLC   Health Care Services                
First Lien Term Loan, LIBOR+5.00% cash due 2/28/2024 6.46%   $27,799
 —
 172
 —
 27,869
 (70) 27,799
 3.7%
First Lien Revolver, LIBOR+5.00% cash due 2/28/2024 6.46%   5,260
 —
 35
 —
 5,260
 —
 5,260
 0.7%
30,030.8 Common Units in DD Healthcare Services Holdings, LLC     —
 —
 —
 —
 18,626
 (8,511) 10,115
 1.3%
                     
 First Star Speir Aviation Limited (5)   Airlines             

 

First Lien Term Loan, 9.00% cash due 12/15/2020     11,510
 —
 600
 11,510
 42
 (42) 11,510
 1.5%
100% equity interest     —
 —
 —
 4,630
 —
 (1,465) 3,165
 0.4%
New IPT, Inc.   Oil & Gas Equipment & Services             

 

First Lien Term Loan, LIBOR+5.00% cash due 3/17/2021 6.45%   2,605
 —
 112
 3,256
 —
 (651) 2,605
 0.3%
First Lien Revolver, LIBOR+5.00% cash due 3/17/2021 6.45%   1,009
 —
 40
 1,009
 —
 —
 1,009
 0.1%
50.087 Class A Common Units in New IPT Holdings, LLC      ��—
 —
 2,903
 —
 (1,307) 1,596
 0.2%
 Senior Loan Fund JV I, LLC (6)   Multi-Sector Holdings             

 

Subordinated Debt, LIBOR+7.00% cash due 12/29/2028 8.73%   96,250
 —
 4,341
 96,250
 —
 (4,079) 92,171
 12.3%
87.5% LLC equity interest       —
 —
 30,052
 —
 (30,052) —
 —%
 Thruline Marketing, Inc.   Advertising               —%
First Lien Term Loan, LIBOR+7.00% cash due 4/3/2022     —
 —
 257
 18,146
 —
 (18,146) —
 —%
First Lien Revolver, LIBOR+7.75% cash due 4/3/2022     —
 —
 1
 —
 —
 —
 —
 —%
 9,073 Class A Units in FS AVI Holdco, LLC       —
 —
 6,438
 —
 (2,039) 4,399
 0.6%
Total Control Investments     $144,433
 $—
 $5,558
 $209,178
 $51,797
 $(73,708) $187,267
 24.9%
                     
Affiliate Investments                    
 Assembled Brands Capital LLC   Specialized Finance                
First Lien Delayed Draw Term Loan, LIBOR+6.00% cash due 10/17/2023 6.99%   $7,623
 $—
 $262
 $5,585
 $2,038
 $(1,508) $6,115
 0.8%
1,609,201 Class A Units       —
 —
 782
 135
 —
 917
 0.1%
1,019,168.80 Preferred Units, 6%       —
 —
 1,019
 31
 —
 1,050
 0.1%
70,424.5641 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029       —
 —
 —
 —
 —
 —
 —%
Caregiver Services, Inc.   Health Care Services               

1,080,399 shares of Series A Preferred Stock, 10%     —
 —
 —
 1,784
 —
 (452) 1,332
 0.2%
Total Affiliate Investments     $7,623
 $—
 $262
 $9,170
 $2,204
 $(1,960) $9,414
 1.3%
Total Control & Affiliate Investments     $152,056
 $—
 $5,820
 $218,348
 $54,001
 $(75,668) $196,681
 26.1%


This schedule should be read in connection with the Company's Consolidated Financial Statements, including the Consolidated Schedules of Investments and Notes to the Consolidated Financial Statements.

______________________
______________________
(1)The principal amount and ownership detail are shown in the Company's Consolidated Schedules of Investments.
(2)Represents the total amount of interest (net of non-accrual amounts), fees and dividends credited to income for the portion of the period an investment was included in the Control or Affiliate categories.
(3)Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments, accrued PIK interest (net of non-accrual amounts) and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation as well as the movement of an existing portfolio company into this category or out of a different category.
(4)Gross reductions include decreases in the cost basis of investments resulting from principal payments or sales and exchanges of one or more existing securities for one or more new securities. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category.
(5)First Star Speir Aviation Limited is a wholly-owned holding company formed by the Company in order to facilitate its investment strategy. In accordance with ASU 2013-08, the Company has deemed the holding company to be an investment company under GAAP and therefore deemed it appropriate to consolidate the financial results and financial position of the holding company and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding company are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entities.
(6)Together with Kemper, the Company co-invests through SLF JV I. SLF JV I is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF JV I must be approved by the SLF JV I investment committee consisting of representatives of the Company and Kemper (with approval from a representative of each required).

(1)The principal amount and ownership detail are shown in the Company's Consolidated Schedules of Investments.

(2)Represents the total amount of interest (net of non-accrual amounts), fees and dividends credited to income for the portion of the period an investment was included in the Control or Affiliate categories.

(3)Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments, accrued PIK interest (net of non-accrual amounts) and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation as well as the movement of an existing portfolio company into this category or out of a different category.
(4)Gross reductions include decreases in the cost basis of investments resulting from principal payments or sales and exchanges of one or more existing securities for one or more new securities. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category.
(5)First Star Speir Aviation Limited is a wholly-owned holding company formed by the Company in order to facilitate its investment strategy. In accordance with ASU 2013-08, the Company has deemed the holding company to be an investment company under GAAP and therefore deemed it appropriate to consolidate the financial results and financial position of the holding company and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding company are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entities.
(6)Together with Kemper, the Company co-invests through SLF JV I. SLF JV I is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF JV I must be approved by the SLF JV I investment committee consisting of representatives of the Company and Kemper (with approval from a representative of each required).



68

Schedule 12-14
Oaktree Specialty Lending Corporation
Schedule of Investments in and Advances to Affiliates
(in thousands, except share and per share amounts, percentages and as otherwise indicated)
SixNine months ended March 31,June 30, 2019
(unaudited)

Portfolio Company/Type of Investment (1)  Cash Interest Rate Industry Principal Net Realized Gain (Loss) 
Amount of
Interest,
Fees or
Dividends
Credited in
Income (2)
 
Fair Value
at October 1,
2018
 
Gross
Additions (3)
 
Gross
Reductions (4)
 
Fair Value
at March 31, 2019
 % of Total Net AssetsPortfolio Company/Type of Investment (1)Cash Interest RateIndustryPrincipalNet Realized Gain (Loss)Amount of
Interest,
Fees or
Dividends
Credited in
Income (2)		Fair Value
at October 1,
2018		Gross
Additions (3)		Gross
Reductions (4)		Fair Value
at June 30, 2019		% of Total Net Assets
Control Investments                  Control Investments
First Star Speir Aviation Limited (5)   Airlines                First Star Speir Aviation Limited (5)Airlines
First Lien Term Loan, 9.00% cash due 12/15/2020   $32,510
 $—
 $976
 $32,510
 $722
 $(722) $32,510
 3.5%First Lien Term Loan, 9.00% cash due 12/15/2020$11,510  $—  $1,711  $32,510  $753  $(21,753) $11,510  1.2 %
100% equity interest   —
 —
 —
 —
 967
 (100) 867
 0.1%100% equity interest—  —  —  3,847  (100) 3,747  0.4 %
New IPT, Inc.    Oil & gas equipment services                New IPT, Inc.Oil & gas equipment services
First Lien Term Loan, LIBOR+5.00% cash due 3/17/2021 7.60% 4,107
 —
 170
 4,107
 —
 —
 4,107
 0.4%First Lien Term Loan, LIBOR+5.00% cash due 3/17/20217.33 %3,957  —  255  4,107  19  (169) 3,957  0.4 %
Second Lien Term Loan, LIBOR+5.10% cash due 9/17/2021 7.70% 601
 —
 39
 1,453
 —
 (851) 602
 0.1%Second Lien Term Loan, LIBOR+5.10% cash due 9/17/2021—  —  45  1,453  —  (1,453) —  — %
First Lien Revolver, LIBOR+5.00% cash due 3/17/2021 7.60% 1,009
 —
 43
 1,009
 —
 —
 1,009
 0.1%First Lien Revolver, LIBOR+5.00% cash due 3/17/20217.33 %1,009  —  64  1,009  —  —  1,009  0.1 %
50.087 Class A Common Units in New IPT Holdings, LLC   —
 —
 —
 2,291
 612
 —
 2,903
 0.3%50.087 Class A Common Units in New IPT Holdings, LLC—  —  2,291  612  —  2,903  0.3 %
Senior Loan Fund JV I, LLC (6)   Multi-sector holdings                Senior Loan Fund JV I, LLC (6)Multi-sector holdings
Class A Mezzanine Secured Deferrable Floating Rate Notes due 2036 in SLF Repack Issuer 2016 LLC   —
 —
 2,036
 99,813
 —
 (99,813) —
 —%Class A Mezzanine Secured Deferrable Floating Rate Notes due 2036 in SLF Repack Issuer 2016 LLC—  —  2,036  99,813  —  (99,813) —  — %
Class B Mezzanine Secured Deferrable Fixed Rate Notes, 10.00% cash due 2036 in SLF Repack Issuer 2016 LLC   —
 —
 707
 29,520
 67
 (29,587) —
 —%Class B Mezzanine Secured Deferrable Fixed Rate Notes, 10.00% cash due 2036 in SLF Repack Issuer 2016 LLC—  —  707  29,520  67  (29,587) —  — %
Subordinated Note, LIBOR+7.00% cash due 12/29/2028 9.51% 96,250
 —
 2,388
 —
 96,250
 —
 96,250
 10.4%Subordinated Note, LIBOR+7.00% cash due 12/29/20289.49 %96,250  —  4,698  —  96,250  —  96,250  10.3 %
87.5% LLC equity interest   —
 —
 —
 41
 37,734
 (7,191) 30,584
 3.3%87.5% LLC equity interest—  —  41  37,734  (6,683) 31,092  3.3 %
Thruline Marketing, Inc.   Advertising                Thruline Marketing, Inc.Advertising
First Lien Term Loan, LIBOR+7.00% cash due 4/3/2022 9.60% 18,146
 —
 880
 18,146
 —
 —
 18,146
 2.0%First Lien Term Loan, LIBOR+7.00% cash due 4/3/20229.33 %18,146  —  1,320  18,146  —  —  18,146  2.0 %
First Lien Revolver, LIBOR+7.75% cash due 4/3/2022   —
 —
 8
 —
 —
 —
 —
 —%First Lien Revolver, LIBOR+7.75% cash due 4/3/2022—  —  11  —  —  —  —  — %
9,073 Class A Units in FS AVI Holdco, LLC   —
 —
 —
 7,984
 —
 (1,546) 6,438
 0.7%9,073 Class A Units in FS AVI Holdco, LLC—  —  7,984  —  (1,546) 6,438  0.7 %
Total Control Investments   $152,623
 $—
 $7,247
 $196,874
 $136,352
 $(139,810) $193,416
 20.9%Total Control Investments$130,872  $—  $10,847  $196,874  $139,282  $(161,104) $175,052  18.8 %
                  
Affiliate Investments                  Affiliate Investments
Assembled Brands Capital LLC   Specialized finance                Assembled Brands Capital LLCSpecialized finance
First Lien Delayed Draw Term Loan LIBOR+6.00% cash due 10/17/2023 8.60% $1,835
 $—
 $44
 $—
 $1,835
 $—
 $1,835
 0.2%
First Lien Delayed Draw Term Loan, LIBOR+6.00% cash due 10/17/2023First Lien Delayed Draw Term Loan, LIBOR+6.00% cash due 10/17/20238.33 %$3,221  $—  $119  $—  $3,235  $(14) $3,221  0.3 %
764,376.60 Class A Units   —
 —
 —
 —
 764
 —
 764
 0.1%764,376.60 Class A Units—  —  —  764  —  764  0.1 %
583,190.81 Class B Units   —
 —
 —
 —
 —
 —
 —
 —%583,190.81 Class B Units—  —  —  —  —  —  — %
Caregiver Services, Inc.   Healthcare services                Caregiver Services, Inc.Healthcare services
1,080,399 shares of Series A Preferred Stock, 10.00%   —
 —
 —
 2,161
 —
 (182) 1,979
 0.2%1,080,399 shares of Series A Preferred Stock, 10.00%—  —  2,161  —  (182) 1,979  0.2 %
Total Affiliate Investments   $1,835
 $—
 $44
 $2,161
 $2,599
 $(182) $4,578
 0.5%Total Affiliate Investments$3,221  $—  $119  $2,161  $3,999  $(196) $5,964  0.6 %
Total Control & Affiliate Investments   $154,458
 $—
 $7,291
 $199,035
 $138,951
 $(139,992) $197,994
 21.4%Total Control & Affiliate Investments$134,093  $—  $10,966  $199,035  $143,281  $(161,300) $181,016  19.5 %


This schedule should be read in connection with the Company's Consolidated Financial Statements, including the Consolidated Schedules of Investments and Notes to the Consolidated Financial StatementsStatements.
______________________
(1)The principal amount and ownership detail are shown in the Company's Consolidated Schedules of Investments as of March 31,June 30, 2019 included in the Company's quarterly report on Form 10-Q for the quarter ended March 31,June 30, 2019.
______________________
(1)The principal amount and ownership detail are shown in the Company's Consolidated Schedules of Investments as of March 31, 2019 included in the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2019.
(2)Represents the total amount of interest (net of non-accrual amounts), fees and dividends credited to income for the portion of the period an investment was included in the Control or Affiliate categories.

(3)Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments, accrued PIK interest (net of non-accrual amounts) and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation as well as the movement of an existing portfolio company into this category or out of a different category.
(4)Gross reductions include decreases in the cost basis of investments resulting from principal payments or sales and exchanges of one or more existing securities for one or more new securities. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category.
(5)First Star Speir Aviation Limited is a wholly-owned holding company formed by the Company in order to facilitate its investment strategy. In accordance with ASU 2013-08, the Company has deemed the holding company to be investment companies under GAAP and therefore deemed it appropriate to consolidate the financial results and financial position of the holding company and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding companies are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entity.
(6)Together with Kemper, the Company co-invests through SLF JV I. SLF JV I is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF JV I must be approved by the SLF JV I investment committee consisting of representatives of the Company and Kemper (with approval from a representative of each required).

(2)Represents the total amount of interest (net of non-accrual amounts), fees and dividends credited to income for the portion of the period an investment was included in the Control or Affiliate categories.

(3)Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments, accrued PIK interest (net of non-accrual amounts) and the exchange of one or more existing securities for one or more new securities.
69


Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation as well as the movement of an existing portfolio company into this category or out of a different category.


(4)Gross reductions include decreases in the cost basis of investment resulting from principal payments or sales and exchanges of one or more existing securities for one or more new securities. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category.
(5)First Star Speir Aviation Limited is a wholly-owned holding company formed by the Company in order to facilitate its investment strategy. In accordance with ASU 2013-08, the Company has deemed the holding company to an investment company under GAAP and therefore deemed it appropriate to consolidate the financial results and financial position of the holding company and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding companies are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entity.
(6)Together with Kemper, the Company co-invests through SLF JV I. SLF JV I is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF JV I must be approved by the SLF JV I investment committee consisting of representatives of the Company and Kemper (with approval from a representative of each required).





70

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in connection with our Consolidated Financial Statements and the notes thereto included elsewhere in this quarterly report on Form 10-Q.
Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q may include statements as to:

•our future operating results and distribution projections;
•the ability of Oaktree Capital Management, L.P.,Fund Advisors, LLC, or Oaktree, to reposition our portfolio and to implement Oaktree's future plans with respect to our business;
•the ability of Oaktree and its affiliates to attract and retain highly talented professionals;
•our business prospects and the prospects of our portfolio companies;
•the impact of the investments that we expect to make;
•the ability of our portfolio companies to achieve their objectives;
•our expected financings and investments and additional leverage we may seek to incur in the future;
•the adequacy of our cash resources and working capital;
•the timing of cash flows, if any, from the operations of our portfolio companies; and
•the cost or potential outcome of any litigation to which we may be a party.
In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended September 30, 2019 and elsewhere in this quarterly report on Form 10-Q.
Other factors that could cause actual results to differ materially include:
•changes or potential disruptions in our operations, the economy, financial markets or political environment;
•risks associated with possible disruption in our operations or the economy generally due to terrorism, natural disasters or the COVID-19 pandemic;
•future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our operating areas, particularly with respect to Business Development Companies or regulated investment companies, or RICs;
•general considerations associated with the COVID-19 pandemic; and
•other considerations that may be disclosed from time to time in our publicly disseminated documents and filings.
We have based the forward-looking statements included in this quarterly report on Form 10-Q on information available to us on the date of this quarterly report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the Securities and Exchange Commission, or the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
All dollar amounts in tables are in thousands, except share and per share amounts and as otherwise indicated.
Business Overview
We are a specialty finance company that looks to provide customized, one-stop credit solutions to companies with limited access to public or syndicated capital markets. We are a closed-end, externally managed, non-diversified management investment company that has elected to be regulated as a Business Development Company under the Investment Company Act of 1940, as amended, or the Investment Company Act. In addition, we have qualified and elected to be treated as a RIC under the Internal Revenue Code of 1986, as amended, or the Code, for tax purposes.
As of March 31, 2020, weWe are externally managed by Oaktree pursuant to an investment advisory agreement, as amended from time to time, or the Investment Advisory Agreement, between the Company and Oaktree. Oaktree Fund Administration, LLC, or the Oaktree Administrator, a subsidiaryan affiliate of Oaktree, provides certain administrative and other services necessary for us to operate pursuant to an administration agreement, as amended from time to time, or the Administration Agreement.
71


We seekOur investment objective is to generate current income and capital appreciation by providing companies with flexible and innovative financing solutions, including first and second lien loans, unsecured and mezzanine loans, bonds, preferred equity and certain equity co-investments. We may also seek to generate capital appreciation and income through secondary investments at discounts to par in either private or syndicated transactions. Our portfolio may also include certain structured finance and other non-traditional structures. We invest in companies that typically possess business models we expect to be resilient in the future with underlying fundamentals that will provide strength in economic downturns. We intend to deploy capital across credit and economic cycles with a focus on long-term results, which we believe will enable us to build lasting partnerships with financial sponsors and management teams, and we may seek to opportunistically take advantage of dislocations in the financial markets and other situations that may benefit from Oaktree’s credit and structuring expertise, including during the COVID-19 pandemic. Sponsors may include financial sponsors, such as an institutional investor or a private equity firm, or a strategic entity seeking to invest in a portfolio company. Oaktree is generally focused on middle-market companies, which we define as companies with enterprise values of between $100 million and $750 million. We generally invest in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as “high yield” and “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.
Oaktree intends to continue to repositionrotate our portfolio into investments that are better aligned with Oaktree's overall approach to credit investing and that it believes have the potential to generate attractive returns across market cycles. Since becoming our investment adviser,cycles (which we call "core investments"). Oaktree has performed a comprehensive review of our portfolio and categorized our portfolio into core investments, non-core performing investments and underperforming investments. Certain additional information on such categorization and our portfolio composition is included in investor presentations that we file with the SEC. Since becomingan Oaktree affiliate became our investment adviser in October 2017, Oaktree hasand its affiliates have reduced the investments it has identified as non-core by over $700 million at fair value. Over time, Oaktree intends to rotate us out of the remaining non-core investments, which were approximately $142$134 million at fair value as of March 31,June 30, 2020. Oaktree periodically reviews designations of investments as core and non-core and may change such designations over time.
Business Environment and Developments

We believe that the economic impact of the COVID-19 pandemic has contributed to significant market volatility and disruption, which may have lasting effects on the U.S. and global financial markets and have caused (and may cause further)further economic uncertainties or deterioration in the performance of the middle market in the United States and worldwide.
In particular, While the initial market disruptions inhave somewhat eased, the capital markets have increasedglobal economy continues to experience economic uncertainty. This uncertainty can impact the spread between the yields realized on risk-freeoverall supply and higher risk securities, resulting in illiquidity in partsdemand of the capital markets, significant write-offs in the financial sectormarket through changing spreads, deal terms and re-pricing of credit risk in the broadly syndicated market. This widening of spreads makes it more difficult for middle market businesses to access capital as lenders could become more selective in evaluating investment opportunities,structures, and equity sponsors delay transactions given earnings uncertainty and sellers are hesitant to accept lower purchase price multiples.
In
Despite this type of environment,economic uncertainty, we believe attractive risk-adjusted returns can be achieved by making loans to companies in the middle market. Given the breadth of Oaktree’sthe investment platform of Oaktree and its affiliates, we believe that we have the resources and experience to source, diligence and structure investments in these companies and are well placed to generate attractive returns for investors.

We have proactively taken a number of actions to evaluate and support our portfolio companies in light of the COVID-19 pandemic, including outreach to a variety of management teams and sponsors. We have established a dialoguebeen in close contact with many of our portfolio companies to understand their liquidity and are especially focused on those that might have moderate to higher risk of material impacts from COVID-19.solvency positions. We believe that these efforts to closely monitor and identify vulnerable creditsinvestments will allow us to address potential problems early and provide constructive solutions to our portfolio companies.
As of March 31,June 30, 2020, 90.6%86.2% of our debt investment portfolio (at fair value) and 90.9%87.3% of our debt investment portfolio (at cost) bore interest at floating rates indexed to the London Interbank Offered Rate, or LIBOR, and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly or monthly at the borrower’s option. As a result of the COVID-19 pandemic and the related decision of the U.S. Federal Reserve to reduce certain interest rates, LIBOR decreased beginning in March 2020. A prolonged reduction in interest rates will result in a decrease in our total investment income and could result in a decrease in our net investment income to the extent the decreases are not offset by an increase in the spread on our floating rate investments, a decrease in our interest expense or a reduction of our incentive fee on income. In July 2017, the head of the United Kingdom Financial Conduct Authority announced the desire to phase out the use of LIBOR by the end of 2021. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing U.S.-dollar LIBOR with the Secured Overnight Financing Rate, or SOFR, a new index calculated by short-term repurchase agreements, backed by Treasury securities. Although there have been a few issuances utilizing SOFR or the Sterling Over Night Index Average, an alternative reference rate that is based on transactions, it remains unknown whether these alternative reference rates will attain market acceptance as replacements for LIBOR.  If LIBOR ceases to exist, we may need to renegotiate any credit agreements extending beyond 2021 with our prospective portfolio


companies that utilize LIBOR as a factor in determining the interest rate and may also need to renegotiate the terms of
72

the Credit Facility (as defined below), which matures in 2024. Certain of the loan agreements with our portfolio companies have included fallback language in the event that LIBOR becomes unavailable. This language generally provides that the administrative agent may identify a replacement reference rate, typically with the consent of (or prior consultation with) the borrower.  In certain cases, the administrative agent will be required to obtain the consent of either a majority of the lenders under the facility, or the consent of each lender, prior to identifying a replacement reference rate.  Certain of the loan agreements with our portfolio companies do not include any fallback language providing a mechanism for the parties to negotiate a new reference interest rate and will instead revert to the base rate in the event LIBOR ceases to exist. It remains unclear whether the cessation of LIBOR will be delayed due to COVID-19 or what form any delay may take, and there are no assurances that there will be a delay. It is also unclear what the duration and severity of COVID-19 will be, and whether this will impact LIBOR transition planning. COVID-19 may also slow regulators’ and others’ efforts to develop and implement alternative reference rates, which could make LIBOR transition planning more difficult, particularly if the cessation of LIBOR is not delayed but alternatives doan alternative reference rate does not develop.emerge as industry standard.
Critical Accounting Policies

Basis of Presentation
Our Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. In the opinion of management, all adjustments of a normal recurring nature considered necessary for the fair presentation of the Consolidated Financial Statements have been made. All intercompany balances and transactions have been eliminated. We are an investment company following the accounting and reporting guidance in Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 946, Financial Services-Investment Companies, or ASC 946.
Investment Valuation
We value our investments in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820, which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. ASC 820 prioritizes the use of observable market prices over entity-specific inputs. Where observable prices or inputs are not available or reliable, valuation techniques are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments’ complexity.
Hierarchical levels, defined by ASC 820 and directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:
 
•Level 1 — Unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date.
•Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data at the measurement date for substantially the full term of the assets or liabilities.
•Level 3 — Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
If inputs used to measure fair value fall into different levels of the fair value hierarchy, an investment's level is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. This includes investment securities that are valued using "bid" and "ask" prices obtained from independent third party pricing services or directly from brokers. These investments may be classified as Level 3 because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities or may require adjustments for investment-specific factors or restrictions.
Financial instruments with readily available quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. As such, Oaktree obtains and analyzes readily available market quotations provided by pricing vendors and brokers for all of our investments for which quotations are available. In determining the fair value of a particular investment, pricing vendors and brokers use observable market information, including both binding and non-binding indicative quotations.
We seek to obtain at least two quotations for the subject or similar securities, typically from pricing vendors. If we are unable to obtain two quotes from pricing vendors, or if the prices obtained from pricing vendors are not within our set
73

threshold, we seek to obtain a quote directly from a broker making a market for the asset. Oaktree evaluates the quotations provided by pricing vendors and brokers


based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated. Oaktree also performs back-testing of valuation information obtained from pricing vendors and brokers against actual prices received in transactions. In addition to ongoing monitoring and back-testing, Oaktree performs due diligence procedures over pricing vendors to understand their methodology and controls to support their use in the valuation process. Generally, we do not adjust any of the prices received from these sources.
If the quotations obtained from pricing vendors or brokers are determined to not be reliable or are not readily available, we value such investments using any of three different valuation techniques. The first valuation technique is the transaction precedent technique, which utilizes recent or expected future transactions of the investment to determine fair value, to the extent applicable. The second valuation technique is an analysis of the enterprise value, or EV, of the portfolio company. EV means the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time. The EV analysis is typically performed to determine (i) the value of equity investments, (ii) whether there is credit impairment for debt investments and (iii) the value for debt investments that we are deemed to control under the Investment Company Act. To estimate the EV of a portfolio company, Oaktree analyzes various factors, including the portfolio company’s historical and projected financial results, macroeconomic impacts on the company and competitive dynamics in the company’s industry. Oaktree also utilizes some or all of the following information based on the individual circumstances of the portfolio company: (i) valuations of comparable public companies, (ii) recent sales of private and public comparable companies in similar industries or having similar business or earnings characteristics, (iii) purchase prices as a multiple of their earnings or cash flow, (iv) the portfolio company’s ability to meet its forecasts and its business prospects, (v) a discounted cash flow analysis, (vi) estimated liquidation or collateral value of the portfolio company’s assets and (vii) offers from third parties to buy the portfolio company. We may probability weight potential sale outcomes with respect to a portfolio company when uncertainty exists as of the valuation date. The third valuation technique is a market yield technique, which is typically performed for non-credit impaired debt investments. In the market yield technique, a current price is imputed for the investment based upon an assessment of the expected market yield for a similarly structured investment with a similar level of risk, and we consider the current contractual interest rate, the capital structure and other terms of the investment relative to risk of the company and the specific investment. A key determinant of risk, among other things, is the leverage through the investment relative to the EV of the portfolio company. As debt investments held by us are substantially illiquid with no active transaction market, we depend on primary market data, including newly funded transactions and industry-specific market movements, as well as secondary market data with respect to high yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable.
In accordance with ASC 820-10, certain investments that qualify as investment companies in accordance with ASC 946 may be valued using net asset value as a practical expedient for fair value. Consistent with FASB guidance under ASC 820, these investments are excluded from the hierarchical levels. These investments are generally not redeemable.
We estimate the fair value of privately held warrants using a Black Scholes pricing model, which includes an analysis of various factors and subjective assumptions, including the current stock price (by using an EV analysis as described above), the expected period until exercise, expected volatility of the underlying stock price, expected dividends and the risk-free rate. Changes in the subjective input assumptions can materially affect the fair value estimates.
Our Board of Directors undertakes a multi-step valuation process each quarter in connection with determining the fair value of our investments:
•The quarterly valuation process begins with each portfolio company or investment being initially valued by Oaktree’s valuation team in conjunction with Oaktree’s portfolio management team and investment professionals responsible for each portfolio investment;
•Preliminary valuations are then reviewed and discussed with management of Oaktree;
•Separately, independent valuation firms engaged by our Board of Directors prepare valuations of our investments, on a selected basis, for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment, and submit the reports to us and provide such reports to Oaktree and the Audit Committee of our Board of Directors;
•Oaktree compares and contrasts its preliminary valuations to the valuations of the independent valuation firms and prepares a valuation report for the Audit Committee;
•The Audit Committee reviews the preliminary valuations with Oaktree, and Oaktree responds and supplements the preliminary valuations to reflect any discussions between Oaktree and the Audit Committee;
•The Audit Committee makes a recommendation to our full Board of Directors regarding the fair value of the investments in our portfolio; and
74

•Our Board of Directors discusses valuations and determines the fair value of each investment in our portfolio.


The fair value of our investments as of March 31,June 30, 2020 and September 30, 2019 was determined in good faith by our Board of Directors. Our Board of Directors has and will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of a portion of our portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter, and the Board of Directors may reasonably rely on that assistance. As of March 31,June 30, 2020, 92.4%92.8% of our portfolio at fair value was valued either based on market quotations, the transactions precedent approach or corroborated by independent valuation firms. However, our Board of Directors is responsible for the ultimate valuation of the portfolio investments at fair value as determined in good faith pursuant to our valuation policy and a consistently applied valuation process.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.
As of March 31,June 30, 2020 and September 30, 2019, approximately 92.7%94.8% and 97.1%, respectively, of our total assets represented investments at fair value.
Revenue Recognition
Interest Income
Interest income, adjusted for accretion of original issue discount, or OID, is recorded on an accrual basis to the extent that such amounts are expected to be collected. We stop accruing interest on investments when it is determined that interest is no longer collectible. Investments that are expected to pay regularly scheduled interest in cash are generally placed on non-accrual status when there is reasonable doubt that principal or interest cash payments will be collected. Cash interest payments received on investments may be recognized as income or a return of capital depending upon management’s judgment. A non-accrual investment is restored to accrual status if past due principal and interest are paid in cash, and the portfolio company, in management’s judgment, is likely to continue timely payment of its remaining obligations. As of March 31,June 30, 2020, there were three investments on which we had stopped accruing cash and/or payment in kind, or PIK, interest or OID income.
In connection with our investment in a portfolio company, we sometimes receive nominal cost equity that is valued as part of the negotiation process with the portfolio company. When we receive nominal cost equity, we allocate our cost basis in the investment between debt securities and the nominal cost equity at the time of origination. Any resulting discount from recording the loan, or otherwise purchasing a security at a discount, is accreted into interest income over the life of the loan.
For our secured borrowings, the interest earned on the entire loan balance is recorded within interest income and the interest earned by the buyer from the partial loan sales is recorded within interest expense in the Consolidated Statements of Operations.
PIK Interest Income
Our investments in debt securities may contain PIK interest provisions. PIK interest, which typically represents contractually deferred interest added to the loan balance that is generally due at the end of the loan term, is generally recorded on the accrual basis to the extent such amounts are expected to be collected. We generally cease accruing PIK interest if there is insufficient value to support the accrual or if we do not expect the portfolio company to be able to pay all principal and interest due. Our decision to cease accruing PIK interest on a loan or debt security involves subjective judgments and determinations based on available information about a particular portfolio company, including whether the portfolio company is current with respect to its payment of principal and interest on its loans and debt securities; financial statements and financial projections for the portfolio company; our assessment of the portfolio company's business development success; information obtained by us in connection with periodic formal update interviews with the portfolio company's management and, if appropriate, the private equity sponsor; and information about the general economic and market conditions in which the portfolio company operates. Our determination to cease accruing PIK interest is generally made well before our full write-down of a loan or debt security. In addition, if it is subsequently determined that we will not be able to collect any previously accrued PIK interest, the fair value of the loans or debt securities would be reduced by the amount of such previously accrued, but uncollectible, PIK interest. The accrual of PIK interest on our debt investments increases the recorded cost bases of these investments in our Consolidated Financial Statements including for purposes of computing the capital gains incentive fee payable by us to Oaktree. To maintain our status as a RIC, certain income from PIK interest may be required to be distributed to our stockholders, even though we have not yet collected the cash and may never do so.

75

Fee Income
Oaktree or its affiliates may provide financial advisory services to portfolio companies and, in return, we may receive fees for capital structuring services. These fees are generally nonrecurring and are recognized by us upon the investment closing date. We may also receive additional


fees in the ordinary course of business, including servicing, amendment and prepayment fees, which are classified as fee income and recognized as they are earned or the services are rendered.
We have also structured exit fees across certain of our portfolio investments to be received upon the future exit of those investments. These fees are typically paid to us upon the earliest to occur of (i) a sale of the borrower or substantially all of the assets of the borrower, (ii) the maturity date of the loan or (iii) the date when full prepayment of the loan occurs. The receipt of such fees is contingent upon the occurrence of one of the events listed above for each of the investments. These fees are included in net investment income over the life of the loan.
Dividend Income
We generally recognize dividend income on the record date. Distributions received from equity investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, we will not record distributions from such equity investments as dividend income unless there are sufficient earnings at the portfolio company prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.
Portfolio Composition
Our investments principally consist of loans, common and preferred equity and warrants in privately-held companies and Senior Loan Fund JV I, LLC, or SLF JV I.I, a joint venture through which we and Trinity Universal Insurance Company, a subsidiary of Kemper Corporation, or Kemper, co-invest in senior secured loans of middle-market companies and other corporate debt securities. Our loans are typically secured by a first, second or subordinated lien on the assets of the portfolio company and generally have terms of up to ten years (but an expected average life of between three and four years).
During the sixnine months ended March 31,June 30, 2020, we originated $407.1$667.6 million of investment commitments in 4151 new and 1220 existing portfolio companies and funded $387.9$586.4 million of investments.
During the sixnine months ended March 31,June 30, 2020, we received $251.5$379.3 million of proceeds from prepayments, exits, other paydowns and sales and exited 1736 portfolio companies.
A summary of the composition of our investment portfolio at cost and fair value as a percentage of total investments is shown in the following tables:
June 30, 2020September 30, 2019
Cost:
Senior secured debt78.03 %77.35 %
Subordinated debt6.92  6.88  
Debt investment in SLF JV I5.67  6.36  
Common equity and warrants4.14  3.48  
LLC equity interests of SLF JV I2.91  3.26  
Preferred equity2.33  2.67  
Total100.00 %100.00 %
 
June 30, 2020September 30, 2019
Fair value:
Senior secured debt80.93 %78.64 %
Subordinated debt7.18  5.65  
Debt investment in SLF JV I6.17  6.69  
Common equity and warrants2.92  4.10  
Preferred equity1.92  2.82  
LLC equity interests of SLF JV I0.88  2.10  
Total100.00 %100.00 %
  March 31, 2020 September 30, 2019
Cost:    
Senior secured debt 77.94% 77.35%
Subordinated debt 6.37
 6.88
Debt investments in SLF JV I 5.91
 6.36
Common equity and warrants 4.32
 3.48
LLC equity interests of SLF JV I 3.03
 3.26
Preferred equity 2.43
 2.67
Total 100.00% 100.00%

76
  March 31, 2020 September 30, 2019
Fair value:    
Senior secured debt 81.93% 78.64%
Debt investments in SLF JV I 6.62
 6.69
Subordinated debt 5.75
 5.65
Common equity and warrants 3.45
 4.10
Preferred equity 2.25
 2.82
LLC equity interests of SLF JV I —
 2.10
Total 100.00% 100.00%




The industry composition of our portfolio at cost and fair value as a percentage of total investments was as follows:
June 30, 2020September 30, 2019
Cost:
Application Software11.34 %8.73 %
Multi-Sector Holdings (1)9.03  9.67  
Data Processing & Outsourced Services6.43  6.46  
Pharmaceuticals5.87  3.92  
Biotechnology4.69  5.43  
Health Care Services4.20  6.62  
Oil & Gas Refining & Marketing3.71  2.01  
Specialized Finance3.12  3.52  
Personal Products3.08  0.00  
Property & Casualty Insurance2.91  4.83  
Specialty Chemicals2.67  2.10  
Movies & Entertainment2.63  1.25  
Real Estate Services2.30  2.60  
Oil & Gas Storage & Transportation2.01  0.77  
Auto Parts & Equipment1.98  2.82  
Aerospace & Defense1.95  2.23  
Internet Services & Infrastructure1.86  2.15  
Health Care Technology1.85  3.37  
Research & Consulting Services1.83  2.30  
Managed Health Care1.62  1.83  
Alternative Carriers1.61  1.94  
Electronic Components1.50  0.00  
Education Services1.36  1.04  
Advertising1.35  2.80  
Airport Services1.32  —  
Independent Power Producers & Energy Traders1.28  —  
Electrical Components & Equipment1.24  1.40  
Systems Software1.22  2.10  
Integrated Telecommunication Services1.19  2.23  
General Merchandise Stores1.12  1.25  
Diversified Support Services1.11  1.24  
Apparel, Accessories & Luxury Goods1.02  1.20  
Hotels, Resorts & Cruise Lines0.91  —  
Industrial Machinery0.90  1.13  
Diversified Real Estate Activities0.90  —  
IT Consulting & Other Services0.88  0.99  
Construction & Engineering0.78  1.55  
Health Care Distributors0.76  1.49  
Metal & Glass Containers0.66  —  
Airlines0.62  0.70  
Trading Companies & Distributors0.60  0.68  
Restaurants0.60  0.20  
Commercial Printing0.47  0.40  
Food Retail0.40  0.96  
Distributors0.22  —  
Oil & Gas Equipment & Services0.20  0.80  
Health Care Facilities0.18  —  
Insurance Brokers0.13  —  
Construction Materials0.13  —  
Leisure Facilities0.11  0.12  
Specialty Stores0.08  0.09  
Thrifts & Mortgage Finance0.06  0.08  
Other Diversified Financial Services0.01  0.01  
Interactive Media & Services—  1.44  
Specialized REITs—  0.55  
Household Appliances—  0.52  
Environmental & Facilities Services—  0.39  
Human Resource & Employment Services—  0.05  
Department Stores—  0.04  
Total100.00 %100.00 %
77

  March 31, 2020 September 30, 2019
Cost:    
Application Software 11.97% 8.73%
Multi-Sector Holdings (1) 9.73
 9.67
Data Processing & Outsourced Services 6.50
 6.46
Health Care Services 4.44
 6.62
Biotechnology 4.40
 5.43
Pharmaceuticals 3.89
 3.92
Auto Parts & Equipment 3.59
 2.82
Specialized Finance 3.42
 3.52
Personal Products 3.28
 0.00
Property & Casualty Insurance 3.14
 4.83
Specialty Chemicals 2.76
 2.10
Research & Consulting Services 2.44
 2.30
Real Estate Services 2.41
 2.60
Aerospace & Defense 2.25
 2.23
Health Care Technology 2.24
 3.37
Systems Software 2.07
 2.10
Oil & Gas Storage & Transportation 1.94
 0.77
Internet Services & Infrastructure 1.93
 2.15
Alternative Carriers 1.92
 1.94
Oil & Gas Refining & Marketing 1.86
 2.01
Managed Health Care 1.69
 1.83
Specialized REITs 1.50
 0.55
Education Services 1.42
 1.04
Advertising 1.41
 2.80
Airport Services 1.38
 —
Independent Power Producers & Energy Traders 1.35
 —
Integrated Telecommunication Services 1.31
 2.23
Electrical Components & Equipment 1.29
 1.40
General Merchandise Stores 1.17
 1.25
Diversified Support Services 1.15
 1.24
Apparel, Accessories & Luxury Goods 1.08
 1.20
Industrial Machinery 0.99
 1.13
Health Care Distributors 0.97
 1.49
IT Consulting & Other Services 0.92
 0.99
Movies & Entertainment 0.82
 1.25
Construction & Engineering 0.81
 1.55
Oil & Gas Equipment & Services 0.70
 0.80
Airlines 0.65
 0.70
Trading Companies & Distributors 0.63
 0.68
Restaurants 0.57
 0.20
Commercial Printing 0.49
 0.40
Food Retail 0.42
 0.96
Health Care Facilities 0.22
 —
Distributors 0.21
 —
Specialty Stores 0.17
 0.09
Construction Materials 0.13
 —
Leisure Facilities 0.12
 0.12
Building Products 0.10
 —
Communications Equipment 0.08
 —
Thrifts & Mortgage Finance 0.06
 0.08
Other Diversified Financial Services 0.01
 0.01
Interactive Media & Services —
 1.44
Household Appliances —
 0.52
Environmental & Facilities Services —
 0.39
Human Resource & Employment Services —
 0.05
Department Stores —
 0.04
Total 100.00% 100.00%


 March 31, 2020 September 30, 2019June 30, 2020September 30, 2019
Fair value:    Fair value:
Application Software 13.02% 9.00%Application Software11.86 %9.00 %
Multi-Sector Holdings (1) 7.53
 8.94
Multi-Sector Holdings (1)7.68  8.94  
PharmaceuticalsPharmaceuticals6.40  4.18  
Data Processing & Outsourced Services 6.51
 6.83
Data Processing & Outsourced Services6.13  6.83  
Biotechnology 5.20
 5.96
Biotechnology5.76  5.96  
Oil & Gas Refining & MarketingOil & Gas Refining & Marketing4.44  2.20  
Health Care Services 4.55
 4.06
Health Care Services3.84  4.06  
Pharmaceuticals 4.24
 4.18
Personal Products 3.70
 —
Personal Products3.29  —  
Specialized Finance 3.56
 3.58
Specialized Finance3.11  3.58  
Auto Parts & Equipment 3.29
 2.82
Property & Casualty Insurance 3.26
 5.16
Property & Casualty Insurance2.98  5.16  
Research & Consulting Services 2.56
 2.60
Health Care Technology 2.55
 3.64
Movies & EntertainmentMovies & Entertainment2.79  1.29  
Real Estate Services 2.50
 2.75
Real Estate Services2.35  2.75  
Specialty Chemicals 2.41
 1.64
Specialty Chemicals2.33  1.64  
Systems Software 2.21
 2.19
Health Care TechnologyHealth Care Technology2.01  3.64  
Oil & Gas Storage & TransportationOil & Gas Storage & Transportation1.97  0.83  
Internet Services & Infrastructure 2.13
 2.26
Internet Services & Infrastructure1.90  2.26  
Oil & Gas Storage & Transportation 2.12
 0.83
Research & Consulting ServicesResearch & Consulting Services1.87  2.60  
Auto Parts & EquipmentAuto Parts & Equipment1.87  2.82  
Aerospace & Defense 2.12
 2.35
Aerospace & Defense1.87  2.35  
Alternative Carriers 1.87
 2.06
Alternative Carriers1.69  2.06  
Oil & Gas Refining & Marketing 1.85
 2.20
Managed Health Care 1.73
 1.93
Managed Health Care1.64  1.93  
Specialized REITs 1.61
 0.57
Electronic ComponentsElectronic Components1.50  —  
Airport Services 1.55
 —
Airport Services1.37  —  
Independent Power Producers & Energy Traders 1.52
 —
Independent Power Producers & Energy Traders1.34  —  
Systems SoftwareSystems Software1.29  2.19  
Electrical Components & Equipment 1.31
 1.39
Electrical Components & Equipment1.25  1.39  
Diversified Support ServicesDiversified Support Services1.06  1.30  
Diversified Real Estate ActivitiesDiversified Real Estate Activities1.06  —  
Hotels, Resorts & Cruise LinesHotels, Resorts & Cruise Lines1.06  —  
General Merchandise StoresGeneral Merchandise Stores1.05  1.18  
Advertising 1.24
 2.59
Advertising1.05  2.59  
Diversified Support Services 1.18
 1.30
Integrated Telecommunication ServicesIntegrated Telecommunication Services1.02  2.01  
Airlines 1.05
 1.12
Airlines0.94  1.12  
Integrated Telecommunication Services 1.05
 2.01
Construction & EngineeringConstruction & Engineering0.83  1.67  
IT Consulting & Other ServicesIT Consulting & Other Services0.83  0.96  
Industrial Machinery 1.02
 1.17
Industrial Machinery0.77  1.17  
General Merchandise Stores 1.00
 1.18
Metal & Glass ContainersMetal & Glass Containers0.77  —  
Health Care Distributors 0.92
 1.53
Health Care Distributors0.75  1.53  
IT Consulting & Other Services 0.86
 0.96
Apparel, Accessories & Luxury Goods 0.82
 0.92
Apparel, Accessories & Luxury Goods0.72  0.92  
Movies & Entertainment 0.75
 1.29
Construction & Engineering 0.75
 1.67
Oil & Gas Equipment & Services 0.64
 0.95
Trading Companies & Distributors 0.63
 0.72
Trading Companies & Distributors0.64  0.72  
RestaurantsRestaurants0.48  0.19  
Commercial Printing 0.55
 0.41
Commercial Printing0.48  0.41  
Education Services 0.50
 —
Education Services0.46  —  
Food Retail 0.50
 1.04
Food Retail0.44  1.04  
Restaurants 0.46
 0.19
Oil & Gas Equipment & ServicesOil & Gas Equipment & Services0.30  0.95  
DistributorsDistributors0.26  —  
Health Care Facilities 0.24
 —
Health Care Facilities0.22  —  
Distributors 0.24
 —
Insurance BrokersInsurance Brokers0.14  —  
Construction MaterialsConstruction Materials0.12  —  
Thrifts & Mortgage FinanceThrifts & Mortgage Finance0.02  0.05  
Leisure Facilities 0.22
 0.33
Leisure Facilities—  0.33  
Construction Materials 0.13
 —
Building Products 0.11
 —
Specialty Stores 0.11
 —
Communications Equipment 0.10
 —
Thrifts & Mortgage Finance 0.03
 0.05
Interactive Media & Services —
 1.56
Interactive Media & Services—  1.56  
Leisure Products —
 1.05
Leisure Products—  1.05  
Specialized REITsSpecialized REITs—  0.57  
Household Appliances —
 0.53
Household Appliances—  0.53  
Environmental & Facilities Services —
 0.41
Environmental & Facilities Services—  0.41  
Human Resource & Employment Services —
 0.05
Human Resource & Employment Services—  0.05  
Department Stores —
 0.03
Department Stores—  0.03  
Total 100.00% 100.00%Total100.00 %100.00 %
___________________
(1)This industry includes our investments in SLF JV I, collateral loan obligations and certain limited partnership interests.

(1)This industry includes our investments in SLF JV I, collateral loan obligations and certain limited partnership interests.
78


Loans and Debt Securities on Non-Accrual Status
As of June 30, 2020, non-accruals represented 1.3% of the debt portfolio at cost and 0.2% at fair value in three positions. During the three monthsquarter ended March 31,June 30, 2020, with the exception ofwe placed one portfolio company that modified its scheduled interest payment to PIK in order to preserve liquidity, all of our portfolio companies made their scheduled interest payments.
During the three months ended March 31, 2020, two debt investments were added to cashnew investment on non-accrual status, after experiencing price deterioration inrepresenting 0.1% of the quarter.debt portfolio at both cost and fair value and we exited one investment that was previously on non-accrual status. As of each of March 31,June 30, 2020 and September 30, 2019, there were three investments on which we had stopped accruing cash and/or PIK interest or OID income.
The percentages of our debt investments at cost and fair value by accrual status as of March 31,June 30, 2020 and September 30, 2019 were as follows:
 March 31, 2020 September 30, 2019 June 30, 2020September 30, 2019
 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost% of Debt
Portfolio		Fair
Value		% of Debt
Portfolio		Cost% of Debt
Portfolio		Fair
Value		% of Debt
Portfolio
Accrual $1,443,128
 98.22% $1,306,989
 99.55% $1,311,849
 95.72% $1,305,718
 99.79%Accrual$1,517,762  98.72 %$1,469,325  99.83 %$1,311,849  95.72 %$1,305,718  99.79 %
PIK non-accrual (1) 12,661
 0.86
 —
 —
 12,661
 0.92
 —
 —
PIK non-accrual (1)12,661  0.82  —  —  12,661  0.92  —  —  
Cash non-accrual (2) 13,572
 0.92
 5,864
 0.45
 46,107
 3.36
 2,706
 0.21
Cash non-accrual (2)7,108  0.46  2,497  0.17  46,107  3.36  2,706  0.21  
Total $1,469,361
 100.00% $1,312,853
 100.00% $1,370,617
 100.00% $1,308,424
 100.00%Total$1,537,531  100.00 %$1,471,822  100.00 %$1,370,617  100.00 %$1,308,424  100.00 %
 ___________________
(1)PIK non-accrual status is inclusive of other non-cash income, where applicable.
(2)Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.
(1)PIK non-accrual status is inclusive of other non-cash income, where applicable.
(2)Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.

Senior Loan Fund JV I, LLC
In May 2014, we entered into a limited liability company, or LLC, agreement with Trinity Universal Insurance Company, a subsidiary of Kemper Corporation, or Kemper to form SLF JV I. We co-invest in senior secured loans of middle-market companies and other corporate debt securities with Kemper through our investment in SLF JV I. SLF JV I is managed by a four person Board of Directors, two of whom are selected by us and two of whom are selected by Kemper. All portfolio decisions and investment decisions in respect of SLF JV I must be approved by the SLF JV I investment committee, which consists of one representative selected by us and one representative selected by Kemper (with approval from a representative of each required). Since we do not have a controlling financial interest in SLF JV I, we do not consolidate SLF JV I.
SLF JV I is capitalized pro rata with LLC equity interests as transactions are completed and may be capitalized with additional subordinated notes issued to us and Kemper by SLF JV I. On December 28, 2018, we and Kemper directed the redemption of our holdings of mezzanine notes issued by SLF Repack Issuer 2016, LLC, a wholly-owned, special purpose issuer subsidiary of SLF JV I. Upon such redemption, the assets collateralizing the mezzanine notes, which consisted of equity interests of SLF JV I Funding LLC, or the Equity Interests, were distributed in-kind to each of us and Kemper, based upon our respective holdings of mezzanine notes. Upon such distribution, we and Kemper each then directed that a portion of our respective Equity Interests holdings be contributed to SLF JV I in exchange for LLC equity interests of SLF JV I and the remainder be applied as payment for the subordinated notes of SLF JV I.  SLF Repack Issuer 2016, LLC was dissolved following the foregoing redemption and liquidation. The subordinated notes issued by SLF JV I, or the SLF JV 1 Subordinated Notes, and the mezzanine notes issued by SLF Repack Issuer 2016, LLC, or the SLF Repack Notes, collectively are referred to as the SLF JV I Notes. Prior to their redemption on December 28, 2018, the SLF Repack Notes consisted of Class A mezzanine secured deferrable floating rate notes and Class B mezzanine secured deferrable fixed rate notes. The SLF JV I Subordinated Notes are (and the SLF Repack Notes were, prior to their redemption) senior in right of payment to SLF JV I LLC equity interests and subordinated in right of payment to SLF JV I’s secured debt. As of March 31,June 30, 2020 and September 30, 2019, we and Kemper owned, in the aggregate, 87.5% and 12.5%, respectively, of the LLC equity interests of SLF JV I and the outstanding SLF JV I Subordinated Notes.
SLF JV I has a senior revolving credit facility with Deutsche Bank AG, New York Branch, or, as amended, the Deutsche Bank I Facility, which permitted up to $250.0 million of borrowings (subject to borrowing base and other limitations) as of March 31,June 30, 2020 and September 30, 2019. Borrowings under the Deutsche Bank I Facility are secured by all of the assets of SLF JV I Funding LLC, a special purpose financing subsidiary of SLF JV I. As of March 31,June 30, 2020, the reinvestment period of the Deutsche Bank I Facility was scheduled to expire June 28, 2021 and the maturity date for the Deutsche Bank I Facility was June 29, 2026. As of March 31,June 30, 2020, borrowings under the Deutsche Bank I Facility accrued interest at a rate equal to the 3-month LIBOR plus 1.85% per annum during the reinvestment period and 3-month LIBOR plus 2.00% per annum during the amortization period. Under the Deutsche Bank I Facility, $193.9$173.9 million and $170.2 million of borrowings were outstanding as of March 31,June 30, 2020 and September 30, 2019, respectively.
79

On July 10, 2020, SLF JV I amended the Deutsche Bank I Facility to (a) establish a waiver period beginning on July 10, 2020 and ending 180 days thereafter (the “Waiver Period”), during which the facility agent is restricted from revaluing certain collateral obligations where the change in valuation is caused by or results from a business disruption due primarily to the COVID-19 pandemic and (b) modify the minimum utilization percentage from 75% to 50% until 90 days after the end of the Waiver Period.
As of March 31,June 30, 2020 and September 30, 2019, SLF JV I had total assets of $329.6$315.4 million and $360.9 million, respectively. SLF JV I's portfolio primarily consisted of senior secured loans to 53 and 51 portfolio companies as of March 31,June 30, 2020 and September 30, 2019,


respectively. The portfolio companies in SLF JV I are in industries similar to those in which we may invest directly. As of March 31,June 30, 2020, our investment in SLF JV I consisted of LLC equity interests and SLF JV I Subordinated Notes of $92.2$110.0 million in aggregate at fair value. As of September 30, 2019, our investment in SLF JV I consisted of LLC equity interests and SLF JV I Subordinated Notes of $126.3 million in aggregate at fair value.
As of each of March 31,June 30, 2020 and September 30, 2019, we and Kemper had funded approximately $165.5 million to SLF JV I, of which $144.8 million was from us. As of March 31,June 30, 2020 and September 30, 2019, we and Kemper had the option to fund additional SLF JV I Notes, subject to additional equity funding to SLF JV I. As of each of March 31,June 30, 2020 and September 30, 2019, we had commitments to fund LLC equity interests in SLF JV I of $17.5 million, of which $1.3 million was unfunded.
Below is a summary of SLF JV I's portfolio, followed by a listing of the individual loans in SLF JV I's portfolio as of March 31,June 30, 2020 and September 30, 2019:

 March 31, 2020 September 30, 2019June 30, 2020September 30, 2019
Senior secured loans (1) $337,016 $340,960Senior secured loans (1)$306,759$340,960
Weighted average interest rate on senior secured loans (2) 5.54% 6.57%Weighted average interest rate on senior secured loans (2)5.43%6.57%
Number of borrowers in SLF JV I 53 51Number of borrowers in SLF JV I5351
Largest exposure to a single borrower (1) $10,686 $10,835Largest exposure to a single borrower (1)$10,515$10,835
Total of five largest loan exposures to borrowers (1) $51,441 $50,510Total of five largest loan exposures to borrowers (1)$49,198$50,510
__________________
(1) At principal amount.
(2) Computed using the weighted average annual interest rate on accruing senior secured loans at fair value.
80



SLF JV I Portfolio as of March 31,June 30, 2020
Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Access CIG, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 2/27/20253.92 %Diversified Support Services$9,229  $9,192  $8,816  
AdVenture Interactive, Corp.927 shares of common stockAdvertising1,390  1,353  (4)
AI Convoy (Luxembourg) S.À.R.L.First Lien Term Loan, LIBOR+3.50% cash due 1/18/20274.65 %Aerospace & Defense5,647  5,619  5,414  
AI Ladder (Luxembourg) Subco S.a.r.l.First Lien Term Loan, LIBOR+4.50% cash due 7/9/20254.68 %Electrical Components & Equipment6,064  5,933  5,534  (4)
Airbnb, Inc.First Lien Term Loan, LIBOR+7.50% cash due 4/17/20258.50 %Hotels, Resorts & Cruise Lines3,059  2,984  3,197  
Altice France S.A.First Lien Term Loan, LIBOR+4.00% cash due 8/14/20264.18 %Integrated Telecommunication Services4,655  4,453  4,494  
Alvogen Pharma US, Inc.First Lien Term Loan, LIBOR+5.25% cash due 12/31/20236.32 %Pharmaceuticals9,879  9,603  9,237  
Amplify Finco Pty Ltd.First Lien Term Loan, LIBOR+4.00% cash due 11/26/20264.75 %Movies & Entertainment7,980  7,900  6,983  (4)
Anastasia Parent, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/11/2025Personal Products2,835  2,317  1,003  (6)
Apptio, Inc.First Lien Term Loan, LIBOR+7.25% cash due 1/10/20258.25 %Application Software4,615  4,546  4,512  (4)
First Lien Revolver, LIBOR+7.25% cash due 1/10/2025Application Software—  (6) (9) (4)(5)
Total Apptio, Inc.4,540  4,503  
Aurora Lux Finco S.À.R.L.First Lien Term Loan, LIBOR+6.00% cash due 12/24/20267.00 %Airport Services6,484  6,334  6,036  (4)
Blackhawk Network Holdings, Inc.First Lien Term Loan, LIBOR+3.00% cash due 6/15/20253.18 %Data Processing & Outsourced Services9,800  9,783  9,073  
Boxer Parent Company Inc.First Lien Term Loan, LIBOR+4.25% cash due 10/2/20254.43 %Systems Software7,552  7,466  7,174  (4)
Brazos Delaware II, LLCFirst Lien Term Loan, LIBOR+4.00% cash due 5/21/20254.19 %Oil & Gas Equipment & Services7,350  7,324  5,053  
C5 Technology Holdings, LLC171 Common UnitsData Processing & Outsourced Services—  —  (4)
7,193,539.63 Preferred UnitsData Processing & Outsourced Services7,194  5,683  (4)
Total C5 Technology Holdings, LLC7,194  5,683  
Carrols Restaurant Group, Inc.First Lien Term Loan, LIBOR+6.25% cash due 4/30/20267.25 %Restaurants4,000  3,800  3,840  
CITGO Petroleum Corp.First Lien Term Loan, LIBOR+5.00% cash due 3/28/20246.00 %Oil & Gas Refining & Marketing7,202  7,130  6,932  (4)
Clear Channel Outdoor Holdings, Inc.First Lien Term Loan, LIBOR+3.50% cash due 8/21/20264.26 %Advertising331  289  302  
Connect U.S. Finco LLCFirst Lien Term Loan, LIBOR+4.50% cash due 12/11/20265.50 %Alternative Carriers7,456  7,274  7,041  (4)
Curium Bidco S.à.r.l.First Lien Term Loan, LIBOR+4.00% cash due 7/9/20265.07 %Biotechnology5,955  5,910  5,851  
Dcert Buyer, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/16/20264.18 %Internet Services & Infrastructure7,980  7,960  7,744  
Dealer Tire, LLCFirst Lien Term Loan, LIBOR+4.25% cash due 12/12/20254.43 %Distributors945  903  906  (4)
Ellie Mae, Inc.First Lien Term Loan, LIBOR+3.75% cash due 4/17/20264.06 %Application Software4,963  4,938  4,830  
eResearch Technology, Inc.First Lien Term Loan, LIBOR+4.50% cash due 2/4/20275.50 %Application Software7,500  7,425  7,371  
Frontier Communications CorporationFirst Lien Term Loan, PRIME+2.75% cash due 6/15/20246.00 %Integrated Telecommunication Services3,939  3,901  3,853  
Gigamon, Inc.First Lien Term Loan, LIBOR+4.25% cash due 12/27/20245.25 %Systems Software7,801  7,750  7,479  
81

Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipal Cost Fair Value (3)Notes
Access CIG, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 2/27/20255.53%Diversified Support Services$9,253
 $9,213
 $7,622
 
AdVenture Interactive, Corp.927 shares of common stock Advertising  1,390
 1,312
(4)
AI Convoy (Luxembourg) S.À.R.L.First Lien Term Loan, LIBOR+3.50% cash due 1/18/20275.34%Aerospace & Defense9,200
 9,154
 8,257
 
AI Ladder (Luxembourg) Subco S.a.r.l.First Lien Term Loan, LIBOR+4.50% cash due 7/9/20255.49%Electrical Components & Equipment6,092
 5,953
 5,137
(4)
Altice France S.A.First Lien Term Loan, LIBOR+4.00% cash due 8/14/20264.70%Integrated Telecommunication Services9,709
 9,398
 9,296
 
Alvogen Pharma US, Inc.First Lien Term Loan, LIBOR+5.25% cash due 12/31/20236.32%Pharmaceuticals9,879
 9,586
 8,594

Anastasia Parent, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/11/20255.20%Personal Products2,843
 2,360
 1,658
 
Apptio, Inc.First Lien Term Loan, LIBOR+7.25% cash due 1/10/20258.25%Application Software4,615
 4,542
 4,398
(4)
 First Lien Revolver, LIBOR+7.25% cash due 1/10/2025 Application Software—
 (6) (18)(4)(5)
Total Apptio, Inc.     4,536
 4,380
 
Aurora Lux Finco S.À.R.L.First Lien Term Loan, LIBOR+6.00% cash due 12/24/20267.00%Airport Services6,500
 6,344
 6,111
(4)
Blackhawk Network Holdings, Inc.First Lien Term Loan, LIBOR+3.00% cash due 6/15/20253.99%Data Processing & Outsourced Services9,825
 9,807
 8,134
 
Boxer Parent Company Inc.First Lien Term Loan, LIBOR+4.25% cash due 10/2/20255.24%Systems Software7,571
 7,483
 6,366
(4)
Brazos Delaware II, LLCFirst Lien Term Loan, LIBOR+4.00% cash due 5/21/20254.92%Oil & Gas Equipment & Services7,369
 7,342
 3,887
 
C5 Technology Holdings, LLC171 Common Units Data Processing & Outsourced Services  —
 —
(4)
 7,193,539.63 Preferred Units    7,194
 5,683
(4)
Total C5 Technology Holdings, LLC     7,194
 5,683
 
CITGO Petroleum Corp.First Lien Term Loan, LIBOR+5.00% cash due 3/28/20246.00%Oil & Gas Refining & Marketing7,920
 7,841
 7,009
(4)
Connect U.S. Finco LLCFirst Lien Term Loan, LIBOR+4.50% cash due 12/11/20265.49%Alternative Carriers8,367
 8,162
 6,746
(4)
Curium Bidco S.à.r.l.First Lien Term Loan, LIBOR+4.00% cash due 7/9/20265.07%Biotechnology5,970
 5,925
 5,672
 
Dcert Buyer, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/16/20264.99%Internet Services & Infrastructure8,000
 7,980
 7,193
 
Dealer Tire, LLCFirst Lien Term Loan, LIBOR+4.25% cash due 12/12/20255.24%Distributors948
 904
 788
(4)
Delta 2 (Lux) S.à.r.l.First Lien Term Loan, LIBOR+2.50% cash due 2/1/20243.50%Movies & Entertainment5,167
 4,649
 4,665
 
Ellie Mae, Inc.First Lien Term Loan, LIBOR+3.75% cash due 4/17/20265.20%Application Software4,974
 4,950
 4,372
 
eResearch Technology, Inc.First Lien Term Loan, LIBOR+4.50% cash due 2/4/20275.95%Application Software7,500
 7,425
 6,653

Frontier Communications CorporationFirst Lien Term Loan, LIBOR+3.75% cash due 6/15/20245.21%Integrated Telecommunication Services7,162
 7,068
 6,846

GFL Environmental, Inc.First Lien Term Loan, LIBOR+3.00% cash due 5/30/20254.00%Environmental & Facilities Services718
 663
 700
 
Gigamon, Inc.First Lien Term Loan, LIBOR+4.25% cash due 12/27/20245.25%Systems Software7,820
 7,767
 6,726



Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Guidehouse LLPSecond Lien Term Loan, LIBOR+8.00% cash due 5/1/20268.18 %Research & Consulting Services$6,000  $5,978  $5,490  (4)
Helios Software Holdings, Inc.First Lien Term Loan, LIBOR+4.25% cash due 10/24/20255.32 %Systems Software3,980  3,940  3,852  
Intelsat Jackson Holdings S.A.First Lien Term Loan, PRIME+4.75% cash due 11/27/20238.00 %Alternative Carriers3,568  3,539  3,565  
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 7/13/20216.50 %Alternative Carriers971  798  1,006  (5)
Total Intelsat Jackson Holdings S.A.4,337  4,571  
KIK Custom Products Inc.First Lien Term Loan, LIBOR+4.00% cash due 5/15/20235.00 %Household Products8,000  7,978  7,645  
Mindbody, Inc.First Lien Term Loan, LIBOR+7.00% cash 1.5% PIK due 2/14/20258.00 %Internet Services & Infrastructure4,529  4,459  4,185  (4)
First Lien Revolver, LIBOR+8.00% cash due 2/14/20259.07 %Internet Services & Infrastructure476  469  440  (4)
Total Mindbody, Inc.4,928  4,625  
MRI Software LLCFirst Lien Term Loan, LIBOR+5.50% cash due 2/10/20266.57 %Application Software3,716  3,682  3,577  (4)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026Application Software—  (2) (10) (4)(5)
First Lien Revolver, LIBOR+5.50% cash due 2/10/2026Application Software—  (3) (13) (4)(5)
Total MRI Software LLC3,677  3,554  
Navicure, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/22/20264.18 %Health Care Technology5,985  5,955  5,761  
New IPT, Inc.First Lien Term Loan, LIBOR+5.00% cash due 3/17/20216.00 %Oil & Gas Equipment & Services1,072  1,072  1,072  (4)
21.876 Class A Common Units in New IPT Holdings, LLCOil & Gas Equipment & Services—  512  (4)
Total New IPT, Inc.1,072  1,584  
Northern Star Industries Inc.First Lien Term Loan, LIBOR+4.50% cash due 3/31/20255.57 %Electrical Components & Equipment6,843  6,819  6,329  
Northwest Fiber, LLCFirst Lien Term Loan, LIBOR+5.50% cash due 6/5/20275.67 %Integrated Telecommunication Services2,406  2,316  2,394  
Novetta Solutions, LLCFirst Lien Term Loan, LIBOR+5.00% cash due 10/17/20226.00 %Application Software5,946  5,922  5,832  
OEConnection LLCFirst Lien Term Loan, LIBOR+4.00% cash due 9/25/20265.07 %Application Software7,253  7,216  6,890  
First Lien Delayed Draw Term Loan, LIBOR+4.00% cash due 9/25/2026Application Software—  (3) (35) (5)
Total OEConnection LLC7,213  6,855  
Olaplex, Inc.First Lien Term Loan, LIBOR+6.50% cash due 1/8/20267.50 %Personal Products4,969  4,877  4,770  (4)
First Lien Revolver, LIBOR+6.50% cash due 1/8/20257.50 %Personal Products540  530  518  (4)
Total Olaplex, Inc.5,407  5,288  
PG&E CorporationFirst Lien Term Loan, LIBOR+4.50% cash due 6/23/20255.50 %Electric Utilities6,000  5,910  5,904  
Sabert CorporationFirst Lien Term Loan, LIBOR+4.50% cash due 12/10/20265.50 %Metal & Glass Containers4,339  4,296  4,241  
Salient CRGT, Inc.First Lien Term Loan, LIBOR+6.50% cash due 2/28/20227.57 %Aerospace & Defense2,142  2,127  1,928  (4)
SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.00% cash due 10/27/20226.00 %Footwear8,354  8,341  5,555  
Signify Health, LLCFirst Lien Term Loan, LIBOR+4.50% cash due 12/23/20245.50 %Health Care Services9,775  9,711  9,237  
Sirva Worldwide, Inc.First Lien Term Loan, LIBOR+5.50% cash due 8/4/20255.68 %Diversified Support Services4,809  4,736  3,558  
82

Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipal Cost Fair Value (3)Notes
GoodRx, Inc.First Lien Term Loan, LIBOR+2.75% cash due 10/10/20253.74%Interactive Media & Services$8,592
 $8,470
 $8,119
 
Guidehouse LLPSecond Lien Term Loan, LIBOR+8.00% cash due 5/1/20268.99%Research & Consulting Services6,000
 5,977
 5,190
(4)
Helios Software Holdings, Inc.First Lien Term Loan, LIBOR+4.25% cash due 10/24/20255.32%Systems Software3,990
 3,950
 3,438
 
Intelsat Jackson Holdings S.A.First Lien Term Loan, LIBOR+3.75% cash due 11/27/20235.68%Alternative Carriers10,686
 10,563
 9,905

KIK Custom Products Inc.First Lien Term Loan, LIBOR+4.00% cash due 5/15/20235.00%Household Products8,000
 7,976
 7,237

Mindbody, Inc.First Lien Term Loan, LIBOR+7.00% cash due 2/14/20258.00%Internet Services & Infrastructure4,524
 4,450
 4,185
(4)
 First Lien Revolver, LIBOR+7.00% cash due 2/14/20258.07%Internet Services & Infrastructure476
 468
 440
(4)
Total Mindbody, Inc.     4,918
 4,625
 
MRI Software LLCFirst Lien Term Loan, LIBOR+5.50% cash due 2/10/20266.57%Application Software3,411
 3,379
 3,019
(4)
 First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026 Application Software—
 (4) (68)(4)(5)
 First Lien Revolver, LIBOR+5.50% cash due 2/10/20266.57%Application Software169
 166
 130
(4)(5)
Total MRI Software LLC     3,541
 3,081
 
Navicure, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/22/20264.99%Health Care Technology6,000
 5,970
 5,565

New IPT, Inc.First Lien Term Loan, LIBOR+5.00% cash due 3/17/20216.45%Oil & Gas Equipment & Services1,138
 1,138
 1,138
(4)
 21.876 Class A Common Units in New IPT Holdings, LLC Oil & Gas Equipment & Services  —
 697
(4)
Total New IPT, Inc.     1,138
 1,835
 
Northern Star Industries Inc.First Lien Term Loan, LIBOR+4.50% cash due 3/31/20255.57%Electrical Components & Equipment6,860
 6,835
 5,831

Novetta Solutions, LLCFirst Lien Term Loan, LIBOR+5.00% cash due 10/17/20226.00%Application Software5,962
 5,935
 5,315

OEConnection LLCFirst Lien Term Loan, LIBOR+4.00% cash due 9/25/20265.45%Application Software7,271
 7,234
 5,871
 
 First Lien Delayed Draw Term Loan, LIBOR+4.00% cash due 9/25/2026 Application Software—
 (3) (133)(5)
Total OEConnection LLC     7,231
 5,738
 
Olaplex, Inc.First Lien Term Loan, LIBOR+6.50% cash due 1/8/20267.50%Personal Products5,000
 4,904
 4,675
(4)
 First Lien Revolver, LIBOR+6.50% cash due 1/8/20257.50%Personal Products540
 530
 505
(4)
Total Olaplex, Inc.     5,434
 5,180
 
Quikrete Holdings, Inc.First Lien Term Loan, LIBOR+2.50% cash due 2/1/20273.49%Construction Materials2,280
 2,106
 2,109
 
Sabert CorporationFirst Lien Term Loan, LIBOR+4.50% cash due 12/10/20265.50%Metal & Glass Containers4,350
 4,307
 4,046
 
Salient CRGT, Inc.First Lien Term Loan, LIBOR+6.50% cash due 2/28/20227.57%Aerospace & Defense2,173
 2,156
 1,793
(4)
Scientific Games International, Inc.First Lien Term Loan, LIBOR+2.75% cash due 8/14/20243.74%Casinos & Gaming6,483
 6,461
 5,262

SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.00% cash due 10/27/20226.78%Footwear8,376
 8,362
 6,575

Signify Health, LLCFirst Lien Term Loan, LIBOR+4.50% cash due 12/23/20245.95%Health Care Services9,800
 9,732
 8,232

Star US Bidco LLCFirst Lien Term Loan, LIBOR+4.25% cash due 3/17/20275.94%Industrial Machinery2,973
 2,943
 2,587
 
Sirva Worldwide, Inc.First Lien Term Loan, LIBOR+5.50% cash due 8/4/20256.49%Diversified Support Services4,844
 4,771
 3,633
 


Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipal Cost Fair Value (3)NotesPortfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Star US Bidco LLCStar US Bidco LLCFirst Lien Term Loan, LIBOR+4.25% cash due 3/17/20275.25 %Industrial Machinery$3,728  $3,534  $3,423  
Sunshine Luxembourg VII SARLFirst Lien Term Loan, LIBOR+4.25% cash due 10/1/20265.32%Personal Products$7,980
 $7,940
 $7,262
(4)Sunshine Luxembourg VII SARLFirst Lien Term Loan, LIBOR+4.25% cash due 10/1/20265.32 %Personal Products7,960  7,920  7,650  
Supermoose Borrower, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/29/20255.20%Application Software4,913
 4,566
 3,960
(4)Supermoose Borrower, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 8/29/20253.93 %Application Software4,901  4,571  4,339  (4)
Surgery Center Holdings, Inc.First Lien Term Loan, LIBOR+3.25% cash due 9/2/20244.25%Health Care Facilities4,987
 4,966
 3,868
(4)Surgery Center Holdings, Inc.First Lien Term Loan, LIBOR+3.25% cash due 9/3/20244.25 %Health Care Facilities4,974  4,954  4,402  (4)
Thruline Marketing, Inc.927 Class A Units in FS AVI Holdco, LLC Advertising  949
 449
(4)Thruline Marketing, Inc.927 Class A Units in FS AVI Holdco, LLCAdvertising949  322  (4)
Thunder Finco (US), LLCFirst Lien Term Loan, LIBOR+4.25% cash due 11/26/20265.24%Movies & Entertainment8,000
 7,920
 6,260
 
Uber Technologies, Inc.First Lien Term Loan, LIBOR+4.00% cash due 4/4/20255.00%Application Software10,509
 10,440
 9,887
(4)Uber Technologies, Inc.First Lien Term Loan, LIBOR+4.00% cash due 4/4/20255.00 %Application Software8,005  7,947  7,718  
UFC Holdings, LLCFirst Lien Term Loan, LIBOR+3.25% cash due 4/29/20264.25%Movies & Entertainment4,831
 4,787
 4,306
(4)UFC Holdings, LLCFirst Lien Term Loan, LIBOR+3.25% cash due 4/29/20264.25 %Movies & Entertainment4,819  4,777  4,622  
Veritas US Inc.First Lien Term Loan, LIBOR+4.50% cash due 1/27/20235.95%Application Software6,859
 6,826
 5,941
(4)Veritas US Inc.First Lien Term Loan, LIBOR+4.50% cash due 1/27/20235.50 %Application Software6,841  6,812  6,358  (4)
Verscend Holding Corp.First Lien Term Loan, LIBOR+4.50% cash due 8/27/20255.49%Health Care Technology4,133
 4,099
 3,926

Verscend Holding Corp.First Lien Term Loan, LIBOR+4.50% cash due 8/27/20254.68 %Health Care Technology4,122  4,090  3,998  (4)
VM Consolidated, Inc.First Lien Term Loan, LIBOR+3.25% cash due 2/28/20254.24%Data Processing & Outsourced Services10,542
 10,554
 9,593
(4)VM Consolidated, Inc.First Lien Term Loan, LIBOR+3.25% cash due 2/28/20253.56 %Data Processing & Outsourced Services10,515  10,525  10,068  
WideOpenWest Finance, LLCFirst Lien Term Loan, LIBOR+3.25% cash due 8/18/20234.25%Cable & Satellite962
 867
 897
 
WP CPP Holdings, LLCSecond Lien Term Loan, LIBOR+7.75% cash due 4/30/20269.53%Aerospace & Defense6,000
 5,953
 4,120
(4)WP CPP Holdings, LLCSecond Lien Term Loan, LIBOR+7.75% cash due 4/30/20268.75 %Aerospace & Defense6,000  5,955  4,530  (4)
   $337,016
 $341,737
 $299,572
 $306,759  $312,009  $291,335  
__________________
(1) Represents the current interest rate as of March 31,June 30, 2020. All interest rates are payable in cash, unless otherwise noted.
(2) The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, we have provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All the LIBOR shown above is in U.S. dollars. As of March 31,June 30, 2020, the reference rates for SLF JV I's variable rate loans were the 30-day LIBOR at 0.99%0.18%, the 60-day LIBOR at 1.26%0.24%, the 90-day LIBOR at 1.45% and0.31%, the 180-day LIBOR at 1.07%0.36% and the PRIME at 3.25%. Most loans include an interest floor, which generally ranges from 0% to 1%.
(3) Represents the current determination of fair value as of March 31,June 30, 2020 utilizing a similar technique as us in accordance with ASC 820. However, the determination of such fair value is not included in our Board of Directors' valuation process described elsewhere herein.
(4) This investment is held by both us and SLF JV I as of March 31,June 30, 2020.
(5) Investment has undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.

(6) This investment was on cash non-accrual status as of June 30, 2020. Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.

SLF JV I Portfolio as of September 30, 2019
Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Access CIG, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 2/27/20256.07 %Diversified support services$9,300  $9,256  $9,201  
AdVenture Interactive, Corp.927 shares of common stockAdvertising1,390  1,295  (4)
AI Ladder (Luxembourg) Subco S.a.r.l.First Lien Term Loan, LIBOR+4.50% cash due 7/9/20256.60 %Electrical components & equipment6,145  5,992  5,659  (4)
Air Newco LPFirst Lien Term Loan, LIBOR+4.75% cash due 5/31/20246.79 %IT consulting & other services9,900  9,875  9,916  
AL Midcoast Holdings LLCFirst Lien Term Loan, LIBOR+5.50% cash due 8/1/20257.60 %Oil & gas storage & transportation9,900  9,801  9,764  
Altice France S.A.First Lien Term Loan, LIBOR+4.00% cash due 8/14/20266.03 %Integrated telecommunication services7,444  7,282  7,439  
Alvogen Pharma US, Inc.First Lien Term Loan, LIBOR+4.75% cash due 4/1/20226.79 %Pharmaceuticals7,656  7,656  6,963  
Apptio, Inc.First Lien Term Loan, LIBOR+7.25% cash due 1/10/20259.56 %Application software4,615  4,534  4,530  (4)
First Lien Revolver, LIBOR+7.25% cash due 1/10/2025Application software—  (7) (7) (4)(5)
Total Apptio, Inc.4,527  4,523  
83

Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipal Cost Fair Value (3)Notes
Access CIG, LLCFirst Lien Term Loan, LIBOR+3.75% cash due 2/27/20256.07%Diversified support services$9,300
 $9,256
 $9,201
 
AdVenture Interactive, Corp.927 shares of common stock Advertising  1,390
 1,295
(4)
AI Ladder (Luxembourg) Subco S.a.r.l.First Lien Term Loan, LIBOR+4.50% cash due 7/9/20256.60%Electrical components & equipment6,145
 5,992
 5,659
(4)
Air Newco LPFirst Lien Term Loan, LIBOR+4.75% cash due 5/31/20246.79%IT consulting & other services9,900
 9,875
 9,916
 
AL Midcoast Holdings LLCFirst Lien Term Loan, LIBOR+5.50% cash due 8/1/20257.60%Oil & gas storage & transportation9,900
 9,801
 9,764
 
Altice France S.A.First Lien Term Loan, LIBOR+4.00% cash due 8/14/20266.03%Integrated telecommunication services7,444
 7,282
 7,439
 
Alvogen Pharma US, Inc.First Lien Term Loan, LIBOR+4.75% cash due 4/1/20226.79%Pharmaceuticals7,656
 7,656
 6,963
 
Apptio, Inc.First Lien Term Loan, LIBOR+7.25% cash due 1/10/20259.56%Application software4,615
 4,534
 4,530
(4)
 First Lien Revolver, LIBOR+7.25% cash due 1/10/2025 Application software—
 (7) (7)(4)(5)
Total Apptio, Inc.     4,527
 4,523
 


Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Blackhawk Network Holdings, Inc.First Lien Term Loan, LIBOR+3.00% cash due 6/15/20255.04 %Data processing & outsourced services$9,875  $9,855  $9,858  
Boxer Parent Company Inc.First Lien Term Loan, LIBOR+4.25% cash due 10/2/20256.29 %Systems software7,609  7,518  7,336  (4)
Brazos Delaware II, LLCFirst Lien Term Loan, LIBOR+4.00% cash due 5/21/20256.05 %Oil & gas equipment & services7,406  7,376  6,855  
C5 Technology Holdings, LLC171 Common UnitsData Processing & Outsourced Services—  —  (4)
7,193,539.63 Preferred Units7,194  7,194  (4)
Total C5 Technology Holdings, LLC7,194  7,194  
Cast & Crew Payroll, LLCFirst Lien Term Loan, LIBOR+4.00% cash due 2/9/20266.05 %Application software4,975  4,925  5,018  
CITGO Petroleum Corp.First Lien Term Loan, LIBOR+5.00% cash due 3/28/20247.10 %Oil & gas refining & marketing7,960  7,880  8,010  (4)
Connect U.S. Finco LLCFirst Lien Term Loan, LIBOR+4.50% cash due 9/23/20267.10 %Alternative Carriers8,000  7,840  7,888  (4)
Curium Bidco S.à r.l.First Lien Term Loan, LIBOR+4.00% cash due 7/9/20266.10 %Biotechnology6,000  5,955  6,030  
Dcert Buyer, Inc.First Lien Term Loan, LIBOR+4.00% cash due 8/8/20266.26 %Internet services & infrastructure8,000  7,980  7,985  
DigiCert, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/31/20246.04 %Internet services & infrastructure8,250  8,148  8,249  (4)
Ellie Mae, Inc.First Lien Term Loan, LIBOR+4.00% cash due 4/17/20266.04 %Application software5,000  4,975  5,015  
Everi Payments Inc.First Lien Term Loan, LIBOR+3.00% cash due 5/9/20245.04 %Casinos & gaming4,764  4,742  4,776  
Falmouth Group Holdings Corp.First Lien Term Loan, LIBOR+6.75% cash due 12/14/20218.95 %Specialty chemicals4,938  4,909  4,910  
Frontier Communications CorporationFirst Lien Term Loan, LIBOR+3.75% cash due 6/15/20245.80 %Integrated telecommunication services6,473  6,400  6,471  
Gentiva Health Services, Inc.First Lien Term Loan, LIBOR+3.75% cash due 7/2/20255.81 %Healthcare services7,920  7,801  7,974  
Gigamon, Inc.First Lien Term Loan, LIBOR+4.25% cash due 12/27/20246.29 %Systems software7,860  7,801  7,644  
GoodRx, Inc.First Lien Term Loan, LIBOR+2.75% cash due 10/10/20254.81 %Interactive media & services7,852  7,835  7,862  
Guidehouse LLPSecond Lien Term Loan, LIBOR+7.50% cash due 5/1/20269.54 %Research & consulting services6,000  5,975  5,925  (4)
Indivior Finance S.a.r.l.First Lien Term Loan, LIBOR+4.50% cash due 12/19/20226.76 %Pharmaceuticals7,898  7,797  7,272  
Intelsat Jackson Holdings S.A.First Lien Term Loan, LIBOR+3.75% cash due 11/27/20235.80 %Alternative Carriers10,000  9,891  10,042  
KIK Custom Products Inc.First Lien Term Loan, LIBOR+4.00% cash due 5/15/20236.26 %Household products8,000  7,972  7,610  
McDermott Technology (Americas), Inc.First Lien Term Loan, LIBOR+5.00% cash due 5/9/20257.10 %Oil & gas equipment & services4,187  4,119  2,676  
Mindbody, Inc.First Lien Term Loan, LIBOR+7.00% cash due 2/14/20259.06 %Internet services & infrastructure4,524  4,443  4,438  (4)
First Lien Revolver, LIBOR+7.00% cash due 2/15/2025Internet services & infrastructure—  (9) (9) (4)(5)
Total Mindbody, Inc.4,434  4,429  
Navicure, Inc.First Lien Term Loan, LIBOR+3.75% cash due 9/18/20266.13 %Healthcare technology6,000  5,970  6,008  
New IPT, Inc.First Lien Term Loan, LIBOR+5.00% cash due 3/17/20217.10 %Oil & gas equipment & services1,422  1,422  1,422  (4)
21.876 Class A Common Units in New IPT Holdings, LLCOil & gas equipment & services—  1,268  (4)
Total New IPT, Inc.1,422  2,690  
Northern Star Industries Inc.First Lien Term Loan, LIBOR+4.50% cash due 3/31/20256.56 %Electrical components & equipment6,895  6,868  6,792  
84

Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipal Cost Fair Value (3)Notes
Blackhawk Network Holdings, Inc.First Lien Term Loan, LIBOR+3.00% cash due 6/15/20255.04%Data processing & outsourced services$9,875
 $9,855
 $9,858
 
Boxer Parent Company Inc.First Lien Term Loan, LIBOR+4.25% cash due 10/2/20256.29%Systems software7,609
 7,518
 7,336
(4)
Brazos Delaware II, LLCFirst Lien Term Loan, LIBOR+4.00% cash due 5/21/20256.05%Oil & gas equipment & services7,406
 7,376
 6,855
 
C5 Technology Holdings, LLC171 Common Units Data Processing & Outsourced Services  —
 —
(4)
 7,193,539.63 Preferred Units    7,194
 7,194
(4)
Total C5 Technology Holdings, LLC     7,194
 7,194
 
Cast & Crew Payroll, LLCFirst Lien Term Loan, LIBOR+4.00% cash due 2/9/20266.05%Application software4,975
 4,925
 5,018
 
CITGO Petroleum Corp.First Lien Term Loan, LIBOR+5.00% cash due 3/28/20247.10%Oil & gas refining & marketing7,960
 7,880
 8,010
(4)
Connect U.S. Finco LLCFirst Lien Term Loan, LIBOR+4.50% cash due 9/23/20267.10%Alternative Carriers8,000
 7,840
 7,888
(4)
Curium Bidco S.à r.l.First Lien Term Loan, LIBOR+4.00% cash due 7/9/20266.10%Biotechnology6,000
 5,955
 6,030
 
Dcert Buyer, Inc.First Lien Term Loan, LIBOR+4.00% cash due 8/8/20266.26%Internet services & infrastructure8,000
 7,980
 7,985
 
DigiCert, Inc.First Lien Term Loan, LIBOR+4.00% cash due 10/31/20246.04%Internet services & infrastructure8,250
 8,148
 8,249
(4)
Ellie Mae, Inc.First Lien Term Loan, LIBOR+4.00% cash due 4/17/20266.04%Application software5,000
 4,975
 5,015
 
Everi Payments Inc.First Lien Term Loan, LIBOR+3.00% cash due 5/9/20245.04%Casinos & gaming4,764
 4,742
 4,776
 
Falmouth Group Holdings Corp.First Lien Term Loan, LIBOR+6.75% cash due 12/14/20218.95%Specialty chemicals4,938
 4,909
 4,910
 
Frontier Communications CorporationFirst Lien Term Loan, LIBOR+3.75% cash due 6/15/20245.80%Integrated telecommunication services6,473
 6,400
 6,471
 
Gentiva Health Services, Inc.First Lien Term Loan, LIBOR+3.75% cash due 7/2/20255.81%Healthcare services7,920
 7,801
 7,974
 
Gigamon, Inc.First Lien Term Loan, LIBOR+4.25% cash due 12/27/20246.29%Systems software7,860
 7,801
 7,644
 
GoodRx, Inc.First Lien Term Loan, LIBOR+2.75% cash due 10/10/20254.81%Interactive media & services7,852
 7,835
 7,862
 
Guidehouse LLPSecond Lien Term Loan, LIBOR+7.50% cash due 5/1/20269.54%Research & consulting services6,000
 5,975
 5,925
(4)
Indivior Finance S.a.r.l.First Lien Term Loan, LIBOR+4.50% cash due 12/19/20226.76%Pharmaceuticals7,898
 7,797
 7,272
 
Intelsat Jackson Holdings S.A.First Lien Term Loan, LIBOR+3.75% cash due 11/27/20235.80%Alternative Carriers10,000
 9,891
 10,042
 
KIK Custom Products Inc.First Lien Term Loan, LIBOR+4.00% cash due 5/15/20236.26%Household products8,000
 7,972
 7,610
 
McDermott Technology (Americas), Inc.First Lien Term Loan, LIBOR+5.00% cash due 5/9/20257.10%Oil & gas equipment & services4,187
 4,119
 2,676
 
Mindbody, Inc.First Lien Term Loan, LIBOR+7.00% cash due 2/14/20259.06%Internet services & infrastructure4,524
 4,443
 4,438
(4)
 First Lien Revolver, LIBOR+7.00% cash due 2/15/2025 Internet services & infrastructure—
 (9) (9)(4)(5)
Total Mindbody, Inc.     4,434
 4,429
 
Navicure, Inc.First Lien Term Loan, LIBOR+3.75% cash due 9/18/20266.13%Healthcare technology6,000
 5,970
 6,008
 
New IPT, Inc.First Lien Term Loan, LIBOR+5.00% cash due 3/17/20217.10%Oil & gas equipment & services1,422
 1,422
 1,422
(4)
 21.876 Class A Common Units in New IPT Holdings, LLC Oil & gas equipment & services  —
 1,268
(4)
Total New IPT, Inc.     1,422
 2,690
 
Northern Star Industries Inc.First Lien Term Loan, LIBOR+4.50% cash due 3/31/20256.56%Electrical components & equipment6,895
 6,868
 6,792
 


Portfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipal Cost Fair Value (3)NotesPortfolio CompanyInvestment Type Cash Interest Rate (1)(2)IndustryPrincipalCostFair Value (3)Notes
Novetta Solutions, LLCFirst Lien Term Loan, LIBOR+5.00% cash due 10/17/20227.05%Application software$5,993
 $5,961
 $5,882
 Novetta Solutions, LLCFirst Lien Term Loan, LIBOR+5.00% cash due 10/17/20227.05 %Application software$5,993  $5,961  $5,882  
OCI Beaumont LLCFirst Lien Term Loan, LIBOR+4.00% cash due 3/13/20256.10%Commodity chemicals7,880
 7,872
 7,890
 OCI Beaumont LLCFirst Lien Term Loan, LIBOR+4.00% cash due 3/13/20256.10 %Commodity chemicals7,880  7,872  7,890  
OEConnection LLCFirst Lien Term Loan, LIBOR+4.00% cash due 9/24/20266.13%Application software7,312
 7,275
 7,298
 OEConnection LLCFirst Lien Term Loan, LIBOR+4.00% cash due 9/24/20266.13 %Application software7,312  7,275  7,298  
First Lien Delayed Draw Term Loan, LIBOR+4.00% cash due 9/24/2026 Application software—
 (3) (1)(5)First Lien Delayed Draw Term Loan, LIBOR+4.00% cash due 9/24/2026Application software—  (3) (1) (5)
Total OEConnection LLC     7,272
 7,297
 Total OEConnection LLC7,272  7,297  
Red Ventures, LLCFirst Lien Term Loan, LIBOR+3.00% cash due 11/8/20245.04%Interactive media & services3,990
 3,971
 4,011
 Red Ventures, LLCFirst Lien Term Loan, LIBOR+3.00% cash due 11/8/20245.04 %Interactive media & services3,990  3,971  4,011  
Salient CRGT, Inc.First Lien Term Loan, LIBOR+6.00% cash due 2/28/20228.05%Aerospace & defense2,205
 2,183
 2,094
(4)Salient CRGT, Inc.First Lien Term Loan, LIBOR+6.00% cash due 2/28/20228.05 %Aerospace & defense2,205  2,183  2,094  (4)
Scientific Games International, Inc.First Lien Term Loan, LIBOR+2.75% cash due 8/14/20244.79%Casinos & gaming6,516
 6,491
 6,470
 Scientific Games International, Inc.First Lien Term Loan, LIBOR+2.75% cash due 8/14/20244.79 %Casinos & gaming6,516  6,491  6,470  
SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.00% cash due 10/27/20227.26%Footwear8,420
 8,403
 7,999
 SHO Holding I CorporationFirst Lien Term Loan, LIBOR+5.00% cash due 10/27/20227.26 %Footwear8,420  8,403  7,999  
Signify Health, LLCFirst Lien Term Loan, LIBOR+4.50% cash due 12/23/20246.60%Healthcare services9,850
 9,775
 9,838
 Signify Health, LLCFirst Lien Term Loan, LIBOR+4.50% cash due 12/23/20246.60 %Healthcare services9,850  9,775  9,838  
Sirva Worldwide, Inc.First Lien Term Loan, LIBOR+5.50% cash due 8/4/20257.54%Diversified support services4,906
 4,833
 4,759
 Sirva Worldwide, Inc.First Lien Term Loan, LIBOR+5.50% cash due 8/4/20257.54 %Diversified support services4,906  4,833  4,759  
Sunshine Luxembourg VII SARLFirst Lien Term Loan, LIBOR+4.25% cash due 9/25/20266.59%Personal products8,000
 7,960
 8,048
 Sunshine Luxembourg VII SARLFirst Lien Term Loan, LIBOR+4.25% cash due 9/25/20266.59 %Personal products8,000  7,960  8,048  
Thruline Marketing, Inc.First Lien Term Loan, LIBOR+7.00% cash due 4/3/20229.10%Advertising1,854
 1,851
 1,854
(4)Thruline Marketing, Inc.First Lien Term Loan, LIBOR+7.00% cash due 4/3/20229.10 %Advertising1,854  1,851  1,854  (4)
927 Class A Units in FS AVI Holdco, LLC Advertising  1,088
 658
(4)927 Class A Units in FS AVI Holdco, LLCAdvertising1,088  658  (4)
Total Thruline Marketing, Inc.     2,939
 2,512
 Total Thruline Marketing, Inc.2,939  2,512  
Triple Royalty Sub LLCFixed Rate Bond 144A 9.0% Toggle PIK cash due 4/15/2033 Pharmaceuticals5,000
 5,000
 5,175
 Triple Royalty Sub LLCFixed Rate Bond 144A 9.0% Toggle PIK cash due 4/15/2033Pharmaceuticals5,000  5,000  5,175  
Uber Technologies, Inc.First Lien Term Loan, LIBOR+4.00% cash due 4/4/20256.03%Application software9,875
 9,836
 9,836
(4)Uber Technologies, Inc.First Lien Term Loan, LIBOR+4.00% cash due 4/4/20256.03 %Application software9,875  9,836  9,836  (4)
UFC Holdings, LLCFirst Lien Term Loan, LIBOR+3.25% cash due 4/29/20265.30%Movies & entertainment4,489
 4,489
 4,506
 UFC Holdings, LLCFirst Lien Term Loan, LIBOR+3.25% cash due 4/29/20265.30 %Movies & entertainment4,489  4,489  4,506  
Uniti Group LPFirst Lien Term Loan, LIBOR+5.00% cash due 10/24/20227.04%Specialized REITs6,401
 6,221
 6,256
(4)Uniti Group LPFirst Lien Term Loan, LIBOR+5.00% cash due 10/24/20227.04 %Specialized REITs6,401  6,221  6,256  (4)
Valeant Pharmaceuticals International Inc.First Lien Term Loan, LIBOR+2.75% cash due 11/27/20254.79%Pharmaceuticals1,772
 1,764
 1,778
 Valeant Pharmaceuticals International Inc.First Lien Term Loan, LIBOR+2.75% cash due 11/27/20254.79 %Pharmaceuticals1,772  1,764  1,778  
Veritas US Inc.First Lien Term Loan, LIBOR+4.50% cash due 1/27/20236.60%Application software6,894
 6,856
 6,534
(4)Veritas US Inc.First Lien Term Loan, LIBOR+4.50% cash due 1/27/20236.60 %Application software6,894  6,856  6,534  (4)
Verra Mobility, Corp.First Lien Term Loan, LIBOR+3.75% cash due 2/28/20255.79%Data processing & outsourced services10,835
 10,849
 10,894
 Verra Mobility, Corp.First Lien Term Loan, LIBOR+3.75% cash due 2/28/20255.79 %Data processing & outsourced services10,835  10,849  10,894  
WP CPP Holdings, LLCSecond Lien Term Loan, LIBOR+7.75% cash due 4/30/202610.01%Aerospace & defense6,000
 5,949
 5,974
(4)WP CPP Holdings, LLCSecond Lien Term Loan, LIBOR+7.75% cash due 4/30/202610.01 %Aerospace & defense6,000  5,949  5,974  (4)
   $340,960
 $347,985
 $345,032
 $340,960  $347,985  $345,032  
__________________
(1) Represents the current interest rate as of September 30, 2019. All interest rates are payable in cash, unless otherwise noted.
(2) The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, we have provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All the LIBOR shown above is in U.S. dollars. As of September 30, 2019, the reference rates for SLF JV I's variable rate loans were the 30-day LIBOR at 2.04%, the 60-day LIBOR at 2.09%, the 90-day LIBOR at 2.10%, the 180-day LIBOR at 2.06%, and the PRIME at 5.00%. Most loans include an interest floor, which generally ranges from 0% to 1%.
(3) Represents the current determination of fair value as of September 30, 2019 utilizing a similar technique as us in accordance with ASC 820. However, the determination of such fair value is not included in our Board of Directors' valuation process described elsewhere herein.
(4) This investment was held by both us and SLF JV I as of September 30, 2019.
(5) Investment had undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.
As of March 31, 2020, the cost and fair value of our debt investments in the SLF JV I were $96.3 million and $92.2 million, respectively. Both the cost and fair value of our debt investment in the SLF JV I were $96.3 million as of each of June 30, 2020 and September 30, 2019. We earned interest income of $2.1$2.0 million and $4.3$6.3 million on our investments in the SLF JV I Subordinated Notes for the three and sixnine months ended March 31,June 30, 2020, respectively. We earned interest income of $2.3 million and $5.1$7.4 million on our investments in the SLF JV I Notes for the


three and sixnine months ended March 31,June 30, 2019, respectively. The
85

SLF JV I Subordinated Notes bear interest at a rate of one-month LIBOR plus 7.0% per annum and mature on December 29, 2028.
The cost and fair value of the LLC equity interests in SLF JV I held by us was $49.3 million and $0.0$13.8 million, respectively, as of March 31,June 30, 2020, and $49.3 million and $30.1 million, respectively, as of September 30, 2019. We did not earn dividend income for the three and sixnine months ended March 31,June 30, 2020 and 2019 with respect to our investment in the LLC equity interests of SLF JV I. The LLC equity interests of SLF JV I are dividend producing to the extent SLF JV I has residual cash to be distributed on a quarterly basis.
Below is certain summarized financial information for SLF JV I as of March 31,June 30, 2020 and September 30, 2019 and for the three and sixnine months ended March 31,June 30, 2020 and 2019:
June 30, 2020September 30, 2019
Selected Balance Sheet Information:
Investments at fair value (cost June 30, 2020: $312,009; cost September 30, 2019: $347,985)$291,335  $345,032  
Cash and cash equivalents10,112  3,674  
Restricted cash4,038  5,242  
Other assets9,888  6,912  
Total assets$315,373  $360,860  
Senior credit facility payable$173,910  $170,210  
Debt securities payable at fair value (proceeds June 30, 2020: $110,000; proceeds September 30, 2019: $110,000)110,000  110,000  
Other liabilities15,623  46,303  
Total liabilities299,533  326,513  
Members' equity15,840  34,347  
Total liabilities and members' equity$315,373  $360,860  
  March 31, 2020 September 30, 2019
Selected Balance Sheet Information:    
Investments at fair value (cost March 31, 2020: $341,737; cost September 30, 2019: $347,985) $299,572
 $345,032
Cash and cash equivalents 14,039
 3,674
Restricted cash 5,242
 5,242
Other assets 10,783
 6,912
Total assets $329,636
 $360,860
     
Senior credit facility payable $193,910
 $170,210
Debt securities payable at fair value (proceeds March 31, 2020: $110,000; proceeds September 30, 2019: $110,000) 105,339
 110,000
Other liabilities 30,387
 46,303
Total liabilities 329,636
 326,513
Members' equity —
 34,347
Total liabilities and members' equity $329,636
 $360,860

 Three months ended March 31, 2020 Three months ended March 31, 2019 Six months ended March 31, 2020 Six months ended March 31, 2019Three months ended June 30, 2020Three months ended June 30, 2019Nine months ended June 30, 2020Nine months ended June 30, 2019
Selected Statements of Operations Information:        Selected Statements of Operations Information:
Interest income $5,546
 $5,551
 $10,939
 $10,989
Interest income$4,419  $5,864  $15,358  $16,853  
Other income 291
 80
 297
 89
Other income—  —  297  89  
Total investment income 5,837
 5,631
 11,236
 11,078
Total investment income4,419  5,864  15,655  16,942  
Interest expense 4,493
 4,709
 9,134
 9,863
Interest expense4,076  4,999  13,210  14,862  
Other expenses 64
 276
 131
 326
Other expenses47  26  178  352  
Total expenses (1) 4,557
 4,985
 9,265
 10,189
Total expenses (1)4,123  5,025  13,388  15,214  
Net unrealized appreciation (depreciation) (37,491) 4,576
 (34,550) 1,120
Net unrealized appreciation (depreciation)16,829  (370) (17,721) 750  
Net realized gains (losses) (615) 19
 (1,767) (4,986)Net realized gains (losses)(1,285) 111  (3,052) (4,875) 
Net income (loss) $(36,826) $5,241
 $(34,346) $(2,977)Net income (loss)$15,840  $580  $(18,506) $(2,397) 
 __________
(1) There are no management fees or incentive fees charged at SLF JV I.

SLF JV I has elected to fair value the debt securities issued to us and Kemper under FASB ASC Topic 825, Financial Instruments - Fair Value Option. The debt securities are valued based on the total assets less the total liabilities senior to the mezzanine notes of SLF JV I in an amount not exceeding par under the enterprise value technique.
During the three and sixnine months ended March 31,June 30, 2020 and 2019, we did not sell any debt investments to SLF JV I.
Discussion and Analysis of Results and Operations
Results of Operations
Net increase (decrease) in net assets resulting from operations includes net investment income, net realized gains (losses) and net unrealized appreciation (depreciation). Net investment income is the difference between our income from interest, dividends and fees and net expenses. Net realized gains (losses) is the difference between the proceeds received from dispositions of investment related assets and


liabilities and their stated costs. Net unrealized appreciation (depreciation) is the
86

net change in the fair value of our investment related assets and liabilities carried at fair value during the reporting period, including the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized.
Comparison of three and sixnine months ended March 31,June 30, 2020 and March 31,June 30, 2019
Total Investment Income
Total investment income includes interest on our investments, fee income and dividend income.
Total investment income for the three months ended March 31,June 30, 2020 and March 31,June 30, 2019 was $34.2$34.4 million and $38.2$36.7 million, respectively. For the three months ended March 31,June 30, 2020, this amount consisted of $31.8$32.3 million of interest income from portfolio investments (which included $1.9$2.2 million of PIK interest), $2.1$1.8 million of fee income and $0.3 million of dividend income. For the three months ended March 31,June 30, 2019, this amount consisted of $36.6$34.1 million of interest income from portfolio investments (which included $2.3$1.2 million of PIK interest), $1.1$1.8 million of fee income and $0.5$0.7 million of dividend income. The decrease of $4.1$2.3 million, or 10.7%6.2%, in our total investment income for the three months ended March 31,June 30, 2020, as compared to the three months ended March 31,June 30, 2019, was due primarily to a $4.7$1.8 million decrease in interest income, which was attributable to decreases in LIBOR on our floating rate investments and a $0.5 million decrease in dividend income from our investment in First Star Speir Aviation Limited.
Total investment income for the nine months ended June 30, 2020 and June 30, 2019 was $99.5 million and $113.2 million, respectively. For the nine months ended June 30, 2020, this amount consisted of $93.7 million of interest income from portfolio investments (which included $5.3 million of PIK interest), $4.9 million of fee income and $0.9 million of dividend income. For the nine months ended June 30, 2019, this amount consisted of $107.3 million of interest income from portfolio investments (which included $4.3 million of PIK interest), $4.2 million of fee income and $1.7 million of dividend income. The decrease of $13.7 million, or 12.1%, in our total investment income for the nine months ended June 30, 2020, as compared to the nine months ended June 30, 2019, was due primarily to a $13.6 million decrease in interest income, which was attributable to lower levels of OID accretion, primarily attributablerelated to $4.3$9.9 million of non-recurring OID accretion related toon one of our investments during the threenine months ended March 31,June 30, 2019, and decreases in LIBOR on our floating rate investments.
Total investment income for the six months ended March 31, 2020investments and March 31, 2019 was $65.1 million and $76.5 million, respectively. For the six months ended March 31, 2020, this amount consisted of $61.4 million of interest income from portfolio investments (which included $3.1 million of PIK interest), $3.1 million of fee income and $0.6 million of dividend income. For the six months ended March 31, 2019, this amount consisted of $73.2 million of interest income from portfolio investments (which included $3.1 million of PIK interest), $2.3 million of fee income and $1.0 million of dividend income. The decrease of $11.4 million, or 14.9%, in our total investment income for the six months ended March 31, 2020, as compared to the six months ended March 31, 2019, was due primarily to a $11.8$0.8 million decrease in interestdividend income which was attributable to lower levels of OID accretion, primarily the result of $9.9 million of OID accretion related to one offrom our investments during the six months ended March 31, 2019,investment in First Star Speir Aviation Limited, partially offset by higher prepayment and decreases in LIBOR on our floating rate investments.exit fees.
Expenses
Net expenses (expenses net of fee waivers) for the three months ended March 31,June 30, 2020 and March 31,June 30, 2019 were $11.3$17.6 million and $20.5$20.1 million, respectively. Net expenses decreased for the three months ended March 31,June 30, 2020, as compared to the three months ended March 31,June 30, 2019, by $9.2$2.4 million, or 44.8%12.1%, due primarily to a $7.7$1.2 million decrease in interest expense primarily driven by decreases to LIBOR and a $1.0 million decrease in base management fees and incentive fees (net of fee waivers) primarily driven by a $0.6 million decrease in Part II incentive fees and a $0.6 million reversal of previously accrued waived fees in the prior quarter.
Net expenses (expenses net of fee waivers) for the nine months ended June 30, 2020 and June 30, 2019 were $52.1 million and $61.6 million, respectively. Net expenses decreased for the nine months ended June 30, 2020, as compared to the nine months ended June 30, 2019, by $9.5 million, or 15.4%, due primarily to a $5.3 million decrease in interest expense resulting from decreases to LIBOR during the period and a $3.4 million decrease in base management fees and incentive fees (net of fee waivers), which was attributable toprimarily driven by a $6.6$1.3 million reversal of previously accrued Part II incentive fees as a result of unrealized depreciation on investments during the quarter and lowerdecrease in Part I incentive fees due to lower investment income, a $1.2 million reversal of previously accrued waived fees in the prior year and a $1.8$0.7 million decrease in interest expense primarily driven by decreases to LIBOR, partially offset by a $0.2 million increase in professional fees.
Net expenses (expenses net of fee waivers) for the six months ended March 31, 2020 and March 31, 2019 were $34.5 million and $41.5 million, respectively. Net expenses decreased for the six months ended March 31, 2020, as compared to the six months ended March 31, 2019, by $7.0 million, or 17.0%, due primarily to a $2.4 million decrease in base management fees and incentive fees (net of fee waivers), which was attributable to a $1.7 million decrease in Part III incentive fees (net of waivers) due to a reversal of previously waived fees of $0.6 million in the prior period and lower investment income during the current period and a $0.4 million decrease in base management fees due to a decrease in the size of the investment portfolio at fair value, and a $4.1 million decrease in interest expense resulting from decreases to LIBOR during the period.year.
Net Investment Income
As a result of the $4.1$2.3 million decrease in total investment income and the $9.2$2.4 million decrease in net expenses, net investment income for the three months ended March 31,June 30, 2020 increased by $5.1$0.2 million, or 29.0%1.0%, compared to the three months ended March 31,June 30, 2019.
As a result of the $11.4$13.7 million decrease in total investment income and the $7.0$9.5 million decrease in net expenses, net investment income for the sixnine months ended March 31,June 30, 2020 decreased by $4.3$4.2 million, or 12.4%8.1%, compared to the sixnine months ended March 31,June 30, 2019.

87



Realized Gain (Loss)
Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption of investments, secured borrowings and foreign currency and the cost basis without regard to unrealized appreciation or depreciation previously recognized, and includes investments written-off during the period, net of recoveries. Realized losses may also be recorded in connection with our determination that certain investments are considered worthless securities and/or meet the conditions for loss recognition per the applicable tax rules.
During the three months ended March 31,June 30, 2020 and 2019, we recorded aggregate net realized gains (losses) of $(26.5)$2.8 million and $25.2$(19.8) million, respectively, primarily in connection with the exits or restructurings of various investments. During the sixnine months ended March 31,June 30, 2020 and 2019, we recorded aggregate net realized gains (losses) of $(23.2)$(20.4) million and $43.2$23.3 million, respectively, in connection with the exits or restructurings of various investments. See “Note 9. Realized Gains or Losses and Net Unrealized Appreciation or Depreciation” in the notes to the accompanying Consolidated Financial Statements for more details regarding investment realization events for the three and sixnine months ended March 31,June 30, 2020 and 2019.
Net Unrealized Appreciation (Depreciation)
Net unrealized appreciation or depreciation is the net change in the fair value of our investments, secured borrowings and foreign currency during the reporting period, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.
During the three months ended March 31,June 30, 2020 and 2019, we recorded net unrealized appreciation (depreciation) of $(163.5)$100.6 million and $21.5$23.4 million, respectively. For the three months ended March 31,June 30, 2020, this consisted of $(139.8)$85.2 million of net unrealized appreciation on debt investments, $11.8 million of net unrealized appreciation on equity investments and $3.9 million of net unrealized appreciation related to exited investments (a portion of which results in a reclassification to realized losses), partially offset by $0.4 million of net unrealized depreciation of foreign currency forward contracts. The unrealized appreciation on investments during the quarter was largely due to price increases on liquid debt investments and $(54.4) millionthe impact of net unrealized depreciationtighter credit spreads on equity investments, partially offset by $28.4private debt investment valuations following the improvement in broader credit market conditions.
For the three months ended June 30, 2019, this consisted of $23.8 million of net unrealized appreciation related to exited investments (a portion of which results in a reclassification to realized losses) and $2.2 million of net unrealized appreciation of foreign currency forward contracts. The unrealized depreciation on debt and equity investments during the three months ended March 31, 2020 was largely due to increased market volatility and wider credit spreads resulting from the onset of the COVID-19 pandemic in March 2020 and the direct impact of the COVID-19 pandemic on certain of our portfolio companies, including the impact of leverage at the SLF JV I.
For the three months ended March 31, 2019, this consisted of $22.3 million of net unrealized appreciation on equity investments, $3.6$2.5 million of net unrealized appreciation on debt investments, and $0.8 million of net unrealized appreciation of foreign currency forward contracts, partially offset by $(5.2)$2.1 million of net unrealized depreciation related to exitedon equity investments (a portionand$0.8 million of which results in a reclassification to realized gains).net unrealized depreciation of foreign currency forward contracts.
During the sixnine months ended March 31,June 30, 2020 and 2019, we recorded net unrealized appreciation (depreciation) of $(160.7)$(60.1) million and $14.5$37.9 million, respectively. For the sixnine months ended March 31,June 30, 2020, this consisted of $(134.0)$42.5 million of net unrealized depreciation on debt investments and $(50.0)$39.3 million of net unrealized depreciation on equity investments, partially offset by $22.5$21.3 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses) and $0.8$0.4 million of net unrealized appreciation of foreign currency forward contracts.
For the sixnine months ended March 31,June 30, 2019, this consisted of $24.2$44.3 million of net unrealized appreciation related to exited investments (a portion of which results in a reclassification to realized losses), $14.0 and $11.8 million of net unrealized appreciation on equity investments, and $0.4 million of net unrealized appreciation of foreign currency forward contracts, partially offset by $(24.1)$17.8 million of net unrealized depreciation on debt investments.investments and $0.4 million of net unrealized depreciation of foreign currency forward contracts.
Financial Condition, Liquidity and Capital Resources
We have a number of alternatives available to fund our investment portfolio and our operations, including raising equity, increasing or refinancing debt and funding from operational cash flow. We generally expect to fund the growth of our investment portfolio through additional debt and equity capital, which may include securitizing a portion of our investments. We cannot assure you, however, that our efforts to grow our portfolio will be successful. For example, our common stock has generally traded at prices below net asset value for the past several years, and we are currently limited in our ability to raise additional equity at prices below the then-current net asset value per share. We intend to continue to generate cash primarily from cash flows from operations, including interest earned, and future borrowings. We intend to fund our future distribution obligations through operating cash flow or with funds obtained through future equity and debt offerings or credit facilities, as we deem appropriate.
88


Our primary uses of funds are investments in our targeted asset classes and cash distributions to holders of our common stock. We may from time to time repurchase or redeem some or all of our outstanding notes in open-market transactions, privately negotiated transactions or otherwise. At a special meeting of our stockholders held on June 28, 2019, our stockholders approved the application of the reduced asset coverage requirements in Section 61(a)(2) of the Investment Company Act to us effective as of June 29, 2019. As a result of the reduced asset coverage requirement, we can incur $2 of debt for each $1 of equity as compared to $1 of debt for each $1 of equity. As of March 31,June 30, 2020, we had $704.8$766.8 million in senior securities and our asset coverage ratio was 205.9%211.3%. During the quarter, we increased ourOur target debt to equity ratio from 0.70x to 0.85x tois 0.85x to 1.0x (i.e., one dollar of equity for each $0.85 to $1.00 of debt outstanding) as we plan to continue to opportunistically deploy capital into the markets. As of June 30, 2020, our debt to equity ratio was 0.89x.
For the sixnine months ended March 31,June 30, 2020, we experienced a net increase in cash and cash equivalents of $74.1$35.3 million. During that period, we used $121.6$207.7 million of net cash from operating activities, primarily from funding $379.2$576.9 million of investments, a $21.0$61.9 million of net decrease in payables from unsettled transactions, partially offset by $251.5$388.3 million of principal payments and sale proceeds received and the cash activities related to $30.7$47.4 million of net investment income. During the same period, net cash provided by financing activities was $195.7$243.1 million, primarily consisting of $90.0$152.0 million of net borrowings under the Credit Facility (as defined below) and $136.2 million net incurrence of unsecured notes, partially offset by $25.8$38.8 million of cash distributions paid to our stockholders, $3.7$4.8 million of deferred financing costs paid and $1.0$1.4 million of repurchases of common stock under our dividend reinvestment plan, or DRIP.
For the sixnine months ended March 31,June 30, 2019, we experienced a net decrease in cash and cash equivalents and restricted cash of $0.3$7.9 million. During that period, we received $74.7$135.8 million of net cash from operating activities, primarily from $329.0$467.3 million of principal payments and sale proceeds received and the cash activities related to $35.0$51.6 million of net investment income, partially offset by funding $270.3$351.7 million of investments. During the same period, net cash used in financing activities was $75.1$143.9 million, primarily consisting of $183.8$128.8 million of net borrowings under the Credit Facility (as defined below), $228.8 million of repayments of unsecured notes, $0.70.8 million of repayments of secured borrowings, $26.1$39.1 million of cash distributions paid to our stockholders and $0.7$1.0 million of repurchases of common stock under our dividend reinvestment plan, or DRIP.
As of March 31,June 30, 2020, we had $89.5$50.7 million in cash and cash equivalents, portfolio investments (at fair value) of $1.4$1.6 billion, $6.2$8.8 million of interest, dividends and fees receivable, $295.2$233.2 million of undrawn capacity on the Credit Facility (subject to borrowing base and other limitations), $34.0$6.9 million of net payablesreceivables from unsettled transactions, $404.8$466.8 million of borrowings outstanding under our Credit Facility, $293.9$294.2 million of unsecured notes payable (net of unamortized financing costs and unaccreted discount) and unfunded commitments to portfolio companies of $91.6$154.6 million. As of March 31,June 30, 2020, we have analyzed cash and cash equivalents, availability under the Credit Facility, the ability to rotate out of certain assets and amounts of unfunded commitments that could be drawn and believe our liquidity and capital resources are sufficient to take advantage of market opportunities in the current economic climate.
As of September 30, 2019, we had $15.4 million in cash and cash equivalents, portfolio investments (at fair value) of $1.4 billion, $11.2 million of interest, dividends and fees receivable, $385.2 of undrawn capacity on the Credit Facility (subject to borrowing base and other limitations), $55.0 million of net payables from unsettled transactions, $314.8 million of borrowings outstanding under our Credit Facility, $158.5 million of unsecured notes payable (net of unamortized financing costs) and unfunded commitments of $88.3 million.
89


Significant Capital Transactions
The following table reflects the distributions per share that we have paid, including shares issued under our DRIP, on our common stock since October 1, 2017:
Date Declared Record Date Payment Date 
Amount
per Share
 
Cash
Distribution
 DRIP Shares
Issued (1)		 
DRIP Shares
Value
Date DeclaredRecord DatePayment DateAmount
per Share		Cash
Distribution		DRIP Shares
Issued (1)		DRIP Shares
Value
August 7, 2017 December 15, 2017 December 29, 2017 $0.125
  $ 17.3 million 58,456
  $ 0.3 millionAugust 7, 2017December 15, 2017December 29, 2017$0.125   $ 17.3 million58,456   $ 0.3 million
February 5, 2018 March 15, 2018 March 30, 2018 0.085
 11.5 million 122,884
 0.5 millionFebruary 5, 2018March 15, 2018March 30, 20180.085  11.5 million122,884  0.5 million
May 3, 2018 June 15, 2018 June 29, 2018 0.095
 13.0 million 87,283
 0.4 millionMay 3, 2018June 15, 2018June 29, 20180.095  13.0 million87,283  0.4 million
August 1, 2018 September 15, 2018 September 28, 2018 0.095
 13.2 million 34,575
 0.2 millionAugust 1, 2018September 15, 2018September 28, 20180.095  13.2 million34,575  0.2 million
November 19, 2018 December 17, 2018 December 28, 2018 0.095
 13.0 million 87,429
 0.4 millionNovember 19, 2018December 17, 2018December 28, 20180.095  13.0 million87,429  0.4 million
February 1, 2019 March 15, 2019 March 29, 2019 0.095
 13.1 million 59,603
  0.3 millionFebruary 1, 2019March 15, 2019March 29, 20190.095  13.1 million59,603   0.3 million
May 3, 2019 June 14, 2019 June 28, 2019 0.095
 13.1 million 61,093
  0.3 millionMay 3, 2019June 14, 2019June 28, 20190.095  13.1 million61,093   0.3 million
August 2, 2019 September 13, 2019 September 30, 2019 0.095
 13.1 million 61,205
  0.3 millionAugust 2, 2019September 13, 2019September 30, 20190.095  13.1 million61,205   0.3 million
November 12, 2019 December 13, 2019 December 31, 2019 0.095
 12.9 million 87,747
 0.5 millionNovember 12, 2019December 13, 2019December 31, 20190.095  12.9 million87,747  0.5 million
January 31, 2020 March 13, 2020 March 31, 2020 0.095
 12.9 million 157,523
 0.5 millionJanuary 31, 2020March 13, 2020March 31, 20200.095  12.9 million157,523  0.5 million
April 30, 2020April 30, 2020June 15, 2020June 30, 20200.095  13.0 million87,351  0.4 million
 ______________
(1)Shares were purchased on the open market and distributed.
(1)Shares were purchased on the open market and distributed.
Indebtedness
See “Note 6. Borrowings” in the Consolidated Financial Statements for more details regarding our indebtedness.
Credit Facility

As of March 31,June 30, 2020, and September 30, 2019, (i) the size of our senior secured revolving credit facility, or, as amended and restated, the Credit Facility, pursuant to a senior secured revolving credit agreement, with the lenders party thereto, ING Capital LLC, as administrative agent, ING Capital LLC, JPMorgan Chase Bank, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint lead arrangers and joint bookrunners, and JPMorgan Chase Bank, N.A. and Bank of America, N.A., as syndication agents, was $700 million (with an “accordion” feature that permits us, under certain circumstances, to increase the size of the facility to up to $1.02 billion),the greater of $800 million and our net worth (as defined in the Credit Facility) on the date of such increase, (ii) the period during which we may make drawings will expire on February 25, 2023 and the maturity date is February 25, 2024 and (iii) the interest rate margin for (a) LIBOR loans (which may be 1-, 2-, 3- or 6-month, at our option) was 2.00% (which can be increased up to 2.25%) and (b) alternate base rate loans was 1.00% (which can be increased up to 1.25%),; provided that the interest margin will increase to 2.75% and 1.75% for LIBOR loans and alternative base rate loans, respectively, if our stockholders’ equity is below $700 million, each depending on our senior debt coverage ratio.

On December 13, 2019, we amended the Credit Facility to (1) reduce the required ratio of total assets (less total liabilities) to total indebtedness of us and our subsidiaries (subject to certain exceptions), from 1.65 to 1.00 to 1.50 to 1.00 and (2) modify the definition of Advance Rate to reference asset coverage of 1.50 to 1.00, rather than 1.65 to 1.00.

Each loan or letter of credit originated or assumed under the Credit Facility is subject to the satisfaction of certain conditions. Borrowings under the Credit Facility are subject to the facility’s various covenants and the leverage restrictions contained in the Investment Company Act. We cannot be assuredassure you that we will be able to borrow funds under the Credit Facility at any particular time or at all.


The following table describes significant financial covenants, as of March 31,June 30, 2020, with which we must comply under the Credit Facility on a quarterly basis:
Financial CovenantDescriptionTarget ValueDecemberMarch 31, 20192020 Reported Value (1)
Minimum shareholders' equityNet assets shall not be less than the greatersum of (a) 40% of total assets and (b) $700(x) $550 million, plus (y) 50% of the aggregate net proceeds of all sales of equity interests after November 30, 2017May 6, 2020
$700550 million$931752 million
Asset coverage ratioAsset coverage ratio shall not be less than the greater of 1.50:1 and the statutory test applicable to us1.50:12.72:2.06:1
Interest coverage ratioInterest coverage ratio shall not be less than 2.00:2.25:12.00:2.25:12.89:3.20:1
Minimum net worthNet worth shall not be less than $600$500 million$600500 million$887748 million
 ___________ 
(1) As contractually required, we report financial covenants based on the last filed quarterly or annual report, in this case our Quarterly Report on Form 10-Q for the quarter ended DecemberMarch 31, 2019.2020. We were in compliance with all financial covenants under the Credit Facility based on the financial information contained in this Quarterly Report on Form 10-Q.
90

As of March 31,June 30, 2020 and September 30, 2019, we had $404.8$466.8 million and $314.8 million of borrowings outstanding under the Credit Facility, respectively, which had a fair value of $404.8$466.8 million and $314.8 million, respectively. Our borrowings under the Credit Facility bore interest at a weighted average interest rate of 3.806%3.325% and 4.688%4.615% for the sixnine months ended March 31,June 30, 2020 and 2019, respectively. For the three and sixnine months ended March 31,June 30, 2020, we recorded interest expense (inclusive of fees) of $4.2$3.5 million and $8.2$11.7 million, respectively, related to the Credit Facility. For the three and sixnine months ended March 31,June 30, 2019, we recorded interest expense (inclusive of fees) of $4.3$5.1 million and $7.5$12.7 million in the aggregate, related to the Credit Facility.
2025 Notes
On February 25, 2020, we issued $300.0 million in aggregate principal amount of our 3.500% notes due 2025, or the 2025 Notes, for net proceeds of $293.8 million after deducting OID of $2.5 million, underwriting commissions and discounts of $3.0 million and offering costs of $0.7 million. The OID on the 2025 Notes is amortized based on the effective interest method over the term of the notes.
For each of the three and sixnine months ended March 31,June 30, 2020, we recorded interest expense of $1.1$2.9 million and $4.0 million, respectively, related to the 2025 Notes. As of March 31,June 30, 2020, there were $300.0 million of 2025 Notes outstanding, which had a carrying value and fair value of $293.9$294.2 million and $274.5$293.3 million, respectively.
2019 Notes
For the three and sixnine months ended March 31,June 30, 2019, we recorded interest expense of $2.1 million and $5.1 million (inclusive of fees), respectively, related to our 4.875% unsecured notes due 2019, or the 2019 Notes. The 2019 Notes matured on March 1, 2019 and were fully repaid during the three months ended March 31, 2019. As of March 31,June 30, 2020 and September 30, 2019, there were no 2019 Notes outstanding.
2024 Notes
For the three and sixnine months ended March 31,June 30, 2020, we recorded interest expense of $0.8 million and $1.9 million (inclusive of fees), respectively, related to our 5.875% unsecured notes due 2024, or the 2024 Notes. For the three and sixnine months ended March 31,June 30, 2019, the Company recorded interest expense of $1.2 million and $2.3$3.5 million (inclusive of fees), respectively, related to the 2024 Notes.
On March 2, 2020, we redeemed 100%, or $75.0 million aggregate principal amount, of the issued and outstanding 2024 Notes. The redemption price per 2024 Note was $25 plus accrued and unpaid interest. We recognized a loss of $1.0 million in connection with the redemption of the 2024 Notes during the three and sixnine months ended March 31,June 30, 2020. As of March 31,June 30, 2020, there were no 2024 Notes outstanding. As of September 30, 2019, there were $75.0 million of 2024 Notes outstanding, which had a carrying value and fair value of $73.9 million and $77.4 million, respectively.
2028 Notes
For the three and sixnine months ended March 31,June 30, 2020, we recorded interest expense of $1.1 million and $2.5 million (inclusive of fees), respectively, related to our 6.125% unsecured notes due 2028, or the 2028 Notes. For the three and sixnine months ended March 31,June 30, 2019, we recorded interest expense of $1.4 million and $2.7$4.1 million (inclusive of fees), respectively, related to the 2028 Notes.
On March 13, 2020, we redeemed 100%, or $86.3 million aggregate principal amount, of the issued and outstanding 2028 Notes. The redemption price per 2028 Note was $25 plus accrued and unpaid interest. We recognized a loss of $1.5 million in connection with the redemption of the 2028 Notes during the three and sixnine months ended March 31,June 30, 2020. As of March 31,June 30, 2020, there were no 2028 Notes


outstanding. As of September 30, 2019, there were $86.3 million of 2028 Notes outstanding, which had a carrying value and fair value of $84.6 million and $87.6 million, respectively.
Off-Balance Sheet Arrangements
We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of March 31,June 30, 2020, our only off-balance sheet arrangements consisted of $91.6$154.6 million of unfunded commitments, which was comprised of $86.7$149.8 million to provide debt financing to certain of our portfolio companies, $1.3 million to provide equity financing to SLF JV I and $3.5 million related to unfunded limited partnership interests. As of September 30, 2019, our only off-balance sheet arrangements consisted of $88.3 million of unfunded commitments, which was comprised of $83.5 million to provide debt financing to certain of its portfolio companies, $1.3 million to provide equity financing to SLF JV I and $3.5 million related to unfunded limited partnership interests. Such commitments are subject to our portfolio companies' satisfaction of certain financial and nonfinancial covenants and may involve, to varying degrees, elements of credit risk in excess of the amount recognized in our Consolidated Statements of Assets and Liabilities.
91


A list of unfunded commitments by investment (consisting of revolvers, term loans with delayed draw components, SLF JV I subordinated notes and LLC equity interests, and limited partnership interests) as of March 31,June 30, 2020 and September 30, 2019 is shown in the table below:
June 30, 2020September 30, 2019
 March 31, 2020 September 30, 2019
Athenex, Inc.Athenex, Inc.$36,610  $—  
Assembled Brands Capital LLC $33,143
 $35,182
Assembled Brands Capital LLC33,143  35,182  
WPEngine, Inc. 26,348
 —
WPEngine, Inc.26,348  —  
NuStar Logistics, L.P.NuStar Logistics, L.P.17,911  —  
A.T. Holdings II SÀRLA.T. Holdings II SÀRL11,311  —  
Dominion Diagnostics, LLC 5,887
 —
Dominion Diagnostics, LLC5,887  —  
Corrona, LLC 4,273
 —
Corrona, LLC5,189  —  
PaySimple, Inc. 3,985
 12,250
Pingora MSR Opportunity Fund I-A, LP 3,500
 3,500
Pingora MSR Opportunity Fund I-A, LP3,500  3,500  
Accupac, Inc.Accupac, Inc.2,346  —  
MRI Software LLC 2,857
 —
MRI Software LLC2,315  —  
Accupac, Inc. 2,346
 —
Acquia Inc. 2,240
 —
Acquia Inc.2,240  —  
New IPT, Inc. 2,229
 2,229
New IPT, Inc.2,229  2,229  
Apptio, Inc. 1,538
 1,538
Apptio, Inc.1,538  1,538  
Senior Loan Fund JV I, LLC 1,328
 1,328
Senior Loan Fund JV I, LLC1,328  1,328  
iCIMs, Inc. 882
 882
iCIMs, Inc.882  882  
PaySimple, Inc.PaySimple, Inc.762  12,250  
Ministry Brands, LLC 425
 800
Ministry Brands, LLC425  800  
Coyote Buyer, LLC 352
 —
Coyote Buyer, LLC377  —  
GKD Index Partners, LLC 231
 1,156
GKD Index Partners, LLC231  1,156  
Mindbody, Inc.Mindbody, Inc.—  3,048  
4 Over International, LLC4 Over International, LLC—  1,977  
PLATO Learning Inc. (1)PLATO Learning Inc. (1)—  746  
Sorrento Therapeutics, Inc.Sorrento Therapeutics, Inc.—  7,500  
TerSera Therapeutics, LLCTerSera Therapeutics, LLC—  4,200  
P2 Upstream Acquisition Co. —
 9,000
P2 Upstream Acquisition Co.—  9,000  
Sorrento Therapeutics, Inc. —
 7,500
4 Over International, LLC —
 1,977
Mindbody, Inc. —
 3,048
Thruline Marketing, Inc. —
 3,000
Thruline Marketing, Inc.—  3,000  
TerSera Therapeutics, LLC —
 4,200
PLATO Learning Inc. (1) —
 746
Total $91,564
 $88,336
Total$154,572  $88,336  
 ___________ 
(1) This investment was on cash non-accrual status as of March 31,June 30, 2020 and September 30, 2019.

Contractual Obligations
The following table reflects information pertaining to our principal debt outstanding under the Credit Facility, 2025 Notes, 2024 Notes and 2028 Notes:
Debt Outstanding
as of September 30, 2019		Debt Outstanding
as of June 30, 2020		Weighted average debt
outstanding for the
nine months ended
June 30, 2020		Maximum debt
outstanding for the nine months ended
June 30, 2020
Credit Facility$314,825  $466,825  $384,869  $466,825  
2025 Notes—  300,000  137,956  300,000  
2024 Notes75,000  —  42,153  75,000  
2028 Notes86,250  —  51,939  86,250  
Total debt$476,075  $766,825  $616,917  
92
  Debt Outstanding
as of September 30, 2019		 
Debt Outstanding
as of March 31, 2020
 
Weighted average debt
outstanding for the
six months ended
March 31, 2020
 
Maximum debt
outstanding for the six months ended
March 31, 2020
Credit Facility $314,825
 $404,825
 $358,005
 $424,825
2025 Notes —
 300,000
 57,377
 300,000
2024 Notes 75,000
 —
 63,115
 75,000
2028 Notes 86,250
 —
 77,766
 86,250
Total debt $476,075
 $704,825
 $556,263
 



 
The following table reflects our contractual obligations arising from the Credit Facility and the 2025 Notes:
 
 Payments due by period as of March 31, 2020 Payments due by period as of June 30, 2020
Contractual Obligations Total Less than 1 year 1-3 years 3-5 years More than 5 yearsContractual ObligationsTotalLess than 1 year1-3 years3-5 yearsMore than 5 years
Credit Facility $404,825
 $—
 $—
 $404,825
 $—
Credit Facility$466,825  $—  $—  $466,825  $—  
Interest due on Credit Facility 44,622
 11,429
 22,859
 10,334
 —
Interest due on Credit Facility38,388  10,504  21,007  6,877  —  
2025 Notes 300,000
 —
 —
 300,000
 —
2025 Notes300,000  —  —  300,000  —  
Interest due on 2025 Notes 51,551
 10,500
 21,000
 20,051
 —
Interest due on 2025 Notes48,933  10,500  21,000  17,433  —  
Total $800,998
 $21,929
 $43,859
 $735,210
 $—
Total$854,146  $21,004  $42,007  $791,135  $—  


Regulated Investment Company Status and Distributions

We have qualified and elected to be treated as a RIC under Subchapter M of the Code for tax purposes. As long as we continue to qualify as a RIC, we will not be subject to tax on our investment company taxable income (determined without regard to any deduction for dividends paid) or realized net capital gains, to the extent that such taxable income or gains is distributed, or deemed to be distributed as dividends, to stockholders on a timely basis.
Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation. Distributions declared and paid by us in a taxable year may differ from taxable income for that taxable year as such distributions may include the distribution of taxable income derived from the current taxable year or the distribution of taxable income derived from the prior taxable year carried forward into and distributed in the current taxable year. Distributions also may include returns of capital.
To maintain RIC tax treatment, we must, among other things, distribute dividends, with respect to each taxable year, of an amount at least equal to 90% of our investment company taxable income (i.e., our net ordinary income and our realized net short-term capital gains in excess of realized net long-term capital losses, if any), determined without regard to any deduction for dividends paid. As a RIC, we are also subject to a federal excise tax, based on distribution requirements of our taxable income on a calendar year basis. We anticipate timely distribution of our taxable income in accordance with tax rules. We did not incur a U.S. federal excise tax for calendar years 2018 and 2019. We may incur a federal excise tax in future years.
We intend to distribute at least 90% of our annual taxable income (which includes our taxable interest and fee income) to our stockholders. The covenants contained in the Credit Facility may prohibit us from making distributions to our stockholders, and, as a result, could hinder our ability to satisfy the distribution requirement associated with our ability to be subject to tax as a RIC. In addition, we may retain for investment some or all of our net capital gains (i.e., realized net long-term capital gains in excess of realized net short-term capital losses) and treat such amounts as deemed distributions to our stockholders. If we do this, our stockholders will be treated as if they received actual distributions of the capital gains we retained and then reinvested the net after-tax proceeds in our common stock. Our stockholders also may be eligible to claim tax credits (or, in certain circumstances, tax refunds) equal to their allocable share of the tax we paid on the capital gains deemed distributed to them. To the extent our taxable earnings for a fiscal and taxable year fall below the total amount of our dividend distributions for that fiscal and taxable year, a portion of those distributions may be deemed a return of capital to our stockholders.
We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage test for borrowings applicable to us as a Business Development Company under the Investment Company Act and due to provisions in our credit facilities and debt instruments. If we do not distribute a certain percentage of our taxable income annually, we will suffer adverse tax consequences, including possible loss of our ability to be subject to tax as a RIC. We cannot assure stockholders that they will receive any distributions or distributions at a particular level.
A RIC may treat a distribution of its own stock as fulfilling its RIC distribution requirements if each stockholder elects to receive his or her entire distribution in either cash or stock of the RIC, subject to certain limitations regarding the aggregate amount of cash to be distributed to all stockholders. If these and certain other requirements are met, for U.S federal income tax purposes, the amount of the dividend paid in stock will be equal to the amount of cash that could have been received instead of stock.
93

We may generate qualified net interest income or qualified net short-term capital gains that may be exempt from U.S. withholding tax when distributed to foreign stockholders. A RIC is permitted to designate distributions of qualified net interest income and qualified short-term capital gains as exempt from U.S. withholding tax when paid to non-U.S. shareholders with proper documentation. The following table, which may be subject to change as we finalize our annual tax filings, lists the percentage of qualified net interest income and qualified short-term capital gains for the year ended September 30, 2019, our last tax year end.
Year EndedQualified Net Interest IncomeQualified Short-Term Capital Gains
September 30, 201989.6%—
We have adopted a DRIP that provides for the reinvestment of any distributions that we declare in cash on behalf of our stockholders, unless a stockholder elects to receive cash. As a result, if our Board of Directors declares a cash distribution, then our stockholders who have not “opted out” of the DRIP will have their cash distributions automatically reinvested in additional shares of our common stock, rather than receiving a cash distribution. If our shares are trading at a premium to net asset value, we typically issue new shares to implement the DRIP, with such shares issued at the greater of the most recently computed net asset value per share of our common stock or 95% of the current market value per share of our common stock on the payment date for such distribution. If our shares are trading at a discount to net asset value, we typically purchase shares in the open market in connection with our obligations under the DRIP.


Related Party Transactions
We have entered into the Investment Advisory Agreement with Oaktree and the Administration Agreement with Oaktree Administrator, a wholly-owned subsidiaryan affiliate of Oaktree. Mr. John B. Frank, an interested member of our Board of Directors, has an indirect pecuniary interest in Oaktree. Oaktree is a registered investment adviser under the Investment Advisers Act of 1940, as amended, that is partially and indirectly owned by OCG.Oaktree Capital Group, LLC. See “Note 11. Related Party Transactions – Investment Advisory Agreement” and “– Administrative Services” in the notes to the accompanying Consolidated Financial Statements.
Oaktree has voluntarily deferred the payment of Part I incentive fees earned during the three months ended March 31, 2020.
Recent Developments
Distribution Declaration
On April 30,July 31, 2020, our Board of Directors declared a quarterly distribution of $0.095$0.105 per share, payable in cash on JuneSeptember 30, 2020 to stockholders of record on JuneSeptember 15, 2020.
Investment Advisory Agreement

         On May 4, 2020, Oaktree effected the novation of the Investment Advisory Agreement to Oaktree Fund Advisors, LLC, a registered investment adviser under common control with Oaktree. Immediately following such novation, we and Oaktree Fund Advisors, LLC
entered into a new investment advisory agreement with the same terms, including fee structure, as the Investment Advisory Agreement.
94
Investment Portfolio Activity

From April 1, 2020 to April 30, 2020, originations totaled $132 million with a weighted average yield of 10.6% and were primarily comprised of opportunistic purchases made in both the private and public markets. Of these new investment commitments, 50% were first lien loans, 5% were second lien loans and 45% were subordinated debt investments.
Liquidity
As of April 30, 2020, we had $68 million of cash and cash equivalents and $260 million of undrawn capacity on our credit facility (subject to borrowing base and other limitations). Unfunded investment commitments were $122 million as of April 30, 2020, with approximately $76 million that can be drawn immediately as the remaining amount is subject to certain milestones that must be met by portfolio companies.
Credit Facility Amendment
On May 6, 2020, we amended our revolving credit facility (i) to reduce the minimum shareholders' equity covenant from $700 million to $550 million, (ii) to increase the interest rate margin up to 2.75% on LIBOR loans or 1.75% on alternative base rate loans if our minimum shareholders' equity is below $700 million depending on our senior coverage ratio and (iii) to reduce the maximum size of the facility under the "accordion" feature to the greater of $800 million or our net worth on the date of such increase.


Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in the valuations of our investment portfolio and interest rates.
Valuation Risk
Our investments may not have a readily available market price, and we value these investments at fair value as determined in good faith by our Board of Directors, with the assistance of the Audit Committee and Oaktree. There is no single standard for determining fair value in good faith and valuation methodologies involve a significant degree of management judgment. In addition, our valuation methodology utilizes discount rates in part in valuing our investments, and changes in those discount rates may have an impact on the valuation of our investments. Accordingly, valuations by us do not necessarily represent the amounts which may eventually be realized from sales or other dispositions of investments. Estimated fair values may differ from the values that would have been used had a ready market for the investment existed, and the differences could be material to the financial statements.


Interest Rate Risk
We are subject to financial market risks, including changes in interest rates. Changes in interest rates may affect both our cost of funding and our interest income from portfolio investments, cash and cash equivalents and idle fund investments. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks and limits by means of reliable administrative and information systems and other policies and programs. Our investment income will be affected by changes in various interest rates, including LIBOR and prime rates, to the extent our debt investments include floating interest rates.
As of March 31,June 30, 2020, 90.6%86.2% of our debt investment portfolio (at fair value) and 90.9%87.3% of our debt investment portfolio (at cost) bore interest at floating rates. The composition of our floating rate debt investments by interest rate floor as of March 31,June 30, 2020 and September 30, 2019 was as follows: 
 June 30, 2020September 30, 2019
($ in thousands)Fair Value% of Floating Rate PortfolioFair Value% of Floating Rate Portfolio
0%$578,122  45.6 %$489,464  41.6 %
>0% and <1%11,060  0.9 %—  — %
1%668,182  52.6 %685,995  58.4 %
>1%11,969  0.9 %—  — %
Total Floating Rate Investments$1,269,333  100.0 %$1,175,459  100.0 %
95
  March 31, 2020 September 30, 2019
($ in thousands) Fair Value % of Floating Rate Portfolio Fair Value % of Floating Rate Portfolio
0% $489,126
 41.1% $489,464
 41.6%
>0% and <1% 785
 0.1% —
 —%
1% 699,954
 58.8% 685,995
 58.4%
Total Floating Rate Investments $1,189,865
 100.0% $1,175,459
 100.0%



Based on our Consolidated Statement of Assets and Liabilities as of March 31,June 30, 2020, the following table shows the approximate annualized net increase (decrease) in net assets resulting from operations of hypothetical base rate changes in interest rates, assuming no changes in our investment and capital structure. However, there can be no assurances our portfolio companies will be able to meet their contractual obligations at any or all levels on increases in interest rates.
($ in thousands)
Basis point increaseIncrease in Interest Income(Increase) in Interest ExpenseNet increase (decrease) in net assets resulting from operations
250$28,387  $(11,671) $16,716  
20021,695  (9,337) 12,358  
15015,002  (7,002) 8,000  
1008,310  (4,668) 3,642  
503,135  (2,334) 801  
($ in thousands)      
Basis point increase Increase in Interest Income (Increase) in Interest Expense Net increase (decrease) in net assets resulting from operations
250 $33,773
 $(10,121) $23,652
200 27,018
 (8,097) 18,921
150 20,264
 (6,072) 14,192
100 13,509
 (4,048) 9,461
50 6,755
 (2,024) 4,731

Basis point decrease (Decrease) in Interest Income Decrease in Interest Expense Net increase (decrease) in net assets resulting from operationsBasis point decrease(Decrease) in Interest IncomeDecrease in Interest ExpenseNet increase (decrease) in net assets resulting from operations
50 $(4,183) $2,024
 $(2,159)50$(1,174) $1,167  $(7) 
100 (6,782) 3,333
 (3,449)100(1,176) 1,167  (9) 
150 (7,303) 3,333
 (3,970)150(1,177) 1,167  (10) 
200 (1) (7,309) 3,333
 (3,976)200 (1)(1,179) 1,167  (12) 
 __________
(1) The effect of a greater than 200 basis point decrease is limited by interest rate floors on certain investments.
We regularly measure exposure to interest rate risk. We assess interest rate risk and manage our interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on this review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates. The following table shows a comparison of the interest rate base for our interest-bearing cash and outstanding investments, at principal, and our outstanding borrowings as of March 31,June 30, 2020 and September 30, 2019: 
 June 30, 2020September 30, 2019
($ in thousands)Interest Bearing
Cash and
Investments		BorrowingsInterest Bearing
Cash and
Investments		Borrowings
Money market rate$47,871  $—  $9,611  $—  
Prime rate305  —  48,036  14,000  
LIBOR
30 day698,551  466,825  686,880  300,825  
60 day—  —  9,000  —  
90 day425,961  —  402,603  —  
180 day182,788  —  20,967  —  
360 day15,444  —  —  —  
EURIBOR
30 day27,897  —  19,078  —  
UK LIBOR
30 day22,241  —  22,181  —  
Fixed rate199,808  300,000  185,809  161,250  
Total$1,620,866  $766,825  $1,404,165  $476,075  

96
  March 31, 2020 September 30, 2019
($ in thousands) 
Interest Bearing
Cash and
Investments
 Borrowings Interest Bearing
Cash and
Investments		 Borrowings
Money market rate $82,928
 $—
 $9,611
 $—
Prime rate 1,221
 —
 48,036
 14,000
LIBOR        
30 day 718,343
 404,825
 686,880
 300,825
60 day 9,000
 —
 9,000
 —
90 day 423,728
 —
 402,603
 —
180 day 167,265
 —
 20,967
 —
EURIBOR        
30 day 20,015
 —
 19,078
 —
UK LIBOR        
30 day 22,319
 —
 22,181
 —
Fixed rate 135,797
 300,000
 185,809
 161,250
Total $1,580,616
 $704,825
 $1,404,165
 $476,075



Item 4. Controls and Procedures

Management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31,June 30, 2020. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Based on the evaluation of our disclosure controls and procedures as of March 31,June 30, 2020, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, at the reasonable assurance level, in timely identifying, recording, processing, summarizing and reporting any material information relating to us that is required to be disclosed in the reports we file or submit under the Exchange Act.

There were no changes in our internal control over financial reporting that occurred during the three months ended March 31,June 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



97





PART II

Item 1.  Legal Proceedings
Although we may, from time to time, be involved in litigation arising out of our operations in the normal course of business or otherwise, we are currently not a party to any pending material legal proceedings.

Item 1A. Risk Factors

Except as set forth below, there have been no material changes during the three and sixnine months ended March 31,June 30, 2020 to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended September 30, 2019.
Global economic, political and market conditions caused by the current public health crisis have (and in the future could further) adversely affect our business, results of operations and financial condition and those of our portfolio companies.

A novel strain of coronavirus initially appeared in China in late 2019 and has rapidly spread to other countries, including the United States.  In an attempt to slow the spread of the coronavirus, governments in major jurisdictions, including the United States, the United Kingdom, France, Italy, South Korea and China, have placed restrictions on travel, issued “stay at home” orders and ordered the temporary closure of certain businesses, such as factories and retail stores.  As such restrictions and closures have impacted supply chains, consumer demand and/or the operations of many business, uncertainty surrounding the full economic impact of the coronavirus pandemic has contributed to significant market volatility and disruption, which may have long-term effects on the U.S. and global financial markets and have caused (and may cause further) economic uncertainties or deterioration in the United States and worldwide.

Disruptions in the capital markets have increased the spread between the yields realized on risk-free and higher risk securities, resulting in illiquidity in parts of the capital markets, significant write-offs in the financial sector and re-pricing of credit risk in the broadly syndicated market.  These and any other unfavorable economic conditions created by the coronavirus and related restrictions and closures could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events have negatively impacted the fair value of the investments that we hold and could limit our investment originations (including as a result of the investment professionals of our investment adviser diverting their time to the restructuring of certain investments), negatively impact our operating results and limit our ability to grow.  In addition, our success depends in substantial part on the management, skill and acumen of our investment adviser, whose operations may be adversely impacted, including through quarantine measures and travel restrictions imposed on its investment professionals or service providers, or any related health issues of such investment professionals or service providers.

In addition, the restrictions and closures and related market conditions have resulted in certain of our portfolio companies halting or significantly curtailing operations and have negatively affected the supply chains of certain of our portfolio companies.  The financial results of middle-market companies, like those in which we invest, have experienced deterioration, which could ultimately lead to difficulty in meeting debt service requirements and an increase in defaults, and further deterioration will further depress the outlook for those companies. Further, adverse economic conditions have decreased and may in the future decrease the value of collateral securing some of our loans and the value of our equity investments. Such conditions have required and may in the future require us to modify the payment terms of our investments, including changes in PIK interest provisions and/or cash interest rates. The performance of certain of our portfolio companies has been, and in the future may be, negatively impacted by these economic or other conditions, which can result in our receipt of reduced interest income from our portfolio companies and/or realized and unrealized losses related to our investments, and, in turn, may adversely affect distributable income and have a material adverse effect on our results of operations. In addition, as governments ease COVID-19 related restrictions, certain of our portfolio companies may experience increases in health and safety expenses, payroll costs and other operating expenses.

As the potential impact of the coronavirus remains difficult to predict, the extent to which the coronavirus could negatively affect our and our portfolio companies’ operating results or the duration of any potential business or supply-chain disruption is uncertain. Any potential impact to our results of operations will depend to a large extent on future developments
98

regarding the duration and severity of the coronavirus and the actions taken by governments and their citizens to contain the coronavirus or treat its impact, all of which are beyond our control.




As a result of the COVID-19 pandemic and related government actions, certain of our portfolio companies are distressed, and we have opportunistically acquired the securities and obligations of distressed companies.  These and future investments in distressed companies are subject to significant risks, including lack of income, extraordinary expenses, uncertainty with respect to satisfaction of debt, lower-than-expected investment values or income potentials and resale restrictions.

We have acquired, and may in the future acquire, the securities and other obligations of distressed or bankrupt companies, including opportunistic acquisitions during the COVID-19 pandemic. At times, distressed debt obligations may not produce income and may require us to bear certain extraordinary expenses (including legal, accounting, valuation and transaction expenses) in order to protect and recover our investment. Therefore, when we invest in distressed debt, our ability to achieve current income for our stockholders may be diminished, particularly where the portfolio company has negative EBITDA.

We also are subject to significant uncertainty as to when and in what manner and for what value the distressed debt we acquire will eventually be satisfied whether through a refinancing, restructuring, liquidation, an exchange offer or plan of reorganization involving the distressed debt securities or a payment of some amount in satisfaction of the obligation. In addition, even if an exchange offer is made or plan of reorganization is adopted with respect to distressed debt held by us, there can be no assurance that the securities or other assets received by us in connection with such exchange offer or plan of reorganization will not have a lower value or income potential than may have been anticipated when the investment was made.

Moreover, any securities received by us upon completion of an exchange offer or plan of reorganization may be restricted as to resale. As a result of our participation in negotiations with respect to any exchange offer or plan of reorganization with respect to an issuer of distressed debt, we may be restricted from disposing of such securities.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.


Item 3. Defaults Upon Senior Securities
None.

Item 4.  Mine Safety Disclosures
Not applicable.


Item 5. Other Information
None.



99

Item 6. Exhibits

4.110.1
Fifth Supplemental Indenture, dated as of February 25, 2020, relating to the 3.500% Notes due 2025, between the Company and Deutsche Bank Trust Company Americas, as trustee (Incorporated by reference to Exhibit 4.1 filed with the Registrant’s Form 8-K (File No. 814-00755) filed on February 25, 2020).
4.2
Form of 3.500% Notes due 2025 (included as Exhibit A to Exhibit 4.1 hereto).
10.1*
Investment Advisory Agreement, dated as of May 4, 2020, by and between the Company and Oaktree Fund Advisors, LLC.LLC (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Form 10-Q (File No. 814-00755) filed on May 7, 2020).
10.2*10.2
Amendment No. 2 to Amended and Restated Senior Secured Revolving Credit Agreement, dated as of May 6, 2020, among the Company, as Borrower, the lenders party thereto from time to time and ING Capital LLC, as administrative agent for the lenders thereunder.thereunder (Incorporated by reference to Exhibit 10.2 filed with the Registrant’s Form 10-Q (File No. 814-00755) filed on May 7, 2020).
31.1*
  Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2*
  Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
32.1*
  Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
32.2*
  Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
*Filed herewith.


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

OAKTREE SPECIALTY LENDING CORPORATION
By: /s/   Armen Panossian
 
Armen Panossian




 Chief Executive Officer
By: /s/    Mel Carlisle
 
Mel Carlisle

 Chief Financial Officer and Treasurer
Date: May 6,August 7, 2020

103100