UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended September 30, 2017March 31, 2019
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 814-00878
Garrison Capital Inc.
(Exact name of registrant as specified in its charter)
Delaware |
| 90-0900145 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
1290 Avenue of the Americas, Suite 914
New York, New York 10104
(Address of principal executive offices)
(212) 372-9590
(Registrant’s telephone number, including area code): (212) 372-9590
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
| ☐ |
| Accelerated filer |
| ☒ |
Non-accelerated filer |
| ☐ |
| Smaller reporting company |
| ☐ |
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Emerging growth company |
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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 ☒
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Common stock, par value $0.001 per share | GARS | Nasdaq Global Select Market |
As of NovemberMay 3, 20172019 the Registrant had 16,049,352 shares of common stock, $0.001 par value, outstanding.
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Part I. |
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Item 1. |
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| 2 | |
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| 18 | |
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| 19 | |
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| 21 | |
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Item 2. |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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| �� |
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Part II. |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
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Item 6. |
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i
Garrison Capital Inc. and Subsidiaries
Consolidated Statements of Financial Condition
($ in thousands, except share and per share amounts)
|
| September 30, 2017 |
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| December 31, 2016 |
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| March 31, 2019 |
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| December 31, 2018 |
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| (unaudited) |
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| (unaudited) |
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Assets |
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Cash |
| $ | 14,708 |
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| $ | 10,378 |
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| $ | 3,715 |
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| $ | 6,191 |
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Restricted cash |
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| 14,566 |
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| 12,568 |
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| 27,168 |
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| 39,531 |
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Due from counterparties |
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| 95 |
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| 2,083 |
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| 132 |
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| 58 |
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Investments, at fair value |
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Non-control/non-affiliate investments (amortized cost of $380,576 and $387,265, respectively) |
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| 359,139 |
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| 373,601 |
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Non-control/affiliate investments (amortized cost of $4,944 and $4,796, respectively) |
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| 3,103 |
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Non-control/non-affiliate investments (amortized cost of $487,113 and $466,500, respectively) |
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| 479,353 |
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| 452,347 |
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Non-control/affiliate investments (amortized cost of $3,715 and $3,715, respectively) |
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| 1,510 |
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| 1,630 |
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Accrued interest receivable |
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| 2,736 |
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| 3,387 |
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| 3,061 |
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| 2,585 |
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Other assets |
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| 1,504 |
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| 1,427 |
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| 1,674 |
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| 1,624 |
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Total assets |
| $ | 392,748 |
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| $ | 406,547 |
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| $ | 516,613 |
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| $ | 503,966 |
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Liabilities |
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Management fee payable (Note 5) |
| $ | 1,374 |
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| $ | 42 |
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Administrator fee payable (Note 5) |
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| 214 |
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| - |
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Due to counterparties |
| $ | 4,233 |
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| $ | 23,390 |
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Senior secured revolving note (Note 4) |
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| - |
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| - |
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| 40,500 |
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| 8,000 |
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Senior secured term notes (Note 4) |
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| 164,460 |
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| 164,308 |
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| 241,193 |
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| 241,149 |
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SBIC borrowings (Note 4) |
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| 35,931 |
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| 35,851 |
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| 58,387 |
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| 58,343 |
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GLC Trust 2013-2 Class A note (Note 4) |
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| 801 |
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| 4,953 |
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Interest payable |
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| 915 |
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| 1,089 |
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Management fee payable (Note 5) |
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| 1,623 |
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| 49 |
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Incentive fee payable (Note 5) |
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| 510 |
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| 271 |
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Administrator fee payable (Note 5) |
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| 108 |
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Accrued interest payable |
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| 1,569 |
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| 3,040 |
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Accrued expenses and other payables |
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| 618 |
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| 896 |
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| 859 |
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| 812 |
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Total liabilities |
| $ | 204,313 |
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| $ | 207,139 |
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| $ | 348,982 |
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| $ | 335,054 |
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Commitments and contingencies (Note 9) |
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Net assets |
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Common stock, par value $0.001 per share, 100,000,000 shares authorized, 16,758,779 shares issued and 16,049,352 shares outstanding as of both September 30, 2017 and December 31, 2016 |
| $ | 17 |
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| $ | 17 |
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Common stock, par value $0.001 per share, 100,000,000 shares authorized, 16,758,779 shares issued and 16,049,352 shares outstanding as of both March 31, 2019 and December 31, 2018 |
| $ | 17 |
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| $ | 17 |
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Paid-in-capital in excess of par |
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| 249,148 |
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| 249,148 |
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| 249,124 |
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| 249,124 |
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Underdistributed net investment income |
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| 4,643 |
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| 5,165 |
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Accumulated net realized loss from investments |
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| (38,992 | ) |
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| (39,565 | ) | ||||||||
Net unrealized loss from investments |
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| (26,381 | ) |
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| (15,357 | ) | ||||||||
Total distributable earnings/(loss) |
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| (81,510 | ) |
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| (80,229 | ) | ||||||||
Total net assets |
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| 188,435 |
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| 199,408 |
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| 167,631 |
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| 168,912 |
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Total liabilities and net assets |
| $ | 392,748 |
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| $ | 406,547 |
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| $ | 516,613 |
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| $ | 503,966 |
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Shares of common stock outstanding |
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| 16,049,352 |
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| 16,049,352 |
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| 16,049,352 |
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| 16,049,352 |
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Net asset value per share |
| $ | 11.74 |
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| $ | 12.42 |
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| $ | 10.44 |
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| $ | 10.52 |
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See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments
September 30, 2017March 31, 2019 (unaudited)
($ in thousands, except share amounts)
Security Description |
| Base Rate |
| Spread |
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| All In Rate |
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| Maturity |
| Par / Shares |
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| Cost |
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| Fair Value |
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| % of Net Assets |
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| Base Rate |
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| Spread |
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| All In Rate |
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| Maturity |
| Par / Shares |
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| Cost |
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| Fair Value |
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| % of Net Assets |
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Non-Control/Non-Affiliate Investments |
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Investments - United States |
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Common Equity |
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Building Products |
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Valterra Products Holdings, LLC, Class A |
| N/A |
| N/A |
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| N/A |
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| N/A |
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| 185,847 |
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| $ | 186 |
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| $ | 838 |
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| 0.44 | % |
| N/A |
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| N/A |
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| N/A |
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| N/A |
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| 185,847 |
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| $ | 186 |
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| $ | 784 |
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| 0.47 | % | ||||||
Valterra Products Holdings, LLC, Class B |
| N/A |
| N/A |
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| N/A |
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| N/A |
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| 20,650 |
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| 21 |
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| 93 |
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| 0.05 |
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| N/A |
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| N/A |
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| N/A |
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| N/A |
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| 20,650 |
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| 21 |
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| 87 |
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| 0.05 |
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| 207 |
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| 931 |
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| 0.49 |
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| 207 |
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| 871 |
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| 0.52 |
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Commercial Services and Supplies |
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Faraday Holdings, LLC, Common |
| N/A |
| N/A |
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| N/A |
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| N/A |
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| 2,752 |
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| 140 |
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| 320 |
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| 0.17 |
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| N/A |
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| N/A |
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| N/A |
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| N/A |
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| 2,752 |
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| 140 |
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| 742 |
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| 0.44 |
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| 140 |
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| 320 |
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| 0.17 |
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| 140 |
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| 742 |
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| 0.44 |
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Healthcare Equipment and Services |
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Juniper TGX Investment Partners, LLC, Common |
| N/A |
| N/A |
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| N/A |
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| N/A |
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| 3,146 |
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| 671 |
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| 1,394 |
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| 0.74 |
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| N/A |
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| N/A |
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| N/A |
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| N/A |
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| 3,146 |
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| 671 |
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| 3,336 |
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| 1.99 |
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| 671 |
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| 1,394 |
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| 0.74 |
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| 671 |
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| 3,336 |
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| 1.99 |
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Household Products and Durables |
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Oneida Group Inc. (fka Everyware Global, Inc.), Common |
| N/A |
| N/A |
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| N/A |
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| N/A |
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| 242,035 |
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| 2,714 |
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| 1,815 |
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| 0.96 |
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| 2,714 |
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| 1,815 |
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| 0.96 |
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Transportation Services |
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EZE Trucking, LLC, Common |
| N/A |
| N/A |
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| N/A |
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| N/A |
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| 2,898 |
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| 268 |
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| — |
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| — |
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Oneida Group Inc., Common |
| N/A |
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| N/A |
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| N/A |
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| N/A |
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| 844,557 |
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| 3,919 |
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| 1,350 |
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| 0.81 |
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| 268 |
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|
| — |
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| — |
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| 3,919 |
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| 1,350 |
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| 0.81 |
| |
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Total Common Equity |
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|
|
|
|
|
|
|
|
|
|
| $ | 4,000 |
|
| $ | 4,460 |
|
|
| 2.36 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 4,937 |
|
| $ | 6,299 |
|
|
| 3.76 | % | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Preferred Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Diversified Financial Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Prosper Marketplace Series B Preferred Stock⁽¹⁾⁽²⁾ |
| N/A |
| N/A |
|
| N/A |
|
| N/A |
|
| 912,865 |
|
| $ | 551 |
|
| $ | 640 |
|
|
| 0.34 | % |
| N/A |
|
| N/A |
|
| N/A |
|
| N/A |
|
| 912,865 |
|
| $ | 551 |
|
| $ | 640 |
|
|
| 0.38 | % | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 551 |
|
|
| 640 |
|
|
| 0.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 551 |
|
|
| 640 |
|
|
| 0.38 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total Preferred Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 551 |
|
| $ | 640 |
|
|
| 0.34 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 551 |
|
| $ | 640 |
|
|
| 0.38 | % | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Aerospace and Defense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
AbelConn, LLC (Atrenne Computing), Term Loan* |
|
| 1.33% |
| 8.50% |
|
|
| 9.83% |
|
| 7/17/2019 |
|
| 8,452 |
|
| $ | 8,391 |
|
| $ | 8,452 |
|
|
| 4.49 | % | |||||||||||||||||||||||||||||||
Constellis Holdings, LLC, Term Loan* |
| 2.74% |
|
| 5.00% |
|
| 7.74% |
|
| 4/22/2024 |
|
| 3,355 |
|
| $ | 3,306 |
|
| $ | 3,188 |
|
|
| 1.90 | % | ||||||||||||||||||||||||||||||||
Novetta Solutions, Term Loan* |
| 2.50% |
|
| 5.00% |
|
| 7.50% |
|
| 10/17/2022 |
|
| 1,980 |
|
|
| 1,940 |
|
|
| 1,937 |
|
|
| 1.16 |
| ||||||||||||||||||||||||||||||||
Vertex Aerospace Services Corp., Initial Term Loan* |
| 2.50% |
|
| 4.75% |
|
| 7.25% |
|
| 6/30/2025 |
|
| 1,815 |
|
|
| 1,807 |
|
|
| 1,816 |
|
|
| 1.08 |
| ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8,391 |
|
|
| 8,452 |
|
|
| 4.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,053 |
|
|
| 6,941 |
|
|
| 4.14 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Air Freight and Logistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Gruden Acquisition, Inc., Term Loan (First Lien)* |
| 2.60% |
|
| 5.50% |
|
| 8.10% |
|
| 8/18/2022 |
|
| 2,459 |
|
|
| 2,438 |
|
|
| 2,434 |
|
|
| 1.45 |
| ||||||||||||||||||||||||||||||||
Kane is Able, Inc., Term Loan** |
| 2.61% |
|
| 7.00% |
|
| 9.61% |
|
| 3/13/2024 |
|
| 6,620 |
|
|
| 6,489 |
|
|
| 6,488 |
|
|
| 3.87 |
| ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8,927 |
|
|
| 8,922 |
|
|
| 5.32 |
| |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Auto Components |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
BBB Industries LLC (GC EOS Buyer), Term Loan* |
| 2.48% |
|
| 4.50% |
|
| 6.98% |
|
| 8/1/2025 |
|
| 3,483 |
|
|
| 3,474 |
|
|
| 3,474 |
|
|
| 2.07 |
| ||||||||||||||||||||||||||||||||
Challenge Mfg. Company, LLC, Term Loan B* |
| 2.50% |
|
| 6.50% |
|
| 9.00% |
|
| 4/20/2022 |
|
| 7,785 |
|
|
| 7,724 |
|
|
| 7,785 |
|
|
| 4.64 |
| ||||||||||||||||||||||||||||||||
Holley Purchaser, Inc., Term Loan* |
| 2.74% |
|
| 5.00% |
|
| 7.74% |
|
| 10/24/2025 |
|
| 6,603 |
|
|
| 6,505 |
|
|
| 6,471 |
|
|
| 3.86 |
| ||||||||||||||||||||||||||||||||
Shipston Equity Holdings, LLC, Term Loan*⁽⁴⁾ |
| 2.80% |
|
| 6.94% |
|
| 9.74% |
|
| 9/28/2023 |
|
| 5,847 |
|
|
| 5,794 |
|
|
| 5,793 |
|
|
| 3.46 |
| ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 23,497 |
|
|
| 23,523 |
|
|
| 14.03 |
|
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2017March 31, 2019 (unaudited)
($ in thousands, except share amounts)
Security Description |
| Base Rate |
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Air Freight and Logistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gruden Acquisition, Inc., Term Loan (First Lien)* |
|
| 1.33% |
|
| 5.50% |
|
|
| 6.83% |
|
| 8/18/2022 |
|
| 1,965 |
|
| $ | 1,937 |
|
| $ | 1,934 |
|
|
| 1.03 | % |
MXD Group, Inc. (fka Exel Direct Inc.), Term Loan*⁽³⁾ |
|
| 1.25% |
|
| 14.00% |
|
| 15.25% PIK |
|
| 5/31/2018 |
|
| 16,296 |
|
|
| 16,193 |
|
|
| 15,313 |
|
|
| 8.13 |
| |
Raymond Express International, LLC, Revolver* |
|
| 1.75% |
|
| 7.75% |
|
|
| 9.50% |
|
| 2/28/2018 |
|
| 40 |
|
|
| 40 |
|
|
| 40 |
|
|
| 0.02 |
|
Raymond Express International, LLC, Term Loan* |
|
| 1.75% |
|
| 7.75% |
|
|
| 9.50% |
|
| 2/28/2018 |
|
| 385 |
|
|
| 385 |
|
|
| 231 |
|
|
| 0.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 18,555 |
|
|
| 17,518 |
|
|
| 9.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auto Components |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Challenge Mfg. Company, LLC, Term Loan B* |
|
| 1.24% |
|
| 7.00% |
|
|
| 8.24% |
|
| 4/20/2022 |
|
| 8,775 |
|
|
| 8,673 |
|
|
| 8,671 |
|
|
| 4.60 |
|
FRAM Group Holdings Inc. (Autoparts Holdings), Term Loan* |
|
| 1.24% |
|
| 6.75% |
|
|
| 7.99% |
|
| 12/23/2021 |
|
| 8,663 |
|
|
| 8,516 |
|
|
| 8,727 |
|
|
| 4.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 17,189 |
|
|
| 17,398 |
|
|
| 9.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ShelterLogic Corp., Term Loan* |
|
| 1.24% |
|
| 9.50% |
|
|
| 10.74% |
|
| 7/30/2019 |
|
| 9,475 |
|
|
| 9,405 |
|
|
| 9,475 |
|
|
| 5.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9,405 |
|
|
| 9,475 |
|
|
| 5.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemicals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aristech Surfaces LLC, Term Loan B* |
|
| 1.25% |
|
| 7.00% |
|
|
| 8.25% |
|
| 10/17/2019 |
|
| 9,469 |
|
|
| 9,401 |
|
|
| 9,385 |
|
|
| 4.98 |
|
Profusion Industries, LLC, Term Loan* |
|
| 1.25% |
|
| 10.25% |
|
|
| 11.50% |
|
| 6/19/2020 |
|
| 9,399 |
|
|
| 9,297 |
|
|
| 9,305 |
|
|
| 4.94 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 18,698 |
|
|
| 18,690 |
|
|
| 9.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Services and Supplies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Del Mar Recovery Solutions, Inc., Revolver* |
|
| 1.24% |
|
| 8.50% |
|
|
| 9.74% |
|
| 6/27/2021 |
|
| 495 |
|
|
| 495 |
|
|
| 489 |
|
|
| 0.26 |
|
Del Mar Recovery Solutions, Inc., Term Loan** |
|
| 1.24% |
|
| 8.50% |
|
|
| 9.74% |
|
| 6/27/2021 |
|
| 8,056 |
|
|
| 7,951 |
|
|
| 7,951 |
|
|
| 4.22 |
|
Interior Specialists, Inc., Term Loan* |
|
| 1.25% |
|
| 8.00% |
|
|
| 9.25% |
|
| 6/30/2020 |
|
| 9,884 |
|
|
| 9,776 |
|
|
| 9,884 |
|
|
| 5.25 |
|
VIP Cinema Holdings, Inc., Term Loan* |
|
| 1.34% |
|
| 6.00% |
|
|
| 7.34% |
|
| 3/1/2023 |
|
| 1,544 |
|
|
| 1,537 |
|
|
| 1,553 |
|
|
| 0.82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 19,759 |
|
|
| 19,877 |
|
|
| 10.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Financial Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PlanMember Financial Corporation, Term Loan*⁽¹⁾ |
|
| 1.50% |
|
| 6.50% |
|
|
| 8.00% |
|
| 12/31/2020 |
|
| 1,098 |
|
|
| 1,086 |
|
|
| 1,098 |
|
|
| 0.58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,086 |
|
|
| 1,098 |
|
|
| 0.58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Telecommunication Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Onvoy, LLC, Term Loan* |
|
| 1.33% |
|
| 4.50% |
|
|
| 5.83% |
|
| 2/10/2024 |
|
| 3,022 |
|
|
| 3,012 |
|
|
| 3,016 |
|
|
| 1.60 |
|
U.S. Telepacific Corp., Term Loan B* |
|
| 1.32% |
|
| 5.00% |
|
|
| 6.32% |
|
| 5/2/2023 |
|
| 5,982 |
|
|
| 5,927 |
|
|
| 5,819 |
|
|
| 3.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8,939 |
|
|
| 8,835 |
|
|
| 4.69 |
|
Security Description |
| Base Rate |
|
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Integrated Flooring Systems Inc. (Camino Systems, Inc.), Revolver |
| 2.50% |
|
| 8.25% |
|
| 10.75% |
|
| 2/15/2023 |
|
| 36 |
|
| $ | 36 |
|
| $ | 36 |
|
|
| 0.02 | % | |||
Global Integrated Flooring Systems Inc. (Camino Systems, Inc.), Term Loan** |
| 2.50% |
|
| 8.25% |
|
| 10.75% |
|
| 2/15/2023 |
|
| 6,991 |
|
|
| 6,883 |
|
|
| 6,432 |
|
|
| 3.84 |
| |||
Janus International Group, LLC, Tranche B-2 Term Loan* |
| 2.49% |
|
| 4.50% |
|
| 6.99% |
|
| 2/12/2025 |
|
| 2,232 |
|
|
| 2,199 |
|
|
| 2,232 |
|
|
| 1.33 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9,118 |
|
|
| 8,700 |
|
|
| 5.19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemicals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AOC / Aliancys, Term Loan*⁽¹⁾ |
| 2.73% |
|
| 4.25% |
|
| 6.98% |
|
| 8/1/2025 |
|
| 2,317 |
|
|
| 2,301 |
|
|
| 2,294 |
|
|
| 1.37 |
| |||
Aristech Surfaces LLC, Term Loan B |
| 2.50% |
|
| 7.00% |
|
| 9.50% |
|
| 10/17/2019 |
|
| 8,920 |
|
|
| 8,903 |
|
|
| 8,732 |
|
|
| 5.21 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 11,204 |
|
|
| 11,026 |
|
|
| 6.58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Services and Supplies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Del Mar Recovery Solutions, Inc., Term Loan** |
| 2.50% |
|
| 8.50% |
|
| 11.00% |
|
| 6/28/2021 |
|
| 7,726 |
|
|
| 7,666 |
|
|
| 7,649 |
|
|
| 4.56 |
| |||
DMT Solutions Global Corporation (Pitney Bowes), Term Loan* |
| 2.62% |
|
| 7.00% |
|
| 9.62% |
|
| 7/2/2024 |
|
| 7,020 |
|
|
| 6,836 |
|
|
| 6,739 |
|
|
| 4.02 |
| |||
Interior Logic Group, Term Loan* |
| 2.60% |
|
| 4.00% |
|
| 6.60% |
|
| 5/30/2025 |
|
| 6,494 |
|
|
| 6,466 |
|
|
| 6,364 |
|
|
| 3.80 |
| |||
Staples, Inc., Term Loan* |
| 2.49% |
|
| 4.00% |
|
| 6.49% |
|
| 9/12/2024 |
|
| 5,527 |
|
|
| 5,476 |
|
|
| 5,527 |
|
|
| 3.30 |
| |||
USAGM Holdco, LLC, Incremental Term Loan* |
| 2.50% |
|
| 4.25% |
|
| 6.75% |
|
| 7/28/2022 |
|
| 2,895 |
|
|
| 2,880 |
|
|
| 2,820 |
|
|
| 1.68 |
| |||
USAGM Holdco, LLC, Initial Term Loan (First Lien)* |
| 2.50% |
|
| 3.75% |
|
| 6.25% |
|
| 7/28/2022 |
|
| 990 |
|
|
| 982 |
|
|
| 955 |
|
|
| 0.57 |
| |||
VIP Cinema Holdings, Inc., Term Loan* |
| 2.50% |
|
| 6.00% |
|
| 8.50% |
|
| 3/1/2023 |
|
| 5,008 |
|
|
| 4,995 |
|
|
| 4,632 |
|
|
| 2.76 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 35,301 |
|
|
| 34,686 |
|
|
| 20.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and Engineering |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brand Energy & Infrastructure Services, Inc., Term Loan* |
| 2.60% |
|
| 4.25% |
|
| 6.85% |
|
| 6/21/2024 |
|
| 1,993 |
|
|
| 1,921 |
|
|
| 1,905 |
|
|
| 1.14 |
| |||
GeoStabilization International, Term Loan* |
| 2.56% |
|
| 5.50% |
|
| 8.06% |
|
| 12/19/2025 |
|
| 3,349 |
|
|
| 3,317 |
|
|
| 3,332 |
|
|
| 1.99 |
| |||
QualTek USA, LLC, Term Loan* |
| 2.74% |
|
| 5.75% |
|
| 8.49% |
|
| 7/18/2025 |
|
| 5,923 |
|
|
| 5,818 |
|
|
| 5,760 |
|
|
| 3.44 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 11,056 |
|
|
| 10,997 |
|
|
| 6.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Containers and Packaging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ball Metalpack Finco LLC, Term Loan* |
| 2.50% |
|
| 4.50% |
|
| 7.00% |
|
| 7/31/2025 |
|
| 547 |
|
|
| 545 |
|
|
| 544 |
|
|
| 0.32 |
| |||
Klockner Pentaplast of America, Inc., Term Loan*⁽¹⁾ |
| 2.50% |
|
| 4.25% |
|
| 6.75% |
|
| 6/30/2022 |
|
| 4,618 |
|
|
| 4,493 |
|
|
| 4,038 |
|
|
| 2.41 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 5,038 |
|
|
| 4,582 |
|
|
| 2.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Financial Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acrisure, LLC, Term Loan* |
| 2.63% |
|
| 4.25% |
|
| 6.88% |
|
| 11/22/2023 |
|
| 1,492 |
|
|
| 1,482 |
|
|
| 1,481 |
|
|
| 0.88 |
| |||
AIS Holdco, LLC, Term Loan* |
| 2.50% |
|
| 5.00% |
|
| 7.50% |
|
| 8/15/2025 |
|
| 2,681 |
|
|
| 2,669 |
|
|
| 2,614 |
|
|
| 1.56 |
| |||
Financial & Risk US Holdings, Inc. (Refinitiv), Term Loan* |
| 2.50% |
|
| 3.75% |
|
| 6.25% |
|
| 10/1/2025 |
|
| 2,200 |
|
|
| 2,194 |
|
|
| 2,134 |
|
|
| 1.27 |
| |||
Integrity Marketing Acquisition, LLC, Delayed Draw Term Loan* |
| 2.75% |
|
| 4.25% |
|
| 7.00% |
|
| 11/28/2025 |
|
| 401 |
|
|
| 401 |
|
|
| 399 |
|
|
| 0.24 |
| |||
Integrity Marketing Acquisition, LLC, Term Loan* |
| 2.60% |
|
| 4.25% |
|
| 6.85% |
|
| 11/28/2025 |
|
| 5,266 |
|
|
| 5,241 |
|
|
| 5,240 |
|
|
| 3.13 |
| |||
PlanMember Financial Corporation, Term Loan*⁽¹⁾ |
| 3.00% |
|
| 5.00% |
|
| 8.00% |
|
| 12/31/2020 |
|
| 1,565 |
|
|
| 1,555 |
|
|
| 1,561 |
|
|
| 0.93 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 13,542 |
|
|
| 13,429 |
|
|
| 8.01 |
|
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2017March 31, 2019 (unaudited)
($ in thousands, except share amounts)
Security Description |
| Base Rate |
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diamond Crystal Brands, Inc., Term Loan** |
|
| 1.34% |
|
| 7.75% |
|
|
| 9.09% |
|
| 7/29/2021 |
|
| 5,460 |
|
| $ | 5,417 |
|
| $ | 5,460 |
|
|
| 2.90 | % |
Gold Coast Bakeries, LLC, Term Loan**⁽⁴⁾ |
|
| 1.24% |
|
| 6.24% |
|
|
| 7.48% |
|
| 9/27/2022 |
|
| 6,729 |
|
|
| 6,612 |
|
|
| 6,612 |
|
|
| 3.51 |
|
Specialty Bakers LLC, Term Loan*⁽⁴⁾ |
|
| 1.24% |
|
| 7.93% |
|
|
| 9.17% |
|
| 8/7/2019 |
|
| 9,539 |
|
|
| 9,462 |
|
|
| 9,443 |
|
|
| 5.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 21,491 |
|
|
| 21,515 |
|
|
| 11.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare Equipment and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ActivStyle, Inc., Term Loan** |
|
| 1.31% |
|
| 9.00% |
|
|
| 10.31% |
|
| 7/9/2020 |
|
| 8,439 |
|
|
| 8,358 |
|
|
| 8,439 |
|
|
| 4.48 |
|
Aurora Diagnostics, LLC, Delayed Draw Term Loan* |
|
| 1.32% |
|
| 7.13% |
|
|
| 8.45% |
|
| 7/31/2019 |
|
| 850 |
|
|
| 848 |
|
|
| 850 |
|
|
| 0.45 |
|
Aurora Diagnostics, LLC, Delayed Draw Term Loan B* |
|
| 1.32% |
|
| 7.13% |
|
|
| 8.45% |
|
| 7/31/2019 |
|
| 598 |
|
|
| 596 |
|
|
| 598 |
|
|
| 0.32 |
|
Aurora Diagnostics, LLC, Delayed Draw Term Loan C* |
|
| 1.30% |
|
| 7.13% |
|
|
| 8.43% |
|
| 7/31/2019 |
|
| 396 |
|
|
| 404 |
|
|
| 396 |
|
|
| 0.21 |
|
Aurora Diagnostics, LLC, Revolver* |
|
| 1.33% |
|
| 7.13% |
|
|
| 8.46% |
|
| 7/31/2019 |
|
| 544 |
|
|
| 544 |
|
|
| 544 |
|
|
| 0.29 |
|
Aurora Diagnostics, LLC, Term Loan* |
|
| 1.32% |
|
| 7.13% |
|
|
| 8.45% |
|
| 7/31/2019 |
|
| 5,417 |
|
|
| 5,396 |
|
|
| 5,417 |
|
|
| 2.87 |
|
Forest Park Medical Center at San Antonio, LLC, Lease⁽⁵⁾ |
| N/A |
|
| 13.00% |
|
|
| 13.00% |
|
| 2/11/2020 |
|
| 8,982 |
|
|
| 8,832 |
|
|
| 1,435 |
|
|
| 0.76 |
| |
Forest Park Medical Center at San Antonio, LLC, Term Loan⁽⁵⁾ |
| N/A |
|
| 14.00% |
|
|
| 14.00% |
|
| On Demand |
|
| 1,951 |
|
|
| 1,914 |
|
|
| 312 |
|
|
| 0.17 |
| |
RCS Management Corporation (SMS), Term Loan B** |
|
| 1.23% |
|
| 10.50% |
|
|
| 11.73% |
|
| 7/29/2018 |
|
| 9,500 |
|
|
| 9,422 |
|
|
| 9,421 |
|
|
| 5.00 |
|
Theragenics Corporation, Term Loan** |
|
| 1.34% |
|
| 12.00% |
|
|
| 13.34% |
|
| 12/23/2020 |
|
| 8,333 |
|
|
| 8,257 |
|
|
| 8,333 |
|
|
| 4.42 |
|
Walnut Hill Physicians' Hospital, LLC, Term Loan⁽⁵⁾ |
| N/A |
|
| 12.50% |
|
|
| 12.50% |
|
| 4/30/2019 |
|
| 6,688 |
|
|
| 6,688 |
|
|
| 2,341 |
|
|
| 1.24 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 51,259 |
|
|
| 38,086 |
|
|
| 20.21 |
|
Hotels, Restaurants and Leisure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AP Gaming I, LLC, Term Loan* |
|
| 1.24% |
|
| 5.50% |
|
|
| 6.74% |
|
| 2/15/2024 |
|
| 9,975 |
|
|
| 9,951 |
|
|
| 10,137 |
|
|
| 5.38 |
|
HRI Holding Corp. (Houlihans Restaurants), Term Loan*⁽⁴⁾ |
|
| 1.34% |
|
| 7.91% |
|
|
| 9.25% |
|
| 12/17/2020 |
|
| 6,769 |
|
|
| 6,679 |
|
|
| 6,688 |
|
|
| 3.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 16,630 |
|
|
| 16,825 |
|
|
| 8.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Household Products and Durables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brown Jordan International Inc., Term Loan* |
|
| 1.33% |
|
| 5.00% |
|
|
| 6.33% |
|
| 1/31/2023 |
|
| 5,908 |
|
|
| 5,866 |
|
|
| 5,908 |
|
|
| 3.14 |
|
CR Brands, Inc., Term Loan*⁽³⁾ |
|
| 1.24% |
|
| 11.25% |
|
| 12.49% PIK |
|
| 12/31/2017 |
|
| 9,587 |
|
|
| 9,574 |
|
|
| 9,586 |
|
|
| 5.09 |
| |
Lexmark Carpet Mills, Inc., Term Loan* |
|
| 1.30% |
|
| 11.00% |
|
|
| 12.30% |
|
| 12/19/2019 |
|
| 8,846 |
|
|
| 8,748 |
|
|
| 8,747 |
|
|
| 4.64 |
|
NBG Acquisition Inc., Term Loan* |
|
| 1.41% |
|
| 5.50% |
|
|
| 6.91% |
|
| 4/26/2024 |
|
| 5,358 |
|
|
| 5,279 |
|
|
| 5,305 |
|
|
| 2.82 |
|
University Furnishings, L.P., Term Loan B**⁽⁴⁾ |
|
| 1.24% |
|
| 7.41% |
|
|
| 8.65% |
|
| 12/17/2020 |
|
| 7,102 |
|
|
| 7,024 |
|
|
| 7,102 |
|
|
| 3.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 36,491 |
|
|
| 36,648 |
|
|
| 19.46 |
|
Security Description |
| Base Rate |
|
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Telecommunication Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fusion Connect, Inc., Tranche B Term Loan (First Lien)*⁽¹⁾ |
| 2.73% |
|
| 7.50% |
|
| 10.23% |
|
| 5/4/2023 |
|
| 7,145 |
|
| $ | 6,911 |
|
| $ | 6,073 |
|
|
| 3.62 | % | |||
KORE Wireless Group Inc., Term Loan* |
| 2.60% |
|
| 5.50% |
|
| 8.10% |
|
| 12/20/2024 |
|
| 8,239 |
|
|
| 8,161 |
|
|
| 8,160 |
|
|
| 4.87 |
| |||
Onvoy, LLC, Term Loan* |
| 2.60% |
|
| 4.50% |
|
| 7.10% |
|
| 2/12/2024 |
|
| 2,976 |
|
|
| 2,969 |
|
|
| 2,642 |
|
|
| 1.58 |
| |||
U.S. Telepacific Corp., Term Loan B* |
| 2.60% |
|
| 5.00% |
|
| 7.60% |
|
| 5/2/2023 |
|
| 7,190 |
|
|
| 7,144 |
|
|
| 6,943 |
|
|
| 4.14 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 25,185 |
|
|
| 23,818 |
|
|
| 14.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical Components International, Inc., Term Loan* |
| 2.60% |
|
| 4.25% |
|
| 6.85% |
|
| 6/26/2025 |
|
| 4,975 |
|
|
| 4,957 |
|
|
| 4,776 |
|
|
| 2.85 |
| |||
Luminii LLC, Term Loan* |
| 2.80% |
|
| 5.75% |
|
| 8.55% |
|
| 4/11/2023 |
|
| 7,262 |
|
|
| 7,202 |
|
|
| 7,200 |
|
|
| 4.30 |
| |||
Verifone Systems, Inc., Term Loan* |
| 2.68% |
|
| 4.00% |
|
| 6.68% |
|
| 8/20/2025 |
|
| 1,995 |
|
|
| 1,995 |
|
|
| 1,963 |
|
|
| 1.17 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 14,154 |
|
|
| 13,939 |
|
|
| 8.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy Equipment and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BJ Services, LLC, Term Loan* |
| 2.65% |
|
| 7.00% |
|
| 9.65% |
|
| 1/3/2023 |
|
| 6,697 |
|
|
| 6,633 |
|
|
| 6,633 |
|
|
| 3.96 |
| |||
NGS US FinCo, LLC, Term Loan* |
| 2.50% |
|
| 4.25% |
|
| 6.75% |
|
| 10/1/2025 |
|
| 2,708 |
|
|
| 2,696 |
|
|
| 2,701 |
|
|
| 1.61 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9,329 |
|
|
| 9,334 |
|
|
| 5.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold Coast Bakeries, LLC, Revolver* |
| 2.50% |
|
| 5.75% |
|
| 8.25% |
|
| 9/27/2022 |
|
| 2,375 |
|
|
| 2,375 |
|
|
| 2,375 |
|
|
| 1.42 |
| |||
Gold Coast Bakeries, LLC, Term Loan** |
| 2.50% |
|
| 5.75% |
|
| 8.25% |
|
| 9/27/2022 |
|
| 9,379 |
|
|
| 9,297 |
|
|
| 8,441 |
|
|
| 5.04 |
| |||
Mother's Market & Kitchen, Inc, Term Loan**⁽⁴⁾ |
| 2.50% |
|
| 5.98% |
|
| 8.48% |
|
| 7/26/2023 |
|
| 7,814 |
|
|
| 7,713 |
|
|
| 7,710 |
|
|
| 4.60 |
| |||
Quirch Foods Holdings, LLC, Initial Term Loan* |
| 2.49% |
|
| 6.00% |
|
| 8.49% |
|
| 12/19/2025 |
|
| 5,567 |
|
|
| 5,513 |
|
|
| 5,567 |
|
|
| 3.32 |
| |||
US Salt, LLC, Initial Term Loan* |
| 2.48% |
|
| 4.75% |
|
| 7.23% |
|
| 1/16/2026 |
|
| 1,339 |
|
|
| 1,326 |
|
|
| 1,336 |
|
|
| 0.80 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 26,224 |
|
|
| 25,429 |
|
|
| 15.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare Equipment and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AC Merger Sub, Inc. (Analogic), Term Loan* |
| 2.50% |
|
| 6.00% |
|
| 8.50% |
|
| 6/24/2024 |
|
| 8,539 |
|
|
| 8,465 |
|
|
| 8,463 |
|
|
| 5.05 |
| |||
ActivStyle, Inc., Term Loan*** |
| 2.81% |
|
| 7.50% |
|
| 10.31% |
|
| 7/9/2020 |
|
| 10,395 |
|
|
| 10,347 |
|
|
| 10,395 |
|
|
| 6.20 |
| |||
Community Care Health Network, LLC, Term Loan* |
| 2.50% |
|
| 4.75% |
|
| 7.25% |
|
| 2/18/2025 |
|
| 1,389 |
|
|
| 1,386 |
|
|
| 1,375 |
|
|
| 0.82 |
| |||
LifeScan Global Corp., Term Loan* |
| 2.80% |
|
| 6.00% |
|
| 8.80% |
|
| 10/1/2024 |
|
| 2,797 |
|
|
| 2,717 |
|
|
| 2,685 |
|
|
| 1.60 |
| |||
Maxor Acquisition, Inc., Term Loan* |
| 2.60% |
|
| 6.00% |
|
| 8.60% |
|
| 11/22/2023 |
|
| 8,922 |
|
|
| 8,853 |
|
|
| 8,850 |
|
|
| 5.28 |
| |||
Theragenics Corporation, Term Loan** |
| 2.50% |
|
| 8.00% |
|
| 10.50% |
|
| 12/23/2020 |
|
| 8,722 |
|
|
| 8,653 |
|
|
| 8,722 |
|
|
| 5.20 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 40,421 |
|
|
| 40,490 |
|
|
| 24.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels, Restaurants and Leisure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bravo Brio Restaurant Group, Inc., Term Loan*⁽⁴⁾ |
| 2.51% |
|
| 6.65% |
|
| 9.16% |
|
| 5/24/2023 |
|
| 8,302 |
|
|
| 8,199 |
|
|
| 7,887 |
|
|
| 4.71 |
| |||
CircusTrix Holdings, LLC, Term Loan B* |
| 2.50% |
|
| 5.50% |
|
| 8.00% |
|
| 12/16/2021 |
|
| 5,970 |
|
|
| 5,928 |
|
|
| 5,926 |
|
|
| 3.54 |
| |||
HRI Holding Corp. (Houlihans Restaurants), Term Loan* |
| 2.61% |
|
| 8.25% |
|
| 10.86% |
|
| 12/17/2020 |
|
| 6,247 |
|
|
| 6,202 |
|
|
| 5,622 |
|
|
| 3.35 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 20,329 |
|
|
| 19,435 |
|
|
| 11.60 |
|
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2017March 31, 2019 (unaudited)
($ in thousands, except share amounts)
Security Description |
| Base Rate |
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internet Software and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aptos, Inc., Term Loan B* |
|
| 1.33% |
|
| 6.75% |
|
|
| 8.08% |
|
| 9/1/2022 |
|
| 8,910 |
|
| $ | 8,764 |
|
| $ | 8,764 |
|
|
| 4.65 | % |
ASG Technologies Group, Inc., Term Loan* |
|
| 1.31% |
|
| 4.75% |
|
|
| 6.06% |
|
| 7/31/2024 |
|
| 1,395 |
|
|
| 1,388 |
|
|
| 1,409 |
|
|
| 0.75 |
|
Dodge Data & Analytics LLC, Term Loan* |
|
| 1.31% |
|
| 8.75% |
|
|
| 10.06% |
|
| 10/31/2019 |
|
| 8,761 |
|
|
| 8,691 |
|
|
| 8,687 |
|
|
| 4.61 |
|
Emtec Global Services Holdings, LLC, Revolver⁽³⁾ |
|
| 1.24% |
| 8.25% Cash + 4.00% PIK |
|
|
| 13.49% |
|
| 11/30/2020 |
|
| 348 |
|
|
| 348 |
|
|
| 348 |
|
|
| 0.18 |
| |
Emtec Global Services Holdings, LLC, Term Loan**⁽³⁾ |
|
| 1.24% |
| 8.25% Cash + 4.00% PIK |
|
|
| 13.49% |
|
| 11/30/2020 |
|
| 2,937 |
|
|
| 2,913 |
|
|
| 2,647 |
|
|
| 1.40 |
| |
Exela Intermediate LLC, Term Loan*⁽¹⁾ |
|
| 1.30% |
|
| 7.50% |
|
|
| 8.80% |
|
| 7/12/2023 |
|
| 5,165 |
|
|
| 5,066 |
|
|
| 5,103 |
|
|
| 2.71 |
|
Lionbridge Technologies, Inc., Term Loan* |
|
| 1.24% |
|
| 5.50% |
|
|
| 6.74% |
|
| 2/28/2024 |
|
| 1,422 |
|
|
| 1,416 |
|
|
| 1,417 |
|
|
| 0.75 |
|
Vero Parent, Inc. (fka Syncsort Incorporated), Term Loan B* |
|
| 1.31% |
|
| 5.00% |
|
|
| 6.31% |
|
| 8/16/2024 |
|
| 6,333 |
|
|
| 6,271 |
|
|
| 6,270 |
|
|
| 3.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 34,857 |
|
|
| 34,645 |
|
|
| 18.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leisure Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bass Pro Group, LLC, Initial Term Loan* |
|
| 1.30% |
|
| 5.00% |
|
|
| 6.30% |
|
| 12/15/2023 |
|
| 5,750 |
|
|
| 5,711 |
|
|
| 5,410 |
|
|
| 2.87 |
|
Confluence Outdoor, LLC, Delayed Draw Term Loan* |
|
| 1.24% |
|
| 8.75% |
|
|
| 9.99% |
|
| 4/18/2019 |
|
| 999 |
|
|
| 993 |
|
|
| 989 |
|
|
| 0.52 |
|
Confluence Outdoor, LLC, Term Loan* |
|
| 1.24% |
|
| 8.75% |
|
|
| 9.99% |
|
| 4/18/2019 |
|
| 6,657 |
|
|
| 6,621 |
|
|
| 6,590 |
|
|
| 3.50 |
|
Kranos Acquisition Corp., Term Loan* |
|
| 1.25% |
|
| 10.00% |
|
|
| 11.25% |
|
| 4/30/2018 |
|
| 7,506 |
|
|
| 7,516 |
|
|
| 7,431 |
|
|
| 3.94 |
|
Playpower, Inc., Initial Term Loan (First Lien)* |
|
| 1.33% |
|
| 4.75% |
|
|
| 6.08% |
|
| 6/23/2021 |
|
| 960 |
|
|
| 963 |
|
|
| 964 |
|
|
| 0.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 21,804 |
|
|
| 21,384 |
|
|
| 11.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Machinery |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Texas Hydraulics Holding, Inc., Term Loan**⁽⁴⁾ |
|
| 1.24% |
|
| 9.64% |
|
|
| 10.88% |
|
| 2/17/2021 |
|
| 8,200 |
|
|
| 8,089 |
|
|
| 8,200 |
|
|
| 4.35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8,089 |
|
|
| 8,200 |
|
|
| 4.35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Project Sunshine IV Pty Ltd, 2017 Incremental Term Loan*⁽¹⁾ |
|
| 1.24% |
|
| 7.00% |
|
|
| 8.24% |
|
| 8/22/2022 |
|
| 8,949 |
|
|
| 8,888 |
|
|
| 9,000 |
|
|
| 4.78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8,888 |
|
|
| 9,000 |
|
|
| 4.78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metals and Mining |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metal Services LLC (Phoenix), New Term Loans* |
|
| 1.33% |
|
| 7.50% |
|
|
| 8.83% |
|
| 6/30/2019 |
|
| 6,034 |
|
|
| 5,986 |
|
|
| 6,087 |
|
|
| 3.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 5,986 |
|
|
| 6,087 |
|
|
| 3.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retailing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sears Holdings Corporation, Term Loan*⁽¹⁾ |
|
| 1.23% |
|
| 7.50% |
|
|
| 8.73% |
|
| 7/20/2020 |
|
| 1,218 |
|
|
| 1,194 |
|
|
| 1,226 |
|
|
| 0.65 |
|
Western Convenience Stores, Inc., Term Loan* |
|
| 1.24% |
|
| 11.00% |
|
|
| 12.24% |
|
| 9/1/2019 |
|
| 9,000 |
|
|
| 8,827 |
|
|
| 8,820 |
|
|
| 4.68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 10,021 |
|
|
| 10,046 |
|
|
| 5.33 |
|
Security Description |
| Base Rate |
|
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Household Products and Durables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brown Jordan International Inc., Term Loan* |
| 2.50% |
|
| 5.00% |
|
| 7.50% |
|
| 1/31/2023 |
|
| 5,742 |
|
| $ | 5,713 |
|
| $ | 5,405 |
|
|
| 3.22 | % | |||
Comfort Holding, LLC (Innocor, Inc.), Term Loan* |
| 2.50% |
|
| 4.75% |
|
| 7.25% |
|
| 2/5/2024 |
|
| 2,977 |
|
|
| 2,882 |
|
|
| 2,964 |
|
|
| 1.77 |
| |||
CR Brands, Inc., Term Loan⁽³⁾ |
| 2.50% |
|
| 11.25% |
|
| 13.75% PIK |
|
| 4/30/2019 |
|
| 6,130 |
|
|
| 6,130 |
|
|
| 6,130 |
|
|
| 3.66 |
| |||
NBG Acquisition Inc., Term Loan* |
| 2.60% |
|
| 5.50% |
|
| 8.10% |
|
| 4/26/2024 |
|
| 5,751 |
|
|
| 5,690 |
|
|
| 5,607 |
|
|
| 3.34 |
| |||
University Furnishings, L.P., Term Loan***⁽⁴⁾ |
| 2.78% |
|
| 8.24% |
|
| 11.02% |
|
| 10/13/2022 |
|
| 10,830 |
|
|
| 10,721 |
|
|
| 10,830 |
|
|
| 6.46 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 31,136 |
|
|
| 30,936 |
|
|
| 18.45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internet Software and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aptos, Inc., Term Loan* |
| 2.50% |
|
| 5.50% |
|
| 8.00% |
|
| 7/23/2025 |
|
| 7,794 |
|
|
| 7,724 |
|
|
| 7,707 |
|
|
| 4.60 |
| |||
BMC Software Finance, Inc., Term Loan* |
| 2.60% |
|
| 4.25% |
|
| 6.85% |
|
| 10/2/2025 |
|
| 2,993 |
|
|
| 2,969 |
|
|
| 2,927 |
|
|
| 1.75 |
| |||
ConvergeOne Holdings, Inc., Initial Term Loan (First Lien)* |
| 2.50% |
|
| 5.00% |
|
| 7.50% |
|
| 1/4/2026 |
|
| 2,207 |
|
|
| 2,119 |
|
|
| 2,109 |
|
|
| 1.26 |
| |||
Corel Corporation, Term Loan*⁽¹⁾ |
| 2.63% |
|
| 5.00% |
|
| 7.63% |
|
| 6/4/2024 |
|
| 8,487 |
|
|
| 8,426 |
|
|
| 8,465 |
|
|
| 5.05 |
| |||
Emtec Global Services Holdings, LLC, Revolver⁽³⁾⁽⁵⁾ |
| 2.48% |
|
| 16.25% |
|
| 18.73% PIK |
|
| 11/30/2020 |
|
| 490 |
|
|
| 455 |
|
|
| 361 |
|
|
| 0.22 |
| |||
Emtec Global Services Holdings, LLC, Term Loan**⁽³⁾⁽⁵⁾ |
| 2.48% |
|
| 16.25% |
|
| 18.73% PIK |
|
| 11/30/2020 |
|
| 3,954 |
|
|
| 3,810 |
|
|
| 3,060 |
|
|
| 1.83 |
| |||
Exela Intermediate LLC, Term Loan*⁽¹⁾ |
| 2.88% |
|
| 6.50% |
|
| 9.38% |
|
| 7/12/2023 |
|
| 5,354 |
|
|
| 5,284 |
|
|
| 5,332 |
|
|
| 3.18 |
| |||
HDC/HW Intermediate Holdings, LLC, Term Loan* |
| 2.61% |
|
| 7.50% |
|
| 10.11% |
|
| 12/21/2023 |
|
| 6,680 |
|
|
| 6,554 |
|
|
| 6,552 |
|
|
| 3.91 |
| |||
Intermedia Holdings, Inc., Term Loan* |
| 2.50% |
|
| 6.00% |
|
| 8.50% |
|
| 7/21/2025 |
|
| 2,744 |
|
|
| 2,723 |
|
|
| 2,742 |
|
|
| 1.64 |
| |||
LANDesk Group, Inc., Term Loan* |
| 2.50% |
|
| 4.25% |
|
| 6.75% |
|
| 1/22/2024 |
|
| 3,689 |
|
|
| 3,668 |
|
|
| 3,659 |
|
|
| 2.18 |
| |||
Lionbridge Technologies, Inc., Term Loan* |
| 2.50% |
|
| 5.50% |
|
| 8.00% |
|
| 2/28/2024 |
|
| 3,212 |
|
|
| 3,211 |
|
|
| 3,194 |
|
|
| 1.91 |
| |||
Newscycle Solutions, Inc., Delayed Draw Term Loan* |
| 2.49% |
|
| 7.00% |
|
| 9.49% |
|
| 12/29/2022 |
|
| 781 |
|
|
| 781 |
|
|
| 769 |
|
|
| 0.46 |
| |||
Newscycle Solutions, Inc., Revolver |
| 2.50% |
|
| 7.00% |
|
| 9.50% |
|
| 12/29/2022 |
|
| 219 |
|
|
| 219 |
|
|
| 215 |
|
|
| 0.13 |
| |||
Newscycle Solutions, Inc., Term Loan* |
| 2.50% |
|
| 7.00% |
|
| 9.50% |
|
| 12/29/2022 |
|
| 8,543 |
|
|
| 8,415 |
|
|
| 8,408 |
|
|
| 5.02 |
| |||
Orbit Purchaser LLC (Orion), Delayed Draw Term Loan* |
| 2.69% |
|
| 4.50% |
|
| 7.19% |
|
| 10/21/2024 |
|
| 758 |
|
|
| 751 |
|
|
| 751 |
|
|
| 0.45 |
| |||
Orbit Purchaser LLC (Orion), Incremental Term Loan* |
| 2.68% |
|
| 4.50% |
|
| 7.18% |
|
| 10/21/2024 |
|
| 1,567 |
|
|
| 1,552 |
|
|
| 1,553 |
|
|
| 0.93 |
| |||
Orbit Purchaser LLC (Orion), Term Loan* |
| 2.68% |
|
| 4.50% |
|
| 7.18% |
|
| 10/21/2024 |
|
| 2,594 |
|
|
| 2,570 |
|
|
| 2,569 |
|
|
| 1.53 |
| |||
Perforce Software, Inc., Term Loan* |
| 2.50% |
|
| 4.50% |
|
| 7.00% |
|
| 12/27/2024 |
|
| 2,672 |
|
|
| 2,659 |
|
|
| 2,662 |
|
|
| 1.59 |
| |||
Quest Software US Holdings Inc., Term Loan* |
| 2.74% |
|
| 4.25% |
|
| 6.99% |
|
| 5/16/2025 |
|
| 2,271 |
|
|
| 2,255 |
|
|
| 2,237 |
|
|
| 1.33 |
| |||
RA Outdoors LLC (Active Network), Term Loan* |
| 2.50% |
|
| 4.75% |
|
| 7.25% |
|
| 9/11/2024 |
|
| 7,863 |
|
|
| 7,799 |
|
|
| 7,797 |
|
|
| 4.65 |
| |||
Travelport Finance (Luxembourg) S.Ã r.l., Term Loan*⁽¹⁾ |
| 2.50% |
|
| 5.00% |
|
| 7.50% |
|
| 3/18/2026 |
|
| 2,648 |
|
|
| 2,595 |
|
|
| 2,573 |
|
|
| 1.54 |
| |||
Vero Parent, Inc. (fka Syncsort Incorporated), Initial Term Loan (First Lien)* |
| 2.50% |
|
| 4.50% |
|
| 7.00% |
|
| 8/16/2024 |
|
| 8,865 |
|
|
| 8,774 |
|
|
| 8,777 |
|
|
| 5.24 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 85,313 |
|
|
| 84,419 |
|
|
| 50.40 |
|
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2017March 31, 2019 (unaudited)
($ in thousands, except share amounts)
Security Description |
| Base Rate |
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil, Gas and Consumable Fuels |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Badlands Production Company (fka Gasco), Term Loan⁽⁵⁾ |
|
| 1.00% |
|
| 17.50% |
|
|
| 18.50% |
|
| 5/14/2018 |
|
| 10,500 |
|
| $ | 10,421 |
|
| $ | 3,594 |
|
|
| 1.91 | % |
Diversified Gas & Oil Corporation, Term Loan*⁽⁴⁾ |
|
| 1.24% |
|
| 10.41% |
|
|
| 11.65% |
|
| 6/30/2020 |
|
| 5,938 |
|
|
| 5,921 |
|
|
| 5,811 |
|
|
| 3.08 |
|
Rooster Energy Ltd., Term Loan*⁽³⁾⁽⁵⁾ |
|
| 1.50% |
| 11.50% Cash + 8.00% PIK |
|
|
| 21.00% |
|
| 6/25/2018 |
|
| 5,364 |
|
|
| 4,988 |
|
|
| 4,112 |
|
|
| 2.18 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 21,330 |
|
|
| 13,517 |
|
|
| 7.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceuticals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RiteDose Holdings I, Inc., Term Loan* |
|
| 1.32% |
|
| 6.50% |
|
|
| 7.82% |
|
| 9/13/2023 |
|
| 8,058 |
|
|
| 7,938 |
|
|
| 7,938 |
|
|
| 4.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,938 |
|
|
| 7,938 |
|
|
| 4.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology Hardware, Storage and Peripherals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table Top Media, LLC, Lease** |
| N/A |
|
| 10.00% |
|
|
| 10.00% |
|
| 10/15/2019 |
|
| 3,228 |
|
|
| 3,221 |
|
|
| 3,224 |
|
|
| 1.71 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,221 |
|
|
| 3,224 |
|
|
| 1.71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textiles, Apparel and Luxury Goods |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
League Collegiate Holdings, LLC, Revolver* |
|
| 1.24% |
|
| 8.00% |
|
|
| 9.24% |
|
| 6/28/2021 |
|
| 330 |
|
|
| 330 |
|
|
| 326 |
|
|
| 0.17 |
|
League Collegiate Holdings, LLC, Term Loan* |
|
| 1.24% |
|
| 8.00% |
|
|
| 9.24% |
|
| 6/28/2021 |
|
| 7,411 |
|
|
| 7,328 |
|
|
| 7,328 |
|
|
| 3.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,658 |
|
|
| 7,654 |
|
|
| 4.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading Companies and Distributors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sprint Industrial Holdings, LLC, Term Loan (First Lien)* |
|
| 1.34% |
|
| 5.75% |
|
|
| 7.09% |
|
| 5/14/2019 |
|
| 4,737 |
|
|
| 4,727 |
|
|
| 4,263 |
|
|
| 2.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4,727 |
|
|
| 4,263 |
|
|
| 2.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jack Cooper Holdings Corp., Term Loan |
|
| 3.00% |
|
| 7.00% |
|
|
| 10.00% |
|
| 10/18/2018 |
|
| 5,000 |
|
|
| 5,066 |
|
|
| 5,067 |
|
|
| 2.69 |
|
Sirva Worldwide, Term Loan* |
|
| 1.32% |
|
| 6.50% |
|
|
| 7.82% |
|
| 11/22/2022 |
|
| 5,856 |
|
|
| 5,730 |
|
|
| 5,885 |
|
|
| 3.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 10,796 |
|
|
| 10,952 |
|
|
| 5.81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 373,208 |
|
| $ | 351,327 |
|
|
| 186.44 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Financial Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLC Trust 2013-2 Consumer Loan Pool⁽¹⁾⁽⁶⁾ |
| N/A |
| N/A |
|
| N/A |
|
| N/A |
|
| 2,968 |
|
| $ | 2,968 |
|
| $ | 2,767 |
|
|
| 1.47 | % | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,968 |
|
|
| 2,767 |
|
|
| 1.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 2,968 |
|
| $ | 2,767 |
|
|
| 1.47 | % |
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2017 (unaudited)
($ in thousands, except share amounts)
Security Description |
| Base Rate | Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| ||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unfunded Commitments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Air Freight and Logistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raymond Express International, LLC, Revolver* |
| N/A |
| 0.50% |
|
|
| 0.50% |
|
| 2/28/2018 |
|
| 175 |
|
| $ | — |
|
| $ | — |
|
|
| — | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Services and Supplies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Del Mar Recovery Solutions, Inc., Revolver*⁽⁷⁾ |
| N/A |
| 0.75% |
|
|
| 0.75% |
|
| 6/27/2021 |
|
| 825 |
|
|
| (17 | ) |
|
| (11 | ) |
|
| (0.01 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (17 | ) |
|
| (11 | ) |
|
| (0.01 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare Equipment and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aurora Diagnostics, LLC, Delayed Draw Term Loan C* |
| N/A |
| 2.25% |
|
|
| 2.25% |
|
| 7/31/2019 |
|
| 660 |
|
|
| (8 | ) |
|
| — |
|
|
| — |
|
Aurora Diagnostics, LLC, Revolver* |
| N/A |
| 0.38% |
|
|
| 0.38% |
|
| 7/31/2019 |
|
| 476 |
|
|
| (4 | ) |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (12 | ) |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internet Software and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emtec Global Services Holdings, LLC, Revolver |
| N/A |
| 0.00% |
|
|
| 0.00% |
|
| 11/30/2020 |
|
| 114 |
|
|
| (4 | ) |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (4 | ) |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil, Gas and Consumable Fuels |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Gas & Oil Corporation, Term Loan*⁽⁷⁾ |
| N/A |
| 3.00% |
|
|
| 3.00% |
|
| 6/30/2020 |
|
| 792 |
|
|
| (93 | ) |
|
| (15 | ) |
|
| (0.01 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (93 | ) |
|
| (15 | ) |
|
| (0.01 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceuticals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RiteDose Holdings I, Inc., Revolver*⁽⁷⁾ |
| N/A |
| 0.50% |
|
|
| 0.50% |
|
| 9/13/2023 |
|
| 537 |
|
|
| — |
|
|
| (8 | ) |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| (8 | ) |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textiles, Apparel and Luxury Goods |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
League Collegiate Holdings, LLC, Revolver*⁽⁷⁾ |
| N/A |
| 0.75% |
|
|
| 0.75% |
|
| 6/28/2021 |
|
| 1,870 |
|
|
| (25 | ) |
|
| (21 | ) |
|
| (0.01 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (25 | ) |
|
| (21 | ) |
|
| (0.01 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Unfunded Commitments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | (151 | ) |
| $ | (55 | ) |
|
| (0.03 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 380,576 |
|
| $ | 359,139 |
|
|
| 190.58 | % |
Security Description |
| Base Rate |
|
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leisure Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bass Pro Group, LLC, Initial Term Loan* |
| 2.50% |
|
| 5.00% |
|
| 7.50% |
|
| 9/25/2024 |
|
| 7,156 |
|
| $ | 7,119 |
|
| $ | 6,984 |
|
|
| 4.17 | % | |||
Confluence Outdoor, LLC, Delayed Draw Term Loan⁽³⁾⁽⁵⁾ |
| 2.49% |
|
| 10.75% |
|
| 13.24% PIK |
|
| 4/18/2019 |
|
| 1,033 |
|
|
| 1,007 |
|
|
| 811 |
|
|
| 0.48 |
| |||
Confluence Outdoor, LLC, Supplemental Loan⁽³⁾⁽⁵⁾ |
| 2.49% |
|
| 10.75% |
|
| 13.24% PIK |
|
| 4/18/2019 |
|
| 5,086 |
|
|
| 4,990 |
|
|
| 3,993 |
|
|
| 2.38 |
| |||
Confluence Outdoor, LLC, Term Loan⁽³⁾⁽⁵⁾ |
| 2.49% |
|
| 10.75% |
|
| 13.24% PIK |
|
| 4/18/2019 |
|
| 6,885 |
|
|
| 6,713 |
|
|
| 5,407 |
|
|
| 3.23 |
| |||
Playpower, Inc., Initial Term Loan (First Lien)* |
| 2.60% |
|
| 4.75% |
|
| 7.35% |
|
| 6/23/2021 |
|
| 1,385 |
|
|
| 1,383 |
|
|
| 1,385 |
|
|
| 0.83 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 21,212 |
|
|
| 18,580 |
|
|
| 11.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Project Sunshine IV Pty Ltd, 2017 Incremental Term Loan*⁽¹⁾ |
| 2.50% |
|
| 7.00% |
|
| 9.50% |
|
| 8/22/2022 |
|
| 3,132 |
|
|
| 3,100 |
|
|
| 3,116 |
|
|
| 1.86 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,100 |
|
|
| 3,116 |
|
|
| 1.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metals and Mining |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alchemy US Holdco 1, LLC (Kymera), Term Loan* |
| 2.49% |
|
| 5.50% |
|
| 7.99% |
|
| 10/10/2025 |
|
| 2,191 |
|
|
| 2,161 |
|
|
| 2,180 |
|
|
| 1.30 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,161 |
|
|
| 2,180 |
|
|
| 1.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceuticals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Akorn, Inc., Loan*⁽¹⁾ |
| 2.50% |
|
| 5.50% |
|
| 8.00% |
|
| 4/16/2021 |
|
| 2,000 |
|
|
| 1,972 |
|
|
| 1,615 |
|
|
| 0.96 |
| |||
RiteDose Holdings I, Inc., Term Loan* |
| 2.80% |
|
| 6.50% |
|
| 9.30% |
|
| 9/13/2023 |
|
| 7,957 |
|
|
| 7,868 |
|
|
| 7,863 |
|
|
| 4.69 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9,840 |
|
|
| 9,478 |
|
|
| 5.65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Institutional Shareholder Services Inc., Initial Term Loan (First Lien)* |
| 2.60% |
|
| 4.50% |
|
| 7.10% |
|
| 3/5/2026 |
|
| 4,855 |
|
|
| 4,807 |
|
|
| 4,806 |
|
|
| 2.87 |
| |||
Signify Health, LLC (fka Chloe Ox Parent, LLC), Term Loan* |
| 2.60% |
|
| 4.50% |
|
| 7.10% |
|
| 12/23/2024 |
|
| 1,871 |
|
|
| 1,855 |
|
|
| 1,861 |
|
|
| 1.11 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6,662 |
|
|
| 6,667 |
|
|
| 3.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retailing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sundance Holdings Group, LLC, Term Loan*⁽⁴⁾ |
| 2.62% |
|
| 6.40% |
|
| 9.02% |
|
| 5/1/2024 |
|
| 6,717 |
|
|
| 6,655 |
|
|
| 6,654 |
|
|
| 3.97 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6,655 |
|
|
| 6,654 |
|
|
| 3.97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Semiconductors and Semiconductor Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ultra Clean Holdings, Inc., Term Loan*⁽¹⁾ |
| 2.50% |
|
| 4.50% |
|
| 7.00% |
|
| 8/27/2025 |
|
| 2,681 |
|
|
| 2,644 |
|
|
| 2,572 |
|
|
| 1.53 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,644 |
|
|
| 2,572 |
|
|
| 1.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology Hardware, Storage and Peripherals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elo Touch Solutions, Inc., Term B Loan (First Lien)* |
| 2.59% |
|
| 6.50% |
|
| 9.09% |
|
| 12/15/2025 |
|
| 3,086 |
|
|
| 2,939 |
|
|
| 3,071 |
|
|
| 1.83 |
| |||
Table Top Media, LLC, Lease** |
| N/A |
|
| 10.00% |
|
| 10.00% |
|
| 10/15/2019 |
|
| 708 |
|
|
| 706 |
|
|
| 708 |
|
|
| 0.42 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,645 |
|
|
| 3,779 |
|
|
| 2.25 |
|
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2017March 31, 2019 (unaudited)
($ in thousands, except share amounts)
Security Description |
| Base Rate |
| Spread |
|
| All In Rate |
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| ||||||
Non-Control/Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Air Freight and Logistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Speed Commerce Investment Partners LLC, Class A Unit |
| N/A |
| N/A |
|
| N/A |
| N/A |
|
| 1,780 |
|
| $ | 1,693 |
|
| $ | — |
|
|
| — | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,693 |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 1,693 |
|
| $ | — |
|
|
| — | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Air Freight and Logistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Speed Commerce Operating Company LLC, Closing Date Term Loan B⁽³⁾⁽⁵⁾ |
|
| 1.25% |
|
| 19.00% |
|
| 20.25% PIK |
| 12/8/2017 |
|
| 2,072 |
|
| $ | 1,969 |
|
| $ | — |
|
|
| — | % |
Speed Commerce Operating Company LLC, Delayed Draw Term Loan B⁽³⁾⁽⁵⁾ |
|
| 1.25% |
|
| 19.00% |
|
| 20.25% PIK |
| 12/8/2017 |
|
| 1,419 |
|
|
| 1,282 |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,251 |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 3,251 |
|
| $ | — |
|
|
| — | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-Control/Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 4,944 |
|
| $ | — |
|
|
| — | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 385,520 |
|
| $ | 359,139 |
|
|
| 190.58 | % |
Security Description |
| Base Rate |
|
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textiles, Apparel and Luxury Goods |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Centric Brands Inc., Term Loan*⁽¹⁾⁽⁴⁾ |
| 2.75% |
|
| 6.00% |
|
| 8.75% |
|
| 10/27/2023 |
|
| 7,794 |
|
| $ | 7,685 |
|
| $ | 7,683 |
|
|
| 4.58 | % | |||
Champ Acquisition Corp., Initial Term Loan (First Lien)*⁽⁴⁾ |
| 2.60% |
|
| 5.50% |
|
| 8.10% |
|
| 12/19/2025 |
|
| 3,118 |
|
|
| 3,028 |
|
|
| 3,116 |
|
|
| 1.86 |
| |||
Keeco Holdings, LLC, Term Loan* |
| 2.50% |
|
| 7.75% |
|
| 10.25% |
|
| 3/15/2024 |
|
| 5,784 |
|
|
| 5,715 |
|
|
| 5,731 |
|
|
| 3.42 |
| |||
Triangle Home Fashions, LLC, Term Loan**⁽⁴⁾ |
| 2.50% |
|
| 6.87% |
|
| 9.37% |
|
| 3/9/2023 |
|
| 10,500 |
|
|
| 10,360 |
|
|
| 10,352 |
|
|
| 6.18 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 26,788 |
|
|
| 26,882 |
|
|
| 16.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading Companies and Distributors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cook & Boardman Group LLC, The, Term Loan* |
| 2.49% |
|
| 5.75% |
|
| 8.24% |
|
| 10/17/2025 |
|
| 3,696 |
|
|
| 3,661 |
|
|
| 3,677 |
|
|
| 2.19 |
| |||
Sprint Industrial Holdings, LLC, Term Loan (First Lien)* |
| 2.60% |
|
| 6.75% |
|
| 8.35% Cash + 1.00% PIK |
|
| 8/15/2019 |
|
| 4,710 |
|
|
| 4,708 |
|
|
| 4,710 |
|
|
| 2.81 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8,369 |
|
|
| 8,387 |
|
|
| 5.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Airxcel, Inc., Term Loan* |
| 2.50% |
|
| 4.50% |
|
| 7.00% |
|
| 4/28/2025 |
|
| 993 |
|
|
| 990 |
|
|
| 911 |
|
|
| 0.54 |
| |||
PS Holdco, LLC, Term Loan* |
| 2.50% |
|
| 4.75% |
|
| 7.25% |
|
| 3/13/2025 |
|
| 7,465 |
|
|
| 7,435 |
|
|
| 7,418 |
|
|
| 4.43 |
| |||
Sirva Worldwide, Term Loan* |
| 2.56% |
|
| 5.50% |
|
| 8.06% |
|
| 8/4/2025 |
|
| 5,406 |
|
|
| 5,345 |
|
|
| 5,257 |
|
|
| 3.14 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 13,770 |
|
|
| 13,586 |
|
|
| 8.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 481,690 |
|
| $ | 472,491 |
|
|
| 281.92 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unfunded Commitments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Integrated Flooring Systems Inc. (Camino Systems, Inc.), Revolver |
| N/A |
|
| 0.75% |
|
| 0.75% |
|
| 2/15/2023 |
|
| 14 |
|
| $ | — |
|
| $ | — |
|
|
| — | % | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Services and Supplies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Del Mar Recovery Solutions, Inc., Revolver |
| N/A |
|
| 0.75% |
|
| 0.75% |
|
| 6/28/2021 |
|
| 990 |
|
|
| (8 | ) |
|
| — |
|
|
| — |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (8 | ) |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Financial Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrity Marketing Acquisition, LLC, Delayed Draw Term Loan*⁽⁶⁾ |
| N/A |
|
| 1.00% |
|
| 1.00% |
|
| 11/28/2025 |
|
| 583 |
|
|
| (5 | ) |
|
| (3 | ) |
|
| — |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (5 | ) |
|
| (3 | ) |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Luminii LLC, Revolver*⁽⁶⁾ |
| N/A |
|
| 0.50% |
|
| 0.50% |
|
| 4/11/2023 |
|
| 515 |
|
|
| — |
|
|
| (4 | ) |
|
| — |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| (4 | ) |
|
| — |
|
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
March 31, 2019 (unaudited)
($ in thousands, except share amounts)
Security Description |
| Base Rate |
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| ||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unfunded Commitments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold Coast Bakeries, LLC, Revolver* |
| N/A |
| 0.50% |
|
| 0.50% |
|
| 9/27/2022 |
|
| 396 |
|
| $ | — |
|
| $ | — |
|
|
| — | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare Equipment and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AC Merger Sub, Inc. (Analogic), Revolver*⁽⁶⁾ |
| N/A |
| 0.50% |
|
| 0.50% |
|
| 6/22/2023 |
|
| 318 |
|
|
| — |
|
|
| (3 | ) |
|
| — |
| ||
Maxor Acquisition, Inc., Revolver*⁽⁶⁾ |
| N/A |
| 0.50% |
|
| 0.50% |
|
| 11/22/2022 |
|
| 585 |
|
|
| (5 | ) |
|
| (5 | ) |
|
| — |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (5 | ) |
|
| (8 | ) |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internet Software and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emtec Global Services Holdings, LLC, Revolver⁽⁶⁾ |
| N/A |
| 0.00% |
|
| 0.00% |
|
| 11/30/2020 |
|
| 141 |
|
|
| (1 | ) |
|
| (32 | ) |
|
| (0.02 | ) | ||
HDC/HW Intermediate Holdings, LLC, Revolver*⁽⁶⁾ |
| N/A |
| 1.00% |
|
| 1.00% |
|
| 12/21/2023 |
|
| 670 |
|
|
| (13 | ) |
|
| (13 | ) |
|
| (0.01 | ) | ||
Newscycle Solutions, Inc., Revolver⁽⁶⁾ |
| N/A |
| 0.50% |
|
| 0.50% |
|
| 12/29/2022 |
|
| 466 |
|
|
| (10 | ) |
|
| (7 | ) |
|
| — |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (24 | ) |
|
| (52 | ) |
|
| (0.03 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceuticals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RiteDose Holdings I, Inc., Revolver*⁽⁶⁾ |
| N/A |
| 0.50% |
|
| 0.50% |
|
| 9/13/2023 |
|
| 537 |
|
|
| (6 | ) |
|
| (6 | ) |
|
| — |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (6 | ) |
|
| (6 | ) |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Unfunded Commitments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | (48 | ) |
| $ | (73 | ) |
| (0.03)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 487,113 |
|
| $ | 479,353 |
|
|
| 286.06 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Control/Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil, Gas and Consumable Fuels |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cochon – MWS Holdings LLC (fka Rooster Energy Ltd.), Common |
| N/A |
| N/A |
|
| N/A |
|
| N/A |
|
| 99 |
|
| $ | 3,715 |
|
| $ | 1,510 |
|
|
| 0.90 | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,715 |
|
|
| 1,510 |
|
|
| 0.90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 3,715 |
|
| $ | 1,510 |
|
|
| 0.90 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-Control/Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 3,715 |
|
| $ | 1,510 |
|
|
| 0.90 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 490,828 |
|
| $ | 480,863 |
|
|
| 286.96 | % |
* | Denotes that all or a portion of the investment is held as collateral by Garrison Funding |
** | Denotes that all or a portion of the loan is held as collateral by Garrison Capital SBIC LP. |
*** | Denotes that all or a portion of the loan is held as collateral by Garrison Funding 2018-2 Ltd. and Garrison Capital SBIC LP. |
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
March 31, 2019 (unaudited)
($ in thousands, except share amounts)
Base Rate = Our floating rate investments bear interest at a base rate plus a spread. Generally, the borrower has an option to choose whether the base rate is referenced to the London Interbank Offered Rate (“LIBOR”) or the prime rate. The spread may change as a result of the borrower’s choice of base rate. In addition, the floating rate investments that are referenced to LIBOR are generally indexed to 30-day or 90-day U.S. Dollar LIBOR and subject to a minimum LIBOR Floor. The terms disclosed in the consolidated schedule of investments represent the actual base rate and spread in effect as of the reporting date.
All securities above were valued with significant unobservable inputs. Refer to Note 3 of our consolidated financial statements for additional disclosures regarding the unobservable inputs used in fair value measurement.
(1) | Not a qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). Under the 1940 Act, Garrison Capital Inc. (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 |
(2) | Net of a profits interest payable to a third party upon any subsequent sales of Prosper Marketplace Series B Preferred Stock. |
(3) | Interest is payable in cash, and/or payment-in-kind (“PIK”), or a combination thereof. |
(4) |
|
(5) | Investment is currently not income producing and placed on non-accrual status. |
See accompanying notes to consolidated financial statements.
| The negative fair value is the result of the unfunded commitments being valued below par. These amounts may or may not be funded to the borrowing party currently or in the future. |
As required by the 1940 Act, investments are classified by level of control. “Control Investments” are investments in those companies that the Company is deemed to control as defined in the 1940 Act. “Affiliate Investments” are investments in those companies that are affiliated companies, as defined in the 1940 Act, other than Control Investments. “Non-Control/Non-Affiliate Investments” are those that are neither Control Investments nor Affiliate Investments.
Generally, under the 1940 Act, the Company is deemed to control a company in which it has invested if it owns more than 25% of the voting securities of such company. The Company is deemed to be an affiliate of a company in which it has invested if it owns 5% or more of the voting securities of such company.
All debt investments were income producing as of March 31, 2019, unless otherwise noted. Common and preferred equity investments are non income-producing unless otherwise noted.
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments
December 31, 20162018
($ in thousands, except share amounts)
Security Description |
| Libor |
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
|
| Base Rate |
|
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| ||||||||||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Building Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Valterra Products Holdings, LLC, Class A |
| N/A |
| N/A |
|
| N/A |
|
| N/A |
|
| 185,847 |
|
| $ | 186 |
|
| $ | 673 |
|
|
| 0.33 | % |
| N/A |
|
| N/A |
|
| N/A |
|
| N/A |
|
| 185,847 |
|
| $ | 186 |
|
| $ | 784 |
|
|
| 0.46 | % | ||||||
Valterra Products Holdings, LLC, Class B |
| N/A |
| N/A |
|
| N/A |
|
| N/A |
|
| 20,650 |
|
|
| 21 |
|
|
| 75 |
|
|
| 0.04 |
|
| N/A |
|
| N/A |
|
| N/A |
|
| N/A |
|
| 20,650 |
|
|
| 21 |
|
|
| 87 |
|
|
| 0.05 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 207 |
|
|
| 748 |
|
|
| 0.37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 207 |
|
|
| 871 |
|
|
| 0.51 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Commercial Services and Supplies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Faraday Holdings, LLC, Class D Voting Common |
| N/A |
| N/A |
|
| N/A |
|
| N/A |
|
| 2,752 |
|
|
| 140 |
|
|
| 210 |
|
|
| 0.11 |
| |||||||||||||||||||||||||||||||||
Faraday Holdings, LLC, Common |
| N/A |
|
| N/A |
|
| N/A |
|
| N/A |
|
| 2,752 |
|
|
| 140 |
|
|
| 742 |
|
|
| 0.44 |
| ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 140 |
|
|
| 210 |
|
|
| 0.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 140 |
|
|
| 742 |
|
|
| 0.44 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Healthcare Equipment and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Juniper TGX Investment Partners, LLC, Common |
| N/A |
| N/A |
|
| N/A |
|
| N/A |
|
| 3,146 |
|
|
| 671 |
|
|
| 1,129 |
|
|
| 0.57 |
|
| N/A |
|
| N/A |
|
| N/A |
|
| N/A |
|
| 3,146 |
|
|
| 671 |
|
|
| 3,119 |
|
|
| 1.85 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 671 |
|
|
| 1,129 |
|
|
| 0.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 671 |
|
|
| 3,119 |
|
|
| 1.85 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Household Products and Durables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Everyware Global, Inc., Common |
| N/A |
| N/A |
|
| N/A |
|
| N/A |
|
| 242,035 |
|
|
| 2,714 |
|
|
| 1,815 |
|
|
| 0.91 |
| |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,714 |
|
|
| 1,815 |
|
|
| 0.91 |
| |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Transportation Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
EZE Trucking, LLC, Common |
| N/A |
| N/A |
|
| N/A |
|
| N/A |
|
| 2,898 |
|
|
| 268 |
|
|
| — |
|
|
| — |
| |||||||||||||||||||||||||||||||||
Oneida Group Inc., Common |
| N/A |
|
| N/A |
|
| N/A |
|
| N/A |
|
| 844,557 |
|
|
| 3,919 |
|
|
| 1,350 |
|
|
| 0.80 |
| ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 268 |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,919 |
|
|
| 1,350 |
|
|
| 0.80 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 4,000 |
|
| $ | 3,902 |
|
|
| 1.96 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 4,937 |
|
| $ | 6,082 |
|
|
| 3.60 | % | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| �� |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Preferred Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Diversified Financial Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Prosper Marketplace Series B Preferred Stock⁽¹⁾⁽²⁾ |
| N/A |
| N/A |
|
| N/A |
|
| N/A |
|
| 912,865 |
|
| $ | 551 |
|
| $ | 2,086 |
|
|
| 1.05 | % | |||||||||||||||||||||||||||||||||
Prosper Marketplace Series B Preferred Stock⁽¹⁾⁽²⁾ |
| N/A |
|
| N/A |
|
| N/A |
|
| N/A |
|
| 912,865 |
|
| $ | 551 |
|
| $ | 640 |
|
|
| 0.38 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 551 |
|
|
| 2,086 |
|
|
| 1.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 551 |
|
|
| 640 |
|
|
| 0.38 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total Preferred Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 551 |
|
| $ | 2,086 |
|
|
| 1.05 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 551 |
|
| $ | 640 |
|
|
| 0.38 | % | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
| |
Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
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| |
Aerospace and Defense |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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| |
AbelConn, LLC (Atrenne Computing), Term Loan* |
|
| 1.00% |
| 8.50% |
|
|
| 9.50% |
|
| 7/17/2019 |
|
| 9,688 |
|
| $ | 9,589 |
|
| $ | 9,589 |
|
|
| 4.81 | % | |||||||||||||||||||||||||||||||
Constellis Holdings, LLC, Term Loan* |
| 2.52% |
|
| 5.00% |
|
| 7.52% |
|
| 4/22/2024 |
|
| 3,364 |
|
| $ | 3,312 |
|
| $ | 3,196 |
|
|
| 1.89 | % | ||||||||||||||||||||||||||||||||
Novetta Solutions, Term Loan* |
| 2.53% |
|
| 5.00% |
|
| 7.53% |
|
| 10/17/2022 |
|
| 1,985 |
|
|
| 1,942 |
|
|
| 1,920 |
|
|
| 1.14 |
| ||||||||||||||||||||||||||||||||
Vertex Aerospace Services Corp., Initial Term Loan* |
| 2.52% |
|
| 4.75% |
|
| 7.27% |
|
| 6/30/2025 |
|
| 1,820 |
|
|
| 1,812 |
|
|
| 1,798 |
|
|
| 1.06 |
| ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9,589 |
|
|
| 9,589 |
|
|
| 4.81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,066 |
|
|
| 6,914 |
|
|
| 4.09 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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| |||||||||||||||||||||||||||||
Air Freight and Logistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
| |||||||||||||||||||||||||||||
Gruden Acquisition, Inc., Term Loan (First Lien)* |
| 2.80% |
|
| 5.50% |
|
| 8.30% |
|
| 8/18/2022 |
|
| 2,465 |
|
|
| 2,443 |
|
|
| 2,404 |
|
|
| 1.42 |
| ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,443 |
|
|
| 2,404 |
|
|
| 1.42 |
| |||||||||||||||||||||||||||||
|
|
|
|
|
|
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|
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| |||||||||||||||||||||||||||||
Auto Components |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
BBB Industries LLC (GC EOS Buyer), Term Loan* |
| 2.38% |
|
| 4.50% |
|
| 6.88% |
|
| 8/1/2025 |
|
| 3,491 |
|
|
| 3,483 |
|
|
| 3,413 |
|
|
| 2.02 |
| ||||||||||||||||||||||||||||||||
Challenge Mfg. Company, LLC, Term Loan B* |
| 2.53% |
|
| 6.50% |
|
| 9.03% |
|
| 4/20/2022 |
|
| 7,893 |
|
|
| 7,826 |
|
|
| 7,892 |
|
|
| 4.67 |
| ||||||||||||||||||||||||||||||||
FRAM Group Holdings Inc. (Autoparts Holdings), Term Loan* |
| 2.52% |
|
| 6.75% |
|
| 9.27% |
|
| 12/23/2021 |
|
| 6,844 |
|
|
| 6,763 |
|
|
| 6,844 |
|
|
| 4.05 |
| ||||||||||||||||||||||||||||||||
Shipston Equity Holdings, LLC, Term Loan*⁽⁴⁾ |
| 2.39% |
|
| 6.94% |
|
| 9.33% |
|
| 9/28/2023 |
|
| 5,847 |
|
|
| 5,791 |
|
|
| 5,791 |
|
|
| 3.43 |
| ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 23,863 |
|
|
| 23,940 |
|
|
| 14.17 |
|
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments – (continued)
December 31, 20162018
($ in thousands, except share amounts)
Security Description |
| Libor |
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
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|
|
|
|
|
|
|
|
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|
Air Freight and Logistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
Fleetgistics Holdings, Inc., Term Loan* |
|
| 2.00% |
|
| 6.13% |
|
|
| 8.13% |
|
| 12/31/2018 |
|
| 900 |
|
| $ | 900 |
|
| $ | 810 |
|
|
| 0.41 | % |
Gruden Acquisition, Inc., Term Loan (First Lien)* |
|
| 1.00% |
|
| 4.75% |
|
|
| 5.75% |
|
| 8/18/2022 |
|
| 1,980 |
|
|
| 1,947 |
|
|
| 1,881 |
|
|
| 0.93 |
|
MXD Group, Inc. (fka Exel Direct Inc.), Term Loan*⁽³⁾ |
|
| 1.00% |
| 11.00% Cash + 2.00% PIK |
|
|
| 14.00% |
|
| 5/31/2018 |
|
| 15,380 |
|
|
| 15,229 |
|
|
| 14,618 |
|
|
| 7.34 |
| |
Raymond Express International, LLC, Term Loan* |
|
| 1.75% |
|
| 7.75% |
|
|
| 9.50% |
|
| 2/28/2018 |
|
| 1,507 |
|
|
| 1,503 |
|
|
| 1,205 |
|
|
| 0.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 19,579 |
|
|
| 18,514 |
|
|
| 9.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auto Components |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FRAM Group Holdings Inc. (Autoparts Holdings), Term Loan* |
|
| 1.00% |
|
| 6.75% |
|
|
| 7.75% |
|
| 12/23/2021 |
|
| 9,000 |
|
|
| 8,821 |
|
|
| 8,910 |
|
|
| 4.47 |
|
Inteva Products, LLC, Term Loan* |
|
| 1.25% |
|
| 8.50% |
|
|
| 9.75% |
|
| 9/8/2021 |
|
| 4,960 |
|
|
| 4,914 |
|
|
| 4,985 |
|
|
| 2.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 13,735 |
|
|
| 13,895 |
|
|
| 6.97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ShelterLogic Corp., Term Loan* |
|
| 1.00% |
|
| 9.50% |
|
|
| 10.50% |
|
| 7/30/2019 |
|
| 9,854 |
|
|
| 9,752 |
|
|
| 9,752 |
|
|
| 4.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9,752 |
|
|
| 9,752 |
|
|
| 4.89 |
|
Chemicals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aristech Surfaces LLC, Term Loan B |
|
| 1.00% |
|
| 8.00% |
|
|
| 9.00% |
|
| 10/17/2019 |
|
| 9,595 |
|
|
| 9,501 |
|
|
| 9,501 |
|
|
| 4.76 |
|
PCCR USA, Inc., Term Loan A* |
|
| 1.00% |
|
| 8.00% |
|
|
| 9.00% |
|
| 12/1/2019 |
|
| 6,650 |
|
|
| 6,573 |
|
|
| 6,650 |
|
|
| 3.33 |
|
PCCR USA, Inc., Term Loan B* |
|
| 1.00% |
|
| 8.00% |
|
|
| 9.00% |
|
| 12/1/2019 |
|
| 1,709 |
|
|
| 1,685 |
|
|
| 1,709 |
|
|
| 0.86 |
|
Profusion Industries, LLC, Term Loan |
|
| 0.82% |
|
| 9.00% |
|
|
| 9.82% |
|
| 6/19/2020 |
|
| 9,785 |
|
|
| 9,649 |
|
|
| 9,296 |
|
|
| 4.66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 27,408 |
|
|
| 27,156 |
|
|
| 13.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Services and Supplies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Del Mar Recovery Solutions, Inc., Term Loan** |
|
| 0.61% |
|
| 8.50% |
|
|
| 9.11% |
|
| 6/27/2021 |
|
| 8,526 |
|
|
| 8,392 |
|
|
| 8,392 |
|
|
| 4.21 |
|
Del Mar Recovery Solutions, Inc., Revolver* |
|
| 0.61% |
|
| 8.50% |
|
|
| 9.11% |
|
| 6/27/2021 |
|
| 495 |
|
|
| 495 |
|
|
| 487 |
|
|
| 0.24 |
|
Interior Specialists, Inc., Term Loan |
|
| 1.00% |
|
| 8.00% |
|
|
| 9.00% |
|
| 6/30/2020 |
|
| 10,040 |
|
|
| 9,900 |
|
|
| 10,040 |
|
|
| 5.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 18,787 |
|
|
| 18,919 |
|
|
| 9.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Financial Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliated Wealth Partners Holdings LLC, Term Loan*⁽¹⁾ |
|
| 1.00% |
|
| 8.00% |
|
|
| 9.00% |
|
| 9/15/2020 |
|
| 2,868 |
|
|
| 2,836 |
|
|
| 2,836 |
|
|
| 1.42 |
|
PlanMember Financial Corporation, Term Loan*⁽¹⁾ |
|
| 1.50% |
|
| 6.50% |
|
|
| 8.00% |
|
| 12/31/2020 |
|
| 1,154 |
|
|
| 1,139 |
|
|
| 1,154 |
|
|
| 0.58 |
|
Worley Claims Services, LLC, Term Loan* |
|
| 1.00% |
|
| 8.00% |
|
|
| 9.00% |
|
| 10/31/2020 |
|
| 10,290 |
|
|
| 10,238 |
|
|
| 10,291 |
|
|
| 5.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 14,213 |
|
|
| 14,281 |
|
|
| 7.16 |
|
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments – (continued)
December 31, 2016
($ in thousands, except share amounts)
Security Description |
| Libor |
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Telecommunication Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Telepacific Corp., Term Loan* |
|
| 1.00% |
|
| 5.00% |
|
|
| 6.00% |
|
| 11/25/2020 |
|
| 1,971 |
|
| $ | 1,961 |
|
| $ | 1,967 |
|
|
| 0.99 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,961 |
|
|
| 1,967 |
|
|
| 0.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diamond Crystal Brands, Inc., Term Loan** |
|
| 0.77% |
|
| 7.75% |
|
|
| 8.52% |
|
| 7/29/2021 |
|
| 5,460 |
|
|
| 5,408 |
|
|
| 5,460 |
|
|
| 2.74 |
|
Specialty Bakers LLC, Term Loan*⁽⁴⁾ |
|
| 1.00% |
|
| 8.13% |
|
|
| 9.13% |
|
| 8/7/2019 |
|
| 9,818 |
|
|
| 9,707 |
|
|
| 9,720 |
|
|
| 4.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 15,115 |
|
|
| 15,180 |
|
|
| 7.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare Equipment and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ActivStyle, Inc., Term Loan** |
|
| 0.88% |
|
| 9.00% |
|
|
| 9.88% |
|
| 7/9/2020 |
|
| 9,656 |
|
|
| 9,537 |
|
|
| 9,656 |
|
|
| 4.84 |
|
Aurora Diagnostics, LLC, Delayed Draw Term Loan* |
|
| 1.25% |
|
| 7.13% |
|
|
| 8.38% |
|
| 7/31/2019 |
|
| 850 |
|
|
| 850 |
|
|
| 850 |
|
|
| 0.42 |
|
Aurora Diagnostics, LLC, Delayed Draw Term Loan B* |
|
| 1.25% |
|
| 7.13% |
|
|
| 8.38% |
|
| 7/31/2019 |
|
| 598 |
|
|
| 598 |
|
|
| 598 |
|
|
| 0.30 |
|
Aurora Diagnostics, LLC, Term Loan* |
|
| 1.25% |
|
| 7.13% |
|
|
| 8.38% |
|
| 7/31/2019 |
|
| 5,506 |
|
|
| 5,476 |
|
|
| 5,507 |
|
|
| 2.76 |
|
Forest Park Medical Center at San Antonio, LLC, Lease⁽⁵⁾ |
| N/A |
|
| 13.00% |
|
|
| 13.00% |
|
| 2/11/2020 |
|
| 8,982 |
|
|
| 8,832 |
|
|
| 2,392 |
|
|
| 1.20 |
| |
Forest Park Medical Center at San Antonio, LLC, Term Loan⁽⁵⁾ |
| N/A |
|
| 14.00% |
|
|
| 14.00% |
|
| On Demand |
|
| 1,951 |
|
|
| 1,914 |
|
|
| 520 |
|
|
| 0.26 |
| |
RCS Management Corporation (SMS), Term Loan B** |
|
| 1.00% |
|
| 10.50% |
|
|
| 11.50% |
|
| 7/29/2018 |
|
| 9,500 |
|
|
| 9,351 |
|
|
| 9,350 |
|
|
| 4.69 |
|
SCG Capital Corporation (Radiation Therapy), Term Note |
| N/A |
|
| 12.00% |
|
|
| 12.00% |
|
| 5/1/2017 |
|
| 822 |
|
|
| 822 |
|
|
| 822 |
|
|
| 0.41 |
| |
Theragenics Corporation, Term Loan** |
|
| 1.00% |
|
| 12.00% |
|
|
| 13.00% |
|
| 12/23/2020 |
|
| 6,977 |
|
|
| 6,877 |
|
|
| 6,952 |
|
|
| 3.49 |
|
Walnut Hill Physicians' Hospital, LLC, Lease |
| N/A |
|
| 12.50% |
|
|
| 12.50% |
|
| 4/30/2019 |
|
| 6,765 |
|
|
| 6,765 |
|
|
| 6,765 |
|
|
| 3.39 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 51,022 |
|
|
| 43,412 |
|
|
| 21.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels, Restaurants and Leisure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AP Gaming I, LLC, Term B Loan* |
|
| 1.00% |
|
| 8.25% |
|
|
| 9.25% |
|
| 12/21/2020 |
|
| 10,117 |
|
|
| 9,998 |
|
|
| 10,050 |
|
|
| 5.04 |
|
HRI Holding Corp. (Houlihans Restaurants), Term Loan*⁽⁴⁾ |
|
| 1.00% |
|
| 8.10% |
|
|
| 9.10% |
|
| 12/17/2020 |
|
| 6,800 |
|
|
| 6,688 |
|
|
| 6,692 |
|
|
| 3.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 16,686 |
|
|
| 16,742 |
|
|
| 8.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Household Products and Durables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CR Brands, Inc., Term Loan* |
|
| 1.00% |
|
| 9.25% |
|
|
| 10.25% |
|
| 8/23/2017 |
|
| 9,722 |
|
|
| 9,685 |
|
|
| 9,681 |
|
|
| 4.85 |
|
Lexmark Carpet Mills, Inc., Term Loan |
|
| 1.00% |
|
| 10.00% |
|
|
| 11.00% |
|
| 12/19/2019 |
|
| 9,578 |
|
|
| 9,436 |
|
|
| 9,436 |
|
|
| 4.73 |
|
University Furnishings, L.P., Term Loan B**⁽⁴⁾ |
|
| 0.77% |
|
| 7.39% |
|
|
| 8.16% |
|
| 12/17/2020 |
|
| 7,102 |
|
|
| 7,006 |
|
|
| 6,990 |
|
|
| 3.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 26,127 |
|
|
| 26,107 |
|
|
| 13.09 |
|
Security Description |
| Base Rate |
|
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Integrated Flooring Systems Inc. (Camino Systems, Inc.), Revolver |
| 2.35% |
|
| 8.25% |
|
| 10.60% |
|
| 2/15/2023 |
|
| 36 |
|
| $ | 36 |
|
| $ | 36 |
|
|
| 0.02 | % | |||
Global Integrated Flooring Systems Inc. (Camino Systems, Inc.), Term Loan** |
| 2.35% |
|
| 8.25% |
|
| 10.60% |
|
| 2/15/2023 |
|
| 7,216 |
|
|
| 7,097 |
|
|
| 6,927 |
|
|
| 4.10 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,133 |
|
|
| 6,963 |
|
|
| 4.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemicals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AOC / Aliancys, Term Loan*⁽¹⁾ |
| 2.58% |
|
| 4.25% |
|
| 6.83% |
|
| 8/1/2025 |
|
| 1,490 |
|
|
| 1,490 |
|
|
| 1,449 |
|
|
| 0.86 |
| |||
Aristech Surfaces LLC, Term Loan B* |
| 2.38% |
|
| 7.00% |
|
| 9.38% |
|
| 10/17/2019 |
|
| 8,979 |
|
|
| 8,954 |
|
|
| 8,790 |
|
|
| 5.20 |
| |||
Profusion Industries, LLC, Term Loan⁽⁵⁾ |
| 2.38% |
|
| 12.25% |
|
| 14.63% |
|
| 6/19/2020 |
|
| 9,270 |
|
|
| 9,188 |
|
|
| 2,330 |
|
|
| 1.38 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 19,632 |
|
|
| 12,569 |
|
|
| 7.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Services and Supplies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Del Mar Recovery Solutions, Inc., Term Loan** |
| 2.50% |
|
| 8.50% |
|
| 11.00% |
|
| 6/28/2021 |
|
| 7,726 |
|
|
| 7,659 |
|
|
| 7,649 |
|
|
| 4.53 |
| |||
DMT Solutions Global Corporation (Pitney Bowes), Term Loan* |
| 2.55% |
|
| 7.00% |
|
| 9.55% |
|
| 7/2/2024 |
|
| 7,111 |
|
|
| 6,916 |
|
|
| 6,791 |
|
|
| 4.02 |
| |||
Interior Logic Group, Term Loan* |
| 2.80% |
|
| 4.00% |
|
| 6.80% |
|
| 5/30/2025 |
|
| 6,510 |
|
|
| 6,481 |
|
|
| 6,348 |
|
|
| 3.76 |
| |||
Staples, Inc., Term Loan* |
| 2.54% |
|
| 4.00% |
|
| 6.54% |
|
| 9/12/2024 |
|
| 5,541 |
|
|
| 5,487 |
|
|
| 5,301 |
|
|
| 3.14 |
| |||
USAGM Holdco, LLC, Incremental Term Loan* |
| 2.52% |
|
| 4.25% |
|
| 6.77% |
|
| 7/28/2022 |
|
| 2,903 |
|
|
| 2,886 |
|
|
| 2,765 |
|
|
| 1.64 |
| |||
USAGM Holdco, LLC, Initial Term Loan (First Lien)* |
| 2.52% |
|
| 3.75% |
|
| 6.27% |
|
| 7/28/2022 |
|
| 992 |
|
|
| 984 |
|
|
| 939 |
|
|
| 0.56 |
| |||
VIP Cinema Holdings, Inc., Term Loan* |
| 2.53% |
|
| 6.00% |
|
| 8.53% |
|
| 3/1/2023 |
|
| 5,077 |
|
|
| 5,063 |
|
|
| 4,963 |
|
|
| 2.94 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 35,476 |
|
|
| 34,756 |
|
|
| 20.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and Engineering |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brand Energy & Infrastructure Services, Inc., Term Loan* |
| 2.48% |
|
| 4.25% |
|
| 6.73% |
|
| 6/21/2024 |
|
| 665 |
|
|
| 642 |
|
|
| 630 |
|
|
| 0.37 |
| |||
GeoStabilization International, Term Loan* |
| 2.59% |
|
| 5.50% |
|
| 8.09% |
|
| 12/19/2025 |
|
| 3,349 |
|
|
| 3,315 |
|
|
| 3,315 |
|
|
| 1.96 |
| |||
QualTek USA, LLC, Term Loan* |
| 2.53% |
|
| 5.75% |
|
| 8.28% |
|
| 7/18/2025 |
|
| 5,841 |
|
|
| 5,735 |
|
|
| 5,666 |
|
|
| 3.35 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9,692 |
|
|
| 9,611 |
|
|
| 5.68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Containers and Packaging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ball Metalpack Finco LLC, Term Loan* |
| 2.52% |
|
| 4.50% |
|
| 7.02% |
|
| 7/31/2025 |
|
| 549 |
|
|
| 546 |
|
|
| 531 |
|
|
| 0.31 |
| |||
Klockner Pentaplast of America, Inc., Term Loan*⁽¹⁾ |
| 2.52% |
|
| 4.25% |
|
| 6.77% |
|
| 6/30/2022 |
|
| 4,630 |
|
|
| 4,495 |
|
|
| 3,981 |
|
|
| 2.36 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 5,041 |
|
|
| 4,512 |
|
|
| 2.67 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Financial Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acrisure, LLC, Term Loan* |
| 2.52% |
|
| 4.25% |
|
| 6.77% |
|
| 11/22/2023 |
|
| 1,496 |
|
|
| 1,485 |
|
|
| 1,447 |
|
|
| 0.86 |
| |||
AIS Holdco, LLC, Term Loan* |
| 2.80% |
|
| 5.00% |
|
| 7.80% |
|
| 8/15/2025 |
|
| 2,698 |
|
|
| 2,685 |
|
|
| 2,631 |
|
|
| 1.56 |
| |||
Financial & Risk US Holdings, Inc. (Refinitiv), Term Loan* |
| 2.52% |
|
| 3.75% |
|
| 6.27% |
|
| 10/1/2025 |
|
| 2,205 |
|
|
| 2,200 |
|
|
| 2,062 |
|
|
| 1.22 |
| |||
Integrity Marketing Acquisition, LLC, Term Loan* |
| 2.71% |
|
| 4.25% |
|
| 6.96% |
|
| 11/28/2025 |
|
| 5,266 |
|
|
| 5,240 |
|
|
| 5,240 |
|
|
| 3.10 |
| |||
PlanMember Financial Corporation, Term Loan*⁽¹⁾ |
| 3.00% |
|
| 5.00% |
|
| 8.00% |
|
| 12/31/2020 |
|
| 1,586 |
|
|
| 1,572 |
|
|
| 1,577 |
|
|
| 0.93 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 13,182 |
|
|
| 12,957 |
|
|
| 7.67 |
|
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments – (continued)
December 31, 20162018
($ in thousands, except share amounts)
Security Description |
| Libor |
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internet Software and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aptos, Inc., Term Loan B* |
|
| 1.00% |
|
| 6.75% |
|
|
| 7.75% |
|
| 9/1/2022 |
|
| 8,978 |
|
| $ | 8,808 |
|
| $ | 8,808 |
|
|
| 4.41 | % |
Dodge Data & Analytics LLC, Term Loan* |
|
| 1.00% |
|
| 8.75% |
|
|
| 9.75% |
|
| 10/31/2019 |
|
| 9,023 |
|
|
| 8,921 |
|
|
| 8,921 |
|
|
| 4.47 |
|
Emtec Global Services Holdings, LLC, Revolver⁽³⁾ |
|
| 0.57% |
| 8.25% Cash + 2.00% PIK |
|
|
| 10.82% |
|
| 11/30/2020 |
|
| 335 |
|
|
| 335 |
|
|
| 332 |
|
|
| 0.17 |
| |
Emtec Global Services Holdings, LLC, Term Loan**⁽³⁾ |
|
| 0.57% |
| 8.25% Cash + 2.00% PIK |
|
|
| 10.82% |
|
| 11/30/2020 |
|
| 2,820 |
|
|
| 2,791 |
|
|
| 2,790 |
|
|
| 1.40 |
| |
Syncsort Incorporated, Term Loan* |
|
| 1.00% |
|
| 5.25% |
|
|
| 6.25% |
|
| 12/23/2022 |
|
| 6,729 |
|
|
| 6,662 |
|
|
| 6,662 |
|
|
| 3.34 |
|
YourMembership Holding Company, Term Loan A** |
|
| 1.00% |
|
| 7.00% |
|
|
| 8.00% |
|
| 9/12/2019 |
|
| 9,371 |
|
|
| 9,328 |
|
|
| 9,371 |
|
|
| 4.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 36,845 |
|
|
| 36,884 |
|
|
| 18.49 |
|
Leisure Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Confluence Outdoor, LLC, Term Loan* |
|
| 1.00% |
|
| 7.00% |
|
|
| 8.00% |
|
| 4/18/2019 |
|
| 6,657 |
|
|
| 6,604 |
|
|
| 6,324 |
|
|
| 3.17 |
|
Confluence Outdoor, LLC, Delayed Draw Term Loan |
|
| 1.00% |
|
| 7.00% |
|
|
| 8.00% |
|
| 4/18/2019 |
|
| 999 |
|
|
| 991 |
|
|
| 949 |
|
|
| 0.48 |
|
Kranos Acquisition Corp., Term Loan* |
|
| 1.00% |
|
| 10.00% |
|
|
| 11.00% |
|
| 6/15/2017 |
|
| 8,293 |
|
|
| 8,277 |
|
|
| 8,281 |
|
|
| 4.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 15,872 |
|
|
| 15,554 |
|
|
| 7.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Machinery |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Texas Hydraulics Holding, Inc., Term Loan**⁽⁴⁾ |
|
| 0.77% |
|
| 9.62% |
|
|
| 10.39% |
|
| 2/17/2021 |
|
| 8,200 |
|
|
| 8,065 |
|
|
| 8,065 |
|
|
| 4.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8,065 |
|
|
| 8,065 |
|
|
| 4.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CF Entertainment Inc. (Entertainment Studios), Term Loan* |
|
| 1.00% |
|
| 11.00% |
|
|
| 12.00% |
|
| 6/26/2020 |
|
| 10,032 |
|
|
| 9,979 |
|
|
| 10,133 |
|
|
| 5.08 |
|
Project Sunshine IV Pty Ltd (Sensis), New Term Loans*⁽¹⁾ |
|
| 1.00% |
|
| 7.00% |
|
|
| 8.00% |
|
| 9/23/2019 |
|
| 6,876 |
|
|
| 6,747 |
|
|
| 6,833 |
|
|
| 3.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 16,726 |
|
|
| 16,966 |
|
|
| 8.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metals and Mining |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metal Services LLC (Phoenix), New Term Loans* |
|
| 1.00% |
|
| 7.50% |
|
|
| 8.50% |
|
| 6/30/2019 |
|
| 6,081 |
|
|
| 6,010 |
|
|
| 6,096 |
|
|
| 3.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6,010 |
|
|
| 6,096 |
|
|
| 3.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retailing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
360 Holdings III Corp., Term Loan* |
|
| 1.00% |
|
| 9.00% |
|
|
| 10.00% |
|
| 10/1/2021 |
|
| 7,308 |
|
|
| 7,067 |
|
|
| 7,067 |
|
|
| 3.54 |
|
Sears Holdings Corporation, Term Loan*⁽¹⁾ |
|
| 1.00% |
|
| 7.50% |
|
|
| 8.50% |
|
| 7/20/2020 |
|
| 1,600 |
|
|
| 1,561 |
|
|
| 1,598 |
|
|
| 0.80 |
|
Western Convenience Stores, Inc., Term Loan* |
|
| 0.63% |
|
| 11.00% |
|
|
| 11.63% |
|
| 9/1/2019 |
|
| 9,000 |
|
|
| 8,760 |
|
|
| 8,760 |
|
|
| 4.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 17,388 |
|
|
| 17,425 |
|
|
| 8.73 |
|
Security Description |
| Base Rate |
|
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Telecommunication Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fusion Connect, Inc., Tranche B Term Loan (First Lien)*⁽¹⁾ |
| 2.59% |
|
| 7.50% |
|
| 10.09% |
|
| 5/4/2023 |
|
| 7,145 |
|
| $ | 6,897 |
|
| $ | 6,788 |
|
|
| 4.02 | % | |||
KORE Wireless Group Inc., Term Loan* |
| 2.79% |
|
| 5.50% |
|
| 8.29% |
|
| 12/20/2024 |
|
| 8,260 |
|
|
| 8,178 |
|
|
| 8,177 |
|
|
| 4.84 |
| |||
Onvoy, LLC, Term Loan* |
| 2.80% |
|
| 4.50% |
|
| 7.30% |
|
| 2/12/2024 |
|
| 2,984 |
|
|
| 2,976 |
|
|
| 2,646 |
|
|
| 1.57 |
| |||
U.S. Telepacific Corp., Term Loan B* |
| 2.80% |
|
| 5.00% |
|
| 7.80% |
|
| 5/2/2023 |
|
| 7,190 |
|
|
| 7,141 |
|
|
| 6,794 |
|
|
| 4.02 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 25,192 |
|
|
| 24,405 |
|
|
| 14.45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical Components International, Inc., Term Loan* |
| 2.80% |
|
| 4.25% |
|
| 7.05% |
|
| 6/26/2025 |
|
| 4,987 |
|
|
| 4,969 |
|
|
| 4,813 |
|
|
| 2.85 |
| |||
Luminii LLC, Term Loan* |
| 2.40% |
|
| 5.75% |
|
| 8.15% |
|
| 4/11/2023 |
|
| 7,281 |
|
|
| 7,217 |
|
|
| 7,215 |
|
|
| 4.27 |
| |||
Verifone Systems, Inc., Term Loan* |
| 2.64% |
|
| 4.00% |
|
| 6.64% |
|
| 8/20/2025 |
|
| 2,000 |
|
|
| 2,000 |
|
|
| 1,928 |
|
|
| 1.14 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 14,186 |
|
|
| 13,956 |
|
|
| 8.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy Equipment and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NGS US FinCo, LLC, Term Loan* |
| 2.51% |
|
| 4.25% |
|
| 6.76% |
|
| 10/1/2025 |
|
| 2,715 |
|
|
| 2,702 |
|
|
| 2,695 |
|
|
| 1.60 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,702 |
|
|
| 2,695 |
|
|
| 1.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold Coast Bakeries, LLC, Revolver* |
| 2.52% |
|
| 5.75% |
|
| 8.27% |
|
| 9/27/2022 |
|
| 1,583 |
|
|
| 1,583 |
|
|
| 1,583 |
|
|
| 0.94 |
| |||
Gold Coast Bakeries, LLC, Term Loan** |
| 2.52% |
|
| 5.75% |
|
| 8.27% |
|
| 9/27/2022 |
|
| 9,379 |
|
|
| 9,292 |
|
|
| 8,441 |
|
|
| 5.00 |
| |||
Mother's Market & Kitchen, Inc, Term Loan**⁽⁴⁾ |
| 2.53% |
|
| 5.71% |
|
| 8.24% |
|
| 7/26/2023 |
|
| 7,814 |
|
|
| 7,707 |
|
|
| 7,705 |
|
|
| 4.56 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 18,582 |
|
|
| 17,729 |
|
|
| 10.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare Equipment and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AC Merger Sub, Inc. (Analogic), Term Loan* |
| 2.52% |
|
| 6.00% |
|
| 8.52% |
|
| 6/24/2024 |
|
| 8,561 |
|
|
| 8,483 |
|
|
| 8,481 |
|
|
| 5.02 |
| |||
ActivStyle, Inc., Term Loan*** |
| 2.44% |
|
| 7.50% |
|
| 9.94% |
|
| 7/9/2020 |
|
| 10,421 |
|
|
| 10,364 |
|
|
| 10,421 |
|
|
| 6.17 |
| |||
Aurora Diagnostics, LLC, Delayed Draw Term Loan* |
| 2.53% |
|
| 7.13% |
|
| 9.66% |
|
| 7/31/2019 |
|
| 850 |
|
|
| 849 |
|
|
| 850 |
|
|
| 0.50 |
| |||
Aurora Diagnostics, LLC, Delayed Draw Term Loan B* |
| 2.53% |
|
| 7.13% |
|
| 9.66% |
|
| 7/31/2019 |
|
| 598 |
|
|
| 597 |
|
|
| 598 |
|
|
| 0.35 |
| |||
Aurora Diagnostics, LLC, Delayed Draw Term Loan C* |
| 2.46% |
|
| 7.13% |
|
| 9.59% |
|
| 7/31/2019 |
|
| 1,056 |
|
|
| 1,050 |
|
|
| 1,056 |
|
|
| 0.63 |
| |||
Aurora Diagnostics, LLC, Delayed Draw Term Loan D |
| 2.46% |
|
| 7.13% |
|
| 9.59% |
|
| 7/31/2019 |
|
| 173 |
|
|
| 171 |
|
|
| 173 |
|
|
| 0.10 |
| |||
Aurora Diagnostics, LLC, Revolver* |
| 2.48% |
|
| 7.13% |
|
| 9.61% |
|
| 7/31/2019 |
|
| 1,020 |
|
|
| 1,020 |
|
|
| 1,020 |
|
|
| 0.60 |
| |||
Aurora Diagnostics, LLC, Term Loan* |
| 2.53% |
|
| 7.13% |
|
| 9.66% |
|
| 7/31/2019 |
|
| 5,243 |
|
|
| 5,237 |
|
|
| 5,243 |
|
|
| 3.10 |
| |||
Community Care Health Network, LLC, Term Loan* |
| 2.52% |
|
| 4.75% |
|
| 7.27% |
|
| 2/18/2025 |
|
| 1,393 |
|
|
| 1,390 |
|
|
| 1,351 |
|
|
| 0.80 |
| |||
LifeScan Global Corp., Term Loan* |
| 2.40% |
|
| 6.00% |
|
| 8.40% |
|
| 10/1/2024 |
|
| 2,846 |
|
|
| 2,762 |
|
|
| 2,683 |
|
|
| 1.59 |
| |||
Maxor Acquisition, Inc., Term Loan* |
| 2.82% |
|
| 6.00% |
|
| 8.82% |
|
| 11/22/2023 |
|
| 8,945 |
|
|
| 8,872 |
|
|
| 8,869 |
|
|
| 5.25 |
| |||
Theragenics Corporation, Term Loan** |
| 2.53% |
|
| 12.00% |
|
| 14.53% |
|
| 12/23/2020 |
|
| 8,865 |
|
|
| 8,783 |
|
|
| 8,865 |
|
|
| 5.25 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 49,578 |
|
|
| 49,610 |
|
|
| 29.36 |
|
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments – (continued)
December 31, 20162018
($ in thousands, except share amounts)
Security Description |
| Libor |
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil, Gas and Consumable Fuels |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Badlands Production Company (fka Gasco), Term Loan⁽⁵⁾ |
|
| 1.00% |
|
| 17.50% |
|
|
| 18.50% |
|
| 5/14/2018 |
|
| 10,500 |
|
| $ | 10,403 |
|
| $ | 6,300 |
|
|
| 3.17 | % |
Iracore International Holdings, Inc., Term Loan* |
|
| 1.00% |
|
| 9.00% |
|
|
| 10.00% |
|
| 7/10/2020 |
|
| 8,878 |
|
|
| 8,784 |
|
|
| 8,878 |
|
|
| 4.45 |
|
Rooster Energy Ltd., Term Loan*⁽³⁾⁽⁴⁾ |
|
| 1.50% |
| 12.89% Cash + 8.00% PIK |
|
|
| 22.39% |
|
| 6/25/2018 |
|
| 5,587 |
|
|
| 5,517 |
|
|
| 4,470 |
|
|
| 2.24 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 24,704 |
|
|
| 19,648 |
|
|
| 9.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Simmons Research LLC, Term Loan* |
|
| 0.88% |
|
| 10.50% |
|
|
| 11.38% |
|
| 12/11/2020 |
|
| 3,810 |
|
|
| 3,750 |
|
|
| 3,750 |
|
|
| 1.88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,750 |
|
|
| 3,750 |
|
|
| 1.88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sirva Worldwide, Term Loan* |
|
| 1.00% |
|
| 6.50% |
|
|
| 7.50% |
|
| 11/22/2022 |
|
| 5,900 |
|
|
| 5,755 |
|
|
| 5,767 |
|
|
| 2.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 5,755 |
|
|
| 5,767 |
|
|
| 2.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology Hardware, Storage and Peripherals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TableTop Media, LLC, Lease** |
| N/A |
|
| 10.00% |
|
|
| 10.00% |
|
| 10/15/2019 |
|
| 4,354 |
|
|
| 4,344 |
|
|
| 4,347 |
|
|
| 2.18 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4,344 |
|
|
| 4,347 |
|
|
| 2.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textiles, Apparel and Luxury Goods |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
League Collegiate Holdings, LLC, Term Loan* |
|
| 0.77% |
|
| 8.00% |
|
|
| 8.77% |
|
| 6/28/2021 |
|
| 7,604 |
|
|
| 7,501 |
|
|
| 7,501 |
|
|
| 3.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,501 |
|
|
| 7,501 |
|
|
| 3.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading Companies and Distributors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sprint Industrial Holdings, LLC, Term Loan (First Lien)* |
|
| 1.25% |
|
| 5.75% |
|
|
| 7.00% |
|
| 5/14/2019 |
|
| 4,774 |
|
|
| 4,759 |
|
|
| 3,437 |
|
|
| 1.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4,759 |
|
|
| 3,437 |
|
|
| 1.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 375,693 |
|
| $ | 360,954 |
|
|
| 180.99 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Financial Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLC Trust 2013-2 Consumer Loan Pool⁽¹⁾⁽⁶⁾ |
| N/A |
| N/A |
|
| N/A |
|
| N/A |
|
| 7,086 |
|
| $ | 7,086 |
|
| $ | 6,756 |
|
|
| 3.39 | % | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,086 |
|
|
| 6,756 |
|
|
| 3.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 7,086 |
|
| $ | 6,756 |
|
|
| 3.39 | % |
Security Description |
| Base Rate |
|
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels, Restaurants and Leisure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AP Gaming I, LLC, Term Loan B* |
| 2.52% |
|
| 3.50% |
|
| 6.02% |
|
| 2/15/2024 |
|
| 6,637 |
|
| $ | 6,639 |
|
| $ | 6,488 |
|
|
| 3.84 | % | |||
Bravo Brio Restaurant Group, Inc., Term Loan*⁽⁴⁾ |
| 2.53% |
|
| 6.65% |
|
| 9.18% |
|
| 5/24/2023 |
|
| 8,302 |
|
|
| 8,193 |
|
|
| 8,190 |
|
|
| 4.85 |
| |||
CircusTrix Holdings, LLC, Term Loan B* |
| 2.52% |
|
| 5.50% |
|
| 8.02% |
|
| 12/16/2021 |
|
| 5,985 |
|
|
| 5,939 |
|
|
| 5,938 |
|
|
| 3.52 |
| |||
HRI Holding Corp. (Houlihans Restaurants), Term Loan* |
| 2.81% |
|
| 6.25% |
|
| 9.06% |
|
| 12/17/2020 |
|
| 6,247 |
|
|
| 6,196 |
|
|
| 5,934 |
|
|
| 3.51 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 26,967 |
|
|
| 26,550 |
|
|
| 15.72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Household Products and Durables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brown Jordan International Inc., Term Loan* |
| 2.52% |
|
| 5.00% |
|
| 7.52% |
|
| 1/31/2023 |
|
| 5,757 |
|
|
| 5,726 |
|
|
| 5,556 |
|
|
| 3.29 |
| |||
CR Brands, Inc., Term Loan*⁽³⁾ |
| 2.35% |
|
| 11.25% |
|
| 13.60% PIK |
|
| 3/29/2019 |
|
| 6,547 |
|
|
| 6,547 |
|
|
| 6,547 |
|
|
| 3.88 |
| |||
Innocor, Inc. (Comfort Holding, LLC), Term Loan* |
| 2.52% |
|
| 4.75% |
|
| 7.27% |
|
| 2/5/2024 |
|
| 2,985 |
|
|
| 2,884 |
|
|
| 2,795 |
|
|
| 1.65 |
| |||
NBG Acquisition Inc., Term Loan* |
| 2.59% |
|
| 5.50% |
|
| 8.09% |
|
| 4/26/2024 |
|
| 5,788 |
|
|
| 5,724 |
|
|
| 5,586 |
|
|
| 3.31 |
| |||
University Furnishings, L.P., Term Loan***⁽⁴⁾ |
| 2.44% |
|
| 7.26% |
|
| 9.70% |
|
| 10/13/2022 |
|
| 10,830 |
|
|
| 10,713 |
|
|
| 10,830 |
|
|
| 6.41 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 31,594 |
|
|
| 31,314 |
|
|
| 18.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internet Software and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aptos, Inc., Term Loan* |
| 2.52% |
|
| 5.50% |
|
| 8.02% |
|
| 7/23/2025 |
|
| 7,814 |
|
|
| 7,741 |
|
|
| 7,726 |
|
|
| 4.57 |
| |||
BMC Software Finance, Inc., Term Loan* |
| 2.80% |
|
| 4.25% |
|
| 7.05% |
|
| 10/2/2025 |
|
| 3,000 |
|
|
| 2,975 |
|
|
| 2,887 |
|
|
| 1.71 |
| |||
Corel Corporation, Term Loan*⁽¹⁾⁽⁴⁾ |
| 2.71% |
|
| 5.00% |
|
| 7.71% |
|
| 6/4/2024 |
|
| 8,652 |
|
|
| 8,587 |
|
|
| 8,544 |
|
|
| 5.06 |
| |||
Emtec Global Services Holdings, LLC, Revolver⁽³⁾ |
| 2.34% |
|
| 16.25% |
|
| 18.59% PIK |
|
| 11/30/2020 |
|
| 450 |
|
|
| 450 |
|
|
| 450 |
|
|
| 0.27 |
| |||
Emtec Global Services Holdings, LLC, Term Loan**⁽³⁾ |
| 2.34% |
|
| 16.25% |
|
| 18.59% PIK |
|
| 11/30/2020 |
|
| 3,769 |
|
|
| 3,754 |
|
|
| 3,769 |
|
|
| 2.23 |
| |||
Exela Intermediate LLC, Term Loan*⁽¹⁾ |
| 2.88% |
|
| 6.50% |
|
| 9.38% |
|
| 7/12/2023 |
|
| 5,389 |
|
|
| 5,314 |
|
|
| 5,308 |
|
|
| 3.14 |
| |||
HDC/HW Intermediate Holdings, LLC, Term Loan* |
| 2.81% |
|
| 7.50% |
|
| 10.31% |
|
| 12/21/2023 |
|
| 6,697 |
|
|
| 6,564 |
|
|
| 6,563 |
|
|
| 3.89 |
| |||
Intermedia Holdings, Inc., Term Loan* |
| 2.52% |
|
| 6.00% |
|
| 8.52% |
|
| 7/21/2025 |
|
| 2,750 |
|
|
| 2,729 |
|
|
| 2,740 |
|
|
| 1.62 |
| |||
LANDesk Group, Inc., Term Loan* |
| 2.35% |
|
| 4.25% |
|
| 6.60% |
|
| 1/22/2024 |
|
| 3,698 |
|
|
| 3,676 |
|
|
| 3,522 |
|
|
| 2.09 |
| |||
Lionbridge Technologies, Inc., Term Loan* |
| 2.52% |
|
| 5.50% |
|
| 8.02% |
|
| 2/28/2024 |
|
| 3,220 |
|
|
| 3,219 |
|
|
| 3,192 |
|
|
| 1.89 |
| |||
Newscycle Solutions, Inc., Delayed Draw Term Loan |
| 2.35% |
|
| 7.00% |
|
| 9.35% |
|
| 12/29/2022 |
|
| 792 |
|
|
| 792 |
|
|
| 778 |
|
|
| 0.46 |
| |||
Newscycle Solutions, Inc., Term Loan* |
| 2.52% |
|
| 7.00% |
|
| 9.52% |
|
| 12/29/2022 |
|
| 8,655 |
|
|
| 8,517 |
|
|
| 8,511 |
|
|
| 5.04 |
| |||
Orbit Purchaser LLC (Orion), Term Loan* |
| 2.67% |
|
| 4.50% |
|
| 7.17% |
|
| 10/21/2024 |
|
| 2,594 |
|
|
| 2,569 |
|
|
| 2,568 |
|
|
| 1.52 |
| |||
Quest Software US Holdings Inc., Term Loan* |
| 2.53% |
|
| 4.25% |
|
| 6.78% |
|
| 5/16/2025 |
|
| 1,203 |
|
|
| 1,197 |
|
|
| 1,160 |
|
|
| 0.69 |
| |||
RA Outdoors LLC (Active Network), Term Loan* |
| 2.52% |
|
| 4.75% |
|
| 7.27% |
|
| 9/11/2024 |
|
| 7,883 |
|
|
| 7,816 |
|
|
| 7,815 |
|
|
| 4.63 |
| |||
Vero Parent, Inc. (fka Syncsort Incorporated), Initial Term Loan (First Lien)* |
| 2.52% |
|
| 4.50% |
|
| 7.02% |
|
| 8/16/2024 |
|
| 8,888 |
|
|
| 8,792 |
|
|
| 8,799 |
|
|
| 5.21 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 74,692 |
|
|
| 74,332 |
|
|
| 44.02 |
|
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments – (continued)
December 31, 20162018
($ in thousands, except share amounts)
Security Description |
| Libor | Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| ||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unfunded Commitments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Air Freight and Logistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raymond Express International, LLC, Revolver*⁽⁷⁾ |
| N/A |
| 0.50% |
|
|
| 0.50% |
|
| 2/28/2018 |
|
| 215 |
|
| $ | (1 | ) |
| $ | (43 | ) |
|
| (0.02 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1 | ) |
|
| (43 | ) |
|
| (0.02 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Services and Supplies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Del Mar Recovery Solutions, Inc., Revolver*⁽⁷⁾ |
| N/A |
| 0.75% |
|
|
| 0.75% |
|
| 6/27/2021 |
|
| 825 |
|
|
| (21 | ) |
|
| (14 | ) |
|
| (0.01 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (21 | ) |
|
| (14 | ) |
|
| (0.01 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare Equipment and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aurora Diagnostics, LLC, Revolver*⁽⁷⁾ |
| N/A |
| 0.38% |
|
|
| 0.38% |
|
| 7/31/2019 |
|
| 1,020 |
|
|
| (6 | ) |
|
| (6 | ) |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (6 | ) |
|
| (6 | ) |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internal Software and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emtec Global Services Holdings, LLC, Revolver⁽⁷⁾ |
| N/A |
| 0.00% |
|
|
| 0.00% |
|
| 11/30/2020 |
|
| 123 |
|
|
| (5 | ) |
|
| (1 | ) |
|
| — |
|
YourMembership Holding Company, Revolver*⁽⁷⁾ |
| N/A |
| 0.00% |
|
|
| 0.00% |
|
| 9/12/2019 |
|
| 441 |
|
|
| (2 | ) |
|
| (3 | ) |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (7 | ) |
|
| (4 | ) |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil, Gas and Consumable Fuels |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
League Collegiate Holdings, LLC, Revolver*⁽⁷⁾ |
| N/A |
| 0.75% |
|
|
| 0.75% |
|
| 6/28/2021 |
|
| 2,200 |
|
|
| (30 | ) |
|
| (30 | ) |
|
| (0.02 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (30 | ) |
|
| (30 | ) |
|
| (0.02 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Unfunded Commitments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | (65 | ) |
| $ | (97 | ) |
|
| (0.05 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 387,265 |
|
| $ | 373,601 |
|
|
| 187.34 | % |
Security Description |
| Base Rate |
|
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leisure Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bass Pro Group, LLC, Initial Term Loan* |
| 2.52% |
|
| 5.00% |
|
| 7.52% |
|
| 9/25/2024 |
|
| 7,174 |
|
| $ | 7,135 |
|
| $ | 6,848 |
|
|
| 4.05 | % | |||
Confluence Outdoor, LLC, Delayed Draw Term Loan⁽³⁾ |
| 2.35% |
|
| 10.75% |
|
| 13.10% PIK |
|
| 4/18/2019 |
|
| 1,000 |
|
|
| 996 |
|
|
| 800 |
|
|
| 0.47 |
| |||
Confluence Outdoor, LLC, Supplemental Loan⁽³⁾ |
| 2.35% |
|
| 10.75% |
|
| 13.10% PIK |
|
| 4/18/2019 |
|
| 2,990 |
|
|
| 3,050 |
|
|
| 2,256 |
|
|
| 1.34 |
| |||
Confluence Outdoor, LLC, Term Loan⁽³⁾ |
| 2.35% |
|
| 10.75% |
|
| 13.10% PIK |
|
| 4/18/2019 |
|
| 6,668 |
|
|
| 6,641 |
|
|
| 5,334 |
|
|
| 3.16 |
| |||
Playpower, Inc., Initial Term Loan (First Lien)* |
| 2.80% |
|
| 4.75% |
|
| 7.55% |
|
| 6/23/2021 |
|
| 1,389 |
|
|
| 1,386 |
|
|
| 1,389 |
|
|
| 0.82 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 19,208 |
|
|
| 16,627 |
|
|
| 9.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Project Sunshine IV Pty Ltd, 2017 Incremental Term Loan*⁽¹⁾ |
| 2.52% |
|
| 7.00% |
|
| 9.52% |
|
| 8/22/2022 |
|
| 4,212 |
|
|
| 4,167 |
|
|
| 4,159 |
|
|
| 2.46 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4,167 |
|
|
| 4,159 |
|
|
| 2.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metals and Mining |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alchemy US Holdco 1, LLC (Kymera), Term Loan* |
| 2.49% |
|
| 5.50% |
|
| 7.99% |
|
| 10/10/2025 |
|
| 2,205 |
|
|
| 2,173 |
|
|
| 2,189 |
|
|
| 1.30 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,173 |
|
|
| 2,189 |
|
|
| 1.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceuticals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Akorn, Inc., Loan*⁽¹⁾ |
| 2.56% |
|
| 5.50% |
|
| 8.06% |
|
| 4/16/2021 |
|
| 2,000 |
|
|
| 1,968 |
|
|
| 1,613 |
|
|
| 0.95 |
| |||
RiteDose Holdings I, Inc., Term Loan* |
| 2.40% |
|
| 7.25% |
|
| 9.65% |
|
| 9/13/2023 |
|
| 7,977 |
|
|
| 7,883 |
|
|
| 7,879 |
|
|
| 4.66 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9,851 |
|
|
| 9,492 |
|
|
| 5.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signify Health, LLC (fka Chloe Ox Parent, LLC), Term Loan* |
| 2.80% |
|
| 4.50% |
|
| 7.30% |
|
| 12/23/2024 |
|
| 1,875 |
|
|
| 1,859 |
|
|
| 1,847 |
|
|
| 1.09 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,859 |
|
|
| 1,847 |
|
|
| 1.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retailing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sundance Holdings Group, LLC, Term Loan*⁽⁴⁾ |
| 2.74% |
|
| 6.11% |
|
| 8.85% |
|
| 5/1/2024 |
|
| 6,717 |
|
|
| 6,652 |
|
|
| 6,651 |
|
|
| 3.94 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6,652 |
|
|
| 6,651 |
|
|
| 3.94 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Semiconductors and Semiconductor Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ultra Clean Holdings, Inc., Term Loan*⁽¹⁾ |
| 5.50% |
|
| 3.50% |
|
| 9.00% |
|
| 8/27/2025 |
|
| 2,698 |
|
|
| 2,659 |
|
|
| 2,550 |
|
|
| 1.51 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,659 |
|
|
| 2,550 |
|
|
| 1.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology Hardware, Storage and Peripherals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elo Touch Solutions, Inc., Term B Loan (First Lien)* |
| 2.78% |
|
| 6.50% |
|
| 9.28% |
|
| 12/15/2025 |
|
| 3,125 |
|
|
| 2,971 |
|
|
| 2,996 |
|
|
| 1.77 |
| |||
Table Top Media, LLC, Lease** |
| N/A |
|
| 10.00% |
|
| 10.00% |
|
| 10/15/2019 |
|
| 1,155 |
|
|
| 1,152 |
|
|
| 1,154 |
|
|
| 0.68 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4,123 |
|
|
| 4,150 |
|
|
| 2.45 |
|
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments – (continued)
December 31, 20162018
($ in thousands, except share amounts)
Security Description |
| Base Rate |
|
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textiles, Apparel and Luxury Goods |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Centric Brands Inc., Term Loan*⁽¹⁾⁽⁴⁾ |
| 2.51% |
|
| 6.00% |
|
| 8.51% |
|
| 10/27/2023 |
|
| 7,813 |
|
| $ | 7,698 |
|
| $ | 7,697 |
|
|
| 4.56 | % | |||
Champ Acquisition Corp., Initial Term Loan (First Lien)*⁽⁴⁾ |
| 2.48% |
|
| 5.50% |
|
| 7.98% |
|
| 12/19/2025 |
|
| 3,125 |
|
|
| 3,032 |
|
|
| 3,036 |
|
|
| 1.80 |
| |||
Keeco Holdings, LLC, Term Loan* |
| 2.47% |
|
| 7.00% |
|
| 9.47% |
|
| 9/19/2023 |
|
| 4,358 |
|
|
| 4,317 |
|
|
| 4,316 |
|
|
| 2.56 |
| |||
Triangle Home Fashions, LLC, Term Loan**⁽⁴⁾ |
| 2.53% |
|
| 6.61% |
|
| 9.14% |
|
| 3/9/2023 |
|
| 10,500 |
|
|
| 10,346 |
|
|
| 10,341 |
|
|
| 6.12 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 25,393 |
|
|
| 25,390 |
|
|
| 15.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading Companies and Distributors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cook & Boardman Group LLC, The, Term Loan* |
| 2.80% |
|
| 5.75% |
|
| 8.55% |
|
| 10/17/2025 |
|
| 3,119 |
|
|
| 3,088 |
|
|
| 3,072 |
|
|
| 1.82 |
| |||
Sprint Industrial Holdings, LLC, Term Loan (First Lien)* |
| 2.80% |
|
| 5.75% |
|
| 8.55% |
|
| 5/14/2019 |
|
| 4,675 |
|
|
| 4,673 |
|
|
| 4,488 |
|
|
| 2.66 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,761 |
|
|
| 7,560 |
|
|
| 4.48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Airxcel, Inc., Term Loan* |
| 2.52% |
|
| 4.50% |
|
| 7.02% |
|
| 4/28/2025 |
|
| 995 |
|
|
| 993 |
|
|
| 935 |
|
|
| 0.55 |
| |||
PS Holdco, LLC, Term Loan* |
| 2.53% |
|
| 4.75% |
|
| 7.28% |
|
| 3/13/2025 |
|
| 6,416 |
|
|
| 6,391 |
|
|
| 6,224 |
|
|
| 3.68 |
| |||
Sirva Worldwide, Term Loan* |
| 2.56% |
|
| 5.50% |
|
| 8.06% |
|
| 8/4/2025 |
|
| 2,654 |
|
|
| 2,635 |
|
|
| 2,594 |
|
|
| 1.54 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 10,019 |
|
|
| 9,753 |
|
|
| 5.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 460,886 |
|
| $ | 445,585 |
|
|
| 263.79 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Financial Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Loan Pool⁽¹⁾⁽⁶⁾ |
| N/A |
|
| N/A |
|
| N/A |
|
| N/A |
|
| 244 |
|
| $ | 244 |
|
| $ | 232 |
|
|
| 0.14 | % | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 244 |
|
|
| 232 |
|
|
| 0.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 244 |
|
| $ | 232 |
|
|
| 0.14 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unfunded Commitments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Integrated Flooring Systems Inc. (Camino Systems, Inc.), Revolver |
| N/A |
|
| 0.75% |
|
| 0.75% |
|
| 2/15/2023 |
|
| 14 |
|
| $ | — |
|
| $ | — |
|
|
| — | % | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Services and Supplies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Del Mar Recovery Solutions, Inc., Revolver |
| N/A |
|
| 0.75% |
|
| 0.75% |
|
| 6/28/2021 |
|
| 990 |
|
|
| (8 | ) |
|
| — |
|
|
| — |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (8 | ) |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Financial Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrity Marketing Acquisition, LLC, Delayed Draw Term Loan*⁽⁷⁾ |
| N/A |
|
| 1.00% |
|
| 1.00% |
|
| 11/28/2025 |
|
| 984 |
|
|
| (5 | ) |
|
| (5 | ) |
|
| — |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (5 | ) |
|
| (5 | ) |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Luminii LLC, Revolver*⁽⁷⁾ |
| N/A |
|
| 0.50% |
|
| 0.50% |
|
| 4/11/2023 |
|
| 515 |
|
|
| — |
|
|
| (5 | ) |
|
| — |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| (5 | ) |
|
| — |
|
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments – (continued)
December 31, 2018
($ in thousands, except share amounts)
Security Description |
| Libor |
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
|
| Base Rate |
| Spread |
|
| All In Rate |
|
| Maturity |
| Par / Shares |
|
| Cost |
|
| Fair Value |
|
| % of Net Assets |
| |||||||||||||
Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Unfunded Commitments (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Healthcare Equipment and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
AC Merger Sub, Inc. (Analogic), Revolver*⁽⁷⁾ |
| N/A |
| 0.50% |
|
| 0.50% |
|
| 6/22/2023 |
|
| 318 |
|
| $ | — |
|
| $ | (3 | ) |
|
| 0.00 | % | |||||||||||||||||||||||||||||||
Maxor Acquisition, Inc., Revolver*⁽⁷⁾ |
| N/A |
| 0.50% |
|
| 0.50% |
|
| 11/22/2022 |
|
| 585 |
|
|
| (5 | ) |
|
| (5 | ) |
|
| — |
| |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (5 | ) |
|
| (8 | ) |
|
| — |
| |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Internet Software and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Emtec Global Services Holdings, LLC, Revolver |
| N/A |
| 0.00% |
|
| 0.00% |
|
| 11/30/2020 |
|
| 159 |
|
|
| (2 | ) |
|
| — |
|
|
| — |
| |||||||||||||||||||||||||||||||
HDC/HW Intermediate Holdings, LLC, Revolver*⁽⁷⁾ |
| N/A |
| 1.00% |
|
| 1.00% |
|
| 12/21/2023 |
|
| 670 |
|
|
| (13 | ) |
|
| (13 | ) |
|
| (0.01 | ) | |||||||||||||||||||||||||||||||
Newscycle Solutions, Inc., Revolver⁽⁷⁾ |
| N/A |
| 0.50% |
|
| 0.50% |
|
| 12/29/2022 |
|
| 685 |
|
|
| (11 | ) |
|
| (11 | ) |
|
| (0.01 | ) | |||||||||||||||||||||||||||||||
Orbit Purchaser LLC (Orion), Delayed Draw Term Loan*⁽⁷⁾ |
| N/A |
| 0.00% |
|
| 0.00% |
|
| 10/21/2024 |
|
| 758 |
|
|
| (7 | ) |
|
| (7 | ) |
|
| — |
| |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (33 | ) |
|
| (31 | ) |
|
| (0.02 | ) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Leisure Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Confluence Outdoor, LLC, Supplemental Loan⁽⁷⁾ |
| N/A |
| 0.00% |
|
| 0.00% |
|
| 4/18/2019 |
|
| 1,359 |
|
|
| (61 | ) |
|
| (136 | ) |
|
| (0.08 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (61 | ) |
|
| (136 | ) |
|
| (0.08 | ) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Pharmaceuticals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
RiteDose Holdings I, Inc., Revolver*⁽⁷⁾ |
| N/A |
| 0.50% |
|
| 0.50% |
|
| 9/13/2023 |
|
| 537 |
|
|
| (6 | ) |
|
| (7 | ) |
|
| — |
| |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (6 | ) |
|
| (7 | ) |
|
| — |
| |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Total Unfunded Commitments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | (118 | ) |
| $ | (192 | ) |
|
| (0.10 | %) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Total Non-Control/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 466,500 |
|
| $ | 452,347 |
|
|
| 267.81 | % | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Non-Control/Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Air Freight and Logistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Speed Commerce Investment Partners LLC, Class A Unit |
| N/A |
| N/A |
|
| N/A |
|
| N/A |
|
| 1,780 |
|
| $ | 1,693 |
|
| $ | — |
|
|
| — | % | |||||||||||||||||||||||||||||||
Oil, Gas and Consumable Fuels |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Cochon – MWS Holdings LLC (fka Rooster Energy Ltd.), Common |
| N/A |
| N/A |
|
| N/A |
|
| N/A |
|
| 99 |
|
| $ | 3,715 |
|
| $ | 1,630 |
|
|
| 0.97 | % | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,693 |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,715 |
|
|
| 1,630 |
|
|
| 0.97 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 1,693 |
|
| $ | — |
|
|
| — | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 3,715 |
|
| $ | 1,630 |
|
|
| 0.97 | % | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Air Freight and Logistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Speed Commerce Operating Company LLC, Closing Date Term Loan B⁽³⁾ |
|
| 1.00% |
| 16.00% |
|
| 17.00% PIK |
|
| 12/8/2017 |
|
| 1,879 |
|
| $ | 1,879 |
|
| $ | 1,879 |
|
|
| 0.95 | % | ||||||||||||||||||||||||||||||
Speed Commerce Operating Company LLC, Delayed Draw Term Loan B⁽³⁾ |
|
| 1.00% |
| 16.00% |
|
| 17.00% PIK |
|
| 12/8/2017 |
|
| 1,224 |
|
|
| 1,224 |
|
|
| 1,224 |
|
|
| 0.62 |
| ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,103 |
|
|
| 3,103 |
|
|
| 1.57 |
| |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Total Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 3,103 |
|
| $ | 3,103 |
|
|
| 1.57 | % | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Unfunded Commitments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Healthcare Equipment and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Speed Commerce Operating Company LLC, Delayed Draw Term Loan B |
| N/A |
| 0.00% |
|
|
| 0.00% |
|
| 12/8/2017 |
|
| 18 |
|
| $ | — |
|
| $ | — |
|
|
| — | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| — |
|
|
| — |
| |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Total Unfunded Commitments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | — |
|
| $ | — |
|
|
| — | % | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Total Non-Control/Affiliate Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 4,796 |
|
| $ | 3,103 |
|
|
| 1.57 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 3,715 |
|
| $ | 1,630 |
|
|
| 0.97 | % | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total Investments - United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 392,061 |
|
| $ | 376,704 |
|
|
| 188.91 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 470,215 |
|
| $ | 453,977 |
|
|
| 268.78 | % |
* | Denotes that all or a portion of the investment is held as collateral by Garrison Funding |
** | Denotes that all or a portion of the loan is held as collateral by Garrison Capital SBIC LP. |
*** | Denotes that all or a portion of the investment is held as collateral by Garrison Funding 2018-2 Ltd. and Garrison Capital SBIC LP. |
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Schedule of Investments – (continued)
December 31, 2018
($ in thousands, except share amounts)
Base Rate = Our floating rate investments bear interest at a base rate plus a spread. Generally, the borrower has an option to choose whether the base rate is referenced to LIBOR or the prime rate. The spread may change as a result of the borrower’s choice of base rate. In addition, the floating rate investments that are referenced to LIBOR are generally indexed to 30-day or 90-day U.S. Dollar LIBOR and subject to a minimum LIBOR Floor. The terms disclosed in the consolidated schedule of investments represent the actual base rate and spread in effect as of the reporting period date.
All securities above were valued with significant unobservable inputs. Refer to Note 3 of our consolidated financial statements for additional disclosures regarding the unobservable inputs used in fair value measurement.
(1) | Not a qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, |
See accompanying notes to consolidated financial statements.
(3) | Interest is payable in cash, and/or PIK, or a combination thereof. |
(4) |
|
(5) | Investment is currently not income producing and placed on non-accrual status. |
(6) |
|
(7) | The negative fair value is the result of the unfunded commitments being valued below par. These amounts may or may not be funded to the borrowing party currently or in the future. |
As required by the 1940 Act, investments are classified by level of control. “Control Investments” are investments in those companies that the Company is deemed to control as defined in the 1940 Act. “Affiliate Investments” are investments in those companies that are affiliated companies, as defined in the 1940 Act, other than Control Investments. “Non-Control/Non-Affiliate Investments” are those that are neither Control Investments nor Affiliate Investments.
Generally, under the 1940 Act, the Company is deemed to control a company in which it has invested if it owns more than 25% of the voting securities of such company. The Company is deemed to be an affiliate of a company in which it has invested if it owns 5% or more of the voting securities of such company.
All debt investments were income producing as of December 31, 2018, unless otherwise noted. Common and preferred equity investments are non income-producing unless otherwise noted.
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
($ in thousands, except share and per share amounts)
|
| Three Months Ended |
|
| Three Months Ended |
|
| Nine Months Ended |
|
| Nine Months Ended |
|
| Three Months Ended |
| |||||||||
|
| September 30, 2017 |
|
| September 30, 2016 |
|
| September 30, 2017 |
|
| September 30, 2016 |
|
| March 31, 2019 |
|
| March 31, 2018 |
| ||||||
Investment income | Investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Investment income |
|
|
|
|
|
|
|
Interest income | Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest income |
|
|
|
|
|
|
|
Non-control/non-affiliate investments | Non-control/non-affiliate investments | $ | 7,835 |
|
| $ | 10,160 |
|
| $ | 24,120 |
|
| $ | 31,080 |
| Non-control/non-affiliate investments | $ | 9,726 |
|
| $ | 8,360 |
|
Non-control/affiliate investments | Non-control/affiliate investments |
| - |
|
|
| 76 |
|
|
| 148 |
|
|
| 76 |
| Non-control/affiliate investments |
| — |
|
|
| — |
|
Payment-in-kind | Payment-in-kind |
| 975 |
|
|
| 528 |
|
|
| 1,671 |
|
|
| 1,457 |
| Payment-in-kind |
| 239 |
|
|
| 1,219 |
|
Other income | Other income |
| 93 |
|
|
| 341 |
|
|
| 992 |
|
|
| 685 |
| Other income |
| 264 |
|
|
| 642 |
|
Total investment income | Total investment income |
| 8,903 |
|
|
| 11,105 |
|
|
| 26,931 |
|
|
| 33,298 |
| Total investment income |
| 10,229 |
|
|
| 10,221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses | Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses |
|
|
|
|
|
|
|
Interest expense | Interest expense |
| 2,220 |
|
|
| 3,665 |
|
|
| 6,483 |
|
|
| 7,751 |
| Interest expense |
| 3,727 |
|
|
| 2,554 |
|
Loss on refinancing of secured notes (Note 4) |
| - |
|
|
| 1,828 |
|
|
| - |
|
|
| 1,828 |
| |||||||||
Management fee | Management fee |
| 1,374 |
|
|
| 1,805 |
|
|
| 4,423 |
|
|
| 5,479 |
| Management fee |
| 1,623 |
|
|
| 1,492 |
|
Incentive fee | Incentive fee |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| Incentive fee |
| 289 |
|
|
| — |
|
Professional fees | Professional fees |
| 255 |
|
|
| 357 |
|
|
| 596 |
|
|
| 1,079 |
| Professional fees |
| 398 |
|
|
| 294 |
|
Directors' fees | Directors' fees |
| 77 |
|
|
| 91 |
|
|
| 236 |
|
|
| 304 |
| Directors' fees |
| 82 |
|
|
| 77 |
|
Administrator expenses | Administrator expenses |
| 305 |
|
|
| 311 |
|
|
| 893 |
|
|
| 1,025 |
| Administrator expenses |
| 371 |
|
|
| 298 |
|
Other expenses | Other expenses |
| 482 |
|
|
| 576 |
|
|
| 1,612 |
|
|
| 1,645 |
| Other expenses |
| 492 |
|
|
| 586 |
|
Total expenses | Total expenses |
| 4,713 |
|
|
| 8,633 |
|
|
| 14,243 |
|
|
| 19,111 |
| Total expenses |
| 6,982 |
|
|
| 5,301 |
|
Management fee waived |
| - |
|
|
| - |
|
|
| (310 | ) |
|
| - |
| |||||||||
Net expenses |
| 4,713 |
|
|
| 8,633 |
|
|
| 13,933 |
|
|
| 19,111 |
| |||||||||
Net investment income before excise taxes | Net investment income before excise taxes |
| 4,190 |
|
|
| 2,472 |
|
|
| 12,998 |
|
|
| 14,187 |
| Net investment income before excise taxes |
| 3,247 |
|
|
| 4,920 |
|
Excise tax expense/(benefit) |
| 5 |
|
|
| (65 | ) |
|
| 39 |
|
|
| 35 |
| |||||||||
Excise tax expense | Excise tax expense |
| — |
|
|
| 6 |
| ||||||||||||||||
Net investment income | Net investment income |
| 4,185 |
|
|
| 2,537 |
|
|
| 12,959 |
|
|
| 14,152 |
| Net investment income |
| 3,247 |
|
|
| 4,914 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized and unrealized gain/(loss) on investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Net realized (loss)/gain from investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Realized and unrealized (losses)/gains | Realized and unrealized (losses)/gains |
|
|
|
|
|
|
| ||||||||||||||||
Net realized loss on investments | Net realized loss on investments |
|
|
|
|
|
|
| ||||||||||||||||
Non-control/non-affiliate investments | Non-control/non-affiliate investments |
| (30 | ) |
|
| (11,182 | ) |
|
| 573 |
|
|
| (29,592 | ) | Non-control/non-affiliate investments |
| (7,133 | ) |
|
| (577 | ) |
Non-control/affiliate investments | Non-control/affiliate investments |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| Non-control/affiliate investments |
| — |
|
|
| — |
|
Net change in unrealized gain/(loss) from investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized gain/(loss) on investments | Net change in unrealized gain/(loss) on investments |
|
|
|
|
|
|
| ||||||||||||||||
Non-control/non-affiliate investments | Non-control/non-affiliate investments |
| 267 |
|
|
| 7,557 |
|
|
| (7,772 | ) |
|
| 7,776 |
| Non-control/non-affiliate investments |
| 6,416 |
|
|
| (2,312 | ) |
Non-control/affiliate investments | Non-control/affiliate investments |
| - |
|
|
| - |
|
|
| (3,251 | ) |
|
| - |
| Non-control/affiliate investments |
| (120 | ) |
|
| — |
|
Net realized and unrealized gain/(loss) on investments |
| 237 |
|
|
| (3,625 | ) |
|
| (10,450 | ) |
|
| (21,816 | ) | |||||||||
Net realized and unrealized loss on investments | Net realized and unrealized loss on investments |
| (837 | ) |
|
| (2,889 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in net assets resulting from operations | $ | 4,422 |
|
| $ | (1,088 | ) |
| $ | 2,509 |
|
| $ | (7,664 | ) | |||||||||
Net increase in net assets resulting from operations | Net increase in net assets resulting from operations | $ | 2,410 |
|
| $ | 2,025 |
| ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income per common share | Net investment income per common share | $ | 0.26 |
|
| $ | 0.16 |
|
| $ | 0.81 |
|
| $ | 0.87 |
| Net investment income per common share | $ | 0.20 |
|
| $ | 0.31 |
|
Net increase/(decrease) in net assets resulting from operations per common share | $ | 0.27 |
|
| $ | (0.07 | ) |
| $ | 0.16 |
|
| $ | (0.47 | ) | |||||||||
Net increase in net assets resulting from operations per common share | Net increase in net assets resulting from operations per common share | $ | 0.15 |
|
| $ | 0.13 |
| ||||||||||||||||
Basic weighted average common shares outstanding | Basic weighted average common shares outstanding |
| 16,049,352 |
|
|
| 16,059,665 |
|
|
| 16,049,352 |
|
|
| 16,183,615 |
| Basic weighted average common shares outstanding |
| 16,049,352 |
|
|
| 16,049,352 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and distributions declared per common share | Dividends and distributions declared per common share | $ | 0.28 |
|
| $ | 0.35 |
|
| $ | 0.84 |
|
| $ | 1.05 |
| Dividends and distributions declared per common share | $ | 0.23 |
|
| $ | 0.28 |
|
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Statements of Changes in Net Assets (unaudited)
($ in thousands, except share and per share amounts)
|
| Nine Months Ended |
|
| Nine Months Ended |
| ||
|
| September 30, 2017 |
|
| September 30, 2016 |
| ||
Increase/(decrease) in net assets from operations: |
|
|
|
|
|
|
|
|
Net investment income |
| $ | 12,959 |
|
| $ | 14,152 |
|
Net realized gain/(loss) from investments |
|
| 573 |
|
|
| (29,592 | ) |
Net change in unrealized (loss)/gain on investments |
|
| (11,023 | ) |
|
| 7,776 |
|
Net increase/(decrease) in net assets from operations |
|
| 2,509 |
|
|
| (7,664 | ) |
|
|
|
|
|
|
|
|
|
Dividends and distributions to stockholders: |
|
|
|
|
|
|
|
|
From net investment income |
|
| (13,482 | ) |
|
| (16,957 | ) |
Total dividends and distributions to stockholders |
|
| (13,482 | ) |
|
| (16,957 | ) |
|
|
|
|
|
|
|
|
|
Common share transactions |
|
|
|
|
|
|
|
|
Repurchase of common stock (see Note 8) |
|
| - |
|
|
| (5,041 | ) |
Net increase/(decrease) in net assets from common share transaction |
|
| - |
|
|
| (5,041 | ) |
|
|
|
|
|
|
|
|
|
Total decrease in net assets |
|
| (10,973 | ) |
|
| (29,662 | ) |
Net assets at beginning of period |
|
| 199,408 |
|
|
| 230,710 |
|
Net assets at end of period |
| $ | 188,435 |
|
| $ | 201,048 |
|
Net asset value per common share |
| $ | 11.74 |
|
| $ | 12.53 |
|
Common shares outstanding at end of period |
|
| 16,049,352 |
|
|
| 16,049,352 |
|
|
|
|
|
|
|
|
|
|
Underdistributed net investment income included in net assets |
| $ | 4,643 |
|
| $ | 5,977 |
|
|
| Three Months Ended | |||||||
|
| March 31, 2019 |
|
| March 31, 2018 |
|
| ||
|
|
|
|
|
|
|
|
|
|
Increase in net assets from operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
| $ | 3,247 |
|
| $ | 4,914 |
|
|
Net realized loss on investments |
|
| (7,133 | ) |
|
| (577 | ) |
|
Net change in unrealized gain/(loss) on investments |
|
| 6,296 |
|
|
| (2,312 | ) |
|
Net increase in net assets resulting from operations |
|
| 2,410 |
|
|
| 2,025 |
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and distributions to stockholders: |
|
|
|
|
|
|
|
|
|
From net investment income |
|
| (3,691 | ) |
|
| (4,494 | ) |
|
Total dividends and distributions to stockholders |
|
| (3,691 | ) |
|
| (4,494 | ) |
|
|
|
|
|
|
|
|
|
|
|
Total decrease in net assets |
|
| (1,281 | ) |
|
| (2,469 | ) |
|
Net assets at beginning of period |
|
| 168,912 |
|
|
| 187,658 |
|
|
Net assets at end of period |
| $ | 167,631 |
|
| $ | 185,189 |
|
|
Net asset value per share |
| $ | 10.44 |
|
| $ | 11.54 |
|
|
Shares of common stock outstanding at end of period |
|
| 16,049,352 |
|
|
| 16,049,352 |
|
|
See accompanying notes to consolidated financial statements.
Garrison Capital Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
($ in thousands, except share and per share amounts)
| Nine Months Ended |
|
| Nine Months Ended |
| ||
| September 30, 2017 |
|
| September 30, 2016 |
| ||
Cash flows from operating activities |
|
|
|
|
|
|
|
Net increase/(decrease) in net assets resulting from operations | $ | 2,509 |
|
| $ | (7,664 | ) |
Adjustments to reconcile net increase/(decrease) in net assets resulting from operations to net cash provided by operating activities: |
|
|
|
|
|
|
|
Net accretion of discounts on investments |
| (981 | ) |
|
| (1,078 | ) |
Net realized (gain)/loss from investments |
| (573 | ) |
|
| 29,592 |
|
Loss on refinancing of secured notes |
| - |
|
|
| 1,828 |
|
Amortization of deferred debt issuance costs and discounts on notes payable |
| 298 |
|
|
| 2,300 |
|
Net change in unrealized loss/(gain) on investments |
| 11,023 |
|
|
| (7,776 | ) |
Payment-in-kind interest |
| (1,671 | ) |
|
| (1,457 | ) |
Purchases of investments |
| (105,053 | ) |
|
| (99,874 | ) |
Paydowns of investments |
| 114,392 |
|
|
| 67,792 |
|
Sales of investments |
| 419 |
|
|
| 26,983 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Increase in cash, restricted |
| (1,998 | ) |
|
| (10,795 | ) |
Decrease in due from counterparties |
| 1,988 |
|
|
| 1,511 |
|
Decrease in accrued interest receivable |
| 651 |
|
|
| 1,673 |
|
Increase in other assets |
| (77 | ) |
|
| (281 | ) |
Increase in due to counterparties |
| - |
|
|
| 601 |
|
Increase in payables to affiliates |
| 1,546 |
|
|
| 190 |
|
Decrease in interest payable on notes payable |
| (174 | ) |
|
| (684 | ) |
(Decrease)/increase in accrued expenses and other payables |
| (268 | ) |
|
| 475 |
|
Net cash provided by operating activities |
| 22,031 |
|
|
| 3,336 |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
Repurchase of common stock |
| - |
|
|
| (5,041 | ) |
Distributions paid to stockholders |
| (13,482 | ) |
|
| (16,957 | ) |
Payments for financing costs |
| - |
|
|
| (2,432 | ) |
Proceeds of senior secured revolving note |
| - |
|
|
| (10,000 | ) |
Repayment of GLC Trust 2013-2 Class A note |
| (4,219 | ) |
|
| (8,828 | ) |
Proceeds from Garrison SBIC borrowings |
| - |
|
|
| 15,660 |
|
Proceeds from borrowing on senior secured term notes |
| - |
|
|
| 5,983 |
|
Net cash used in financing activities |
| (17,701 | ) |
|
| (21,615 | ) |
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash |
| 4,330 |
|
|
| (18,279 | ) |
Cash at beginning of period |
| 10,378 |
|
|
| 24,985 |
|
Cash at end of period | $ | 14,708 |
|
| $ | 6,706 |
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information |
|
|
|
|
|
|
|
Cash paid for interest expense | $ | 6,310 |
|
| $ | 6,135 |
|
Supplemental disclosure of non-cash activities |
|
|
|
|
|
|
|
Restructuring of portfolio investment |
| - |
|
| $ | 840 |
|
| Three Months Ended |
| |||||
| March 31, 2019 |
|
| March 31, 2018 |
| ||
Cash flows from operating activities |
|
|
|
|
|
|
|
Net increase in net assets resulting from operations | $ | 2,410 |
|
| $ | 2,025 |
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash (used in)/provided by operating activities: |
|
|
|
|
|
|
|
Net accretion of discounts on investments |
| (305 | ) |
|
| (339 | ) |
Net realized loss on investments |
| 7,133 |
|
|
| 577 |
|
Amortization of deferred debt issuance costs and discounts on notes payable |
| 122 |
|
|
| 90 |
|
Net change in unrealized (gain)/loss on investments |
| (6,296 | ) |
|
| 2,312 |
|
Payment-in-kind interest |
| (239 | ) |
|
| (938 | ) |
Purchases of investments |
| (57,170 | ) |
|
| (35,811 | ) |
Paydowns of investments |
| 20,292 |
|
|
| 34,758 |
|
Sales of investments |
| 9,699 |
|
|
| 1,395 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Increase in due from counterparties |
| (74 | ) |
|
| (378 | ) |
Decrease in due from affiliates |
| — |
|
|
| 509 |
|
(Increase)/decrease in accrued interest receivable |
| (476 | ) |
|
| 41 |
|
Decrease/(increase) in other assets |
| (84 | ) |
|
| 267 |
|
Decrease in due to counterparties |
| (19,157 | ) |
|
| (1,921 | ) |
Increase in payables to affiliates |
| 1,921 |
|
|
| 1,474 |
|
Decrease in accrued interest payable |
| (1,471 | ) |
|
| (262 | ) |
Increase/(decrease) in accrued expenses and other payables |
| 47 |
|
|
| (204 | ) |
Net cash (used in)/provided by operating activities |
| (43,648 | ) |
|
| 3,595 |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
Distributions paid to stockholders |
| (3,691 | ) |
|
| (4,494 | ) |
Payments for financing costs |
| — |
|
|
| (247 | ) |
Net proceeds from senior secured revolving note |
| 32,500 |
|
|
| (8,000 | ) |
Proceeds from Garrison SBIC borrowings |
| — |
|
|
| 10,200 |
|
Net cash provided by/(used in) financing activities |
| 28,809 |
|
|
| (2,541 | ) |
|
|
|
|
|
|
|
|
Net (decrease)/increase in cash and restricted cash |
| (14,839 | ) |
|
| 1,054 |
|
Cash and restricted cash at beginning of period |
| 45,722 |
|
|
| 19,516 |
|
Cash and restricted cash at end of period | $ | 30,883 |
|
| $ | 20,570 |
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information |
|
|
|
|
|
|
|
Cash paid for interest expense | $ | 5,076 |
|
| $ | 2,956 |
|
Supplemental disclosure of non-cash activities |
|
|
|
|
|
|
|
Restructuring of portfolio investment | $ | — |
|
| $ | 4,112 |
|
See accompanying notes to consolidated financial statements.
20
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017March 31, 2019
Garrison Capital Inc. (“GARS” and, collectively with its subsidiaries, the “Company”, “we” or “our”) is a Delaware corporation and is an externally managed, closed-end, non-diversified management investment company that has filed an election to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for tax purposes, GARS has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), for the period beginning October 9, 2012 and intends to qualify annually thereafter. GARS’ shares trade on the NASDAQNasdaq Global Select Market under the symbol “GARS”.
Our investment objective is to generate current income and capital appreciation through direct loans and debt investments in U.S. based middle-market companies. Our loans and debt investments are primarily first lien senior secured loans (including "unitranche" loans, which are loans that combine the characteristics of both senior and subordinated debt, generally in a first lien position). We also may, to a lesser extent, invest in subordinated and mezzanine debt unsecured consumer loans and equity investments. Our goal is to generate attractive risk-adjusted returns by assembling a broad portfolio of investments.
The Company’s business and affairs are managed and controlled by the Company’s board of directors (the “Board”). The majority of the members of the Board are independent of the Company and its affiliates. Our investment activities and day-to-day operations are managed by Garrison Capital Advisers, LLC (our “Investment Adviser”), and Garrison Capital Administrator, LLC (the “GARS Administrator”) provides the Company with certain administrative services necessary to conduct our day-to-day operations. We are organized as a holding company and conduct our business primarily through our various subsidiaries.
2. Significant Accounting Policies and Recent Updates
Basis of Presentation
The Company is an investment company as defined in the accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 — Financial Services — Investment Companies (“ASC Topic 946”).
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, or 10 and 12 of Regulation S-X. In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications consisting solely of normal accruals that are necessary for the fair presentation of financial results as of and for the periods presented. All intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation.
21
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
March 31, 2019
2. Significant Accounting Policies and Recent Updates – (continued)
Principles of Consolidation
The consolidated financial statements include the accounts of Garrison Capital Inc.GARS and its wholly-owned subsidiaries. The accounts of the subsidiaries are prepared using consistent accounting policies and as of the same reporting period as GARS. Under ASC Topic 946, the Company is generally precluded from consolidating any entity other than another investment company. Accordingly, the Company consolidates any investment company when it owns 100% of its equity units or 100% of the economic equity interest. ASC Topic 946 also provides for the consolidation of a controlled operating company that provides substantially all of its services to the investment company or its consolidated subsidiaries.
21
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
2. Significant Accounting Policies and Recent Updates – (continued)
As a result, as of March 31, 2019 GARS has consolidated the results of Garrison Funding 2013-2 Manager, LLC2018-2 Ltd. (“GF 2013-2 Manager”2018-2” formerly, Garrison Funding 2016-2 Ltd.), Garrison Funding 2013-2 Ltd. (“GF 2013-2”),2018-2 LLC (formerly Garrison Funding 2016-2 Ltd. (“GF 2016-2”)LLC), Garrison Capital SBIC LP (“Garrison SBIC”), GLC Trust 2013-2 (“GLC Trust 2013-2”)Garrison Capital PL Holdings LLC, GIG Rooster Holdings I LLC and a series of limited liability companies that GARS created primarily to provide specific tax treatment for the minority equity and other investments held in these limited liability companies.
companies.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts and disclosures in the consolidated financial statements, including the estimated fair values of investments and the amount of income and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
As of September 30, 2017March 31, 2019 and December 31, 2016,2018, cash held in designated bank accounts with Deutsche Bank Trust Company Americas (the “Custodian”) was $14.0$3.6 million and $9.1$6.0 million, respectively. Cash held in designated bank accounts with other major financial institutions was $0.7$0.1 million and $1.3$0.1 million as of September 30, 2017March 31, 2019 and December 31, 2016,2018, respectively. At times, these balances may exceed federally insured limits and this potentially subjects the Company to a concentration of credit risk. The Company believes it is not exposed to any significant credit risk associated with its cash custodian.
the Custodian.
The Company defines cash equivalents as highly liquid financial instruments with original maturities of three months or less, including those held in overnight sweep bank deposit accounts. As of both September 30, 2017March 31, 2019 and December 31, 2016,2018, the Company held no cash equivalents.
Cash and Cash Equivalents, Restricted
Restricted cash as of September 30, 2017March 31, 2019 and December 31, 20162018 included cash of $13.8$27.2 million and $11.3$39.5 million, respectively, held by GF 2016-22018-2 and Garrison SBIC in designated bank accounts with the Custodian. GF 2016-2 isThe CLOs, as defined in Note 4, are required to use a portion of these amountstheir cash to pay interest expense, reduce borrowings at the end of the investment period and to pay other amounts in accordance with the terms of the indenture governing the 2016-2 CLO, as defined in Note 4. FundsCLOs. Cash held with Garrison SBIC is typically restricted to eligible SBIC investments and the payment of U.S. Small Business Administration (“SBA”) debentures and interest expense. As a result, funds held by GF 2016-22018-2 and Garrison SBIC are not available for general use by the Company. Restricted cash as of September 30, 2017 and December 31, 2016 also included cash of $0.8 million and $1.3 million, respectively, held by GLC Trust 2013-2 in designated restricted bank accounts. GLC Trust 2013-2 is required to use a portion of these amounts to make principal payments and pay interest expense in accordance with the terms of the indenture governing the GLC Trust 2013-2 Notes, as defined in Note 4.
As of both September 30, 2017March 31, 2019 and December 31, 2016,2018, the Company held no restricted cash equivalents.
22
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017March 31, 2019
2. Significant Accounting Policies and Recent Updates – (continued)
Revenue Recognition
In general, we generate revenue that primarily consists of interest income, fee income, dividend income and gains and losses on our investments.
Interest income: Interest income is comprised of cash interest, PIK interest, original issue discounts or premiums as well as any loan origination, facility and commitment fees. Cash and PIK interest income is accrued based on the outstanding principal amount and interest terms outlined in the respective contractual agreement that governs that investment. The Company accrues interest income if it expects that it ultimately will be able to collect such income. Loan origination fees and any original issue or purchase discounts or premiums received by the Company are initially capitalized, deferred and reduce or increase the cost basis of the investment and subsequently accreted into interest income over the stated term of the loan.
Similarly, commitment fees are based upon the undrawn portion committed by the Company and are accrued over the life of the loan. Upon the prepayment of a loan or debt security, any unamortized fees, discounts or premiums are recorded into income.
Fee and dividend income: Fee income is generally comprised of amendment, forbearance, prepayment, syndication, structuring, diligence, consulting and possible fees for providing managerial assistance to a portfolio company and may be received in the form of cash or PIK. Amendment and forbearance fees are generally received in connection with loan amendments or waivers and are recognized upon completion of the amendments or waivers, generally when such fees are receivable. We record prepayment premiums on loans and debt securities into income when we receive such amounts.
In addition, we may receive structuring, diligence fees, consulting and managerial assistance fees for periodically providing services to a portfolio or third party company. These fees are recognized when such services have been completed and the fees are generally receivable. Any such fee income received is recorded and classified as other income and included in investment income on the consolidated statements of operations. As these fees are generally paid and recognized in connection with specific loan event or the performance of a service, there may be significant fluctuations from period to period in the amount and size of such fees, and they are typically non-recurring in nature.
In addition, the Company may receive periodic dividends or distributions from our preferred or equity investments. Such amounts are recorded and classified as other income. Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.
To the extent distributions are received from a limited liability company or limited partnership investment, we will evaluate the distribution to determine if it should be recorded as income or return of capital. Generally, we will not record such distributions as income unless there is sufficient accumulated tax-basis earnings and profits 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.
Investment Transactionsgains and Related Investment Incomelosses: Realized gains and Expenselosses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis of the investment, without regard to any previously recognized unrealized changes in the investments’ fair value. Current period changes in the fair value of our investments, which are measured at fair value, are recognized and recorded as a component of the net change in unrealized gain / (loss) on investments on the consolidated statement of operations. Both realized and unrealized gains and losses are recorded using the specific identification method.
23
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
March 31, 2019
2. Significant Accounting Policies and Recent Updates – (continued)
Non-accrual loans: The Company accrues interest income based on the contractual interest terms of its investments if it expects that it will ultimately be able to collect it. Generally, when management believes that the issuer of the loan will not be able to service the loan, the Investment Adviser will place the loan on non-accrual status and the Company will cease recognizing interest income on that loan. However, the Company remains contractually entitled to this interest. The Company may restore an investment to accrual status when past due principal and interest payments are made or if the interest income is otherwise deemed to be collectible by the Investment Adviser. The Company may make exceptions to this policy if the loan has sufficient collateral value and is in the process of collection. As of March 31, 2019, the Company had two investments on non-accrual status. As of December 31, 2018, the Company had one investment on non-accrual status.
Investments, at Fair Value
The Company records its investment transactions on a trade date basis, which is the date when management has determined that all material legal terms have been contractually defined for the transactions. These transactions could possibly settle on a subsequent date depending on the transaction type. Any amounts related to purchase, sale and principal paydowns that have traded but not settled will beare reflected as either a due to counterparty or due from counterparty on our consolidated statement of financial condition. All related revenue and expenses attributable to our investmentthese transactions are reflected on the consolidated statements of operations commencing on the trade date unless otherwise specified by the transaction documents. Realized gains and losses on investment transactions are recorded using the specific identification method.
Fair Value Measurements
The Company accrues interest income if it expects that ultimately it will be able to collect such income. Generally, whenvalues its investments in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a payment default occursframework for measuring fair value and expands disclosures about assets and liabilities measured at fair value. ASC Topic 820’s definition of fair value focuses on a loanexit price in the principal, or most advantageous, market and prioritizes the use of market-based inputs over entity-specific inputs within a measurement of fair value.
ASC Topic 820 classifies the inputs used to measure these fair values into the following hierarchy:
Level 1 — Unadjusted quoted prices in active markets for identical investments as of the reporting date.
Level 2 — Pricing inputs include quoted prices in active markets for similar instruments, quoted prices in less active or inactive markets for identical or similar instruments where multiple price quotes can be obtained, and other observable inputs, such as interest rates, yield curves, credit risks, and default rates.
Level 3 — Pricing inputs are unobservable and includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation including, in certain instances, the Investment Adviser’s own assumptions about how market participants would price the financial instrument.
Our investments include debt investments (both funded and unfunded, “Debt Investments”), preferred and minority common equity investments of diversified companies (“Equity”) and a portfolio of unsecured small balance consumer loans (“Financial Assets”). Due to the nature of the Company’s strategy, the Company’s portfolio is primarily comprised of relatively illiquid investments that are privately held. Inputs into the determination of fair value of the Company’s portfolio investments require significant management judgment or if management otherwise believesestimation. This means that the issuerCompany’s portfolio valuations are based on unobservable inputs and the Investment Adviser’s own assumptions about how market participants would price the asset or liability in question. Valuations of privately held investments are inherently uncertain and they may fluctuate over short periods of time and may be based on estimates. The determination of fair value by the Board may differ materially from the values that would have been used if a ready market for these investments existed.
Net assets could be materially affected if the determinations regarding the fair value of the loan will not be able to make contractual interest paymentsinvestments were materially higher or principal payments,lower than the Investment Adviser will place the loan on non-accrual status and the Company will cease recognizing interest income onvalues that loan until all principal and interest is current through payment or until a restructuring occurs, such that the interest income is deemed to be collectible. However, the Company remains contractually entitled to this interest.
The Company may make exceptions to this policy if the loan has sufficient collateral value and is in the process of collection. Accrued interest is written off when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. For consumer loans, any loan which is 120 days past due is considered defaulted and 100% of the principal is charged off with no expected recovery or sale of defaulted receivables. As of September 30, 2017, the Company had investments in five portfolio companies that were placed on non-accrual status. As of December 31, 2016, the Company had investments in two portfolio companies that were placed on non-accrual status.
Any original issue discounts, as well as any other purchase discounts or premiums on debt investments, are accreted or amortized and included in interest income over the maturity periods of the investments. If a loan is placed on non-accrual status, the Company will cease recognizing amortization of original issue discount and purchase discount until all principal and interest is current through payment or until a restructuring occurs, such that the income is deemed to be collectible.
Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected.
Certain investments may have contractual PIK interest. PIK represents accrued interest that is added to the principal amount of the investment on the respective interest payment dates instead of being paid in cash and generally becomes due at maturity of the investment orultimately realized upon the investment being called by the issuer.disposal of such investments.
Loan Origination, Facility, Commitment and Amendment Fees
The Company may receive loan origination, prepayment, facility, commitment, forbearance and amendment fees in addition to interest income during the life of the investment. The Company may receive origination fees upon the origination of an investment.
Origination fees received by the Company are initially deferred and reduced from the cost basis of the investment and subsequently accreted into interest income over the stated term of the loan.
2324
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017March 31, 2019
2. Significant Accounting Policies and Recent Updates – (continued)
Valuation Techniques
UponThe following is a description of the prepaymentvarious valuation techniques the Company utilizes when valuing its investments.
Bid quotations: Certain of the Company’s debt investments are publicly traded instruments for which quoted market prices are not readily available. The fair value of these investments may be determined based on bid quotations from unaffiliated market makers or independent third-party pricing services or the price activity of comparable instruments. The Company will generally supplement the bid quotations for these investments by also performing a comparable yield approach outlined below.
Comparable yield approach: This valuation technique determines the fair value of an investment by assessing the expected market yield of other debt investments with similar credit structures, leverage statistics, interest rates and time to maturity. The Company generally uses this approach for its debt investments that have not been deemed to be credit-impaired and where a market rate of recovery is expected.
Market comparable companies: This valuation technique determines the total enterprise value of a loancompany by assessing the expected multiple that a market participant would apply to that company’s earnings before interest, taxes, depreciation and amortization (“EBITDA”), revenue or other collateral that secures the investment. These valuation multiples are typically determined based on reviewing market comparable transactions or other comparable publicly traded companies, if any. The resulting enterprise value will dictate whether or not the Company’s debt security, any unamortized loan origination fees are recorded as interest income. We record prepayment premiums on loansinvestment has adequate enterprise value coverage. In instances where the enterprise value is inadequate, the market comparable companies approach may be used to estimate a recovery value for our credit-impaired debt investments and debt securities as interest incomethe fair value of our equity investments. With respect to equity investments, when we receivean external event, such amounts. Facility fees, sometimes referred to as asset management fees, are accrued as a percentage periodic feepurchase transaction, public offering or subsequent sale of equity occurs, the pricing indicated by that external event will be utilized to corroborate our valuation.
Discounted cash flows: This valuation technique determines the fair value of an investment by projecting the expected cash flows based on contractual terms calculating the base amount (either the funded facility amount or the committed principal amount). Commitment fees are based upon the undrawn portion committed by the Company and are accrued over the lifepresent value of such cash flows as of the loan.valuation date using a discount rate.
25
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
March 31, 2019
Amendment2. Significant Accounting Policies and forbearance fees are paid in connection with loan amendments and waivers and are recognized upon completionRecent Updates – (continued)
Valuation Process
The Board is responsible for determining, within the meaning of the amendments or waivers, generally when such fees1940 Act, in good faith the fair value of the Company’s assets for which market quotations are receivable. Any such fees are recordednot readily available, using a documented valuation policy and classifiedconsistently applied valuation process. The valuation process is a multi-step process conducted at the end of each fiscal quarter as other income and included in investment income on the consolidated statements of operations. As these fees are paid and recognized in connection with specific loan amendments or forbearance, they are typically non-recurring in nature.described below:
The Company’s valuation process begins with each portfolio company or investment being initially valued by investment professionals of the Investment Adviser responsible for credit monitoring.
At least once annually, the valuation for each portfolio investment that does not have a readily available quotation is reviewed by an independent valuation firm, subject to the de minimis exception described below.
Preliminary valuation conclusions are then documented, compared to the range of prices provided by an independent valuation firm where applicable, and discussed with our senior management and the Investment Adviser.
The Investment Adviser submits these preliminary valuations to the Valuation Committee of the Board.
The Board discusses valuations and determines, within the meaning of the 1940 Act, the fair value of each investment in the Company’s portfolio for which market quotations are not readily available in good faith.
As noted above, the Board has retained several independent valuation firms to review the valuation of each portfolio investment that does not have a readily available market quotation at least once during each 12-month period provided, the Board reserves the right to have any investment within the portfolio valued by an independent valuation firm to the extent it determines such a valuation was warranted. To the extent a security is reviewed in a particular quarter, it is reviewed and valued by only one service provider.
However, the Board does not, and does not intend to have investments independently reviewed that (1) have closed within the two most recent quarters or (2) are de minimis investments that are less than 0.5% of the Company’s total assets (up to an aggregate of 10.0% of the Company’s total assets).
Interest Expense
Interest expense is recorded on an accrual basis and includes the amortization of deferred debt issuance costs and any original issue discounts.
Fair Value Measurements
The Company values its investments in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about assets and liabilities measured at fair value. ASC Topic 820’s definition of fair value focuses on exit price in the principal, or most advantageous, market and prioritizes the use of market-based inputs over entity-specific inputs within a measurement of fair value.
ASC Topic 820 classifies the inputs used to measure these fair values into the following hierarchy:
Level 1 — Unadjusted quoted prices in active markets for identical investments as of the reporting date.
Level 2 — Pricing inputs include quoted prices in active markets for similar instruments, quoted prices in less active or inactive markets for identical or similar instruments where multiple price quotes can be obtained, and other observable inputs, such as interest rates, yield curves, credit risks, and default rates.
Level 3 — Pricing inputs are unobservable and includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation including, in certain instances, the Investment Adviser’s own assumptions about how market participants would price the financial instrument.
Our investments include debt investments (both funded and unfunded, “Debt Investments”), preferred and minority common equity investments of diversified companies (“Equity”) and a portfolio of unsecured small balance consumer loans (“Financial Assets”). Due to the nature of the Company’s strategy, the Company’s portfolio is primarily comprised of relatively illiquid investments that are privately held. Inputs into the determination of fair value of the Company’s portfolio investments require significant management judgment or estimation. This means that the Company’s portfolio valuations are based on unobservable inputs and the Investment Adviser’s own assumptions about how market participants would price the asset or liability in question. Valuations of privately held investments are inherently uncertain and they may fluctuate over short periods of time and may be based on estimates. The determination of fair value by the Board may differ materially from the values that would have been used if a ready market for these investments existed.
Net assets could be materially affected if the determinations regarding the fair value of the investments were materially higher or lower than the values that are ultimately realized upon the disposal of such investments.
24
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
2. Significant Accounting Policies and Recent Updates – (continued)
Valuation Techniques
The following is a description of the different valuation techniques utilized by the Company.
Debt and Equity Investments
Bid quotations – Certain of the Company’s debt investments are publicly traded instruments for which quoted market prices are not readily available. The fair value of these investments may be determined based on bid quotations from unaffiliated market makers or independent third-party pricing services or the price activity of comparable instruments. The Company will generally supplement the bid quotations for these investments by also performing a comparable yield approach outlined below.
Comparable yield approach – This valuation technique determines the fair value of an investment by assessing the expected market yield of other debt investments with similar credit structures, leverage statistics, interest rates and time to maturity. The Company generally uses this approach for its debt investments that have not been deemed to be credit-impaired and where a market rate of recovery is expected.
Market comparable companies – This valuation technique determines the total enterprise value of a company by assessing the expected multiple that a market participant would apply to that company’s earnings before interest, taxes, depreciation and amortization (“EBITDA”), revenue or other collateral that secures the investment. These valuation multiples are typically determined based on reviewing market comparable transactions or other comparable publicly traded companies, if any. The resulting enterprise value will dictate whether or not the Company’s debt investment has adequate enterprise value coverage. In instances where the enterprise value is inadequate, the market comparable companies approach may be used to estimate a recovery value for our credit-impaired debt investments. The Company generally also uses this approach for its equity investments.
Financial Assets
Discounted cash flows – This valuation technique determines the fair value of an investment by projecting the expected cash flows based on contractual terms calculating the present value of such cash flows as of the valuation date using a discount rate.
Valuation Process
The Board is responsible for determining the fair value of the Company’s assets in good faith using a documented valuation policy and consistently applied valuation process. The valuation process is a multi-step process conducted at the end of each fiscal quarter as described below:
The Company’s valuation process begins with each portfolio company or investment being initially valued by investment professionals of the Investment Adviser responsible for credit monitoring.
At least once annually, the valuation for each portfolio investment that does not have a readily available quotation is reviewed by an independent valuation firm, subject to the de minimis exception as more fully described below.
Preliminary valuation conclusions are then documented, compared to the range of prices provided by an independent valuation firm where applicable, and discussed with our senior management and the Investment Adviser.
The Investment Adviser submits these preliminary valuations to the Valuation Committee of the Board.
The Board discusses valuations and determines the fair value of each investment in the Company’s portfolio in good faith.
25
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
2. Significant Accounting Policies and Recent Updates – (continued)
As noted above, the Board has retained several independent valuation firms to review the valuation of each portfolio investment that does not have a readily available market quotation at least once during each 12-month period. To the extent a security is reviewed in a particular quarter, it is reviewed and valued by only one service provider.
However, the Board does not intend to have de minimis investments of less than 0.5% of the Company’s total assets (up to an aggregate of 10.0% of the Company’s total assets) independently reviewed.
Dividends and Distributions
Dividends and distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend or distribution is determined by the Board each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are distributed at least annually, although the Company may decide to retain such capital gains for investment.
Recent Accounting Pronouncements
In January 2017, the FASB issued ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08 amends the amortization period for certain purchased callable debt securities held at a premium. The amortization period will be shortened for the premium to the earliest call date. This new guidance is effective for annual and interim periods beginning on or after December 15, 2018 and for interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact ASU 2017-08 will have on the Company’s consolidated financial statements and disclosures.
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” or ASU 2014-09. ASU 2014-09 amends the accounting guidance for revenue recognition from contracts with customers. ASU 2014-09 is effective for the first interim or annual period beginning after December 15, 2017, and is to be applied retrospectively. The Company is evaluating the impact of ASU 2014-09 on the Company’s consolidated financial statements and disclosures.
26
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017March 31, 2019
2. Significant Accounting Policies and Recent Updates – (continued)
Recent Accounting Pronouncements
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 will modify the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. ASU 2018-13 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period, with early adoption permitted. The Company is currently evaluating the impact ASU 2018-13 will have on the Company’s consolidated financial statements and disclosures.
27
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
March 31, 2019
As of September 30, 2017,March 31, 2019, we held 119 investments in 6199 portfolio companies with a fair value of $359.1 million,$480.9 million. As of December 31, 2018, we held 118 investments across 93 portfolio companies with a weighted average yield on debt investments of 10.4% and a weighted average contractual maturity of 36 months. Weighted average yield is calculated based on the current fair value of the investments and interest expected to be received using the current all-in rate of interest at the balance sheet date to contractual maturity, excluding the effects of future scheduled principal amortization.$454.0 million.
The composition of the Company’s portfolio by industry at fair value as of September 30, 2017March 31, 2019 and December 31, 20162018 was as follows:
|
| Fair Value of Investments |
|
| Fair Value of Investments |
| ||||||||||||||||||||||||||
Industry ($ in thousands) |
| As of September 30, 2017 |
|
| As of December 31, 2016 |
|
| As of March 31, 2019 |
|
| As of December 31, 2018 |
| ||||||||||||||||||||
Internet Software and Services |
| $ | 84,367 |
|
|
| 17.5 | % |
| $ | 74,301 |
|
|
| 16.4 | % | ||||||||||||||||
Healthcare Equipment and Services |
| $ | 39,480 |
|
|
| 10.9 | % |
| $ | 44,535 |
|
|
| 12.1 | % |
|
| 43,818 |
|
|
| 9.1 |
|
|
| 52,721 |
|
|
| 11.6 |
|
Commercial Services and Supplies |
|
| 35,428 |
|
|
| 7.4 |
|
|
| 35,498 |
|
|
| 7.8 |
| ||||||||||||||||
Household Products and Durables |
|
| 38,463 |
|
|
| 10.7 |
|
|
| 27,922 |
|
|
| 7.4 |
|
|
| 32,286 |
|
|
| 6.7 |
|
|
| 32,664 |
|
|
| 7.2 |
|
Internet Software and Services |
|
| 34,645 |
|
|
| 9.6 |
|
|
| 36,880 |
|
|
| 9.8 |
| ||||||||||||||||
Textiles, Apparel and Luxury Goods |
|
| 26,882 |
|
|
| 5.6 |
|
|
| 25,390 |
|
|
| 5.6 |
| ||||||||||||||||
Food Products |
|
| 21,515 |
|
|
| 6.0 |
|
|
| 15,180 |
|
|
| 4.0 |
|
|
| 25,429 |
|
|
| 5.3 |
|
|
| 17,729 |
|
|
| 3.9 |
|
Leisure Products |
|
| 21,384 |
|
|
| 6.0 |
|
|
| 15,554 |
|
|
| 4.1 |
| ||||||||||||||||
Commercial Services and Supplies |
|
| 20,186 |
|
|
| 5.6 |
|
|
| 19,115 |
|
|
| 5.1 |
| ||||||||||||||||
Chemicals |
|
| 18,690 |
|
|
| 5.2 |
|
|
| 27,156 |
|
|
| 7.2 |
| ||||||||||||||||
Air Freight and Logistics |
|
| 17,518 |
|
|
| 4.9 |
|
|
| 21,574 |
|
|
| 5.7 |
| ||||||||||||||||
Diversified Telecommunication Services |
|
| 23,818 |
|
|
| 5.0 |
|
|
| 24,405 |
|
|
| 5.4 |
| ||||||||||||||||
Auto Components |
|
| 17,398 |
|
|
| 4.8 |
|
|
| 13,895 |
|
|
| 3.7 |
|
|
| 23,523 |
|
|
| 4.9 |
|
|
| 23,940 |
|
|
| 5.3 |
|
Hotels, Restaurants and Leisure |
|
| 16,825 |
|
|
| 4.7 |
|
|
| 16,742 |
|
|
| 4.4 |
|
|
| 19,435 |
|
|
| 4.0 |
|
|
| 26,550 |
|
|
| 5.8 |
|
Leisure Products |
|
| 18,580 |
|
|
| 3.9 |
|
|
| 16,491 |
|
|
| 3.6 |
| ||||||||||||||||
Diversified Financial Services |
|
| 14,066 |
|
|
| 2.9 |
|
|
| 13,824 |
|
|
| 3.0 |
| ||||||||||||||||
Electrical Equipment |
|
| 13,935 |
|
|
| 2.9 |
|
|
| 13,951 |
|
|
| 3.1 |
| ||||||||||||||||
Transportation Services |
|
| 13,586 |
|
|
| 2.8 |
|
|
| 9,753 |
|
|
| 2.1 |
| ||||||||||||||||
Chemicals |
|
| 11,026 |
|
|
| 2.3 |
|
|
| 12,569 |
|
|
| 2.8 |
| ||||||||||||||||
Construction and Engineering |
|
| 10,997 |
|
|
| 2.3 |
|
|
| 9,611 |
|
|
| 2.1 |
| ||||||||||||||||
Building Products |
|
| 9,571 |
|
|
| 2.0 |
|
|
| 7,834 |
|
|
| 1.7 |
| ||||||||||||||||
Pharmaceuticals |
|
| 9,472 |
|
|
| 2.0 |
|
|
| 9,485 |
|
|
| 2.1 |
| ||||||||||||||||
Energy Equipment and Services |
|
| 9,334 |
|
|
| 1.9 |
|
|
| 2,695 |
|
|
| 0.6 |
| ||||||||||||||||
Air Freight and Logistics |
|
| 8,922 |
|
|
| 1.9 |
|
|
| 2,404 |
|
|
| 0.5 |
| ||||||||||||||||
Trading Companies and Distributors |
|
| 8,387 |
|
|
| 1.7 |
|
|
| 7,560 |
|
|
| 1.7 |
| ||||||||||||||||
Aerospace and Defense |
|
| 6,941 |
|
|
| 1.4 |
|
|
| 6,914 |
|
|
| 1.5 |
| ||||||||||||||||
Professional Services |
|
| 6,667 |
|
|
| 1.4 |
|
|
| 1,847 |
|
|
| 0.4 |
| ||||||||||||||||
Retailing |
|
| 6,654 |
|
|
| 1.4 |
|
|
| 6,651 |
|
|
| 1.5 |
| ||||||||||||||||
Containers and Packaging |
|
| 4,582 |
|
|
| 1.0 |
|
|
| 4,512 |
|
|
| 1.0 |
| ||||||||||||||||
Technology Hardware, Storage and Peripherals |
|
| 3,779 |
|
|
| 0.8 |
|
|
| 4,150 |
|
|
| 0.9 |
| ||||||||||||||||
Media |
|
| 3,116 |
|
|
| 0.6 |
|
|
| 4,159 |
|
|
| 0.9 |
| ||||||||||||||||
Semiconductors and Semiconductor Equipment |
|
| 2,572 |
|
|
| 0.5 |
|
|
| 2,550 |
|
|
| 0.6 |
| ||||||||||||||||
Metals and Mining |
|
| 2,180 |
|
|
| 0.5 |
|
|
| 2,189 |
|
|
| 0.5 |
| ||||||||||||||||
Oil, Gas and Consumable Fuels |
|
| 13,502 |
|
|
| 3.8 |
|
|
| 19,648 |
|
|
| 5.2 |
|
|
| 1,510 |
|
|
| 0.3 |
|
|
| 1,630 |
|
|
| 0.4 |
|
Transportation Services |
|
| 10,952 |
|
|
| 3.0 |
|
|
| 5,767 |
|
|
| 1.5 |
| ||||||||||||||||
Building Products |
|
| 10,406 |
|
|
| 2.9 |
|
|
| 10,500 |
|
|
| 2.8 |
| ||||||||||||||||
Retailing |
|
| 10,046 |
|
|
| 2.8 |
|
|
| 17,425 |
|
|
| 4.6 |
| ||||||||||||||||
Media |
|
| 9,000 |
|
|
| 2.5 |
|
|
| 16,966 |
|
|
| 4.5 |
| ||||||||||||||||
Diversified Telecommunication Services |
|
| 8,835 |
|
|
| 2.5 |
|
|
| 1,967 |
|
|
| 0.5 |
| ||||||||||||||||
Aerospace and Defense |
|
| 8,452 |
|
|
| 2.4 |
|
|
| 9,589 |
|
|
| 2.5 |
| ||||||||||||||||
Machinery |
|
| 8,200 |
|
|
| 2.3 |
|
|
| 8,065 |
|
|
| 2.1 |
| ||||||||||||||||
Pharmaceuticals |
|
| 7,930 |
|
|
| 2.2 |
|
|
| - |
|
|
| - |
| ||||||||||||||||
Textiles, Apparel and Luxury Goods |
|
| 7,633 |
|
|
| 2.1 |
|
|
| 7,471 |
|
|
| 2.0 |
| ||||||||||||||||
Metals and Mining |
|
| 6,087 |
|
|
| 1.7 |
|
|
| 6,096 |
|
|
| 1.6 |
| ||||||||||||||||
Diversified Financial Services |
|
| 4,505 |
|
|
| 1.3 |
|
|
| 23,123 |
|
|
| 6.1 |
| ||||||||||||||||
Trading Companies and Distributors |
|
| 4,263 |
|
|
| 1.2 |
|
|
| 3,437 |
|
|
| 0.9 |
| ||||||||||||||||
Technology Hardware, Storage and Peripherals |
|
| 3,224 |
|
|
| 0.9 |
|
|
| 4,347 |
|
|
| 1.2 |
| ||||||||||||||||
Professional Services |
|
| - |
|
|
| - |
|
|
| 3,750 |
|
|
| 1.0 |
| ||||||||||||||||
|
| $ | 359,139 |
|
|
| 100.0 | % |
| $ | 376,704 |
|
|
| 100.0 | % |
| $ | 480,863 |
|
|
| 100.0 | % |
| $ | 453,977 |
|
|
| 100.0 | % |
Refer to the consolidated schedules of investments for a detailed disaggregation of the Company’s investments.investments by industry.
2728
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017March 31, 2019
Fair Value Measurement
The following tables summarize the valuation of the Company’s investments measured at fair value based on the fair value hierarchy, as detailed in Note 2, as of both September 30, 2017March 31, 2019 and December 31, 2016:2018:
|
| As of September 30, 2017 |
| |||||||||||||
($ in thousands) |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||
Senior Secured Investments⁽¹⁾⁽²⁾ |
| $ | — |
|
| $ | — |
|
| $ | 351,272 |
|
| $ | 351,272 |
|
Preferred Equity Investments |
|
| — |
|
|
| — |
|
|
| 640 |
|
|
| 640 |
|
Common Equity Investments |
|
| — |
|
|
| — |
|
|
| 4,460 |
|
|
| 4,460 |
|
Financial Assets |
|
| — |
|
|
| — |
|
|
| 2,767 |
|
|
| 2,767 |
|
|
| $ | — |
|
| $ | — |
|
| $ | 359,139 |
|
| $ | 359,139 |
|
|
| As of March 31, 2019 |
| |||||||||||||
($ in thousands) |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||
Senior Secured Investments(1) |
| $ | — |
|
| $ | — |
|
| $ | 472,414 |
|
| $ | 472,414 |
|
Equity Investments⁽²⁾ |
|
| — |
|
|
| — |
|
|
| 8,449 |
|
|
| 8,449 |
|
|
| $ | — |
|
| $ | — |
|
| $ | 480,863 |
|
| $ | 480,863 |
|
(1) Included in senior secured loans are loans structured as first lien last out loans. These loans may in certain cases be subordinated in payment priority to other senior secured lenders.
(2) Includes preferred and common equity investments.
|
|
|
|
|
| As of December 31, 2018 |
| |||||||||||||
($ in thousands) |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||
Senior Secured Investments(1) |
| $ | — |
|
| $ | — |
|
| $ | 445,393 |
|
| $ | 445,393 |
|
Equity Investments⁽²⁾ |
|
| — |
|
|
| — |
|
|
| 8,352 |
|
|
| 8,352 |
|
Financial Assets |
|
| — |
|
|
| — |
|
|
| 232 |
|
|
| 232 |
|
|
| $ | — |
|
| $ | — |
|
| $ | 453,977 |
|
| $ | 453,977 |
|
|
| As of December 31, 2016 |
| |||||||||||||
($ in thousands) |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||
Senior Secured Investments⁽¹⁾⁽²⁾ |
| $ | — |
|
| $ | — |
|
| $ | 363,960 |
|
| $ | 363,960 |
|
Preferred Equity Investments |
|
| — |
|
|
| — |
|
|
| 2,086 |
|
|
| 2,086 |
|
Common Equity Investments |
|
| — |
|
|
| — |
|
|
| 3,902 |
|
|
| 3,902 |
|
Financial Assets |
|
| — |
|
|
| — |
|
|
| 6,756 |
|
|
| 6,756 |
|
|
| $ | — |
|
| $ | — |
|
| $ | 376,704 |
|
| $ | 376,704 |
|
(1) Included in senior secured loans are loans structured as first lien last out loans. These loans may in certain cases be subordinated in payment priority to other senior secured lenders.
|
|
|
|
(2) Includes preferred and common equity investments.
The net change in unrealized lossgain/(loss) attributable to the Company’s Level 3 assets for the ninethree months ended September 30, 2017March 31, 2019 and March 31, 2018 included in the net change in unrealized loss fromgain/(loss) on investments in the Company’s consolidated statementstatements of operations was $11.0 million. The net change in unrealized gain attributable to the Company’s Level 3 assets for the nine months ended September 30, 2016 included in the net change in unrealized gain from investments in the Company’s consolidated statement of operations was $7.8 million.$6.3 million and $2.3 million, respectively.
2829
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017March 31, 2019
The following table is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value for the ninethree months ended September 30, 2017:March 31, 2019:
|
| Nine Months Ended September 30, 2017 |
|
| Three Months Ended March 31, 2019 |
| ||||||||||||||||||||||||||||||||||
|
| Senior Secured |
|
| Mezzanine |
|
| Preferred Equity |
|
| Common Equity |
|
| Financial |
|
|
|
|
|
| Senior Secured |
|
| Equity |
|
| Financial |
|
|
|
|
| ||||||||
($ in thousands) |
| Investments |
|
| Investments |
|
| Investments |
|
| Investments |
|
| Assets |
|
| Total |
|
| Investments |
|
| Investments⁽¹⁾ |
|
| Assets |
|
| Total |
| ||||||||||
Fair value, beginning of period |
| $ | 363,960 |
|
| $ | — |
|
| $ | 2,086 |
|
| $ | 3,902 |
|
| $ | 6,756 |
|
| $ | 376,704 |
|
| $ | 445,393 |
|
| $ | 8,352 |
|
| $ | 232 |
|
| $ | 453,977 |
|
Total net realized and unrealized (loss)/gain on investments⁽¹⁾ |
|
| (9,198 | ) |
|
| — |
|
|
| (1,446 | ) |
|
| 558 |
|
|
| (170 | ) |
|
| (10,256 | ) | ||||||||||||||||
Total net realized and unrealized (loss)/gain on investments⁽²⁾ |
|
| (943 | ) |
|
| 97 |
|
|
| 9 |
|
|
| (837 | ) | ||||||||||||||||||||||||
Total net accretion of discounts on investments |
|
| 981 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 981 |
|
|
| 305 |
|
|
| — |
|
|
| — |
|
|
| 305 |
|
Purchases/issuances⁽²⁾ |
|
| 106,724 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 106,724 |
| ||||||||||||||||
Purchases/issuances(3) |
|
| 57,409 |
|
|
| — |
|
|
| — |
|
|
| 57,409 |
| ||||||||||||||||||||||||
Sales |
|
| (419 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (419 | ) |
|
| (9,699 | ) |
|
| — |
|
|
| — |
|
|
| (9,699 | ) |
Paydowns⁽²⁾ |
|
| (110,776 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,819 | ) |
|
| (114,595 | ) | ||||||||||||||||
Paydowns(3) |
|
| (20,051 | ) |
|
| — |
|
|
| (241 | ) |
|
| (20,292 | ) | ||||||||||||||||||||||||
Fair value, end of period |
| $ | 351,272 |
|
| $ | — |
|
| $ | 640 |
|
| $ | 4,460 |
|
| $ | 2,767 |
|
| $ | 359,139 |
|
| $ | 472,414 |
|
| $ | 8,449 |
|
| $ | — |
|
| $ | 480,863 |
|
(1) | Includes preferred and common equity investments. |
(2) | Net change in unrealized loss |
Senior Secured Investments of $0.8 million, offset by unrealized gains on Equity Investments of $0.1 million.
| There were no non-cash |
The following table is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value for the ninethree months ended September 30, 2016:March 31, 2018:
|
| Nine Months Ended September 30, 2016 |
|
| Three Months Ended March 31, 2018 |
| ||||||||||||||||||||||||||||||||||
|
| Senior Secured |
|
| Mezzanine |
|
| Preferred Equity |
|
| Common Equity |
|
| Financial |
|
|
|
|
|
| Senior Secured |
|
| Equity |
|
| Financial |
|
|
|
|
| ||||||||
($ in thousands) |
| Investments |
|
| Investments |
|
| Investments |
|
| Investments |
|
| Assets |
|
| Total |
|
| Investments |
|
| Investments⁽¹⁾ |
|
| Assets |
|
| Total |
| ||||||||||
Fair value, beginning of period |
| $ | 380,781 |
|
| $ | 7,512 |
|
| $ | 5,486 |
|
| $ | 3,468 |
|
| $ | 17,754 |
|
| $ | 415,001 |
|
| $ | 387,480 |
|
| $ | 5,224 |
|
| $ | 2,026 |
|
| $ | 394,730 |
|
Total net realized and unrealized (loss)/gain on investments⁽¹⁾ |
|
| (18,913 | ) |
|
| (20 | ) |
|
| (3,169 | ) |
|
| 617 |
|
|
| (463 | ) |
|
| (21,948 | ) | ||||||||||||||||
Total net realized and unrealized (loss) on investments⁽²⁾ |
|
| (2,881 | ) |
|
| — |
|
|
| (8 | ) |
|
| (2,889 | ) | ||||||||||||||||||||||||
Total net accretion of discounts on investments |
|
| 1,056 |
|
|
| 20 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,076 |
|
|
| 339 |
|
|
| — |
|
|
| — |
|
|
| 339 |
|
Purchases/issuances⁽²⁾ |
|
| 99,465 |
|
|
| 155 |
|
|
| — |
|
|
| 1,711 |
|
|
| — |
|
|
| 101,331 |
| ||||||||||||||||
Purchases/issuances(3) |
|
| 32,637 |
|
|
| 4,112 |
|
|
| — |
|
|
| 36,749 |
| ||||||||||||||||||||||||
Sales |
|
| (26,983 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (26,983 | ) |
|
| (1,395 | ) |
|
| — |
|
|
| — |
|
|
| (1,395 | ) |
Paydowns⁽²⁾ |
|
| (58,997 | ) |
|
| — |
|
|
| — |
|
|
| (297 | ) |
|
| (8,297 | ) |
|
| (67,591 | ) | ||||||||||||||||
Paydowns(3) |
|
| (34,198 | ) |
|
| — |
|
|
| (559 | ) |
|
| (34,757 | ) | ||||||||||||||||||||||||
Fair value, end of period |
| $ | 376,409 |
|
| $ | 7,667 |
|
| $ | 2,317 |
|
| $ | 5,499 |
|
| $ | 8,994 |
|
| $ | 400,886 |
|
| $ | 381,982 |
|
| $ | 9,336 |
|
| $ | 1,459 |
|
| $ | 392,777 |
|
(1) | Includes preferred and common equity investments. |
(2) | Net change in unrealized loss |
| Includes non-cash |
2930
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017March 31, 2019
The following table is a quantitative disclosure about significant unobservable inputs (Level 3) that were used in determining fair value at September 30, 2017:March 31, 2019:
|
|
| Quantitative Information about Level 3 Fair Value Measurements |
| |||||||||||||||||
|
|
| Fair Value at |
|
| Valuation |
| Unobservable |
| Range |
|
| Weighted |
| |||||||
($ in thousands) |
|
| September 30, 2017 |
|
| Technique |
| Input |
| Low |
|
| High |
|
| Average |
| ||||
Senior Secured Investments |
| $ | 351,272⁽¹⁾ |
|
| Comparable yield approach |
| Market rate⁽²⁾ |
|
| 5.9 | % |
|
| 25.3 | % |
|
| 9.2 | % | |
|
|
|
|
|
|
| Market comparable companies |
| EBITDA multiple⁽⁵⁾ |
|
| 2.0 | x |
|
| 13.8 | x |
|
| 5.9 | x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Investments⁽³⁾ |
|
|
| 5,100 |
|
| Market comparable companies |
| EBITDA multiple |
|
| 5.0 | x |
|
| 6.5 | x |
|
| 5.8 | x |
|
|
|
|
|
|
| Market comparable companies |
| Origination fees multiple |
|
| 3.5 | x |
|
| 3.5 | x |
|
| 3.5 | x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets⁽⁴⁾ |
|
|
| 2,767 |
|
| Discounted cash flows |
| Interest rate |
|
| 9.8 | % |
|
| 31.0 | % |
|
| 16.3 | % |
|
|
|
|
|
|
|
|
| Conditional prepayment rate |
|
| 0.0 | % |
|
| 16.7 | % |
|
| 15.6 | % |
|
|
|
|
|
|
|
|
| Cumulative default rate |
|
| 0.0 | % |
|
| 18.8 | % |
|
| 13.6 | % |
|
|
|
|
|
|
|
|
| Discount rate |
|
| 7.0 | % |
|
| 7.0 | % |
|
| 7.0 | % |
Total |
| $ |
| 359,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Quantitative Information about Level 3 Fair Value Measurements |
| |||||||||||||||||
|
|
| Fair Value at |
|
| Valuation |
| Unobservable |
| Range |
|
| Weighted |
| |||||||
($ in thousands) |
|
| March 31, 2019 |
|
| Technique |
| Input |
| Low |
|
| High |
|
| Average |
| ||||
Senior Secured Investments⁽¹⁾ |
| $ |
| 472,414 |
|
| Comparable yield approach |
| Market rate⁽²⁾ |
|
| 6.5 | % |
|
| 20.8 | % |
|
| 9.4 | % |
|
|
|
|
|
|
| Market comparable companies |
| EBITDA multiple |
|
| 2.0 | x |
|
| 14.0 | x |
|
| 8.1 | x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Investments(3) |
|
|
| 8,449 |
|
| Market comparable companies |
| EBITDA multiple |
|
| 6.5 | x |
|
| 9.0 | x |
|
| 8.9 | x |
|
|
|
|
|
|
|
|
| Origination fees multiple |
|
| 3.5 | x |
|
| 3.5 | x |
|
| 3.5 | x |
|
|
|
|
|
|
| Discounted cash flows |
| Recovery Rate |
|
| 43.9 | % |
|
| 43.9 | % |
|
| 43.9 | % |
|
|
|
|
|
|
|
|
| Discount rate |
|
| 10.0 | % |
|
| 15.0 | % |
|
| 13.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
| $ |
| 480,863 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Includes |
(2) | Market rate is calculated based on the fair value of the investments and interest expected to be received using the current |
(3) | Includes preferred and common equity. |
31
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
March 31, 2019
The following table is a quantitative disclosure about significant unobservable inputs (Level 3) that were used in determining fair value at December 31, 2018:
|
|
| Quantitative Information about Level 3 Fair Value Measurements |
| |||||||||||||||||
|
|
| Fair Value at |
|
| Valuation |
| Unobservable |
| Range |
|
| Weighted |
| |||||||
($ in thousands) |
|
| December 31, 2018 |
|
| Technique |
| Input |
| Low |
|
| High |
|
| Average |
| ||||
Senior Secured Investments |
| $ |
| 445,393 |
|
| Comparable yield approach |
| Market rate⁽¹⁾ |
|
| 6.5 | % |
|
| 38.1 | % |
|
| 10.0 | % |
|
|
|
|
|
|
| Market comparable companies |
| EBITDA multiple(2) |
|
| 2.0 | x |
|
| 17.3 | x |
|
| 7.5 | x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Investments(3) |
|
|
| 8,352 |
|
| Market comparable companies |
| EBITDA multiple |
|
| 6.5 | x |
|
| 9.0 | x |
|
| 8.9 | x |
|
|
|
|
|
|
|
|
| Origination fees multiple |
|
| 3.4 | x |
|
| 3.4 | x |
|
| 3.4 | x |
|
|
|
|
|
|
| Discounted cash flows |
| Recovery Rate |
|
| 43.9 | % |
|
| 43.9 | % |
|
| 43.9 | % |
|
|
|
|
|
|
|
|
| Discount rate |
|
| 10.0 | % |
|
| 15.0 | % |
|
| 13.9 | % |
Financial Assets(4) |
|
|
| 232 |
|
| Discounted cash flows |
| Recovery Rate |
|
| 94.8 | % |
|
| 94.8 | % |
|
| 94.8 | % |
Total |
| $ |
| 453,977 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Excludes non-operating portfolio companies, which we define as those loans collateralized by proved developed producing (“PDP”) value, real estate or other hard assets. PDPs are proven revenues that can be produced with existing wells. As of |
(3) | Includes preferred and common equity. |
(4) | See Exhibit 99.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 for detail on the underlying loans. |
3032
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017March 31, 2019
The following table is a quantitative disclosure about significant unobservable inputs (Level 3) that were used in determining fair value at December 31, 2016:
|
|
| Quantitative Information about Level 3 Fair Value Measurements |
| |||||||||||||||||
|
|
| Fair Value at |
|
| Valuation |
| Unobservable |
| Range |
|
| Weighted |
| |||||||
($ in thousands) |
|
| December 31, 2016 |
|
| Technique |
| Input |
| Low |
|
| High |
|
| Average |
| ||||
Senior Secured Investments |
| $ | 363,960⁽¹⁾ |
|
| Comparable yield approach |
| Market rate⁽²⁾ |
|
| 6.1 | % |
|
| 41.0 | % |
|
| 10.2 | % | |
|
|
|
|
|
|
| Market comparable companies |
| EBITDA multiple⁽⁵⁾ |
|
| 2.5 | x |
|
| 11.3 | x |
|
| 5.9 | x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Investments⁽³⁾ |
|
|
| 5,988 |
|
| Market comparable companies |
| EBITDA multiple |
|
| 5.0 | x |
|
| 7.5 | x |
|
| 6.5 | x |
|
|
|
|
|
|
| Market comparable companies |
| Origination fees multiple |
|
| 5.8 | x |
|
| 5.8 | x |
|
| 5.8 | x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets⁽⁴⁾ |
|
|
| 6,756 |
|
| Discounted cash flows |
| Interest rate |
|
| 6.0 | % |
|
| 31.3 | % |
|
| 16.0 | % |
|
|
|
|
|
|
|
|
| Conditional prepayment rate |
|
| 10.4 | % |
|
| 24.5 | % |
|
| 15.2 | % |
|
|
|
|
|
|
|
|
| Cumulative default rate |
|
| 0.0 | % |
|
| 17.9 | % |
|
| 11.1 | % |
|
|
|
|
|
|
|
|
| Discount rate |
|
| 9.0 | % |
|
| 9.0 | % |
|
| 9.0 | % |
Total |
| $ |
| 376,704 |
|
|
|
|
|
|
|
|
| �� |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unobservable inputs used in the fair value measurement of the Company’s Debt and Equity Investmentsinvestments include bid quotations obtained from independent third party services (“consensus pricing”), multiples of market comparable companies, and relative comparable yields. Significant decreases (increases) in consensus pricing or market comparables could result in lower (higher) fair value measurements. Significant increases (decreases) in comparable yields could result in lower (higher) fair value measurements. Generally, a change in the assumption used for relative comparable yields is accompanied by a directionally opposite change in the assumptions used for pricing.
31
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
Unobservable inputs used in the fair value measurement of Financial Assets include interest rate, conditional prepayment rate, cumulative default rate and discount rate. Significant decreases (increases) in interest rates or conditional prepayment rates could result in lower (higher) fair value measurements. Significant increases (decreases) in cumulative default rates or discount rates could result in significantly lower (higher) fair value measurements.
The terms of theour Debt Investments may provide forinclude provisions that require us to extend to a borrower additional credit or provide funding to a borrower for any unfunded portion of such Debt Investments at the request of the borrower. This exposes us to potential future liabilities that are not reflected on the consolidated statements of financial condition. As of September 30, 2017March 31, 2019 and December 31, 2016,2018, the Company had $5.4$5.2 million and $4.8$7.6 million of unfunded commitments, with negative fair values of $0.1 million and $0.1 million, respectively. The negative fair value is the result of the unfunded commitments being valued below par. These amounts may or may not be funded to the borrowing party now or in the future.
4. Financing
As of September 30, 2017, the total carrying value of the Company’s aggregate debt outstanding was $201.2 million with a weighted average effective interest rate of 4.2%. The Company’s debt outstanding as of September 30, 2017 was comprised of notes issued by GF 2016-2 and GLC Trust 2013-2 as well as Garrison SBIC borrowings.
The table below provides details, of the Company’s outstanding debt including maturity dates, the weighted average interest rates and the weighted average effective interest rates, inclusive of the effects of deferred debt issuance costs, of the Company’s outstanding debt as of September 30, 2017:March 31, 2019:
September 30, 2017 ($ in thousands) |
| Amortized Carrying Value |
|
| Outstanding Principal at Par |
|
| Interest Rate |
|
| Effective Interest Rate |
| Rating⁽¹⁾ |
| Stated Maturity | |||
GF 2016-2 Secured Notes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Class A-1R Notes |
| $ | — |
|
| $ | — |
|
| LIBOR + 2.20%⁽²⁾ |
|
| 3.62% |
| AAA(sf) |
| 9/29/2027 | |
Class A-1F Notes |
|
| 24,716 |
|
|
| 25,000 |
|
|
| 3.41% |
|
| 3.55% |
| AAA(sf) |
| 9/29/2027 |
Class A-1T Notes |
|
| 87,022 |
|
|
| 88,150 |
|
| LIBOR + 2.20% |
|
| 3.67% |
| AAA(sf) |
| 9/29/2027 | |
Class A-2 Notes |
|
| 20,362 |
|
|
| 20,700 |
|
| LIBOR + 3.15% |
|
| 4.67% |
| AA(sf) |
| 9/29/2027 | |
Class B Notes |
|
| 20,942 |
|
|
| 21,450 |
|
| LIBOR + 4.00% |
|
| 5.63% |
| A (sf) |
| 9/29/2027 | |
Class C Notes |
|
| 11,418 |
|
|
| 11,700 |
|
| LIBOR + 6.00% |
|
| 7.66% |
| BBB(sf) |
| 9/29/2027 | |
Total /weighted average |
|
| 164,460 |
|
|
| 167,000 |
|
| 4.12% |
|
| 4.31% |
|
|
|
| |
Garrison SBIC Borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
SBIC 2017-10 A |
|
| 6,761 |
|
|
| 6,980 |
|
| 3.47%⁽³⁾ |
|
| 3.87% |
| N/A |
| 3/1/2027 | |
SBIC 2016-10 B |
|
| 3,217 |
|
|
| 3,320 |
|
| 2.79%⁽³⁾ |
|
| 3.19% |
| N/A |
| 9/1/2026 | |
SBIC 2016-10 A |
|
| 12,333 |
|
|
| 12,700 |
|
| 3.25%⁽³⁾ |
|
| 3.65% |
| N/A |
| 3/1/2026 | |
SBIC 2015-10 B |
|
| 13,620 |
|
|
| 14,000 |
|
| 3.57%⁽³⁾ |
|
| 3.97% |
| N/A |
| 9/1/2025 | |
Total /weighted average |
|
| 35,931 |
|
|
| 37,000 |
|
| 3.37% |
|
| 3.77% |
|
|
|
| |
GLC Trust 2013-2 Notes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Class A Notes |
|
| 801 |
|
|
| 830 |
|
|
| 3.00% |
|
| 3.35% |
| N/A |
| 7/15/2021 |
Total /weighted average |
|
| 801 |
|
|
| 830 |
|
|
| 3.00% |
|
| 3.35% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total /weighted average |
| $ | 201,192 |
|
| $ | 204,830 |
|
| 3.98% |
|
| 4.21% |
|
|
|
|
March 31, 2019 ($ in thousands) |
| Amortized Carrying Value |
|
| Outstanding Principal at Par |
|
| Interest Rate |
| Effective Interest Rate |
| Rating(1) |
| Stated Maturity(4) | ||
2018-2 CLO Secured Notes: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Class A-1R-R Notes |
| $ | 40,500 |
|
| $ | 40,500 |
|
| LIBOR + 1.58%(2) |
| 4.35% |
| AAA(sf) |
| 11/20/2029 |
Class A-1T-R Notes |
|
| 168,661 |
|
|
| 170,400 |
|
| LIBOR + 1.58% |
| 4.34% |
| AAA(sf) |
| 11/20/2029 |
Class A-2-R Notes |
|
| 54,619 |
|
|
| 55,100 |
|
| LIBOR + 2.45% |
| 5.20% |
| AA (sf) |
| 11/20/2029 |
Class B-R Notes |
|
| 17,913 |
|
|
| 18,250 |
|
| LIBOR + 3.17% |
| 5.93% |
| A (sf) |
| 11/20/2029 |
Subtotals / weighted averages |
|
| 281,693 |
|
|
| 284,250 |
|
| 4.49% |
| 4.61% |
|
|
| 11/20/2029 |
Garrison SBIC Borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
SBIC 2018-10 A |
|
| 22,291 |
|
|
| 23,000 |
|
| 3.53%(3) |
| 3.95% |
| N/A |
| 3/1/2028 |
SBIC 2017-10 A |
|
| 6,791 |
|
|
| 6,980 |
|
| 3.47%(3) |
| 3.87% |
| N/A |
| 3/1/2027 |
SBIC 2016-10 B |
|
| 3,233 |
|
|
| 3,320 |
|
| 2.79%(3) |
| 3.19% |
| N/A |
| 9/1/2026 |
SBIC 2016-10 A |
|
| 12,390 |
|
|
| 12,700 |
|
| 3.25%(3) |
| 3.65% |
| N/A |
| 3/1/2026 |
SBIC 2015-10 B |
|
| 13,682 |
|
|
| 14,000 |
|
| 3.57%(3) |
| 3.97% |
| N/A |
| 9/1/2025 |
Subtotals / weighted averages |
|
| 58,387 |
|
|
| 60,000 |
|
| 3.43% |
| 3.84% |
|
|
| 12/16/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals / weighted averages |
| $ | 340,080 |
|
| $ | 344,250 |
|
| 4.31% |
| 4.48% |
|
|
| 5/22/2029 |
(1) | Represents |
(2) |
|
(3) | Represents the stated interest rate and annual charge of our |
(4) | The indenture governing the 2018-2 CLO permits the repricing or refinancing of the secured notes issued as part of the 2018-2 CLO after November 20, 2022, which may result in the actual maturity of the existing notes occurring prior to their stated maturity. |
3233
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017March 31, 2019
The table below provides details of the Company’sour outstanding debt including the weighted average interest rates and the weighted average effective interest rates, inclusive of the effects of deferred debt issuance costs as of December 31, 2016:2018:
December 31, 2016 ($ in thousands) |
| Amortized Carrying Value |
|
| Outstanding Principal at Par |
|
| Interest Rate |
|
| Effective Interest Rate |
| Rating⁽¹⁾ |
| Stated Maturity | |||
GF 2016-2 Secured Notes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Class A-1R Notes |
| $ | — |
|
| $ | — |
|
| LIBOR + 2.20%⁽²⁾ |
|
| 3.23% |
| AAA(sf) |
| 9/29/2027 | |
Class A-1F Notes |
|
| 24,699 |
|
|
| 25,000 |
|
|
| 3.41% |
|
| 3.55% |
| AAA(sf) |
| 9/29/2027 |
Class A-1T Notes |
|
| 86,950 |
|
|
| 88,150 |
|
| LIBOR + 2.20% |
|
| 3.35% |
| AAA(sf) |
| 9/29/2027 | |
Class A-2 Notes |
|
| 20,342 |
|
|
| 20,700 |
|
| LIBOR + 3.15% |
|
| 4.26% |
| AA(sf) |
| 9/29/2027 | |
Class B Notes |
|
| 20,913 |
|
|
| 21,450 |
|
| LIBOR + 4.00% |
|
| 5.22% |
| A (sf) |
| 9/29/2027 | |
Class C Notes |
|
| 11,404 |
|
|
| 11,700 |
|
| LIBOR + 6.00% |
|
| 7.25% |
| BBB(sf) |
| 9/29/2027 | |
Total /weighted average |
|
| 164,308 |
|
|
| 167,000 |
|
| 3.77% |
|
| 4.01% |
|
|
|
| |
Garrison SBIC Borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
SBIC 2016-10 B |
|
| 3,210 |
|
|
| 3,320 |
|
| 2.79%⁽³⁾ |
|
| 3.19% |
| N/A |
| 9/1/2026 | |
SBIC 2016-10 A |
|
| 12,306 |
|
|
| 12,700 |
|
| 3.25%⁽³⁾ |
|
| 3.65% |
| N/A |
| 3/1/2026 | |
SBIC 2015-10 B |
|
| 13,589 |
|
|
| 14,000 |
|
| 3.57%⁽³⁾ |
|
| 3.97% |
| N/A |
| 9/1/2025 | |
SBIC Interim Financing |
|
| 6,746 |
|
|
| 6,980 |
|
| LIBOR + 0.93%⁽⁴⁾ |
|
| 1.87% |
| N/A |
| 3/29/2017 | |
Total /weighted average |
|
| 35,851 |
|
|
| 37,000 |
|
| 3.00% |
|
| 3.40% |
|
|
|
| |
GLC Trust 2013-2 Notes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Class A Notes |
|
| 4,953 |
|
|
| 5,048 |
|
|
| 3.00% |
|
| 3.35% |
| N/A |
| 7/15/2021 |
Total /weighted average |
|
| 4,953 |
|
|
| 5,048 |
|
|
| 3.00% |
|
| 3.35% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total /weighted average |
| $ | 205,112 |
|
| $ | 209,048 |
|
| 3.62% |
|
| 3.88% |
|
|
|
|
December 31, 2018 ($ in thousands) |
| Amortized Carrying Value |
|
| Outstanding Principal at Par |
|
| Interest Rate |
| Effective Interest Rate |
| Rating(1) |
| Stated Maturity(4) | ||
2018-2 CLO Secured Notes: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Class A-1R-R Notes |
| $ | 8,000 |
|
| $ | 8,000 |
|
| LIBOR + 1.58%(2) |
| 4.23% |
| AAA(sf) |
| 11/20/2029 |
Class A-1T-R Notes |
|
| 168,630 |
|
|
| 170,400 |
|
| LIBOR + 1.58% |
| 4.22% |
| AAA(sf) |
| 11/20/2029 |
Class A-2-R Notes |
|
| 54,611 |
|
|
| 55,100 |
|
| LIBOR + 2.45% |
| 5.08% |
| AA (sf) |
| 11/20/2029 |
Class B-R Notes |
|
| 17,908 |
|
|
| 18,250 |
|
| LIBOR + 3.17% |
| 5.81% |
| A (sf) |
| 11/20/2029 |
Subtotals / weighted averages |
|
| 249,149 |
|
|
| 251,750 |
|
| 4.41% |
| 4.52% |
|
|
| 11/20/2029 |
Garrison SBIC Borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
SBIC 2018-10 A |
|
| 22,275 |
|
|
| 23,000 |
|
| 3.53%(3) |
| 3.95% |
| N/A |
| 3/1/2028 |
SBIC 2017-10 A |
|
| 6,786 |
|
|
| 6,980 |
|
| 3.47%(3) |
| 3.87% |
| N/A |
| 3/1/2027 |
SBIC 2016-10 B |
|
| 3,230 |
|
|
| 3,320 |
|
| 2.79%(3) |
| 3.19% |
| N/A |
| 9/1/2026 |
SBIC 2016-10 A |
|
| 12,381 |
|
|
| 12,700 |
|
| 3.25%(3) |
| 3.65% |
| N/A |
| 3/1/2026 |
SBIC 2015-10 B |
|
| 13,671 |
|
|
| 14,000 |
|
| 3.57%(3) |
| 3.97% |
| N/A |
| 9/1/2025 |
Subtotals / weighted averages |
|
| 58,343 |
|
|
| 60,000 |
|
| 3.43% |
| 3.84% |
|
|
| 12/16/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals / weighted averages |
| $ | 307,492 |
|
| $ | 311,750 |
|
| 4.22% |
| 4.39% |
|
|
| 5/22/2029 |
(1) | Represents |
(2) |
|
(3) | Represents the stated interest rate and annual charge of our |
(4) |
|
In accordance with the 1940 Act, with certain limited exceptions, prior to August 15, 2018 the Company is onlywas allowed to borrow up to amounts such that its asset coverage, as defined in the 1940 Act, iswas at least 200% after such borrowing (other thanexcluding the SBASBA-guaranteed debentures of Garrison SBIC as permitted byper the Company’s exemptive relief which has been granted byfrom the Securities and Exchange Commission (the “SEC”). On August 14, 2018, the Company’s stockholders approved the application of the reduced asset coverage requirements in Section 61(a)(2) of the 1940 Act to the Company)Company. Thus, effective August 15, 2018, the asset coverage requirements applicable to the Company under the 1940 Act were reduced to 150%. As of September 30, 2017March 31, 2019 and December 31, 2016,2018, the Company’s asset coverage for borrowed amounts was 212.3%159.0% and 215.5%167.1%, respectively. As of March 31, 2019 and December 31, 2018, the Company’s total leverage capacity of the Class A-1R-R Notes under the 2018-2 CLO was $9.5 million and $42.0 million, respectively.
3334
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017March 31, 2019
RefinancingCollateralized Loan Obligation Financings
On October 18, 2018, the Company completed the $420.0 million 2018-2 CLO. The notes offered in the 2018-2 CLO, collectively referred to as the “2018-2 Notes” and individually defined above in the table, were issued by GF 2018-2 (the “Issuer”) and Garrison Funding 2018-2 LLC (together with the Issuer, the “Co-Issuers”) and are backed by a diversified portfolio of primarily senior secured loans. The proceeds of the 2013-2 Collateralized Loan Obligation
On September 25, 2013, GF 2013-2 completed a $350.0 million collateralized loan obligation (the “2013-2 CLO”), the proceeds of which2018-2 CLO were utilized, along with cash on hand, to refinance an existing credit facility. The notes offered in the 2013-2 CLO (the “2013-2 Notes”) were issued by GF 2013-2 through a private placement and were comprised of $50.0 million of senior secured revolving notes, $160.3 million of senior secured term notes and an aggregate of $139.7 million of subordinated notes that were retained by GARS via the GF 2013-2 Manager.
On September 29, 2016, GF 2016-2 completed a $300.0 million collateralized loan obligation (the “2016-2 CLO”), the proceeds of which were utilized, along with cash on hand, to refinance the 2013-2 CLO. The notes offered inunder the 2016-2 CLO (the “2016-2 Notes”) were issued by GF 2016-2 through a private placement and were comprised of: (i) $25.00 million of AAA(sf) Class A-1R Senior Secured Revolving Floating Rate Notes (“Class A-1R Notes”); (ii) $88.15 million of AAA(sf) Class A-1T Senior Secured Floating Rate Notes (“Class A-1T Notes”); (iii) $25.00 million of AAA(sf) Class A-1F Senior Secured Fixed Rate Notes (“Class A-1F Notes”); (iv) $20.70 million of AA(sf) Class A-2 Senior Secured Floating Rate Notes (“Class A-2 Notes” and collectively with the Class A-1R Notes, the Class A-1T Notes and the Class A-2F Notes, the “Class A Notes”); (v) $21.45 million of A(sf) Class B Secured Deferrable Floating Rate Notes (“Class B Notes”); (vi) $11.70 million of BBB(sf) Class C Secured Deferrable Floating Rate Notes (“Class C Notes” and collectively, the Class A Notes, Class B Notes and Class C Notes are referred to as the “Secured Notes”); and (vii)(as defined below). The Company also retained $108.00 million of subordinated notes (“(the “2018-2 Subordinated Notes”), which do not have that were issued in the transaction and that are entitled to receive distributions to the extent funds are available for such purpose. As a stated interest rate,result of the Company retaining the 2018-2 Subordinated Notes, it consolidates the accounts of the Co-Issuers into its financial statements. As a result of this consolidation, the amounts outstanding under the 2018-2 CLO are not rated and weretreated as the Company’s indebtedness. The Company also initially retained by GARS.$18.3 million of the Class B-R Notes. The 2016-22018-2 Notes are scheduled to mature on September 29, 2027. The 2013-2 CLO and 2016-2 CLO are collectively referredNovember 20, 2029, however the 2018-2 Notes may be redeemed by the Co-Issuers on any business day after November 20, 2022. On or before July 18, 2019, $25.0 million of the aggregate $50.0 million Class A-1R-R Notes outstanding will convert to as “the CLOs”.
In connectionterm notes with the closing of the sale of the 2016-2 Notes, substantially all of the net cash proceeds, along with existing cash, were used to purchase a portion of the portfolio of loans held by GF 2013-2. GF 2013-2 used the proceeds received in connection with such sale of loans to redeem in full all of the 2013-2 Notes. The refinancing of the 2013-2 CLO resulted in a $1.8remaining $25.0 million loss for the year ended December 31, 2016 due to the third party expenses incurred as part of the 2013-2 CLO which had initially been deferred and was being amortized over the stated life of the 2013-2 CLO. This loss was included in the consolidated statements of operations within lossconverting on refinancing of secured notes.
As of both September 30, 2017 and December 31, 2016, the Class A-1R Notes under the 2016-2 CLO were fully undrawn. The fair value of the notes issued by the CLOs approximated their carrying values on the consolidated statements of financial condition as of September 30, 2017 and December 31, 2016.
or before November 20, 2022. The indenture governing the 2016-22018-2 Notes provides that, to the extent cash is available from cash collections, the holders of the 2016-22018-2 Notes are to receive quarterly interest payments on the 20th day or, if not a business day, the next succeeding business day of February, May, August and November of each year until the stated maturity.
On September 29, 2016, the Company completed a $300.0 million collateralized loan obligation (the “2016-2 CLO”). The notes offered in the 2016-2 CLO, collectively referred to as the “2016-2 Notes”, were issued by the Co-Issuers through a private placement. The proceeds of which were utilized, along with cash on hand, to refinance notes issued under a previous collateralized loan obligation. The Company retained all of the subordinated notes issued as part of the 2016-2 CLO. The 2016-2 Notes were refinanced by the 2018-2 CLO. The 2018-2 CLO and the 2016-2 CLO are collectively referred to as the “CLOs”.
As noted above, subject to the asset coverage limitations applicable to the Company under the 1940 Act, the Company had $9.5 million and $42.0 million of available leverage capacity in the Class A-1R-R Notes under the 2018-2 CLO of March 31, 2019 and December 31, 2018, respectively. The fair value of the 2018-2 Notes approximated their carrying value on the consolidated statements of financial condition as of March 31, 2019 and December 31, 2018.
Collateralized Loan Obligation Financing Covenants
Under the documents governing the 2016-22018-2 CLO, there arewere two coverage tests applicable to the Secured Notes.Notes as of March 31, 2019 and December 31, 2018. The first test comparescompared the amount of interest received on the collateral loans held by GF 2016-22018-2 to the amount of interest payable on the Secured Notes under the 2016-22018-2 CLO in respect of the amounts drawn and certain expenses. To meet this first test, at any time, the aggregate amount of interest received on the collateral loans must equal, after the payment of certain fees and expenses, at least 135.0% of the aggregate amount of interest payable on the Class AA-1R-R Notes, the Class A-1T-R Notes and the Class A-2-R Notes (collectively the Class A-R Notes), 125.0% of the interest payable on the Class AA-R Notes and Class BB-R Notes, taken together, and 115% of the interest payable on the Class A Notes, Class B Notes and Class C Notes, taken together.
34
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
The second test comparescompared the aggregate principal amount of the collateral loans, as calculated in accordance with the indenture, to the aggregate outstanding principal amount of the 2018-2 CLO Secured Notes in respect of the amounts drawn. To meet this second test at any time, the aggregate principal amount of the collateral loans must equal at least 173.4%128.0% of the aggregate outstanding principal amount of the Class AA-R Notes, 156.1%118.2% of the aggregate principal amount of the Class AA-R Notes and Class BB-R Notes, taken together,together.
35
Garrison Capital Inc. and 148.1% of the aggregate outstanding principal amount of the Class A Subsidiaries
Notes Class B Notes and Class C Notes, taken together.to Consolidated Financial Statements (unaudited)
March 31, 2019
Collateralized Loan Obligation Financing Covenants (continued)
If the coverage tests are not satisfied with respect to a quarterly payment date, GF 2016-2the 2018-2 CLO will be required to apply available amounts to the repayment of interest on and principal of the 2016-22018-2 Notes to the extent necessary to satisfy the applicable coverage tests and, as a result, there may be reduced funds available for GF 2016-22018-2 to make additional investments or to make distributions on the Subordinated2018-2 Notes held by the Company. Additionally, compliance iswas measured on each day collateral loans are purchased, originated or sold and in connection with monthly reporting to the note holders.
Furthermore, if under the second coverage test the aggregateaggregated principal amount of the collateral loans equalsequaled 125.0% or less of the aggregate outstanding principal amount on the Class A-1T NotesA-1R-R and Class A-1RA-1T-R Notes, taken together and remainsremained so for ten business days, an event of default willwould be deemed to have occurred. As of September 30, 2017March 31, 2019 and December 31, 2016,2018, the trustee for the 2016-22018-2 CLO and 2013-2 CLO, respectively, has asserted that all of the coverage tests were met.
Garrison SBIC Borrowings
On May 29, 2014, Garrison SBIC, which has an investment objective substantially similar to GARS, was formed in accordance with small business investment company (“SBIC”) regulations. Garrison SBIC received a license from the U.S. Small Business Administration (the “SBA”)SBA on May 26, 2015. The SBIC license allows Garrison SBIC to obtain SBA-guaranteed debentures in an amount equal to twice its equity capitalization up to $150.0$175.0 million of leverage, subject to the issuance of a capital commitmentcommitments by the SBA and other customary procedures. On June 16, 2015,Since receiving its SBIC license, the SBA has issued Garrison SBIC awith two commitment to provide $35.0 million of leverage and on October 24, 2016 issued a second commitmentletters to provide an additional $35.0aggregate $70.0 million of leverage.SBA debentures.
The SBA issuesThese SBA-guaranteed debentures are issued bi-annually on pooling dates in March and September of each year. TheseThe debentures are non-recourse, interest-only debentures with a 10 year stated maturity, but may be prepaid at any time without penalty. To the extent the debentures are prepaid, they are permanently extinguished and the Company can no longer access those debentures. The interest rate of the debentures is fixed at the time of issuance on each respective pooling date and is based on a coupon rate that equates to a spread over the ten year treasury rate based on market rates at the time of issuance. Interest on the debentures is payable on a semi-annual basis. The SBA issues interim financings to SBICs on non-pooling dates that carry a lower interest rate than the debentures and which mature on the next pooling date.date to be replaced by new SBA-guaranteed debentures.
The SBA, as a creditor, will have a superior claim to Garrison SBIC’s assets over GARS’ stockholders if Garrison SBIC were to be liquidated, or if the SBA exercises its remedies under the SBA-guaranteed debentures issued by Garrison SBIC upon an event of default.
As of September 30, 2017,March 31, 2019, Garrison SBIC had regulatory capital of $36.1$34.7 million and total SBIC borrowings outstanding of $37.0$60.0 million. The SBIC borrowings were comprised of $14.0 million, $12.7 million, $3.3 million, and $7.0 million of SBA guaranteed debentures that mature on September 1, 2025, March 1, 2026, September 1, 2026 and March 1, 2027, respectively. The fair value of the SBIC borrowings approximated the carrying value on the consolidated statements of financial condition as of September 30, 2017March 31, 2019 and December 31, 2016.2018. As of September 30, 2017,March 31, 2019, the Company had $33.0$10.0 million of available SBIC leverage capacity.
35
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
GLC Trust 2013-2 Notes
On July 18, 2014, GARS completed a $39.2 million term debt securitization and the notes offered thereby (the “GLC Trust 2013-2 Notes”) collateralized by the GLC Trust 2013-2 consumer loan portfolio. GLC Trust 2013-2 Notes consisted of $36.9 million of Class A Notes (“GLC Trust 2013-2 Class A Notes”) and $2.3 million of Class B Notes (“GLC Trust 2013-2 Class B Notes”). As of September 30, 2017, GARS has retained all of the GLC Trust 2013-2 Class B Notes, which are eliminated in consolidation.
The GLC Trust 2013-2 Class A Notes bear interest at 3.00% per annum and are scheduled to mature on July 15, 2021. The proceeds of the GLC Trust 2013-2 Notes were used to refinance the $10.0 million revolving credit facility with Capital One, N.A. which was fully paid down and terminated concurrent with the issuance of the GLC Trust 2013-2 Notes.
The fair value of the GLC Trust 2013-2 Notes approximated the carrying value on the consolidated statements of financial condition as of September 30, 2017 and December 31, 2016, respectively.
The indenture governing the GLC Trust 2013-2 Notes provides that, to the extent cash is available from cash collections, the holders of the GLC Trust 2013-2 Notes are to receive monthly interest and principal payments on the 15th day or, if not a business day, the next succeeding business day, commencing in August 2014, until the stated maturity.
Under the indenture governing the GLC Trust 2013-2 Notes, there are two applicable monthly tests. The first test compares the principal balance of the underlying loans to the principal balance of the GLC Trust 2013-2 Notes. To meet this first test, the aggregate principal balance of the underlying loans less the aggregate principal balance of the GLC Trust 2013-2 Notes must equal, at least, the greater of (1) 13.00% of the aggregate principal balance of the underlying loans as of the end of the prior month and (2) 5.25% of the loan pool balance as of July 11, 2014.
The second test compares the ratio of the dollar amount of cumulative defaults to the original principal balance of the underlying loans as of July 11, 2014 (“Cumulative Default Ratio”) to the Cumulative Default Ratio trigger level, as stated in the indenture. To meet this second test, the Cumulative Default Ratio must not exceed the Cumulative Default Ratio trigger level.
If these tests are not satisfied with respect to a monthly payment date and are not cured within 45 days, an event of default will be deemed to have occurred and the GLC Trust 2013-2 Notes will become immediately due and payable, in accordance with the terms of the indenture. As of both September 30, 2017 and December 31, 2016, all of the coverage tests were met.
Deferred Debt Issuance Costs and other Fees
In connection with the issuance of our various debt instruments, GARS incurred aggregate fees in the amount of $6.2 million which consisted of facility fees, rating agency fees, legal fees and other costs. Costs incurred in connection with the issuance of the Company’s debt instruments are included as a reduction to the carrying amount of the related liability on the consolidated statements of financial condition and will be amortized over the stated maturity of the respective loans, with $4.2 million and $4.5 million of deferred debt issuance costs and discounts on notes payable remaining as of September 30, 2017 and December 31, 2016, respectively.
36
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017March 31, 2019
Deferred Debt Issuance Costs and Other Fees
In the ordinary course of operations,connection with executing or refinancing its various debt facilities, the Company incurs feesmay incur debt issuance costs or issue debt at a price below par, referred to as an original issue discount. These debt issuance costs and costsdiscounts are generally included as parta reduction to the carrying amount of the executioncorresponding liability on the consolidated statements of financial condition. However, based on the nature of the debt facilities, costs associated with revolving credit facilities are recorded within the other assets line item on our consolidated statements of financial condition. The costs and refinancingdiscounts are then generally amortized over the stated maturity of our variousthe liability.
As of both March 31, 2019 and December 31, 2018, the Company’s debt instruments. Theseissuance costs and original issue discounts were generally incurred as a result of the CLOs and the Company’s SBIC borrowings. The CLO’s costs typically represent structuring and facility fees, rating agency fees and other legal costs incurred in connection to our CLOs andincurred. The costs associated with SBIC borrowings consist of a 1.00% fee on the total commitments received as well asand a 2.00% leverage fee, a 0.375% underwriting fee and a 0.05% administrative fee on ourany SBA Borrowings. Deferred debt issuance costsborrowings that are included on the consolidated statements of financial condition as a reduction to the carrying amount of the related liability with the exception of those costs associated with our revolving credit facilities, which are included within other assets on our consolidated statement of financial condition. The deferred debt issuance costs will be amortized over the stated maturity of the debt liability to which they relate. drawn.
As of September 30, 2017, $4.2March 31, 2019, $4.3 million of deferred debt issuance costs and discounts on our notes payable remained on our consolidated statementstatements of financial position and wascondition. These costs were comprised of $2.7$2.6 million of costs related to the 2016-22018-2 CLO $1.4and $1.7 million of costs related to our SBA Borrowings and $0.1 million of costs related to the GLC Trust 2013-2 Notes.borrowings of Garrison SBIC. As of December 31, 2016, $4.52018, $4.4 million of deferred debt issuance costs and discounts on our notes payable remained on our consolidated statementstatements of financial position and wascondition. These costs were comprised of $2.9$2.6 million of costs related to our CLOs, $1.5the 2018-2 CLO and $1.8 million of costs related to the borrowings of Garrison SBIC. For both the three months ended March 31, 2019 and 2018, interest expense on our SBA Borrowings andconsolidated statements of operations included $0.1 million of costsamortization related to the GLC Trust 2013-2 Notes.debt issuance costs and original issue discounts on our liabilities.
37
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
March 31, 2019
5. Related Party Transactions and Other Agreements
Investment Advisory Agreement
The Investment Adviser is responsible for sourcing potential investments, conducting research and diligence on prospective investments and equity sponsors, analyzing investment opportunities, structuring our investments and monitoring our investments and portfolio companies on an ongoing basis subject to the supervision of the Board. The Investment Adviser was organized in November 2010 and is a registered investment adviser under the Investment Advisers Act of 1940, as amended. The Investment Adviser is an affiliate of Garrison Investment Group LP (the “Investment Manager”), which is also the investment manager of various stockholders of the Company.
GARS entered into an investment advisory agreement (the “Investment Advisory Agreement”) with the Investment Adviser most recently(as amended andand/or restated on May 3, 2017,from time to time, the “Investment Advisory Agreement”), which entitles the Investment Adviser to a management fee and an incentive fee, bothfee. As of which are described further below.
On May 3, 2017,March 31, 2019, the Company entered into the fourthInvestment Advisory Agreement had been most recently amended and restated investment advisory agreement (the “Fourth Amended and Restated Investment Advisory Agreement”) withon August 14, 2018.
As further disclosed in Note 11, subsequent to quarter-end, the Investment Adviser following approval of the agreement by the Company’s stockholders at the annual meeting of stockholders. The Fourth Amended and Restated Investment Advisory Agreement which iswas amended effective beginning as of May 3, 2017, (i) reducedJanuary 1, 2019 to reduce the management fee from an annual rate of 1.75% to an annual rate of 1.50% of“catch up” provision associated with the Company’s gross assets, excluding cash and cash equivalents but including assets purchased with borrowed funds, payable quarterly in arrears and (ii) reduced the hurdle rate for the incomeincome-based component of the incentive fee from 2.00% per quarter (8.00% annualized)100% to 1.75% per quarter (7.00% annualized)50%.
Advisory In addition, the Incentive Fee Waivers
From October 1, 2016 through May 2, 2017,Cap and Deferral Mechanism (as defined below) was amended to restrict the Investment Adviser, in consultation with the Board, irrevocably waived anypayment of deferred incentive fees payable to the Investment Adviser under the third amended and restated investment advisory agreement, dated August 5, 2016, with respect to a calendar quarter in excess of the sum of (i) 0.375% per quarter (1.50% annualized)cumulative realized capital gains, cumulative realized capital losses, cumulative unrealized capital depreciation and cumulative unrealized capital appreciation during the applicable Incentive Fee Look-back Period (as defined below). There were no other changes made to the fee structure of the gross assets ofInvestment Advisory Agreement. Refer to the Company, excluding cashIncome-based incentive fees and cash equivalents but including assets purchased with borrowed funds, calculated basedthe Incentive Fee Cap and Deferral Mechanism sections below and Note 11 for additional details on the average carrying value of the gross assets of the Company at the end of the two most recently completed calendar quarters, (ii) 20% of pre-incentive fee net investment income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, in excess of a “hurdle rate” of 1.75% per quarter (7.00% annualized) and (iii) in the case of the final calendar quarter of each year, the capital gains incentive fee.amendment.
37
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
5. Related Party Transactions and Other Agreements – (continued)
Management Fee
Under the Fourth Amended and Restated Investment Advisory Agreement, effective May 3, 2017,beginning August 14, 2018, the Investment Adviser is entitled to a management fee for its servicespayable to the Adviser is calculated at an annual rate of 1.50% of the Company's average gross assets, excluding cash andor cash equivalents and cash and cash equivalents, restricted, but including assets purchased with borrowed funds. For purposesfunds, at the end of each of the Investment Advisory Agreement,two most recently completed calendar quarters; provided, however, the management fee is calculated at an annual rate of 1.00% of the average value of the Company’s gross assets, excluding cash or cash equivalents means U.S. government securitiesbut including assets purchased with borrowed funds, that exceeds the product of (i) 200% and commercial paper maturing within 270 days(ii) the Company’s average net assets at the end of purchase. Undereach of the third amendedtwo most recently completed calendar quarters. For the avoidance of doubt, the 200% is calculated in accordance with the asset coverage limitation as defined in the 1940 Act and restated investment advisory agreement,gives effect to the Company’s exemptive relief with respect to our SBIC debentures.
From May 3, 2017 until August 13, 2018, the management fee was calculated at an annual rate of 1.75%1.50% of the Company’s gross assets, excluding cash and cash equivalents and cash equivalents, restricted, but including assets purchased with borrowed funds.funds, and was payable quarterly in arrears.
The following table details ourFor the three months ended March 31, 2019 and 2018, the Company incurred aggregate management fee expenses forof $1.6 million and $1.5 million, respectively. As of March 31, 2019 and December 31, 2018, the three and nine months ended September 30, 2017 and September 30, 2016:
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
Management Fees ($ in thousands) |
| 2017 |
|
| 2016 |
|
| 2017 |
|
| 2016 |
| ||||
Management fee |
| $ | 1,374 |
|
| $ | 1,805 |
|
| $ | 4,423 |
|
| $ | 5,479 |
|
Management fee waived |
|
| — |
|
|
| — |
|
|
| (310 | ) |
|
| — |
|
Total management fees, net of waived fees |
| $ | 1,374 |
|
| $ | 1,805 |
|
| $ | 4,113 |
|
| $ | 5,479 |
|
Managementmanagement fees in the amounts of $1.4$1.6 million and $0.1 million, respectively, were recorded as payable as of September 30, 2017 and December 31, 2016, respectively, and are included in management fee payable on theour consolidated statements of financial condition.
Incentive Fee Overview
Under the Investment Advisory Agreement, the Investment Adviser is entitled to an incentive fee consisting of two components and a cap and deferral mechanism. The twofirst component is income-based and payable quarterly in arrears while the second component is capital gains-based and is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date). The components are independent of each other, and certain instances may result in one component being payable even if the other is not.
Under the Fourth Amended38
Garrison Capital Inc. and Restated Investment Advisory Agreement, theSubsidiaries
Notes to Consolidated Financial Statements (unaudited)
March 31, 2019
5. Related Party Transactions and Other Agreements – (continued)
Income-based incentive fees
The first component, which is income-based and payable quarterly in arrears, equals 20.00% of the amount, if any, that the Company’s pre-incentive fee net investment income exceeds a 1.75% quarterly (7.00% annualized) hurdle rate (the “Hurdle Rate”), subject to a “catch-up” provision, measured at the end of each calendar quarter.
TheEffective January 1, 2019, the operation of the first component of the incentive fee under the Investment Advisory Agreement for each quarter is as follows:
no incentive fee will beis payable to the Investment Adviser in any calendar quarter in which the Company’s pre-incentive fee net investment income does not exceed the Hurdle Rate of 1.75% (7.00% annualized);
50% of the Company’s pre-incentive fee net investment income, if any, that exceeds the 1.75% Hurdle Rate but is less than 2.9167% in any calendar quarter (11.67% annualized) is payable to the Investment Adviser. This portion of the Company’s income-based incentive fee component is referred to as the “catch-up” provision; and
20% of the Company’s pre-incentive fee net investment income, if any, that exceeds 2.9167% in any calendar quarter (11.67% annualized) is payable to the Investment Adviser.
Prior to January 1, 2019, the operation of the first component of the incentive fee under the Investment Advisory Agreement for each quarter was as follows:
no incentive fee was payable to the Investment Adviser for any calendar quarter in which the Company’s pre-incentive fee net investment income did not exceed the Hurdle Rate of 1.75% (7.00% annualized);
100% of the Company’s pre-incentive fee net investment income, with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the 1.75% Hurdle Rate but iswas less than 2.1875% in any calendar quarter (8.75% annualized) iswould have been payable to the Investment Adviser. We refer to this portionAdviser; and
20% of the Company’s pre-incentive fee net investment income, (which exceedsif any, that exceeded 2.1875% in any calendar quarter (8.75% annualized) would have been payable to the Hurdle Rate but is less than 2.1875%) as the “catch-up.” Investment Adviser.
The effect of the “catch-up”catch-up provision is that, if suchthe Company earns pre-incentive fee net investment income exceeds 2.1875% in any calendar quarter in excess of 2.1875% and 2.9167%, as applicable, the Investment Adviser willwould receive 20% of such pre-incentive fee net investment income as if the Hurdle Rate did not apply; and
20% of the amount of such pre-incentive fee net investment income, if any, that exceeds 2.1875% in any calendar quarter (8.75% annualized) is payable to the Investment Adviser (once the Hurdle Rate is reached and the catch-up is achieved).
38
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
5. Related Party Transactions and Other Agreements – (continued)
Under the third amended and restated investment advisory agreement, the first component of the incentive fee equaled 20.00% of the amount, if any, that the Company’s pre-incentive fee net investment income exceeded a 2.00% quarterly (8.00% annualized) hurdle rate, subject to a “catch-up” provision measured at the end of each calendar quarter.apply.
The portion of such income-based incentive fee that is attributable to deferred interest (such as PIK interest or original issue discount)interest) will be paid to the Investment Adviser, together with any other interest accrued on the loan from the date of deferral to the date of payment, only if and to the extent the Company actually receives such interest in cash, andcash. Furthermore, any accrual thereofthat is attributable to deferred interest will be reversed if and to the extent such interest is reversed in connection with any write-off or similar treatment of the investment giving rise to any deferred interest accrual. Any reversal of such deferred interest amounts would reduce net income for the quarter by the net amount of the reversal, (afterafter taking into account the reversal of incentive fees payable) andassociated with the deferred interest amount also being reversed. Such a write-off would result in a reduction and possible elimination of the incentive fees for such quarter. For the avoidance of doubt, no incentive fee will be paid to the Investment Adviser on amounts accrued and not paidreceived in cash with respect ofto deferred interest.
39
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
March 31, 2019
5. Related Party Transactions and Other Agreements – (continued)
Capital gains-based incentive fees
The second component, which is capital gains-based, is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date) and equals 20% of the Company’s cumulative aggregate realized capital gains through the end of such year, computed net of the Company’s aggregate cumulative realized capital losses and aggregate cumulative unrealized capital loss through the end of such year, less the aggregate amount of any previously paid capital gains incentive fees and subject to the Incentive Fee Cap and Deferral Mechanism described below. The capital-gains component of the incentive fee excludes any portion of realized gains/(losses) that are associated with the reversal of any portion of unrealized gain/(loss) attributable to periods prior to April 1, 2013. The capital gains component of the incentive fee is not subject to any minimum return to stockholders.
In addition, under U.S. GAAP, we are required to accrue a capital gains incentive feefees, based upon the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital gain and loss on investments held at the end of each period. If such amount is positive at the end of a period, then the Company will record a capital gains incentive fee equal to 20% of such amount, less the aggregate amount of actual capital gains related incentive fees paid in all prior years. If such amount is negative, then there is no accrual will be recorded for such period. There were no accrued capital gains incentive fees as of September 30, 2017accrued for the three months ending March 31, 2019 and December 31, 2016.2018.
The Investment Advisory Agreement does not permit unrealized capital gains for purposes of calculating the amount payable to the Investment Adviser. Amounts due related to unrealized capital gains, if any, will not be paid to the Investment Adviser until realized under the terms of the Investment Advisory Agreement (as described above).
Incentive Fee Cap and Deferral Mechanism
We have structured the calculation of the incentive fees to include a fee limitation (the “Incentive Fee Cap and Deferral Mechanism”) such that no incentive fee will be paid to our Investment Adviser for any fiscal quarter if, after such payment, the cumulative incentive fees paid to our Investment Adviser for the period that includes such fiscal quarter and the 11 full preceding fiscal quarters (the “Incentive Fee Look-back Period”) would exceed 20.00% of our Cumulative Pre-Incentive Fee Net Return during the applicable Incentive Fee Look-back Period (the “Incentive Fee Cap”). To the extent that the payment of incentive fees is limited by the Incentive Fee Cap, the payment of such fees is deferred and paid in subsequent quarters up to three years after their date of deferment, subject to applicable limitations included in the Investment Advisory Agreement. However, beginning January 1, 2019, no deferred incentive fees will be paid to the Investment Adviser in an amount in excess of the sum of cumulative realized capital gains, cumulative realized capital losses, cumulative unrealized capital depreciation and cumulative unrealized capital appreciation during the applicable Incentive Fee Look-back Period. The “Cumulative Pre-Incentive Fee Net Return” is defined as the sum of (1) pre-incentive fee net investment income, (2) cumulative realized capital gains/(losses), and (3) cumulative unrealized capital gains/(losses) for the Incentive Fee Look-back Period. Prior to April 1, 2016, the Incentive Fee Look-back Period consisted of fewer than 12 full fiscal quarters.
39
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
5. Related Party Transactions and Other Agreements – (continued)
The following table provides a breakdown of our incentive fees for the three and nine months ended September 30, 2017 and September 30, 2016:
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
Incentive Fees ($ in thousands) |
| 2017 |
|
| 2016 |
|
| 2017 |
|
| 2016 |
| ||||
Income-based incentive fees |
| $ | 837 |
|
| $ | — |
|
| $ | 1,955 |
|
| $ | 2,323 |
|
Capital gains-based incentive fees |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Incentive fees subject to cap & deferral mechanism⁽¹⁾ |
|
| (837 | ) |
|
| — |
|
|
| (1,955 | ) |
|
| (2,323 | ) |
Total incentive fees |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
|
|
Due to the fact that there is no clawback of amounts previously paid to the Investment Adviser in accordance with the Investment Advisory Agreement, the Company has not recorded a receivable for the $6.5 million difference between amounts paid under the Investment Advisory Agreement in prior quarters and the Incentive Fee Cap based on the Company’s Cumulative Pre-Incentive Fee Net Return as of September 30, 2017.
The $6.5 million difference may be used to reduce future amounts earned by the Investment Adviser. However, as noted above, no incentive fee will be paid to the Investment Adviser for any fiscal quarter if, after such payment, the cumulative incentive fees paid to our Investment Adviser for the Incentive Fee Look-back Period would exceed 20% of our Cumulative Pre-Incentive Fee Net Return during the applicable Incentive Fee Look-back Period. To the extent unrealized capital losses incurred as of September 30, 2017 are reversed within the applicable Incentive Fee Look-back Period, the corresponding increase in our Cumulative Pre-Incentive Fee Net Return may result in the Investment Adviser earning and being paid up to $7.4 million of income based incentive fees which are currently subject to the Incentive Fee Cap.
As of September 30, 2017, the Incentive Fee Look-back Period is in effect through June 30, 2020 and realizedRealized and unrealized capital gains and losses and pre-incentive net investment income earned during the three months ended September 30, 2017March 31, 2019 will cease to impact the Incentive Fee Cap and Deferral Mechanism after this date.
The Investment Adviser earned aggregate incentive fees of $0.8 million and $2.0 million for the three and nine months ended September 30, 2017. The Investment Adviser did not earn any aggregate incentive fees for the three months ended September 30, 2016 and earned aggregate incentive fees of $2.3 million for the nine months ended September 30, 2016. However, none of the incentive fees earned for the three and nine months ended September 30, 2017 and September 30, 2016 were payable due to the Incentive Fee Cap. In addition, no incentive fees were payable on the consolidated statements of financial condition as of September 30, 2017 and DecemberMarch 31, 2016 due to the Incentive Fee Cap.2022.
40
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017March 31, 2019
5. Related Party Transactions and Other Agreements – (continued)
As of March 31, 2019, the Company’s Cumulative Pre-Incentive Fee Net Return during the Incentive Fee Look-back Period was $6.0 million. As a result, due to the Incentive Fee Cap and Deferral Mechanism (and subject to the applicable limitations set forth in the Investment Advisory Agreement ), the Incentive Fee Cap as of March 31, 2019 was $1.2 million (i.e. 20% of the Cumulative Pre-Incentive Fee Net Return during the Incentive Fee Look-back Period).
As of March 31, 2019, the Investment Adviser had calculated an aggregate of $10.4 million of income-based incentive fees since April 1, 2016, of which $0.5 million is recorded as incentive fee payable on the consolidated statement of financial condition. As a result and to the extent unrealized capital losses incurred as of March 31, 2019 are reversed or cease to impact the Incentive Fee Cap within the applicable Incentive Fee Look-back Period, such that cumulative realized capital gains and cumulative unrealized capital appreciation exceed cumulative realized capital losses and cumulative unrealized capital depreciation during the applicable Incentive Fee Look-back Period, the Investment Adviser may be able to recoup up to $9.9 million of income-based incentive fees which are currently deferred under the Incentive Fee Cap.
The following table provides a breakdown of our incentive fees for the three months ended March 31, 2019 and March 31, 2018:
|
| Three Months Ended |
| |||||
Incentive Fees ($ in thousands) |
| March 31, 2019 |
|
| March 31, 2018 |
| ||
Income-based incentive fees |
| $ | 289 |
|
| $ | 983 |
|
Capital gains-based incentive fees |
|
| — |
|
|
| — |
|
Incentive fees subject to cap & deferral mechanism(1) |
|
| — |
|
|
| (983 | ) |
Total incentive fees |
| $ | 289 |
|
| $ | — |
|
(1) | The Cumulative Pre-Incentive Fee Net Return for the Incentive Fee Look-back Period ending March 31, 2018 was negative due to realized and unrealized capital losses incurred, and therefore all income-based payments were subject to the Incentive Fee Cap and Deferral Mechanism. |
As of March 31, 2019 and December 31, 2018, there was $0.5 million and $0.3 million of incentive fees earned that were recorded as payable on the consolidated statements of financial condition, respectively.
41
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
March 31, 2019
5. Related Party Transactions and Other Agreements – (continued)
Administration Agreement
GARS entered into an administration agreement, which was effective as of October 9, 2012 (the “Administration Agreement”), with GARS Administrator. Under the Administration Agreement, the GARS Administrator provides the Company with office facilities, equipment, clerical, bookkeeping and record keeping services at such facilities and such other services as the GARS Administrator, subject to review by the Board, from time to time determines to be necessary or useful to perform its obligations under the Administration Agreement. The GARS Administrator is responsible for the financial and other records that the Company is required to maintain and prepares reports to stockholders, and reports and other materials filed with the SEC. The GARS Administrator provides on the Company’s behalf significant managerial assistance to those portfolio companies to which the Company is required to provide such assistance. No managerial assistance was provided to any portfolio companies forduring the three and nine months ended September 30, 2017March 31, 2019 and September 30, 2016.March 31, 2018.
In addition, the GARS 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 the printing and dissemination of reports to stockholders of the Company, and generally oversees the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others. The Company reimburses the GARS Administrator for the costs and expenses incurred by the GARS Administrator in performing its obligations and providing personnel and facilities as described.
GLC Trust 2013-2 entered into the GLC Trust 2013-2 Administration Agreement with GARS Administrator, and fees incurred under this agreement are included in total administrator expenses presented on the consolidated statement of operations.
Administrator charges were $0.4 million and $0.3 million for the three and nine months ended September 30, 2017 were $0.3 millionMarch 31, 2019 and $0.9 million, respectively. Administrator charges for the three and nine months ended September 30, 2016 were $0.3 million and $1.0 million,March 31, 2018, respectively. No charges were waived by the GARS Administrator for the three and nine months ended September 30, 2017March 31, 2019 and September 30, 2016.March 31, 2018. As of September 30, 2017, $0.2March 31, 2019, $0.1 million of administration fees were payable to the GARS Administrator. No administration fees were payable to the GARS Administrator as of December 31, 2016.2018.
Directors’ Fees
The Company’s independent directors each receive an annual fee of $75,000. They also receive $2,500 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each in-person Board meeting and receive $1,000 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each in-person committee meeting.
In addition, the chairman of the audit committee receives an annual fee of $10,000, the chairman of the valuation committee receives an annual fee of $10,000 and each chairman of any other committee receives an annual fee of $5,000 for their additional services in these capacities (all such fees and reimbursements collectively, “Directors’ Fees”). No compensation is paid to directors who are not independent of the Company and the Investment Adviser.
For both the three and nine months ended September 30, 2017,March 31, 2019 and March 31, 2018, independent directors earned Directors’ Fees of $0.1 million and $0.2 million, respectively. For the three and nine months ended September 30, 2016, independent directors earned Directors’ Fees of $0.1 million and $0.3 million, respectively. No Directors’ Fees were payable as of September 30, 2017March 31, 2019 and December 31, 2016.2018.
4142
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017March 31, 2019
5. Related Party Transactions and Other Agreements – (continued)
Affiliated Stockholders
As of both September 30, 2017March 31, 2019 and December 31, 2016,2018, Garrison Capital Fairchild I Ltd., Garrison Capital Fairchild II Ltd. and Garrison Capital Adviser Holdings MM LLC owned an aggregate of 789,910, or 4.9%, of the total outstanding shares of GARS common stock. As of September 30, 2017,March 31, 2019, the officers and directors of the Company owned an aggregate of 194,722,approximately 298,000, or 1.2%1.9%, of the total outstanding shares of GARS common stock. As of December 31, 2016,2018, the officers and directors of the Company owned an aggregate of 140,471,approximately 239,000, or 0.9%1.5%, of the total outstanding shares of GARS common stock.
Other Agreements
Garrison Loan Agency Services LLC acts as the administrative and collateral agent for certain loans held by the Company. No fees were paid by the Company to Garrison Loan Agency Services LLC during the three and nine months ended September 30, 2017March 31, 2019 and September 30, 2016.March 31, 2018.
The Company may invest alongside other clients of the Investment Manager and its affiliates in certain circumstances where doing so is consistent with applicable law, SEC staff interpretations and the terms of our exemptive relief.
For certain expenses, the GARS Administrator facilitates payments by GARS to third parties through the Investment Adviser or other affiliate. Other than the amount of expenses paid to third parties and fees payable under the Investment Advisory Agreement, no additional charges or fees are assessed by the GARS Administrator, the Investment Adviser or other affiliates.
GARS entered into a custody agreement with Deutsche Bank Trust Company Americas to act as custodian for GARS. The Custodian is also the trustee of the 2016-22018-2 CLO and is the custodian for Garrison SBIC.
GLC Trust 2013-2 has entered into an agreement with GARS Administrator to act as securities administrator. In addition, GLC Trust 2013-2 has entered into agreements with Prosper Funding LLC, U.S. Bank National Association and Wilmington Trust, National Association and Manufacturers and Traders Trust Company to act as servicer, indenture trustee and custodian, respectively.
4243
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017March 31, 2019
The following table represents financial highlights for the Company for the ninethree months ended September 30, 2017March 31, 2019 and September 30, 2016:
March 31, 2018:
|
|
|
|
|
| ||||||||
Per share data ($ in thousands, except share and per share amounts) | September 30, 2017 |
|
| September 30, 2016 |
| March 31, 2019 |
| March 31, 2018 |
| ||||
Net asset value per common share at beginning of period | $ | 12.42 |
|
| $ | 13.98 |
| $ | 10.52 |
| $ | 11.69 |
|
Increase/(decrease) in net assets from operations: |
|
|
|
|
|
|
| ||||||
Increase in net assets from operations: |
|
|
|
|
| ||||||||
Net investment income |
| 0.81 |
|
|
| 0.87 |
|
| 0.20 |
| 0.31 |
| |
Net realized gain/(loss) on investments |
| 0.04 |
|
|
| (1.83 | ) | ||||||
Net unrealized (loss)/gain on investments |
| (0.69 | ) |
|
| 0.49 |
| ||||||
Net increase/(decrease) in net assets from operations |
| 0.16 |
|
|
| (0.47 | ) | ||||||
Net realized loss on investments |
| (0.44 | ) |
| (0.04 | ) | |||||||
Net unrealized gain/(loss) on investments |
| 0.39 |
| (0.14 | ) | ||||||||
Net increase in net assets resulting from operations |
| 0.15 |
|
| 0.13 |
| |||||||
Stockholder transactions |
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase of common stock |
| — |
|
|
| 0.07 |
| ||||||
Distributions from net investment income |
| (0.84 | ) |
|
| (1.05 | ) |
| (0.23 | ) |
| (0.28 | ) |
Total stockholder transactions |
| (0.84 | ) |
|
| (0.98 | ) |
| (0.23 | ) |
| (0.28 | ) |
Net asset value per common share at end of period | $ | 11.74 |
|
| $ | 12.53 |
| $ | 10.44 |
| $ | 11.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share market value at beginning of period | $ | 9.35 |
|
| $ | 12.17 |
| $ | 6.43 |
| $ | 8.11 |
|
Per share market value at end of period | $ | 8.43 |
|
| $ | 10.25 |
| $ | 7.18 |
| $ | 8.12 |
|
Total book return⁽¹⁾ |
| 1.29 | % |
|
| (2.86 | )% | ||||||
Total market return⁽²⁾ |
| (0.93 | )% |
|
| (6.82 | )% | ||||||
Total book return(1) |
| 1.43 | % |
| 1.11 | % | |||||||
Total market return(2) |
| 15.24 | % |
| 3.55 | % | |||||||
Common shares outstanding at beginning of period |
| 16,049,352 |
|
|
| 16,507,594 |
|
| 16,049,352 |
| 16,049,352 |
| |
Common shares outstanding at end of period |
| 16,049,352 |
|
|
| 16,049,352 |
|
| 16,049,352 |
| 16,049,352 |
| |
Weighted average common shares outstanding |
| 16,049,352 |
|
|
| 16,183,615 |
|
| 16,049,352 |
| 16,049,352 |
| |
Net assets at beginning of period | $ | 199,408 |
|
| $ | 230,710 |
| $ | 168,912 |
| $ | 187,658 |
|
Net assets at end of period | $ | 188,435 |
|
| $ | 201,048 |
| $ | 167,631 |
| $ | 185,189 |
|
Average net assets⁽³⁾ | $ | 191,194 |
|
| $ | 218,838 |
| ||||||
Ratio of net expenses to average net assets⁽⁴⁾ |
| 9.74 | % |
|
| 11.15 | % | ||||||
Ratio of net investment income to average net assets⁽⁴⁾ |
| 9.04 | % |
|
| 9.14 | % | ||||||
Ratio of portfolio turnover to average investments at fair value⁽⁵⁾ |
| 28.92 | % |
|
| 22.99 | % | ||||||
Asset coverage ratio⁽⁶⁾ |
| 212.28 | % |
|
| 200.60 | % | ||||||
Average outstanding debt⁽⁷⁾ | $ | 202,790 |
|
| $ | 225,743 |
| ||||||
Average net assets(3) | $ | 169,163 |
| $ | 188,231 |
| |||||||
Ratio of net expenses to average net assets |
| 16.51 | % |
| 11.28 | % | |||||||
Ratio of net investment income to average net assets |
| 7.67 | % |
| 10.44 | % | |||||||
Ratio of portfolio turnover to average investments at fair value(4) |
| 6.42 | % |
| 9.06 | % | |||||||
Asset coverage ratio(5) |
| 158.97 | % |
| 203.63 | % | |||||||
Average outstanding debt(6) | $ | 334,688 |
| $ | 235,566 |
| |||||||
Average debt per common share | $ | 12.64 |
|
| $ | 14.07 |
| $ | 20.85 |
| $ | 14.68 |
|
(1) | Total book return equals the net increase of ending net asset value from operations plus the effect of repurchases of common stock over the net asset value per common share at the beginning of the period. |
(2) | Based upon the change in market price per share during the period and takes into account distributions, if any, reinvested in accordance with our dividend reinvestment plan. |
(3) | Calculated utilizing monthly net assets. |
(4) |
|
| Calculated based on monthly average investments at fair value. |
|
|
| Calculated based on monthly average debt outstanding. |
4344
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017March 31, 2019
The following table sets forth the computation of the net increase/(decrease), in net assets per share resulting from operations, pursuant to FASB ASC 260, Earnings per Share, for the ninethree months ended September 30, 2017March 31, 2019 and September 30, 2016:
March 31, 2018:
|
| Nine Months Ended |
|
| Nine Months Ended |
| ||
($ in thousands, except per share data) |
| September 30, 2017 |
|
| September 30, 2016 |
| ||
Net increase/(decrease) in net asset resulting from operations |
| $ | 2,509 |
|
| $ | (7,664 | ) |
Basic weighted average shares outstanding |
|
| 16,049,352 |
|
|
| 16,183,615 |
|
Basic earnings/(loss) per share/unit |
| $ | 0.16 |
|
| $ | (0.47 | ) |
|
| Three Months Ended | |||||||
($ in thousands, except per share data) |
| March 31, 2019 |
|
| March 31, 2018 |
|
| ||
Net increase in net assets resulting from operations |
| $ | 2,410 |
|
| $ | 2,025 |
|
|
Basic weighted average common shares outstanding |
|
| 16,049,352 |
|
|
| 16,049,352 |
|
|
Basic earnings per share |
| $ | 0.15 |
|
| $ | 0.13 |
|
|
8. Stockholders’ Equity
Distributions
The Company’s dividends and distributions are recorded on the ex-dividend date. The following table reflects the cash distributions declared on common stock for the ninethree months ended September 30, 2017March 31, 2019 and September 30, 2016:March 31, 2018:
Record Dates ($ in thousands except per share data) |
| Board Approval Date |
| Payment Date |
| Distribution Declared |
|
| Distribution Declared per Share |
| ||
Nine Months Ended September 30, 2017 |
|
|
|
|
|
|
|
|
|
| ||
September 8, 2017 |
| August 1, 2017 |
| September 22, 2017 |
| $ | 4,495 |
|
| $ | 0.28 |
|
June 9, 2017 |
| May 2, 2017 |
| June 23, 2017 |
|
| 4,492 |
|
|
| 0.28 |
|
March 23, 2017 |
| February 28, 2017 |
| March 30, 2017 |
|
| 4,495 |
|
|
| 0.28 |
|
|
|
|
|
|
| $ | 13,482 |
|
| $ | 0.84 |
|
Record Dates ($ in thousands except per share data) |
| Date Declared |
| Payment Date |
| Distribution Declared |
|
| Distribution Declared per Share |
| ||
Three Months Ended March 31, 2019 |
|
|
|
|
|
|
|
|
|
| ||
March 22, 2019 |
| March 5, 2019 |
| March 29, 2019 |
|
| 3,691 |
|
|
| 0.23 |
|
|
|
|
|
|
| $ | 3,691 |
|
| $ | 0.23 |
|
Record Dates ($ in thousands except per share data) |
| Board Approval Date |
| Payment Date |
| Distribution Declared |
|
| Distribution Declared per Share |
| ||
Nine Months Ended September 30, 2016 |
|
|
|
|
|
|
|
|
|
| ||
September 9, 2016 |
| August 2, 2016 |
| September 23, 2016 |
| $ | 5,617 |
|
| $ | 0.35 |
|
June 10, 2016 |
| May 2, 2016 |
| June 24, 2016 |
|
| 5,655 |
|
|
| 0.35 |
|
March 8, 2016 |
| February 24, 2016 |
| March 28, 2016 |
|
| 5,685 |
|
|
| 0.35 |
|
|
|
|
|
|
| $ | 16,957 |
|
| $ | 1.05 |
|
Record Dates ($ in thousands except per share data) |
| Date Declared |
| Payment Date |
| Distribution Declared |
|
| Distribution Declared per Share |
| ||
Three Months Ended March 31, 2018 |
|
|
|
|
|
|
|
|
|
| ||
March 23, 2018 |
| February 28, 2018 |
| March 29, 2018 |
|
| 4,494 |
|
|
| 0.28 |
|
|
|
|
|
|
| $ | 4,494 |
|
| $ | 0.28 |
|
Dividends from net investment income and distributions from net realized capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those amounts determined in accordance with U.S. GAAP.
Dividend Reinvestment Plan
The Company adopted a dividend reinvestment plan that provides for reinvestment of our dividends and other distributions on behalf of our stockholders, unless a stockholder elects to receive cash as provided below. As a result, if the Board declares a cash dividend or other distribution, then our stockholders who have not ‘opted out’ of our dividend reinvestment plan will have their cash distribution automatically reinvested in additional shares of our common stock, which may be newly issued shares or shares acquired by American Stock Transfer & Trust Company, LLC (“AST”), the transfer and dividend paying agent and registrar to GARS, through open-market purchases, rather than receiving the cash distribution. As of September 30, 2017March 31, 2019 and December 31, 2016,2018, no new shares were issued pursuant to the dividend reinvestment plan.
44
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
8. Stockholders’ Equity – (continued)
No action is required on the part of a registered stockholder to have its cash dividend or other distribution reinvested in shares of our common stock. A registered stockholder may elect to receive an entire distribution in cash by notifying AST in writing so that such notice is received by AST no later than the record date for distributions to stockholders.
Those stockholders whose shares are held by a broker or other financial intermediary may receive dividends and other distributions in cash by notifying their broker or other financial intermediary of their election.
Stock Repurchase Program45
Garrison Capital Inc. and Subsidiaries
On October 5, 2015, GARS adopted a share repurchase plan that provided for repurchase of upNotes to $10.0 million of its common stock at prices below GARS' net asset value per share as reported in its most recent financial statements. Under the repurchase program, GARS could, but was not obligated to, repurchase shares of its outstanding common stock in the open market or in privately negotiated transactions from time to time. Repurchases by GARS complied with the requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and any applicable requirements of the 1940 Act. The repurchase program terminated in accordance with its terms on October 5, 2016. GARS' net asset value per share was increased by approximately $0.10 as a result of the aggregate share repurchases.Consolidated Financial Statements (unaudited)
March 31, 2019
|
| Nine Months Ended |
|
| Year Ended |
| ||
($ in thousands, except per share data) |
| September 30, 2017 |
|
| December 31, 2016 |
| ||
Dollar amount repurchased |
| $ | - |
|
| $ | 5,041 |
|
Shares repurchased |
|
| - |
|
|
| 458,242 |
|
Average price per share |
| $ | - |
|
| $ | 11.00 |
|
Weighted average discount to net asset value |
|
| - |
|
|
| (20.14 | )% |
9. Commitments and Contingencies
The Company had outstanding commitments to fund investments totaling $5.4$5.2 million and $4.8$7.6 million under various undrawn revolvers and other credit facilities as of September 30, 2017March 31, 2019 and December 31, 2016,2018, respectively.
In the ordinary course of business, the Company may be named as a defendant or a plaintiff in various lawsuits and other legal proceedings. Such proceedings include actions brought against the Company and others with respect to transactions to which the Company may have been a party. The outcomes of such lawsuits are uncertain and, based on these lawsuits, the values of the investments to which they relate could decrease. Management does not believe that as a result of litigation there would be any material impact on the consolidated financial condition of the Company. The Company has had no outstanding litigation proceedings brought against it since the commencement of operationsinitial public offering on December 17, 2010.April 2, 2013.
In the normal course of business, the Company enters into certain contracts that provide a variety of indemnifications. The Company’s maximum exposure under these indemnifications is unknown. However, no liabilities have arisen under these indemnifications in the past and, while there can be no assurances in this regard, there is no expectation that any will occur in the future. Therefore, the Company does not consider it necessary to record a liability for any indemnifications under U.S. GAAP.
45
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
10. Transactions with Non-control/Non-Control/Affiliate Investments
As required by the 1940 Act, investments are classified by level of control. “Control Investments” are those investments in those companies that the Company iswe have been deemed to control as defined in the 1940 Act. According to the 1940 Act, control is defined as having an ownership interest of more than 25% of a company’s voting securities. “Affiliate Investments”, according to the 1940 Act, are those investments in thoseaffiliate companies that are affiliated companies, as defined in the 1940 Act, other thannot Control Investments.Investments, but are investments that we have an ownership interest of 5% or more of a company’s voting securities. “Non-Control/Non-Affiliate Investments” are those investments that are neither Control Investments nor Affiliate Investments. Please refer the our consolidated schedule of investments for the disaggregated list of our investments including the type / classification of the investment, the principal and cost amounts, details of the investment’s interest rate and the maturity date.
The following table shows the Non-Control/Affiliate activity for the three months ended March 31, 2019.
|
| Three Months Ended March 31, 2019 |
| |||||||||||||||||||||||||||||||||
Portfolio Company ($ in thousands) |
| Fair value at December 31, 2018 |
|
| Purchases (cost) |
|
| Sales (cost) |
|
| Transfer in/ (out) (cost) |
|
| Net unrealized losses |
|
| Fair value at March 31, 2019 |
|
| Net realized losses |
|
| Interest and fee income |
|
| Dividend income |
| |||||||||
Non-control/affiliate investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cochon – MWS Holdings LLC (fka Rooster Energy Ltd.) |
| $ | 1,630 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | (120 | ) |
| $ | 1,510 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
Total non-control/affiliate investments |
| $ | 1,630 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | (120 | ) |
| $ | 1,510 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
The following table shows the Non-Control/Affiliate activity for the three months ended March 31, 2018.
| Nine Months Ended September 30, 2017 |
| |||||||||||||||||||||||||||||||
Portfolio Company | Fair value at December 31, 2016 |
| Purchases (cost) |
| Redemptions (cost) |
| Sales (cost) |
| Transfer in/ (out) (cost) |
| Discount accretion |
| Net unrealized losses |
| Fair value at September 30, 2017 |
| Net realized gains / (losses) |
| Interest and fee income |
| Dividend income |
| |||||||||||
Non-control affiliate investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Speed Commerce Operating Company LLC⁽¹⁾ | $ | 3,103 |
| $ | 148 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | (3,251 | ) | $ | — |
| $ | — |
| $ | 148 |
| $ | — |
|
Speed Commerce Investment Partners LLC |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
Total non-control affiliate investments | $ | 3,103 |
| $ | 148 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | (3,251 | ) | $ | — |
| $ | — |
| $ | 148 |
| $ | — |
|
|
| Three Months Ended March 31, 2018 |
| |||||||||||||||||||||||||||||||||
Portfolio Company ($ in thousands) |
| Fair value at December 31, 2017 |
|
| Purchases (cost) |
|
| Sales (cost) |
|
| Transfer in/ (out) (cost) |
|
| Net unrealized losses |
|
| Fair value at March 31, 2018 |
|
| Net realized losses |
|
| Interest and fee income |
|
| Dividend income |
| |||||||||
Non-control/affiliate investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cochon – MWS Holdings LLC (fka Rooster Energy Ltd.) |
| $ | — |
|
| $ | 4,112 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 4,112 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
Total non-control/affiliate investments |
| $ | — |
|
| $ | 4,112 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 4,112 |
|
| $ | — |
|
| $ |
|
|
| $ | — |
|
46
Garrison Capital Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
March 31, 2019
|
|
11. Subsequent Events
There have beenManagement has evaluated subsequent events through the date of issuance of these financial statements. Other than the items discussed below, the Company has concluded that there is no events since September 30, 2017 that require recognitionimpact requiring adjustment or disclosure in the consolidated financial statements.
On May 6, 2019, the Company entered into the sixth amended and restated investment advisory agreement (the “Sixth Amended and Restated Investment Advisory Agreement”) with the Investment Adviser. The Sixth Amended and Restated Investment Advisory Agreement, which is effective as of January 1, 2019, (i) reduced the “catch up” provision associated with the income-based component of the incentive fee from 100.00% to 50.00% (which had the effect of increasing the pre-incentive fee net investment income as a percent of net asset value required for the Investment Adviser to earn the full 20% income based incentive fee from 2.1875% per quarter (8.75% annualized) to 2.9167% per quarter (11.67% annualized) and (ii) restricted the payment of deferred incentive fees in excess of the sum of cumulative realized capital gains, cumulative realized capital losses, cumulative unrealized capital depreciation and cumulative unrealized capital appreciation during the applicable Incentive Fee Look-back Period.
Item 2: Management’s Discussion and Analysis ofof Financial Condition and Results of Operations
The information contained in this section should be read in conjunction with our consolidated financial statements and related notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. References to the “Company,” "we," "us," "our,” “GARS” and "Garrison Capital" refer to Garrison Capital Inc. and its consolidated subsidiaries.
Forward-Looking Statements
Some of the statements in this quarterly reportQuarterly Report on Form 10-Q constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this Quarterly Report on Form 10-Q involve risks and uncertainties, including statements as to:
our future operating results;
changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, which could result in changes to the value of our assets;
our business prospects and the prospects of our current and prospective portfolio companies;
the impact of investments that we expect to make;
the impact of increased competition;
our contractual arrangements and relationships with third parties;
�� | our contractual arrangements and relationships with third parties; |
the dependence of our future success on the general economy, including general economic trends, and its impact on the industries in which we invest;
the ability of our prospective portfolio companies to achieve their objectives;
the relative and absolute performance of Garrison Capital Advisers LLC, or theour Investment Adviser, including in identifying suitable investments for us;
our expected financings and investments;
the adequacy of our cash resources and working capital;
our ability to make distributions to our stockholders;
the effects of applicable legislation and regulations and changes thereto;
the timing of cash flows, if any, from the operations of our prospective portfolio companies; and
the impact of future acquisitions and divestitures.
We use words such as “anticipate,” “believe,” “expect,” “intend,” “may,” “might,” “will,” “should,” “could,” “can,” “would,” “believe,” “estimate,” “anticipate,” “predict,” “potential” and similar words to identify forward-looking statements. Our actual results could differ materially from those projected in the forward-looking statements for any reason, including the factors set forth as “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q.
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 report, and we assume no obligation to update any such forward-looking statements. Actual results could differ materially from those anticipated in our forward-looking statements and future results could differ materially from historical performance. 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.
You should understand that, under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to statements made in connection with this Quarterly Report on Form 10-Q or any periodic reports we file under the Exchange Act.
Overview
We are an externally managed, non-diversified, closed-end management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, for tax purposes, we have elected to be treated as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code, and intend to qualify annually for such treatment. Our shares are currently listed on The NASDAQNasdaq Global Select Market under the symbol “GARS”.
Our investment objective is to generate current income and capital appreciation through direct loans and debt investments in U.S. based middle-market companies. Our loans and debt investments are primarily first lien senior secured loans (including "unitranche" loans, which are loans that combine the characteristics of both senior and subordinated debt, generally in a first lien position). We also may, to a lesser extent, invest in subordinated and mezzanine debt unsecured consumer loans and equity investments. Our goal is to generate attractive risk-adjusted returns by assembling a broad portfolio of investments.
Our investment activities are managed by our Investment Adviser. The six member investment committee of our Investment Adviser is comprised of Joseph Tansey, Brian Chase, Mitch Drucker, Susan George, Robert Chimenti, Joshua Brandt, Allison Adornato and Joshua Brandt.Daniel Hahn. Our Investment Adviser is responsible for sourcing potential investments, conducting research and diligence on prospective investments and equity sponsors, analyzing investment opportunities, structuring our investments and monitoring our investments and portfolio companies on an ongoing basis. Under an investment advisory agreement with the Investment Adviser, or the Investment Advisory Agreement, we pay a management fee and an incentive fee to our Investment Adviser for its services. Garrison Capital Administrator LLC, or the Administrator, provides certain administrative services and facilities necessary for us to operate, including office facilities and equipment and clerical, bookkeeping and record-keeping services, pursuant to an administration agreement, or the Administration Agreement. The Administrator oversees our financial reporting and prepares our reports to stockholders and reports required to be filed with the SEC.
The Administrator also manages the determination and publication of our net asset value, the preparation and filing of our tax returns and generally monitors the payment of our expenses and the performance of administrative and professional services rendered to us by others. The Administrator may retain third parties to assist in providing administrative services to us. To the extent that the Administrator outsources any of its functions, we pay the fees associated with such functions on a direct basis without any profit to the Administrator.
As of September 30, 2017, we held investments in 61 portfolio companies with a fair value of $359.1 million, including investments in 43 portfolio companies held through the 2016-2 CLO. The investments held by the 2016-2 CLO as of September 30, 2017 consisted of senior secured loans fair valued at $262.4 million and related indebtedness of $164.5 million. The investments held by the 2016-2 CLO (held at fair value), together with cash and other assets held by the CLO, equaled approximately $278.5 million as of September 30, 2017. As of September 30, 2017, our portfolio had an average investment size of approximately $5.7 million, a weighted average yield on debt investments of 10.4% and a weighted average contractual maturity of 36 months. Weighted average yield is calculated based on the fair value of the investments and interest expected to be received using the current rate of interest at the balance sheet date to maturity, excluding the effects of future scheduled principal amortizations.
As of December 31, 2016, we held investments in 57 portfolio companies with a fair value of $376.7 million, including investments in 41 portfolio companies held through the 2016-2 CLO. The investments held by the 2016-2 CLO as of December 31, 2016 consisted of senior secured loans fair valued at $260.2 million and related indebtedness of $164.3 million. As of that date, the investments held by the 2016-2 CLO (held at fair value), together with cash and other assets held by the 2016-2 CLO, equaled approximately $275.6 million. As of December 31, 2016, our portfolio had an average investment size of approximately $6.2 million, a weighted average yield on debt investments of 10.9% and a weighted average contractual maturity of 37 months.
We generate revenue in the form of interest earned on the debt investments that we hold and capital gains and distributions, if any, on the equity interests or warrants that we may acquire in portfolio companies. Our debt investments, whether in the form of senior secured, unitranche or mezzanine loans, typically have a term of one to six years and bear interest at a fixed or floating rate. Interest is generally payable quarterly or semiannually, and in some cases, loans may have a payment-in-kind feature. The principal amount of the debt securities and any accrued but unpaid interest will generally become due at the maturity date. In addition, we may generate revenue in the form of loan origination, prepayment, facility, commitment, forbearance and amendment fees. We also may receive structuring or diligence fees, consulting fees and possibly fees for providing managerial assistance. Origination fees received by us are initially deferred and reduced from the cost basis of the investment and subsequently accreted into interest income over the remaining stated term of the loan.
Upon the prepayment of a loan or debt security, any unamortized loan origination fees are recorded as interest income. We record prepayment premiums on loans and debt securities as interest income when we receive such amounts. Facility fees, sometimes referred to as asset management fees, are accrued as a percentage periodic fee on the base amount (either the funded facility amount or the committed principal amount). Commitment fees are based upon the undrawn portion committed by us and are accrued over the life of the loan.
Amendment and forbearance fees are paid in connection with loan amendments and waivers and are recognized upon completion of the amendments or waivers, generally when such fees are receivable. Any such fees are recorded and classified as other income and included in investment income on the consolidated statements of operations. As these fees are paid and recognized in connection with specific loan amendments or forbearance, they are typically non-recurring in nature.
Expenses
Our primary operating expenses include the payment of (1) the management fee and incentive fee to the Investment Adviser under the Investment Advisory Agreement; (2) the allocable portion of overhead to the Administrator under the Administration Agreement; (3) the interest expense on our outstanding debt, if any; and (4) our other operating costs, as detailed below. We bear all other costs and expenses of our operations and transactions, including:
our organization;
calculating our net asset value and net asset value per share (including the cost and expenses of any independent valuation firms);
fees and expenses, including travel expenses, incurred by the Investment Adviser or payable to third parties in performing due diligence on prospective portfolio companies, monitoring our investments and, if necessary, enforcing our rights;
offerings of our common stock and other securities;
distributions on our shares;
transfer agent and custody fees and expenses;
amounts payable to third parties relating to, or associated with, evaluating, making and disposing of investments;
brokerage fees and commissions;
registration fees;
listing fees;
taxes;
independent director fees and expenses;
|
|
the costs of any reports, proxy statements or other notices to our stockholders, including printing costs;
costs of holding stockholder meetings;
our fidelity bond;
directors and officers/errors and omissions liability insurance and any other insurance premiums;
litigation, indemnification and other non-recurring or extraordinary expenses;
direct costs and expenses of administration and operation, including audit and legal costs;
fees and expenses associated with marketing efforts;
dues, fees and charges of any trade association of which we are a member; and
all other expenses reasonably incurred by us or the Administrator in connection with administering our business, including rent and our allocable portion of the costs and expenses of our chief compliance officer, chief financial officer and their respective staffs.
During periods of asset growth, we expect our general and administrative expenses to be relatively stable or decline as a percentage of total assets and increase during periods of asset declines.
Recent Developments
On May 6, 2019, the Company entered into the sixth amended and restated investment advisory agreement (the “Sixth Amended and Restated Investment Advisory Agreement”) with the Investment Adviser. The Sixth Amended and Restated Investment Advisory Agreement, which is effective as of January 1, 2019, (i) reduced the “catch up” provision associated with the income-based component of the incentive fee from 100.00% to 50.00% (which had the effect of increasing the pre-incentive fee net investment income as a percentage of net asset value required for the Investment Adviser to earn the full 20% income-based incentive fee from 2.1875% per quarter (8.75% annualized) to 2.9167% per quarter (11.67% annualized) and (ii) restricted the payment of deferred incentive fees in excess of the sum of cumulative realized capital gains, cumulative realized capital losses, cumulative unrealized capital depreciation and cumulative unrealized capital appreciation during the applicable look-back period for the incentive fee cap and deferral mechanism.
On November 1, 2017 theApril 30, 2019, our board of directors, or the Board, declared a distribution in the amount of $4.5$3.7 million, or $0.28$0.23 a share, which will be paid on December 22, 2017June 21, 2019 to stockholders of record as of December 8, 2017.June 7, 2019.
In general, we generate revenue in the form of interest earned on the debt investments that we hold and capital gains and distributions, if any, to a lesser extent, on the equity interests or warrants held in portfolio companies. Our debt investments, whether in the form of senior secured, unitranche or mezzanine loans, typically have a term of up to six that ranges from three to seven years and may generally bears interest at a fixed or floating rate. Interest is generally payable monthly or quarterly, and in some cases, loans may have contain a payment-in-kind (“PIK”) feature.
We also earn fee income which is generally comprised of amendment, forbearance, prepayment, syndication, structuring, diligence, consulting and possible fees for providing managerial assistance to a portfolio company. Amendment and forbearance fees are generally received in connection with loan amendments or waivers and are recognized upon completion of the amendments or waivers, generally when such fees are receivable. We record prepayment premiums on loans and debt securities into income when we receive such amounts.
In addition, we may receive structuring, diligence fees, consulting and managerial assistance fees for periodically providing services to a portfolio or third party company. These fees are recognized when such services have been completed and the fees are generally receivable. Any such fee income received is recorded and classified as other income and included in investment income on the consolidated statements of operations. As these fees are generally paid and recognized in connection with specific loan event or the performance of a service, there may be significant fluctuations from period to period in the amount and size of such fee and they are typically non-recurring in nature.
In addition, the Company may receive periodic dividends or distributions from our preferred or equity investments. Such amounts are recorded and classified as other income. Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.
Expenses
Our primary operating expenses include the payment of (1) the interest expense on our outstanding debt; (2) the management and incentive fees to the Investment Adviser under the Investment Advisory Agreement, if applicable; (3) the allocable portion of overhead to the Administrator under the Administration Agreement; and (4) our other operating costs, as detailed below. We bear all other costs and expenses of our operations and transactions, including:
our organization;
calculating our net asset value and net asset value per share (including the cost and expenses of any independent valuation firms);
fees and expenses, including travel expenses, incurred by the Investment Adviser or payable to third parties in performing due diligence on prospective portfolio companies, monitoring our investments and, if necessary, enforcing our rights;
offerings of our common stock and other securities;
distributions on our shares;
transfer agent and custody fees and expenses;
amounts payable to third parties relating to, or associated with, evaluating, making and disposing of investments;
brokerage fees and commissions;
registration fees;
listing fees;
taxes;
costs associated with our reporting and compliance obligations under the 1940 Act and applicable U.S. federal and state securities laws;
the costs of any reports, proxy statements or other notices to our stockholders, including printing costs;
costs of holding stockholder meetings;
our fidelity bond;
directors and officers/errors and omissions liability insurance and any other insurance premiums;
litigation, indemnification and other non-recurring or extraordinary expenses;
direct costs and expenses of administration and operation, including audit and legal costs;
fees and expenses associated with marketing efforts;
dues, fees and charges of any trade association of which we are a member; and
all other expenses reasonably incurred by us or the Administrator in connection with administering our business, including rent and our allocable portion of the costs and expenses of our chief compliance officer, chief financial officer and their respective staffs.
Consolidated Results of Operations
The results of operations described below may not be indicative of the results we report in future periods. Net income can vary substantially from period to period for various reasons, including the recognition of realized gains and losses and unrealized gains and losses. As a result, quarterly comparisons of net investment income may not be meaningful.
Consolidated operating results for the three and nine months ended September 30, 2017March 31, 2019 and September 30, 2016March 31, 2018 are as follows:
| Three Months Ended |
|
|
|
|
|
| Nine Months Ended |
|
|
|
|
|
| Three Months Ended |
|
|
| |||||||||||||||||
($ in thousands, except per share data) | September 30, 2017 |
|
| September 30, 2016 |
|
| Three Months Variance |
|
| September 30, 2017 |
|
| September 30, 2016 |
|
| Nine Months Variance |
|
| March 31, 2019 |
|
| March 31, 2018 |
|
| Three Months Variance |
| |||||||||
Net investment income | $ | 4,185 |
|
| $ | 2,537 |
|
| $ | 1,648 |
|
| $ | 12,959 |
|
| $ | 14,152 |
|
| $ | (1,193 | ) | ||||||||||||
Total investment income |
| 8,903 |
|
|
| 11,105 |
|
|
| (2,202 | ) |
|
| 26,931 |
|
|
| 33,298 |
|
|
| (6,367 | ) |
| $ | 10,229 |
|
| $ | 10,221 |
|
| $ | 8 |
|
Total expenses |
| 4,718 |
|
|
| 8,568 |
|
|
| (3,850 | ) |
|
| 13,972 |
|
|
| 19,146 |
|
|
| (5,174 | ) |
|
| 6,982 |
|
|
| 5,307 |
|
|
| 1,675 |
|
Net realized (loss)/gain on investments |
| (30 | ) |
|
| (11,182 | ) |
|
| 11,152 |
|
|
| 573 |
|
|
| (29,592 | ) |
|
| 30,165 |
| ||||||||||||
Net investment income |
|
| 3,247 |
|
|
| 4,914 |
|
|
| (1,667 | ) | |||||||||||||||||||||||
Net realized loss on investments |
|
| (7,133 | ) |
|
| (577 | ) |
|
| (6,556 | ) | |||||||||||||||||||||||
Net change in unrealized gain/(loss) on investments |
| 267 |
|
|
| 7,557 |
|
|
| (7,290 | ) |
|
| (11,023 | ) |
|
| 7,776 |
|
|
| (18,799 | ) |
|
| 6,296 |
|
|
| (2,312 | ) |
|
| 8,608 |
|
Net increase/(decrease) in net assets resulting from operations |
| 4,422 |
|
|
| (1,088 | ) |
|
| 5,510 |
|
|
| 2,509 |
|
|
| (7,664 | ) |
|
| 10,173 |
| ||||||||||||
Net increase in net assets resulting from operations |
|
| 2,410 |
|
|
| 2,025 |
|
|
| 385 |
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income per share |
| 0.26 |
|
|
| 0.16 |
|
|
| 0.10 |
|
|
| 0.81 |
|
|
| 0.87 |
|
|
| (0.06 | ) | ||||||||||||
Net realized/unrealized gain/(loss) from investments per share |
| 0.01 |
|
|
| (0.23 | ) |
|
| 0.24 |
|
|
| (0.65 | ) |
|
| (1.34 | ) |
|
| 0.69 |
| ||||||||||||
Net earnings/(loss) per share |
| 0.27 |
|
|
| (0.07 | ) |
|
| 0.34 |
|
|
| 0.16 |
|
|
| (0.47 | ) |
|
| 0.63 |
| ||||||||||||
Net investment income per common share |
|
| 0.20 |
|
|
| 0.31 |
|
|
| (0.11 | ) | |||||||||||||||||||||||
Net realized/unrealized loss on investments per share |
|
| (0.05 | ) |
|
| (0.18 | ) |
|
| 0.13 |
| |||||||||||||||||||||||
Basic earnings per share |
|
| 0.15 |
|
|
| 0.13 |
|
|
| 0.02 |
| |||||||||||||||||||||||
Dividends and distributions declared per common share |
|
| 0.23 |
|
|
| 0.28 |
|
|
| (0.05 | ) | |||||||||||||||||||||||
Net asset value per share |
| 11.74 |
|
|
| 12.53 |
|
|
| (0.79 | ) |
|
| 11.74 |
|
|
| 12.53 |
|
|
| (0.79 | ) |
|
| 10.44 |
|
|
| 11.54 |
|
|
| (1.10 | ) |
Net investment income for the three and nine months ended September 30, 2017March 31, 2019 and March 31, 2018 was $4.2$3.2 million and $13.0 million, respectively. Net investment income for the three and nine months ended September 30, 2016 was $2.5 million and $14.2$4.9 million, respectively. As described below under “Investment Income” and “Expenses”, net investment income increaseddecreased by $1.6$1.7 million for the three months ended September 30, 2017March 31, 2019 from the three months ended September 30, 2016, and decreased by $1.2 million for the nine months ended September 30, 2017 from the nine months ended September 30, 2016, respectively.March 31, 2018.
Investment income for both the three and nine months ended September 30, 2017March 31, 2019 and March 31, 2018 was $8.9 million and $26.9 million, respectively. Investment$10.2 million. Interest income for the three and nine months ended September 30, 2016 was $11.1 million and $33.3 million, respectively. Investment income decreasedincreased by $2.2$0.4 million for the three months ended September 30, 2017March 31, 2019 from the three months ended September 30, 2016 due toMarch 31, 2018 largely driven by an increase in the average portfolio size which was partially offset by a decrease in interest income and other income in the amounts of $2.0 million and $0.2 million, respectively.weighted–average yield on the portfolio. The decreaseincrease in interest income was largely drivenoffset by our non-performing assets and lower investment yieldsa of $0.4 million decrease in other income earned during the three months ended September 30, 2017March 31, 2019 compared to the three months ended March 31, 2018. This decrease was due to lower prepayment and amendment fees earned during the three months ended March 31, 2019.
Expenses
Total expenses for the three months ended March 31, 2019 and March 31, 2018 were $6.9 million and $5.3 million, respectively.
The following table summarizes our expenses for the three months ended March 31, 2019 and March 31, 2018:
| Three Months Ended | Three Months |
| ||||||||
($ in thousands) | March 31, 2019 |
|
| March 31, 2018 |
|
| Variance |
| |||
Interest expense | $ | 3,727 |
|
| $ | 2,554 |
|
| $ | 1,173 |
|
Management fee |
| 1,623 |
|
|
| 1,492 |
|
|
| 131 |
|
Incentive fees |
| 289 |
|
|
| — |
|
|
| 289 |
|
Professional fees |
| 398 |
|
|
| 294 |
|
|
| 104 |
|
Directors' fees |
| 82 |
|
|
| 77 |
|
|
| 5 |
|
Administrator expenses |
| 371 |
|
|
| 298 |
|
|
| 73 |
|
Other expenses |
| 492 |
|
|
| 592 |
|
|
| (100 | ) |
Total expenses | $ | 6,982 |
|
| $ | 5,307 |
|
| $ | 1,675 |
|
Interest expense increased $1.2 million for the three months ended March 31, 2019 from the three months ended March 31, 2018 due to higher debt balances resulting from the upsizing our collateralized loan obligation vehicle in the fourth quarter of 2018.
Management fees increased by $0.1 million for the three months ended March 31, 2019 from the three months ended March 31, 2018, primarily due to higher average gross assets during the three months ended March 31, 2019 as compared to the three months ended September 30, 2016. The decrease in other income was primarily drivenMarch 31, 2018.
Incentive fees increased by fewer prepayment and amendment fees recognized during$0.3 million for the three months ended September 30, 2017 as compared toMarch 31, 2019 from the three months ended September 30, 2016. Investment income decreased by $6.4 million for the nine months ended September 30, 2017 from the nine months ended September 30, 2016 due toMarch 31, 2018, as a decrease in interest income in the amountresult of $6.7 million offset byincurring an increase in other income of $0.3 million. The decrease in interest income was largely driven by our non-performing assets and lower investment yields during the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The increase in other income was primarily driven by prepayment fees recognized during the nine months ended September 30, 2017.
Expenses
Total expensesincentive fee expense for the three and nine months ended September 30, 2017 were $4.7 million and $14.0 million, respectively. Total expensesMarch 31, 2019 whereas no such expense was incurred for the three and nine months ended September 30, 2016 were $8.6 millionMarch 31, 2018 as a result of being subject to the deferral under the Incentive Fee Cap and $19.1 million, respectively.Deferral Mechanism.
The following table summarizes our expenses, excluding the loss on refinancing of the secured notes, for the three and nine months ended September 30, 2017and September 30, 2016:
| Three Months Ended |
|
|
|
|
|
| Nine Months Ended |
|
|
|
|
| ||||||||||
($ in thousands) | September 30, 2017 |
|
| September 30, 2016 |
|
| Three Months Variance |
|
| September 30, 2017 |
|
| September 30, 2016 |
|
| Nine Months Variance |
| ||||||
Interest Expense | $ | 2,220 |
|
| $ | 3,665 |
|
| $ | (1,445 | ) |
| $ | 6,483 |
|
| $ | 7,751 |
|
| $ | (1,268 | ) |
Management fee (net of waivers) |
| 1,374 |
|
|
| 1,805 |
|
|
| (431 | ) |
|
| 4,113 |
|
|
| 5,479 |
|
|
| (1,366 | ) |
Professional fees |
| 255 |
|
|
| 357 |
|
|
| (102 | ) |
|
| 596 |
|
|
| 1,079 |
|
|
| (483 | ) |
Directors' fees |
| 77 |
|
|
| 91 |
|
|
| (14 | ) |
|
| 236 |
|
|
| 304 |
|
|
| (68 | ) |
Administrator expenses |
| 305 |
|
|
| 311 |
|
|
| (6 | ) |
|
| 893 |
|
|
| 1,025 |
|
|
| (132 | ) |
Other expenses |
| 487 |
|
|
| 511 |
|
|
| (24 | ) |
|
| 1,651 |
|
|
| 1,680 |
|
|
| (29 | ) |
Total expenses | $ | 4,718 |
|
| $ | 6,740 |
|
| $ | (2,022 | ) |
| $ | 13,972 |
|
| $ | 17,318 |
|
| $ | (3,346 | ) |
Interest expense decreased $1.4 million and $1.3Professional fees increased by $0.1 million for the three and nine months ended September 30, 2017, respectively,March 31, 2019 from the three and nine months ended September 30, 2016,March 31, 2018, primarily due to the acceleration of deferred financing costs, as required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 470, Debt, in association with the refinancing of the Garrison Funding 2013-2 Ltd. collateralized loan obligation. Refer to Note 4 of our consolidated financial statements for additional disclosure regarding the refinancing.
Management fees decreased by $0.4 million and $1.4 million for the three and nine months ended September 30, 2017, respectively, from the three and nine months ended September 30, 2016, primarily due to a reduction in our management fee rate and the irrevocable waiver of certain fees during the nine months ended September 30, 2017. Refer to Note 5 of our consolidated financial statements for additional disclosures regarding fee waivers.
Professional fees decreased by $0.1 million and $0.5 million for the three and nine months ended September 30, 2017, respectively, from the three and nine months ended September 30, 2016, primarily driven by lower consulting and legalhigher audit related fees.
Administrator feesOther expenses decreased by $0.1 million for the ninethree months ended September 30, 2017March 31, 2019 from the ninethree months ended September 30, 2016,March 31, 2018, primarily due to lower staffing overhead.transaction-related expenses incurred during the three months ended March 31, 2019.
Net Realized (Loss)/GainLoss on Investments
There were net losses on investments of $7.1 million and $0.6 million for the three months ended March 31, 2019 and 2018, respectively.
The net realized loss on investments for the three months ended March 31, 2019 was primarily comprised of a $6.9 million loss incurred upon the sale of our investment in Profusion Industries, LLC.
The net realized loss on investments for the three months ended March 31, 2018 was primarily driven by a $0.9 million loss in connection with the restructuring of our investment in Rooster Energy Ltd. This was offset by $0.3 million of realized gains from repayments and sales of other portfolio investments.
Net Change in Unrealized (Loss)/Gain on Investments
There were no material realized gains or losses forFor the three months ended September 30, 2017. We realized net gains of $0.6 million for the nine months ended September 30, 2017 and $11.2 million and $29.6 million of net realized losses for the three and nine months ended September 30, 2016, respectively.
The net realized losses for the three months ended September 30, 2016 were primarily driven by a $11.1 million loss on BFN Operations LLC and $0.3 million of realized losses in the GLC Trust 2013-2’s consumer loan portfolio. This was partially offset by $0.2 million of gains from full repayments of Connexity Inc., HC Cable OpCo, LLC and Vistronix, LLC.
Net realized losses for the nine months ended September 30, 2016 were primarily driven by a $12.6 million loss on Speed Commerce Inc., a $11.1 million loss on BFN Operations LLC, a $5.8 million loss on Forest Park Medical Center at Fort Worth and $1.0 million of realized losses in the GLC Trust 2013-2’s consumer loan portfolio. This was partially offset by a $0.3 million gain on Ellman International, Inc. and $0.6 million of gains from the partial and full repayment and sales of other portfolio investments.
For the three and nine months ended September 30, 2017,March 31, 2019, the net change in unrealized gain andon investments was $6.3 million as compared to the net change in unrealized loss on investments was $0.3of $2.3 million and $11.0 million, respectively.
for three months ended March 31, 2018.
The net change in unrealized gain fromon investments for the three months ended September 30, 2017March 31, 2019 of $0.3$6.3 million was primarily comprised of the $6.9 million reversal of a previous recorded unrealized loss as a result of the sale of our investment in Profusion Industries, LLC and $0.4 million of net positive market-related adjustments driven primarilyby the rebound in market spreads during the three months ended March 31, 2019. These unrealized gains were offset by a positive fair value adjustment$1.0 million negative credit-related mark down on our investment in Sprint IndustrialEmtec Global Services Holdings, of $0.5 millionLLC and the reversal of an unrealized loss of $0.3 million on our investment in Raymond Express International. This was offset by a negative fair value adjustment on our preferred equity investment in Prosper Marketplace of $0.6 million.
Confluence Outdoors, LLC.
The net change in unrealized loss for the ninethree months ended September 30, 2017 of $11.0 millionMarch 31, 2018 was driven primarily by $4.0 million of negative fair valuecredit related adjustments on our investments in Walnut Hill Physicians Hospital, Speed Commerce Operating Company, Badlands Production Company and Prosper Marketplace investments in the amounts of $4.3 million, $3.3 million, $2.7 million and $1.4 million, respectively. These fair value adjustments were the result of decreases in our expected recoveries on these investments and were offset by an aggregate $0.7 million of positive fair value adjustments across our remaining portfolio.
For the three and nine months ended September 30, 2016, the net change in unrealized gain on investments was $7.6 million and $7.8 million, respectively.
The net change in unrealized gain for the three months ended September 30, 2016 was primarily driven by the reversal of prior period unrealized losses on BFN Operations LLC of $11.1 million. In addition, we recognized positive fair value adjustments of $0.9 million on our syndicated credits and $0.3 million on Provo Craft Holdings,Profusion Industries, LLC. This was offset by $4.5a $0.9 million reversal of an unrealized loss in connection with the restructuring of our investment in Rooster Energy Ltd. and $0.8 million of aggregate negative credit-relatedpositive market-related fair value adjustments driven primarily by Badlands Productions Company, Forest Park Medical Center at San Antonio, Rooster Energy Inc. and SC Academy Holdings, Inc. and $0.2 million of negative market related markdowns on our preferred equity investment in Prosper Marketplace.
The net change in unrealized gain for the nine months ended September 30, 2016 was driven primarily by the reversal of prior period unrealized losses on the Speed Commerce, Inc. BFN Operations LLC and Forest park Medical Center at Fort Worth investments in the amounts of $9.8 million, $5.3 million and $1.8 million, respectively. This was offset by a $6.5 million of aggregate negative credit-related adjustments on our investments in Badlands Productions Company, Forest Park Medical Center at San Antonio, SC Academy Holdings, Inc. and Rooster Energy Inc., aggregate adjustments of $0.3 million on our investments in Badlands Production Company and Rooster Energy Inc. and a net $2.3 million of negative market-related adjustments. These market-related adjustments were primarily driven by our preferred equity investment in Prosper Marketplace and our syndicated loan credits.
investments.
Net Increase/(Decrease) in Net Assets Resulting from Operations
We had a net asset value per common share outstanding on September 30, 2017 of $11.74. We had a net asset value per common share outstanding onMarch 31, 2019 and December 31, 20162018 of $12.42.
$10.44 and $10.52, respectively.
Based on basic weighted average shares outstanding of 16,049,352, the net decreaseincrease in net assets from operations per share for the ninethree months ended September 30, 2017March 31, 2019 was $0.16.$0.15 per share. This decreaseincrease was primarily driven by net change ininvestment income of $0.21 per share offset by net realized and unrealized losses from investmentsof $0.05 per share incurred during the ninethree months ended September 30, 2017.
March 31, 2019.
Based on basic weighted average shares outstanding of 16,183,615,16,049,352, the net decreaseincrease in net assets from operations per share for the ninethree months ended September 30, 2016March 31, 2018 was $0.47.$0.13 per share. This increase was driven by net investment income of $0.31 per share offset by net realized and unrealized losses of $0.18 per share incurred during the three months ended March 31, 2018.
Liquidity and Capital Resources
As a business development company, we distribute substantially all of our net income to our stockholders and will have an ongoing need to raise additional capital for investment purposes. We generate cash primarily from offerings of our equity securities and the issuance of debt securities including the 2016-2 Notes, as described below, Garrison SBIC Debentures and any repayments of portfolio investments. In addition, our cash flows from operations, including interest earned from the temporary investment of cash in U.S. government securities and other high-quality debt investments that mature in one year or less also provide liquidity.
As of September 30, 2017 and December 31, 2016, we had cash of $14.7 million and $10.4 million, respectively. Also, as of September 30, 2017 and December 31, 2016, we had restricted cash of $14.6 million and $12.6 million, respectively.
In addition to proceeds from public and private offerings of our debt and equity securities from time to time and also utilize any repayments of portfolio investments as an ongoing source of cash. In addition, we have identified sevengenerate liquidity from our cash flows from operations.
As of March 31, 2019 and December 31, 2018, we had cash of $3.7 million and $6.2 million, respectively. Also, as of March 31, 2019 and December 31, 2018, we had restricted cash of $27.2 million and $39.5 million, respectively.
Our primary liquidity needs includes providing capital to middle market portfolio companies, with a total par value of $20.5 million and a fair value of $20.0 million which we view as transitory investments. Transitory investments are generally those investments that we view as an additional source of liquidity that we are abledistributing our earnings to sell in order to fund investments that fit our core investment strategy. These transitory investments are generally at the lower end of our target portfolio yield range.
Our primary use of funds from operations includes investments in portfolio companies, cash distributions to holders of our common stock, servicing interest and principal payments of interest on our various debt financing facilities and payments ofpaying the fees and other operating expenses we incur.incur as a publicly-traded, externally managed business development company. We believe that our existing cash and cash equivalents, available borrowings on our debt facilities and any cash received in the form of principal or interest payments from our transitoryinvestment portfolio as of September 30, 2017 willMarch 31, 2019 would be sufficient to fund our anticipated funding requirementsliquidity needs through at least September 30, 2018.March 31, 2020. In addition, we may, from time to time, amend or refinance our leverage facilities and borrowings, in order to, among other things, modify covenants or the interest rates payable and extend the reinvestment period or maturity date. However, our ability to access capital is subject to market conditions which may result in either capital not being available, or it may be available but only on unfavorable terms. To the extent we are not able to raise additional capital, or otherwise generate sufficient liquidity or are at or near target leverage ratios, we may receive smaller allocations, if any, on new investment opportunities under the Investment Adviser’s allocation policy.
On August 1, 2017March 5, 2019 the Board approved a distribution in the amount of $4.5$3.7 million, or $0.28$0.23 a share, which was paid on September 22, 2017March 29, 2019 to stockholders of record as of September 8, 2017.
March 22, 2019.
During the ninethree months ended September 30, 2017,March 31, 2019, cash and restricted cash decreased by $14.8 million as a result of net cash used in operating activities of $43.6 million, offset by net cash provided by financing activities in the amount of $28.8 million.
During the three months ended March 31, 2019, cash used in operating activities was mainly driven by the purchase of new investments totaling $57.2 million and the payment for investments that were previously purchased but had not yet settled of $19.2 million. These were offset by repayments and sales of investments in the amount of $30.0 million. Net cash provided by financing activities primarily came from resulted from the receipt of net borrowing proceeds from the senior secured revolving notes under our $420.0 million collateralized loan obligation that closed on October 18, 2018, or the 2018-2 CLO, in the amount of $32.5 million, offset by $3.7 million of cash distributions paid to our stockholders.
During the three months ended March 31, 2018, cash and restricted cash increased by $4.3$1.1 million as a result of net cash provided by operating activities of $22.0$3.6 million, offset by net cash used in financing activities in the amount of $17.7$2.5 million.
During the ninethree months ended September 30, 2017,March 31, 2018, cash provided by operating activities resulted mainly from net investment income in the amount of $13.0 millionrepayments and the net repaymentssales of investments in the amount of $8.1$36.2 million and net realized and unrealized loss on investments in the amount of $2.9 million, offset by purchases of investments in the amount of $35.8 million. Net cash used in financing activities resulted from cash distributions in the amount of $13.5$4.5 million and repayment of the GLC Trust 2013-2 Class Asenior secured revolving notes of our $300.0 million collateralized loan obligation that closed on September 29, 2016, or the 2016-2 CLO, in the amount of $4.2 million.
During the nine months ended September 30, 2016, cash decreased by $18.3 million as a result of net cash used by financing activities in the amount of $21.6 million offset by net cash provided by operating activities of $3.3 million.
During the nine months ended September 30, 2016, cash provided by operating activities resulted mainly from net investment income in the amount of $14.2 million, repayments and sales of investments in the amount of $67.8 million and $27.0 million, respectively, an increase in due from counterparties of $1.5 million, and a decrease in accrued interest receivable of $1.7 million, offset by purchases of investments of $99.9 million, realized losses from investments in the amount of $29.6 million, a decrease in restricted cash of $10.8 million, and a change in unrealized gain of $7.8 million. Net cash used in financing activities resulted from cash distributions in the amount of $17.0 million, repurchases of common stock in the amount of $5.0 million, repayment of the 2013-2 CLO senior secured revolving notes in the amount of $10.0 million, repayment of the GLC Trust 2013-2 Class A notes in the amount of $8.8 million and debt issuance costs of $2.4$8.0 million, offset by proceeds from the issuance of Small Business Administration-guaranteed debentures by Garrison Capital SBIC LP, or Garrison SBIC, borrowings in the amount of $15.7$10.2 million and borrowings on the 2016-2 CLO term note of $6.0 million.
.
As of September 30, 2017March 31, 2019 and December 31, 2016,2018, we had $5.4$5.2 million and $4.8$7.6 million, respectively, of unfunded commitments with a negative fair value of $0.1 million and $0.1 million, respectively.commitments. These amounts may or may not be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but the entire amount was eligible for funding to the borrowers as of, September 30, 2017 and December 31, 2016, respectively, subject to the terms of each loan’s respective credit agreement.
Subject to leverage and borrowing base restrictions, as of September 30, 2017 and DecemberMarch 31, 2016,2019, we had approximately $20.6$9.5 million and $25.0 million, respectively, available for additional borrowings under our senior secured revolving notes of the 2016-22018-2 CLO $33.0and $10.0 million of available small business investment company, or SBIC leverage and noleverage. As of December 31, 2018, we had approximately $42.0 million available for additional borrowings under the GLC Trust 2013-2 Revolver.
2018-2 CLO and $10.0 million of available SBIC leverage subject to leverage and borrowing base restrictions. As of both March 31, 2019 and December 31, 2018, we retained all of the subordinated notes and $18.3 million of the Class B-R Notes under the 2018-2 CLO. The $18.3 million of Class B-R Notes remain available for us to sell in order to generate additional liquidity to the extent we determine market conditions would be favorable.
Portfolio Composition and Select Portfolio Information
As of September 30, 2017,March 31, 2019, we held investments in 6199 portfolio companies with a fair value of $359.1$480.9 million. As of September 30, 2017,March 31, 2019, our portfolio had an average investment size of approximately $5.7$4.6 million a weighted average yield on debt investments of 10.4% and a weighted average contractual maturity of 3653 months.
The following table shows select information of our portfolio for the periods from September 30, 2017March 31, 2019 to September 30, 2016.
March 31, 2018.
Portfolio characteristics ($ in millions, % based on fair market value)* |
| September 30, 2017 |
|
| June 30, 2017 |
|
| March 31, 2017 |
|
| December 31, 2016 |
|
| September 30, 2016 |
| ||||||||||
Total fair market value |
| $ |
| 359.1 |
|
| $ |
| 359.9 |
|
| $ |
| 358.7 |
|
| $ |
| 376.7 |
|
| $ |
| 400.9 |
|
Number of portfolio companies |
|
|
| 61 |
|
|
|
| 62 |
|
|
|
| 62 |
|
|
|
| 58 |
|
|
|
| 64 |
|
Average investment size⁽¹⁾ |
| $ |
| 5.7 |
|
| $ |
| 5.7 |
|
| $ |
| 5.7 |
|
| $ |
| 6.2 |
|
| $ |
| 5.9 |
|
Weighted average yield⁽²⁾ |
|
|
| 10.4 | % |
|
|
| 10.2 | % |
|
|
| 10.8 | % |
|
|
| 10.9 | % |
|
|
| 11.2 | % |
Weighted average price⁽¹⁾ |
|
|
| 92.3 |
|
|
|
| 92.2 |
|
|
|
| 92.9 |
|
|
|
| 95.0 |
|
|
|
| 95.3 |
|
First lien senior secured |
|
|
| 97.8 | % |
|
|
| 97.4 | % |
|
|
| 97.1 | % |
|
|
| 96.6 | % |
|
|
| 93.9 | % |
Second lien & mezzanine/subordinated |
|
|
| — | % |
|
|
| — | % |
|
|
| — | % |
|
|
| — | % |
|
|
| 1.9 | % |
Consumer loans |
|
|
| 0.8 | % |
|
|
| 1.0 | % |
|
|
| 1.3 | % |
|
|
| 1.8 | % |
|
|
| 2.2 | % |
Equity & other |
|
|
| 1.4 | % |
|
|
| 1.6 | % |
|
|
| 1.6 | % |
|
|
| 1.6 | % |
|
|
| 2.0 | % |
Core |
|
|
| 94.4 | % |
|
|
| 91.8 | % |
|
|
| 93.5 | % |
|
|
| 97.3 | % |
|
|
| 93.9 | % |
Transitory |
|
|
| 5.6 | % |
|
|
| 8.2 | % |
|
|
| 6.5 | % |
|
|
| 2.7 | % |
|
|
| 6.1 | % |
Originated⁽³⁾ |
|
|
| 48.6 | % |
|
|
| 47.6 | % |
|
|
| 52.6 | % |
|
|
| 53.0 | % |
|
|
| 57.0 | % |
Club⁽⁴⁾ |
|
|
| 20.0 | % |
|
|
| 21.0 | % |
|
|
| 18.8 | % |
|
|
| 27.0 | % |
|
|
| 25.8 | % |
Purchased |
|
|
| 31.4 | % |
|
|
| 31.4 | % |
|
|
| 28.6 | % |
|
|
| 20.0 | % |
|
|
| 17.2 | % |
Floating⁽¹⁾ |
|
|
| 99.1 | % |
|
|
| 99.0 | % |
|
|
| 98.9 | % |
|
|
| 96.8 | % |
|
|
| 94.9 | % |
Fixed⁽¹⁾ |
|
|
| 0.9 | % |
|
|
| 1.0 | % |
|
|
| 1.1 | % |
|
|
| 3.2 | % |
|
|
| 5.1 | % |
Performing⁽¹⁾ |
|
|
| 96.7 | % |
|
|
| 96.7 | % |
|
|
| 97.1 | % |
|
|
| 97.5 | % |
|
|
| 99.3 | % |
Non-accrual⁽¹⁾ |
|
|
| 3.3 | % |
|
|
| 3.3 | % |
|
|
| 2.9 | % |
|
|
| 2.5 | % |
|
|
| 0.7 | % |
Weighted average debt/EBITDA⁽¹⁾⁽²⁾⁽⁵⁾ |
|
|
| 3.8 | x |
|
|
| 3.8 | x |
|
|
| 3.7 | x |
|
|
| 3.6 | x |
|
|
| 3.7 | x |
Weighted average risk rating⁽¹⁾ |
|
|
| 2.6 |
|
|
|
| 2.7 |
|
|
|
| 2.6 |
|
|
|
| 2.5 |
|
|
|
| 2.6 |
|
($ in millions, % based on fair value, unless otherwise noted)* |
| March 31, 2019 |
|
| December 31, 2018 |
|
| September 30, 2018 |
|
| June 30, 2018 |
|
| March 31, 2018 |
|
| ||||||||||
Portfolio Summary: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total portfolio, at fair value |
| $ |
| 480.9 |
|
| $ |
| 454.0 |
|
| $ |
| 383.0 |
|
| $ |
| 401.9 |
|
| $ |
| 392.8 |
|
|
Total number of portfolio companies |
|
|
| 99 |
|
|
|
| 93 |
|
|
|
| 77 |
|
|
|
| 71 |
|
|
|
| 62 |
|
|
Total number of investments |
|
|
| 119 |
|
|
|
| 118 |
|
|
|
| 98 |
|
|
|
| 92 |
|
|
|
| 82 |
|
|
Average size of debt investments |
| $ |
| 4.6 |
|
| $ |
| 4.6 |
|
| $ |
| 4.6 |
|
| $ |
| 5.2 |
|
| $ |
| 5.7 |
|
|
Weighted average price of debt investments |
|
|
| 97.0 |
|
|
|
| 95.7 |
|
|
|
| 97.2 |
|
|
|
| 97.8 |
|
|
|
| 98.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Yields:(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average yield on debt investments at amortized cost(2) |
|
|
| 8.9 | % |
|
|
| 9.1 | % |
|
|
| 9.2 | % |
|
|
| 9.5 | % |
|
|
| 10.0 | % |
|
Weighted average yield on debt investments at fair value(2) |
|
|
| 9.4 | % |
|
|
| 10.2 | % |
|
|
| 9.6 | % |
|
|
| 9.7 | % |
|
|
| 10.0 | % |
|
Weighted average yield on total portfolio at amortized cost |
|
|
| 8.4 | % |
|
|
| 8.5 | % |
|
|
| 8.7 | % |
|
|
| 9.1 | % |
|
|
| 9.5 | % |
|
Weighted average yield on total portfolio at fair value |
|
|
| 9.1 | % |
|
|
| 9.9 | % |
|
|
| 9.1 | % |
|
|
| 9.3 | % |
|
|
| 9.5 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Structure: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First lien senior secured debt investments |
|
|
| 98.4 | % |
|
|
| 98.3 | % |
|
|
| 97.6 | % |
|
|
| 97.9 | % |
|
|
| 97.2 | % |
|
Equity and other investments |
|
|
| 1.6 | % |
|
|
| 1.7 | % |
|
|
| 2.4 | % |
|
|
| 2.1 | % |
|
|
| 2.8 | % |
|
Floating rate debt investments |
|
|
| 99.8 | % |
|
|
| 99.7 | % |
|
|
| 99.6 | % |
|
|
| 99.5 | % |
|
|
| 99.4 | % |
|
Fixed rate debt investments |
|
|
| 0.2 | % |
|
|
| 0.3 | % |
|
|
| 0.4 | % |
|
|
| 0.5 | % |
|
|
| 0.6 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Sourcing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated(3) |
|
|
| 24.8 | % |
|
|
| 25.3 | % |
|
|
| 29.9 | % |
|
|
| 34.9 | % |
|
|
| 46.4 | % |
|
Club(4) |
|
|
| 41.3 | % |
|
|
| 37.8 | % |
|
|
| 35.0 | % |
|
|
| 32.2 | % |
|
|
| 27.0 | % |
|
Purchased(5) |
|
|
| 33.8 | % |
|
|
| 36.9 | % |
|
|
| 35.1 | % |
|
|
| 32.9 | % |
|
|
| 26.6 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Credit Quality: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing debt investments |
|
|
| 97.1 | % |
|
|
| 99.5 | % |
|
|
| 99.3 | % |
|
|
| 98.8 | % |
|
|
| 98.8 | % |
|
Non-accrual debt investments |
|
|
| 2.9 | % |
|
|
| 0.5 | % |
|
|
| 0.7 | % |
|
|
| 1.2 | % |
|
|
| 1.2 | % |
|
Weighted average debt/EBITDA of our portfolio companies(2)(6) |
|
|
| 3.9 | x |
|
|
| 3.8 | x |
|
|
| 3.7 | x |
|
|
| 3.7 | x |
|
|
| 3.8 | x |
|
Weighted average risk rating of our debt investments |
|
|
| 2.4 |
|
|
|
| 2.4 |
|
|
|
| 2.3 |
|
|
|
| 2.3 |
|
|
|
| 2.3 |
|
|
(2) |
|
(3) | Originated positions include investments where we have sourced and led the execution of the |
(4) | Club positions include debt investments with a total tranche size less than $250.0 million where we |
(5) |
|
(6) | Includes first-lien debt investments which were valued by performing a liquidation analysis of the underlying assets which serve as collateral for those loans. |
* | Table excludes investments with a fair value of zero from all figures except for the total number of portfolio companies |
* Table excludes positions with a fair market value of zero, except for the number of portfolio companies.
Inflation
Inflation has not had a significant effect on our results of operations in any of the reporting periods presented in our financial statements. However, from time to time, inflation may impact the operating results of our portfolio companies.
Off-Balance Sheet Arrangements
We may become a party to financial instruments with off-balance sheet risk in the normal course of our business to meet the financial needs of our portfolio companies. These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. As of September 30, 2017March 31, 2019 and December 31, 2016,2018, we had $5.4$5.2 million and $4.8$7.6 million of outstanding commitments to fund such investments, respectively. As of September 30, 2017 and December 31, 2016, we had $29.3 million and $22.9 million, respectively, of cash and restricted cash.
Ongoing Monitoring
We view active portfolio monitoring as a vital part of the investment process. Our Investment Adviser monitors the financial trends of each portfolio company to determine if it is meeting its respective business plan and to assess the appropriate course of action for each company.
Our Investment Adviser uses several methods of evaluating and monitoring the performance and fair value of our investments, which may include the following:
assessment of success in adhering to portfolio company’s business plan and compliance with covenants;
periodic and regular contact with portfolio company management and, if appropriate, the financial or strategic sponsor, to discuss financial position, requirements and accomplishments;
comparisons to other portfolio companies in the industry, if any;
attendance at and participation in board meetings; and
review of monthly and quarterly financial statements and financial projections for portfolio companies.
Our Investment Adviser assigns an internal rating for each of our portfolio companies. The rating scale is a numeric scale of 1 to 4 based on the credit attributes and prospects of the portfolio company’s business. In general, we use the ratings as follows:
a rating of 1 denotes a high quality investment with no loss of principal expected;
a rating of 2 denotes a moderate to high quality investment with no loss of principal expected;
a rating of 3 denotes a moderate quality investment with market rates of expected loss of principal and potential non-compliance with financial covenants; and
a rating of 4 denotes a low quality investment with an expected loss of principal. In the case of risk rating 4 loans, our Investment Adviser will assign a recovery value to the loan.
The following table shows the distribution of our investments on the 1 to 4 investment risk scale at fair value, excluding our interest in GLC Trust 2013-2consumer loan portfolio and equity investments, as of September 30, 2017March 31, 2019 and December 31, 2016:
2018:
|
| As of September 30, 2017 |
|
| As of December 31, 2016 |
|
| As of March 31, 2019 |
|
| As of December 31, 2018 |
| ||||||||||||||||||||
($ in thousands) |
| Investments at Fair Value |
|
| Percentage of Total Investments |
|
| Investments at Fair Value |
|
| Percentage of Total Investments |
|
| Investments at Fair Value |
|
| Percentage of Total Investments |
|
| Investments at Fair Value |
|
| Percentage of Total Investments |
| ||||||||
Risk Rating 1 |
| $ | 9,000 |
|
|
| 2.5 | % |
| $ | 34,695 |
|
|
| 9.5 | % |
| $ | 3,116 |
|
|
| 0.7 | % |
| $ | 26,431 |
|
|
| 5.9 | % |
Risk Rating 2 |
|
| 154,431 |
|
|
| 44.0 |
|
|
| 152,762 |
|
|
| 42.0 |
|
|
| 301,667 |
|
|
| 63.8 |
|
|
| 260,914 |
|
|
| 58.6 |
|
Risk Rating 3 |
|
| 175,625 |
|
|
| 50.0 |
|
|
| 163,854 |
|
|
| 45.0 |
|
|
| 154,031 |
|
|
| 32.6 |
|
|
| 147,463 |
|
|
| 33.1 |
|
Risk Rating 4 |
|
| 12,216 |
|
|
| 3.5 |
|
|
| 12,649 |
|
|
| 3.5 |
|
|
| 13,600 |
|
|
| 2.9 |
|
|
| 10,585 |
|
|
| 2.4 |
|
|
| $ | 351,272 |
|
|
| 100.0 | % |
| $ | 363,960 |
|
|
| 100.0 | % |
| $ | 472,414 |
|
|
| 100.0 | % |
| $ | 445,393 |
|
|
| 100.0 | % |
The weighted average risk rating of the portfolio increased to 2.6was 2.4 as of September 30, 2017 from 2.5 as ofboth March 31, 2019 and December 31, 2016 as a result of the repayments of investments with a risk rating of one.
2018.
A summary of our significant contractual payment obligations as of September 30, 2017March 31, 2019 is as follows:
|
| Payments Due by Period |
|
| Payments Due by Period |
| |||||||||||||||||||||||||||||||||||||||
($ in thousands) |
| Less Than 1 Year |
|
| 1 - 3 Years |
|
| 3 - 5 Years |
|
| More Than 5 Years |
|
| Total |
|
| Less Than 1 Year |
|
| 1 - 3 Years |
|
| 3 - 5 Years |
|
| More Than 5 Years |
|
| Total |
| |||||||||||||||
2016-2 CLO Facility |
| $ |
| — |
|
| $ |
| — |
|
| $ |
| — |
|
| $ |
| 167,000 |
|
| $ |
| 167,000 |
| ||||||||||||||||||||
GLC Trust 2013-2 Class A Note |
|
|
| — |
|
|
|
| — |
|
|
|
| 830 |
|
|
|
| — |
|
|
| 830 |
| |||||||||||||||||||||
2018-2 CLO |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 284,250 |
|
| $ | 284,250 |
| |||||||||||||||||||||||||
SBIC Borrowings |
|
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
|
| 37,000 |
|
|
|
| 37,000 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 60,000 |
|
|
| 60,000 |
|
Total contractual obligations |
| $ |
| — |
|
| $ |
| — |
|
| $ |
| 830 |
|
| $ |
| 204,000 |
|
| $ |
| 204,830 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 344,250 |
|
| $ | 344,250 |
|
We have certain contracts under which we have material future commitments. Under the Investment Advisory Agreement, the Investment Adviser provides us with investment advisory and management services. We have agreed to pay for these services (1) a management fee equal to a percentage of the average adjusted value of our gross assets and (2) an incentive fee based on our performance.
We entered into the Administration Agreement on October 9, 2012 with the Administrator. Under the Administration Agreement, the Administrator furnishes us with office facilities and equipment, provides us clerical, bookkeeping and record keeping services and provides us with other administrative services necessary to conduct our day-to-day operations.
If any of the contractual obligations discussed above are terminated, our costs under any new agreements that we enter into may increase. In addition, we would likely incur significant time and expense in locating alternative parties to provide the services we expect to receive under our Investment Advisory Agreement and our Administration Agreement. Any new investment advisory agreement would also be subject to approval by our stockholders.
Both the Investment Advisory Agreement and the Administration Agreement may be terminated by either party without penalty upon no fewer than 60 days’ written notice to the other.
Related Party Transactions
We have entered into a number of business relationships with affiliated or related parties, including the following:
We entered intoare party to the Investment Advisory Agreement with the Investment Adviser, under which our Investment Adviser is responsible for sourcing potential investments, conducting research and diligence on prospective investments and equity sponsors, analyzing investment opportunities, structuring our investments and monitoring our investments and portfolio companies on an ongoing basis.
The Administrator provides us with the office facilities and administrative services necessary to conduct day-to-day operations pursuant to our Administration Agreement.
We have entered into the License Agreement with Garrison Investment Group pursuant to which Garrison Investment Group has agreed to grant us a non-exclusive, royalty-free license to use the name “Garrison.”
GLC Trust 2013-2 entered intoUnder the GLC Trust 2013-2 AdministrationStaffing Agreement, Garrison Investment Group provides the Investment Adviser with the GARS Administrator,resources necessary to fulfill these obligations. The Staffing Agreement provides that Garrison Investment Group will make available to the Investment Advisers experienced investment professionals and access to the senior investment personnel of Garrison Investment Group for purposes of evaluating, negotiating, structuring, closing and monitoring our investments. The Staffing Agreement also includes a commitment that the members of the Investment Advisers’ investment committee serve in such capacity. The Staffing Agreement remains in effect until terminated and may be terminated by either party without penalty upon 60 days’ written notice to the other party. Services under the Staffing Agreement are provided to the Investment Adviser on a direct cost reimbursement basis, and such fees incurred under this agreement are included in total administrator expenses presented on the consolidated statement of operations.not our obligation.
|
In connection with the 2016-2 CLO, we retained the Investment Adviser to furnish collateral management sub-management services to us pursuant to a sub-collateral management agreement. The Investment Adviser does not receive a fee for providing such services.
From October 1, 2016 through May 2, 2017, the Investment Adviser, in consultation with our Board, irrevocably waived any fees payable to the Investment Adviser under the Investment Advisory Agreement with respect to a calendar quarter in excess of the sum of (i) 0.375% per quarter (1.50% annualized) of our gross assets, excluding cash and cash equivalents but including assets purchased with borrowed funds, calculated based on the average carrying value of our gross assets at the end of the two most recently completed calendar quarters, (ii) 20% of pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter, in excess of a “hurdle rate” of 1.75% per quarter (7.00% annualized) and (iii) in the case of the final calendar quarter of each year, the capital gains incentive fee.
We have adopted a joint code of ethics that governs the conduct of our and our Investment Adviser’s officers, directors and employees. Our officers and directors also remain subject to the duties imposed by both the 1940 Act and the Delaware General Corporation Law.
Critical Accounting Policies
The preparation of our financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ. We have identified the following as critical accounting policies.
Basis forPrinciples of Consolidation
The consolidated financial statements include the accounts of Garrison Capital Inc.GARS and its wholly-owned subsidiaries. The accounts of the subsidiaries are prepared using consistent accounting policies and as of the same reporting period as GARS. Under ASC Topic 946, Financial Services – Investment Companies, or ASC Topic 946, the Company is generally precluded from consolidating any entity other than another investment company. Accordingly, the Company consolidates any investment company when it owns 100% of its equity units or 100% of the economic equity interest. ASC Topic 946 also provides for the consolidation of a controlled operating company that provides substantially all of its services to the investment company or its consolidated subsidiaries.
As a result, GARS haswe have consolidated the results of Garrison Funding 2013-2 Manager, LLC, Garrison Funding 2013-22018-2 Ltd., Garrison Funding 2016-2 Ltd.,2018-2 LLC, Garrison SBIC, Garrison Capital SBIC, LP, GLC Trust 2013-2PL Holdings LLC, GIG Rooster Holdings I LLC and a series of limited liability companies that GARS created primarily to provide specific tax treatment for the minority equity and other investments held in these limited liability companies.companies.
Revenue Recognition
In general, we generate revenue that primarily consists of interest income, fee income, dividend income and gains and losses on our investments.
Interest income: Interest income is comprised of cash interest, PIK interest, original issue discounts or premiums as well as any loan origination, facility and commitment fees. Cash and PIK interest income is accrued based on the outstanding principal amount and interest terms outlined in the respective contractual agreement that governs that investment. The Company accrues interest income if it expects that it ultimately will be able to collect such income. Loan origination fees and any original issue or purchase discounts or premiums received by the Company are initially capitalized, deferred and reduce or increase the cost basis of the investment and subsequently accreted into interest income over the stated term of the loan.
Similarly, commitment fees are based upon the undrawn portion committed by the Company and are accrued over the life of the loan. Upon the prepayment of a loan or debt security, any unamortized fees, discounts or premiums are recorded into income.
Fee and dividend income: Fee income is generally comprised of amendment, forbearance, prepayment, syndication, structuring, diligence, consulting and possible fees for providing managerial assistance to a portfolio company and may be received in the form of cash or PIK. Amendment and forbearance fees are generally received in connection with loan amendments or waivers and are recognized upon completion of the amendments or waivers, generally when such fees are receivable. We record prepayment premiums on loans and debt securities into income when we receive such amounts.
In addition, we may receive structuring, diligence fees, consulting and managerial assistance fees for periodically providing services to a portfolio or third party company. These fees are recognized when such services have been completed and the fees are generally receivable. Any such fee income received is recorded and classified as other income and included in investment income on the consolidated statements of operations. As these fees are generally paid and recognized in connection with specific loan event or the performance of a service, there may be significant fluctuations from period to period in the amount and size of such fee and they are typically non-recurring in nature.
In addition, the Company may receive periodic dividends or distributions from our preferred or equity investments. Such amounts are recorded and classified as other income. Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.
To the extent distributions are received from a limited liability company or limited partnership investment, we will evaluate the distribution to determine if it should be recorded as income or return of capital. Generally, we will not record such distributions as income unless there is sufficient accumulated tax-basis earnings and profits 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.
Investment gains and losses: Realized gains and losses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis of the investment, without regard to any previously recognized unrealized changes in the investments’ fair value. Current period changes in the fair value of our investments, which are measured at fair value, are recognized and recorded as a component of the net change in unrealized gain / (loss) on investments on the consolidated statement of operations. Both realized and unrealized gains and losses are recorded using the specific identification method.
Non-accrual loans: The Company accrues interest income based on the contractual interest terms of its investments if it expects that it will ultimately be able to collect it. Generally, when management believes that the issuer of the loan will not be able to service the loan, the Investment Adviser will place the loan on non-accrual status and the Company will cease recognizing interest income on that loan. However, the Company remains contractually entitled to this interest. The Company may restore an investment to accrual status when past due principal and interest payments are made or if the interest income is otherwise deemed to be collectible by the Investment Adviser. The Company may make exceptions to this policy if the loan has sufficient collateral value and is in the process of collection. As of March 31, 2019, the Company had two investments on non-accrual status. As of December 31, 2018, the Company had one investment on non-accrual status.
Investments, at Fair Value
The Company records its investment transactions on a trade date basis, which is the date when management has determined that all material legal terms have been contractually defined for the transactions. These transactions could possibly settle on a subsequent date depending on the transaction type. Any amounts related to purchase, sale and principal paydowns that have traded but not settled are reflected as either a due to or due from counterparty on our consolidated statement of financial condition. All related revenue and expenses attributable to these transactions are reflected on the consolidated statements of operations commencing on the trade date unless otherwise specified by the transaction documents.
Fair Value Measurements
The Company values its investments in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures, (“or ASC 820”).Topic 820. ASC Topic 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about assets and liabilities measured at fair value. ASC Topic 820’s definition of fair value focuses on exit price in the principal, or most advantageous, market and prioritizes the use of market-based inputs over entity-specific inputs within a measurement of fair value.
ASC Topic 820 classifies the inputs used to measure these fair values into the following hierarchy:
Level 1 — Unadjusted quoted prices in active markets for identical investments as of the reporting date.
Level 2 — Pricing inputs include quoted prices in active markets for similar instruments, quoted prices in less active or inactive markets for identical or similar instrumentsinvestments where multiple price quotes can be obtained, and other observable inputs, such as interest rates, yield curves, credit risks, and default rates.
Level 3 — Pricing inputs are unobservable and includesinclude situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation including, in certain instances, the Investment Adviser’s own assumptions about how market participants would price the financial instrument.
Our investments include debt investments (both funded and unfunded), preferred and minority common equity investments of diversified companies (“Equity”) and a portfolio of unsecured small balance consumer loans (“Financial Assets”). Due to the nature of the Company’s strategy, the Company’s portfolio is primarily comprised of relatively illiquid investments that are privately held. Inputs into the determination of fair value of the Company’s portfolio investments require significant management judgment or estimation. This means that the Company’s portfolio valuations are based on unobservable inputs and the Investment Adviser’s own assumptions about how market participants would price the asset or liability in question. Valuations of privately held investments are inherently uncertain and they may fluctuate over short periods of time and may be based on estimates. The determination of fair value by the Board may differ materially from the values that would have been used if a ready market for these investments existed.
Net assets could be materially affected if the determinations regarding the fair value of the investments were materially higher or lower than the values that are ultimately realized upon the disposal of such investments.
Valuation of Investments
Techniques
The following is a description of the differentvarious valuation techniques utilized by the Company.
Company utilizes when valuing its investments.
Debt and Equity Investments
Bid quotations – Certain of the Company’s debt investments of ours are publicly traded instruments for which quoted market prices are not readily available. The fair value of these investments may be determined based on bid quotations from unaffiliated market makers or independent third-party pricing services or the price activity of comparable instruments. The CompanyWe will generally supplement the bid quotations for these investments by also performing a comparable yield approach outlined below.
Comparable yield approach – This valuation technique determines the fair value of an investment by assessing the expected market yield of other debt investments with similar credit structures, leverage statistics, interest rates and time to maturity. The CompanyWe generally usesuse this approach for itsour debt investments that have not been deemed to be credit-impaired and where a market rate of recovery is expected.
Market comparable companies – This valuation technique determines the total enterprise value of a company by assessing the expected multiple that a market participant would apply to that company’s earnings before interest, taxes, depreciation and amortization,EBITDA, revenue or other collateral that secures the investment. These valuation multiples are typically determined based on reviewing market comparable transactions or other comparable publicly traded companies, if any. The resulting enterprise value will dictate whether or not the Company’sour debt investment has adequate enterprise value coverage. In instances where the enterprise value is inadequate, the market comparable companies approach may be used to estimate a recovery value for our credit-impaired debt investments. The Company generally also uses this approach for its equity investments.
Financial AssetsEquity Investments
Market comparable companies – This valuation technique determines the total enterprise value of a company by assessing the expected multiple that a market participant would apply to that company’s EBITDA, revenue or other collateral that secures the investment. These valuation multiples are typically determined based on reviewing market comparable transactions or other comparable publicly traded companies, if any. When an external event, such as a purchase transaction, public offering or subsequent sale of equity occurs, the pricing indicated by that external event is utilized to corroborate our valuation.
Discounted cash flows – This valuation technique determines the fair value of an investment by projecting the expected cash flows based on contractual terms calculating the present value of such cash flows as of the valuation date using a discount rate.
rate.
Valuation Process
The Board is responsible for determining, within the meaning of the 1940 Act, in good faith the fair value of the Company’s assets in good faithfor which market quotations are not readily available using a documented valuation policy and consistently applied valuation process. The valuation process is a multi-step process conducted at the end of each fiscal quarter as described below:
The Company’s valuation process begins with each portfolio company or investment being initially valued by investment professionals of the Investment Adviser responsible for credit monitoring.
At least once annually, the valuation for each portfolio investment that does not have a readily available quotation is reviewed by an independent valuation firm, subject to the de minimis exception as more fully described below.
Preliminary valuation conclusions are then documented, compared to the range of prices provided by an independent valuation firm where applicable, and discussed with our senior management and the Investment Adviser.
The Investment Adviser submits these preliminary valuations to the Valuation Committee of the Board.
The Board discusses valuations and determines, within the meaning of the 1940 Act, the fair value of each investment in the Company’s portfolio for which market quotations are not readily available in good faith.
As noted above, the Boardour board of directors has retained several independent valuation firms to review the valuation of each portfolio investment that does not have a readily available market quotation at least once during each 12-month period.period provided, the board of directors reserves the right to have any investment within the portfolio valued by an independent valuation firm to the extent it determines such a valuation was warranted. To the extent a security is reviewed in a particular quarter, it is reviewed and valued by only one service provider. However, the Boardour board of directors does not, and does not intend to, have investments independently reviewed that (1) have closed within the two most recent quarters or (2) are de minimis investments of less than 0.5% of the Company’sour total assets (up to an aggregate of 10.0% of the Company’sour total assets) independently reviewed.
Investment Transactions and Related Investment Income and Expense
The Company records its investment transactions on a trade date basis, which is the date when management has determined that all material legal terms have been contractually defined for the transactions. These transactions could possibly settle on a subsequent date depending on the transaction type. Any amounts related to purchase, sale and principal paydowns that have traded but not settled will be reflected as either a due to counterparty or due from counterparty on our Statement of Financial Condition. All related revenue and expenses attributable to our investment transactions are reflected on the consolidated statements of operations commencing on the trade date unless otherwise specified by the transaction documents. Realized gains and losses on investment transactions are recorded using the specific identification method.
The Company accrues interest income if it expects that ultimately it will be able to collect such income. Generally, when a payment default occurs on a loan in the portfolio, or if management otherwise believes that the issuer of the loan will not be able to make contractual interest payments or principal payments, the Investment Adviser will place the loan on non-accrual status and the Company will cease recognizing interest income on that loan until all principal and interest is current through payment or until a restructuring occurs, such that the interest income is deemed to be collectible. However, the Company remains contractually entitled to this interest.
The Company may make exceptions to this policy if the loan has sufficient collateral value and is in the process of collection. Accrued interest is written off when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. For consumer loans, any loan which is 120 days past due is considered defaulted and 100% of the principal is charged off with no expected recovery or sale of defaulted receivables. As of September 30, 2017, the Company had investments in five portfolio companies that were placed on non-accrual status. As of December 31, 2016, the Company had investments in two portfolio companies that were placed on non-accrual status.
Any original issue discounts, as well as any other purchase discounts or premiums on debt investments, are accreted or amortized and included in interest income over the maturity periods of the investments. If a loan is placed on non-accrual status, the Company will cease recognizing amortization of original issue discount and purchase discount until all principal and interest is current through payment or until a restructuring occurs, such that the income is deemed to be collectible.
Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected.
Certain investments may have contractual payment-in-kind (“PIK”) interest. PIK represents accrued interest that is added to the principal amount of the investment on the respective interest payment dates instead of being paid in cash and generally becomes due at maturity of the investment or upon the investment being called by the issuer.
.
Interest Expense
Interest expense is recorded on an accrual basis and is adjusted for amortization of deferred debt issuance costs and any original issue discount.
Loan Origination, Facility, Commitment and Amendment Fees
The Company may receive loan origination, prepayment, facility, commitment, forbearance and amendment fees in addition to interest income during the life of the investment. The Company may receive origination fees upon the origination of an investment.
Origination fees received by the Company are initially deferred and reduced from the cost basis of the investment and subsequently accreted into interest income over the remaining stated term of the loan.
Upon the prepayment of a loan or debt security, any unamortized loan origination fees are recorded as interest income. We record prepayment premiums on loans and debt securities as interest income when we receive such amounts. Facility fees, sometimes referred to as asset management fees, are accrued as a percentage periodic fee on the base amount (either the funded facility amount or the committed principal amount). Commitment fees are based upon the undrawn portion committed by us and are accrued over the life of the loan.
Amendment and forbearance fees are paid in connection with loan amendments and waivers and are recognized upon completion of the amendments or waivers, generally when such fees are receivable. Any such fees are recorded and classified as other income and included in investment income on the consolidated statements of operations. As these fees are paid and recognized in connection with specific loan amendments or forbearance, they are typically non-recurring in nature.
Distributions
Dividends and distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend or distribution is determined by our Board each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are distributed at least annually, although the Company may decide to retain such capital gains for investment.
Item 3: Quantitative and Qualitative Disclosures About Market Risk
We are subject to financial market risks, including changes in interest rates. During the period covered by our financial statements, the majority of the loans in our portfolio had floating interest rates, and we expect that our loans in the future will also have floating interest rates. As of March 31, 2019 and December 31, 2018, 99.8% and 99.7%, respectively, of the outstanding principal amount of our debt investments bore interest at floating rates. These loans usually have floating interest rates based on the London Interbank Offer Rate, or LIBOR, and typically have interest rate re-set provisions that adjust applicable LIBOR under such loans to current market rates on a regular basis. In addition, the 2016-22018-2 CLO has a floating interest rate provision based on a cost of funds that approximates LIBOR and we expect that any other credit facilities into which we enter in the future may have floating interest rate provisions.
Assuming that the interim and unaudited consolidated statement of financial condition as of September 30, 2017March 31, 2019 were to remain constant and that we took no actions to alter our existing interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates.
|
| (Decrease)/increase |
|
| (Decrease)/increase |
|
| Net increase |
|
| (Decrease)/increase |
|
| (Decrease)/increase |
|
| Net (decrease)/increase |
| ||||||
Change in interest rates ($ in thousands) |
| in interest income |
|
| in interest expense |
|
| in investment income |
|
| in interest income |
|
| in interest expense |
|
| in investment income |
| ||||||
Down 50 basis points |
| $ | (2,337 | ) |
| $ | (1,421 | ) |
| $ | (916 | ) | ||||||||||||
Down 25 basis points |
| $ | (619 | ) |
| $ | (355 | ) |
| $ | (264 | ) |
|
| (1,168 | ) |
|
| (711 | ) |
|
| (457 | ) |
Up 25 basis points |
|
| 1,168 |
|
|
| 711 |
|
|
| 457 |
| ||||||||||||
Up 50 basis points |
|
| 1,867 |
|
|
| 736 |
|
|
| 1,131 |
|
|
| 2,345 |
|
|
| 1,421 |
|
|
| 924 |
|
Up 100 basis points |
|
| 3,543 |
|
|
| 1,446 |
|
|
| 2,097 |
|
|
| 4,690 |
|
|
| 2,843 |
|
|
| 1,847 |
|
Up 200 basis points |
|
| 6,912 |
|
|
| 2,866 |
|
|
| 4,046 |
|
|
| 9,379 |
|
|
| 5,685 |
|
|
| 3,694 |
|
Up 300 basis points |
|
| 10,315 |
|
|
| 4,286 |
|
|
| 6,029 |
|
Although management believes that this analysis is indicative of our existing sensitivity to interest rate changes, it does not adjust for changes in the credit markets, the size, credit quality or composition of the assets in our portfolio and other business developments, including indebtedness under the 2016-22018-2 CLO, Garrison SBIC borrowings or additional borrowings, that could affect our net increase in net assets resulting from operations or net income. Accordingly, we cannot assure you that actual results would not differ materially from the statement above.
above.
We may in the future hedge against currency and interest rate fluctuations by using standard hedging instruments such as futures, forward contracts, currency options and interest rate swaps, caps, collars and floors, including with respect to the obligations of the 2016-22018-2 CLO, to the extent permitted under the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in currency exchange and interest rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to the investments in our portfolio with fixed interest rates. We and our Investment Adviser have not hedged any of the obligations of the 2016-22018-2 CLO.
Item 4: Controls and Procedures
As of the end of the period covered by this report, we, including our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on our evaluation, our management, including the chief executive officer and chief financial officer, concluded that our disclosure controls and procedures were effective in timely alerting management, including the chief executive officer and chief financial officer, of material information about us required to be included in our periodic SEC filings. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, are based upon certain assumptions about the likelihood of future events and can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. There has not been any change in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
We, the Investment Adviser, the Administrator and our wholly-owned subsidiaries are not currently subject to any material legal proceedings.
In addition to the other information set forth in this report, you should carefully consider the “Riskfactors set forth below as well as in “Part 1. Item 1A. Risk Factors” discussed in our Annual Report on Form 10-K filed with the SEC on March 7, 2017,5, 2019, which could materially affect our business, financial condition and/or operating results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially affect our business, financial condition and/or operating results.
Item 2: Unregistered Sales of EquityEquity Securities and Use of Proceeds
None.
Item 3: Defaults Upon Senior Securities
None.
Item 4: Mine Safety Disclosures
Not applicable.
None.
EXHIBIT INDEX
* | Filed herewith. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Garrison Capital Inc. | |
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Dated: | By | /s/ Joseph Tansey |
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| Joseph Tansey | |
| Chief Executive Officer | |
| (Principal Executive Officer) | |
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Dated: | By | /s/ Daniel Hahn |
Daniel Hahn | ||
Chief Financial Officer and Treasurer | ||
(Principal Financial and Accounting Officer) | ||
Dated: May 7, 2019 | By | /s/ Brian Chase |
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| Brian Chase | |
| Chief | |
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