UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
(Mark One)
 
 þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
  OF THE SECURITIES EXCHANGE ACT OF 1934 
For the quarterly period ended June 30,December 31, 2017
OR
 
 oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
  OF THE SECURITIES EXCHANGE ACT OF 1934 
COMMISSION FILE NUMBER: 1-35999
Fifth Street Senior Floating Rate Corp.OaktreeStrategic Income Corporation
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
DELAWARE
(State or jurisdiction of
incorporation or organization)
 
61-1713295
(I.R.S. Employer
Identification No.)
   
777 West Putnam333 South Grand Avenue, 3rd28th Floor
Greenwich, CTLos Angeles, CA
(Address of principal executive office)
 
0683090071
(Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(203) 681-3600(213) 830-6300
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 periods as the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  þ     NO  ¨
Indicate by check mark whether the registrant has submitted electronically 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 (§232.405 of this chapter) 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, or a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer  o
 
Accelerated filer  þ
 
Non-accelerated filer  o
 
Smaller reporting company  o
    (Do not check if a smaller reporting company)  
       
Emerging growth company  þ

 
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 þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act)    YES  ¨     NO  þ
The registrant had 29,466,768 shares of common stock outstanding as of August 9, 2017.February 8, 2018.


 







FIFTH STREET SENIOR FLOATING RATE CORP.OAKTREE STRATEGIC INCOME CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30,DECEMBER 31, 2017


TABLE OF CONTENTS
 
    
  
PART I — FINANCIAL INFORMATION
 
    
Item 1.
Consolidated Financial Statements (unaudited):Statements:
 
  
Consolidated Statements of Assets and Liabilities as of June 30,December 31, 2017 (unaudited) and September 30, 2017
1
Consolidated Statements of Operations (unaudited) for the three months ended December 31, 2017 and 2016
2
Consolidated Statements of Changes in Net Assets (unaudited) for the three months ended December 31, 2017 and 2016
3
  
Consolidated Statements of OperationsCash Flows (unaudited) for the three and nine months ended June 30,December 31, 2017 and 2016
4
  
Consolidated Statements of Changes in Net Assets for the nine months ended June 30, 2017 and 2016
5
Consolidated Statements of Cash Flows for the nine months ended June 30, 2017 and 2016
6
Consolidated Schedule of Investments as of June 30,December 31, 2017 (unaudited)
75
  
Consolidated Schedule of Investments as of September 30, 20162017
1413
  
Notes to Consolidated Financial Statements (unaudited)
2221
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
5956
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
8478
Item 4.
Controls and Procedures
8579
  
PART II — OTHER INFORMATION
 
Item 1.
Legal Proceedings
8579
Item 1A.
Risk Factors
8679
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
8680
Item 3.
Defaults Upon Senior Securities
8680
Item 4.
Mine Safety Disclosures
8680
Item 5.
Other Information
8780
Item 6.
Exhibits
8780
Signatures
8781






 

PART I — FINANCIAL INFORMATION

Item 1.Consolidated Financial Statements.
Fifth Street Senior Floating Rate Corp.Oaktree Strategic Income Corporation
Consolidated Statements of Assets and Liabilities
(unaudited)
 June 30,
2017		 September 30,
2016		 December 31, 2017 (unaudited) September 30,
2017
ASSETSASSETS  ASSETS  
Investments at fair value:        
Control investments (cost June 30, 2017 and September 30, 2016: $71,117,506) $61,614,406
 $63,316,667
Affiliate investments (cost June 30, 2017: $18,006,812; cost September 30, 2016: $15,953,798) 11,778,272
 13,006,458
Non-control/Non-affiliate investments (cost June 30, 2017: $500,706,398; cost September 30, 2016: $513,397,659) 491,785,575
 497,281,256
Total investments at fair value (cost June 30, 2017: $589,830,716; cost September 30, 2016: $600,468,963)
 565,178,253
 573,604,381
Control investments (cost December 31, 2017: $71,635,783; cost September 30, 2017: $71,340,632) $57,180,650
 $57,606,674
Affiliate investments (cost December 31, 2017: $17,477,733; cost September 30, 2017: $17,479,053) 1,010,509
 935,913
Non-control/Non-affiliate investments (cost December 31, 2017: $495,206,582; cost September 30, 2017: $516,270,639) 483,217,174
 501,894,073
Total investments at fair value (cost December 31, 2017: $584,320,098; cost September 30, 2017: $605,090,324) 541,408,333
 560,436,660
Cash and cash equivalents 19,258,982
 19,778,841
 39,975,500
 35,604,127
Restricted cash 7,651,878
 9,036,838
 6,196,671
 7,408,260
Interest, dividends and fees receivable 2,883,409
 4,579,935
 2,679,014
 3,014,075
Due from portfolio companies 305,501
 336,429
 59,606
 286,260
Receivables from unsettled transactions 846,065
 12,869,092
 17,806,666
 505,000
Deferred financing costs 1,348,806
 2,063,133
 1,097,060
 1,222,933
Other assets 344,196
 148,492
 1,036,645
 185,336
Total assets $597,817,090
 $622,417,141
 $610,259,495
 $608,662,651
LIABILITIES AND NET ASSETSLIABILITIES AND NET ASSETS  LIABILITIES AND NET ASSETS  
Liabilities:        
Accounts payable, accrued expenses and other liabilities $466,921
 $1,246,286
 $1,000,417
 $482,877
Base management fee and incentive fee payable 2,163,704
 2,987,721
 1,630,588
 2,236,187
Due to FSC CT 427,646
 402,073
Due to affiliate 724,894
 450,517
Interest payable 1,946,228
 1,798,653
 2,004,249
 1,996,171
Payables from unsettled transactions 12,831,700
 —
 62,920,436
 49,029,789
Amounts payable to syndication partners —
 18,750
Director fees payable 122,450
 236,275
 130,000
 98,008
Credit facilities payable 86,656,800
 107,426,800
 74,056,800
 82,956,800
Notes payable (net of $2,296,658 and $2,514,236 of unamortized financing costs as of June 30, 2017 and September 30, 2016, respectively) 179,503,342
 177,485,764
Secured borrowings at fair value (proceeds September 30, 2016: $5,000,000) —
 4,985,425
Notes payable (net of $2,151,605 and $2,224,132 of unamortized financing costs as of December 31, 2017 and September 30, 2017, respectively) 177,848,395
 177,775,868
Total liabilities 284,118,791
 296,587,747
 320,315,779
 315,026,217
Commitments and contingencies (Note 13)        
Net assets:        
Common stock, $0.01 par value, 150,000,000 shares authorized; 29,466,768 shares issued and outstanding at June 30, 2017 and September 30, 2016 294,668
 294,668
Common stock, $0.01 par value, 150,000,000 shares authorized; 29,466,768 shares issued and outstanding as of December 31, 2017 and September 30, 2017 294,668
 294,668
Additional paid-in-capital 373,995,934
 373,995,934
 373,995,934
 373,995,934
Net unrealized depreciation on investments and secured borrowings (24,652,463) (26,850,007) (42,911,765) (44,653,664)
Net realized loss on investments (24,371,682) (10,969,707) (28,737,328) (24,354,622)
Accumulated overdistributed net investment income (11,568,158) (10,641,494) (12,697,793) (11,645,882)
Total net assets (equivalent to $10.65 and $11.06 per common share at June 30, 2017 and September 30, 2016, respectively) (Note 12) 313,698,299
 325,829,394
Total net assets (equivalent to $9.84 and $9.97 per common share as of December 31, 2017 and September 30, 2017, respectively) (Note 12) 289,943,716
 293,636,434
Total liabilities and net assets $597,817,090
 $622,417,141
 $610,259,495
 $608,662,651
See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.Oaktree Strategic Income Corporation
Consolidated Statements of Operations
(unaudited)
 Three months ended
June 30, 2017		 Three months ended
June 30, 2016		 Nine months ended
June 30, 2017		 Nine months ended
June 30, 2016		 Three months ended
December 31, 2017		 Three months ended
December 31, 2016
Interest income:            
Control investments $1,452,148
 $1,351,423
 $4,250,910
 $3,681,941
 $1,198,697
 $1,395,436
Affiliate investments 130,217
 85,003
 331,804
 85,003
 —
 97,936
Non-control/Non-affiliate investments 10,406,975
 10,078,942
 28,930,631
 31,416,467
 8,764,475
 9,384,005
Interest on cash and cash equivalents 36,094
 20,141
 98,590
 53,311
 71,095
 30,542
Total interest income 12,025,434
 11,535,509
 33,611,935
 35,236,722
 10,034,267
 10,907,919
PIK interest income:            
Control investments 295,151
 —
Affiliate investments 63,551
 42,502
 164,331
 42,502
 —
 48,972
Non-control/Non-affiliate investments —
 21,753
 20,965
 62,786
 3,263
 10,432
Total PIK interest income 63,551
 64,255
 185,296
 105,288
 298,414
 59,404
Fee income:            
Affiliate investments 3,351
 3,148
 9,647
 3,148
 —
 3,148
Non-control/Non-affiliate investments 498,497
 811,548
 1,177,271
 2,865,229
 398,049
 403,296
Total fee income 501,848
 814,696
 1,186,918
 2,868,377
 398,049
 406,444
Dividend and other income:            
Control investments —
 700,000
 187,420
 2,012,500
 —
 187,420
Allowance for control investments (420,192) —
 (420,192) —
Total dividend and other income (420,192) 700,000
 (232,772) 2,012,500
 —
 187,420
Total investment income 12,170,641
 13,114,460
 34,751,377
 40,222,887
 10,730,730
 11,561,187
Expenses:            
Base management fee 1,419,603
 1,511,490
 4,234,003
 4,618,171
 1,412,172
 1,425,216
Part I incentive fee 1,143,101
 1,219,810
 2,420,829
 3,733,909
 259,722
 990,377
Professional fees 280,008
 894,245
 972,310
 3,529,285
 1,020,183
 258,528
Board of Directors fees 127,464
 143,425
 385,064
 465,025
 130,000
 123,650
Interest expense 2,661,975
 2,437,152
 8,124,752
 7,048,434
 2,764,477
 2,456,128
Administrator expense 127,533
 92,622
 456,018
 406,030
 279,684
 146,459
General and administrative expenses 480,490
 652,199
 1,513,902
 1,471,399
 435,210
 533,011
Total expenses 6,240,174
 6,950,943
 18,106,878
 21,272,253
 6,301,448
 5,933,369
Base management fee waived —
 —
 (6,232) —
Fees waived (117,493) (6,232)
Insurance recoveries —
 —
 (250,000) —
 —
 (250,000)
Net expenses 6,240,174
 6,950,943
 17,850,646
 21,272,253
 6,183,955
 5,677,137
Net investment income 5,930,467
 6,163,517
 16,900,731
 18,950,634
 4,546,775
 5,884,050
Unrealized appreciation (depreciation) on investments:            
Control investments 103,555
 (1,348,337) (1,702,261) (5,765,722) (721,175) (1,571,194)
Affiliate investments (1,633,615) (2,380,733) (3,281,200) (2,380,733) 75,916
 (1,187,404)
Non-control/Non-affiliate investments (4,272,744) 6,988,548
 7,195,580
 (10,494,079) 2,387,158
 (2,468,842)
Net unrealized appreciation (depreciation) on investments (5,802,804) 3,259,478
 2,212,119
 (18,640,534) 1,741,899
 (5,227,440)
Net unrealized appreciation on secured borrowings —
 —
 (14,575) —
 —
 (14,575)
Realized gain (loss) on investments:        
Realized gain (loss) on investments and secured borrowings:    
Affiliate investments 28
 —
Non-control/Non-affiliate investments 11,535
 (8,506,936) (13,401,975) (13,360,666) (4,382,734) 82,762
Net realized gain (loss) on investments 11,535
 (8,506,936) (13,401,975) (13,360,666)
Net increase (decrease) in net assets resulting from operations $139,198
 $916,059
 $5,696,300
 $(13,050,566)
Net realized gain (loss) on investments and secured borrowings (4,382,706) 82,762
Net increase in net assets resulting from operations $1,905,968
 $724,797
Net investment income per common share — basic and diluted $0.20
 $0.21
 $0.57
 $0.64
 $0.15
 $0.20
Earnings (loss) per common share — basic and diluted $ 0.00
 $0.03
 $0.19
 $(0.44)
Earnings per common share — basic and diluted (Note 5) $0.06
 $0.02
Weighted average common shares outstanding — basic and diluted 29,466,768
 29,466,768
 29,466,768
 29,466,768
 29,466,768
 29,466,768
Distributions per common share (Note 6) $0.190
 $0.225
 $0.605
 $0.675
Distributions per common share $0.19
 $0.23
 
See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.Oaktree Strategic Income Corporation
Consolidated Statements of Changes in Net Assets
(unaudited)
 Nine months ended
June 30, 2017		 Nine months ended
June 30, 2016		 Three months ended
December 31, 2017		 Three months ended
December 31, 2016
Operations:        
Net investment income $16,900,731
 $18,950,634
 $4,546,775
 $5,884,050
Net unrealized appreciation (depreciation) on investments 2,212,119
 (18,640,534) 1,741,899
 (5,227,440)
Net unrealized appreciation on secured borrowings (14,575) —
 —
 (14,575)
Net realized loss on investments (13,401,975) (13,360,666)
Net increase (decrease) in net assets resulting from operations 5,696,300
 (13,050,566)
Net realized gain (loss) on investments and secured borrowings (4,382,706) 82,762
Net increase in net assets resulting from operations 1,905,968
 724,797
Stockholder transactions:        
Distributions to stockholders (17,827,395) (19,890,068) (5,598,686) (6,630,023)
Net decrease in net assets from stockholder transactions (17,827,395) (19,890,068) (5,598,686) (6,630,023)
Capital share transactions:        
Issuance of common stock under dividend reinvestment plan 208,742
 563,844
 159,167
 84,479
Repurchases of common stock under dividend reinvestment plan (208,742) (563,844) (159,167) (84,479)
Net increase in net assets from capital share transactions —

—
Net change in net assets from capital share transactions —

—
Total decrease in net assets (12,131,095) (32,940,634) (3,692,718) (5,905,226)
Net assets at beginning of period 325,829,394
 356,807,103
 293,636,434
 325,829,394
Net assets at end of period $313,698,299
 $323,866,469
 $289,943,716
 $319,924,168
Net asset value per common share $10.65
 $10.99
 $9.84
 $10.86
Common shares outstanding at end of period 29,466,768
 29,466,768
 29,466,768
 29,466,768








See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.Oaktree Strategic Income Corporation
Consolidated Statements of Cash Flows
(unaudited)


  Three months ended
December 31, 2017		 Three months ended
December 31, 2016
Operating activities:   
Net increase in net assets resulting from operations $1,905,968
 $724,797
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:    
Net unrealized (appreciation) depreciation on investments (1,741,899) 5,227,440
Net unrealized appreciation on secured borrowings —
 14,575
Net realized (gain) loss on investments and secured borrowings 4,382,706
 (82,762)
PIK interest income (298,414) (59,404)
Recognition of fee income (398,049) (406,444)
Accretion of original issue discount on investments (885,752) (692,196)
Amortization of deferred financing costs 198,400
 224,300
Changes in operating assets and liabilities:    
Fee income received 425,622
 435,251
Decrease in restricted cash 1,211,589
 1,571,349
Decrease in interest, dividends and fees receivable 335,061
 808,211
(Increase) decrease in due from portfolio companies 226,654
 (435,668)
(Increase) decrease in receivables from unsettled transactions (17,301,666) 12,869,092
(Increase) decrease in other assets (851,309) 135,034
Increase (decrease) in accounts payable, accrued expenses and other liabilities 517,540
 (144,199)
Decrease in base management fee and incentive fee payable (605,599) (578,360)
Increase in due to affiliate 274,377
 138,975
Increase in interest payable 8,078
 43,743
Increase in payables from unsettled transactions 13,890,647
 14,490,000
Decrease in amounts payable to syndication partners —
 (18,750)
Increase (decrease) in director fees payable 31,992
 (112,625)
Purchases of investments and net revolver activity (143,897,574) (37,633,299)
Principal payments received on investments (scheduled payments) 1,861,286
 2,828,443
Principal payments received on investments (payoffs) 73,171,499
 58,761,164
Proceeds from the sale of investments 86,408,902
 5,123,460
Net cash provided by operating activities 18,870,059
 63,232,127
Financing activities:    
Distributions paid in cash (5,439,519) (6,545,544)
Borrowings under credit facilities 15,500,000
 4,200,000
Repayments of borrowings under credit facilities (24,400,000) (39,370,000)
Repayments of secured borrowings —
 (5,000,000)
Proceeds from issuance of notes payable 3,000,000
 —
Repayments of notes payable (3,000,000) —
Repurchases of common stock under dividend reinvestment plan (159,167) (84,479)
Net cash used by financing activities (14,498,686)
(46,800,023)
Net increase in cash and cash equivalents 4,371,373
 16,432,104
Cash and cash equivalents, beginning of period 35,604,127
 19,778,841
Cash and cash equivalents, end of period $39,975,500
 $36,210,945
Supplemental information:    
Cash paid for interest $2,557,999
 $2,188,085
Non-cash financing activities:    
Issuance of shares of common stock under dividend reinvestment plan $159,167
 $84,479
See notes to Consolidated Financial Statements.
Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
December 31, 2017
(unaudited)



  Nine months ended
June 30, 2017		 Nine months ended
June 30, 2016
Operating activities:   
Net increase (decrease) in net assets resulting from operations $5,696,300
 $(13,050,566)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities:    
Net unrealized (appreciation) depreciation on investments (2,212,119) 18,640,534
Net unrealized appreciation on secured borrowings 14,575
 —
Net realized loss on investments 13,401,975
 13,360,666
PIK interest income (185,296) (105,288)
Recognition of fee income (1,186,918) (2,868,377)
Accretion of original issue discount on investments (2,835,312) (1,281,598)
Amortization of deferred financing costs 1,056,905
 650,381
Changes in operating assets and liabilities:    
Fee income received 1,136,616
 2,872,568
Decrease in restricted cash 1,384,960
 3,278,098
(Increase) decrease in interest, dividends and fees receivable 1,696,526
 (1,429,710)
(Increase) decrease in due from portfolio companies 30,928
 (258,147)
Decrease in receivables from unsettled transactions 12,023,027
 4,642,115
Increase in other assets (195,704) (281,093)
Decrease in accounts payable, accrued expenses and other liabilities (779,365) (71,205)
Increase (decrease) in base management fee and incentive fee payable (824,017) 676,121
Increase (decrease) in due to FSC CT 25,573
 (397)
Increase in interest payable 147,575
 48,219
Increase in payables from unsettled transactions 12,831,700
 1,615,500
Decrease in amounts payable to syndication partners (18,750) —
Decrease in director fees payable (113,825) —
Purchases of investments and net revolver activity (182,183,437) (260,058,416)
Principal payments received on investments (scheduled payments) 11,667,577
 8,027,442
Principal payments received on investments (payoffs) 143,971,302
 107,307,730
PIK interest income received in cash —
 154,217
Proceeds from the sale of investments 26,851,740
 139,305,087
Net cash provided by operating activities 41,402,536
 21,173,881
Financing activities:    
Distributions paid in cash (17,618,653) (19,326,224)
Borrowings under credit facilities 39,700,000
 19,667,000
Repayments of borrowings under credit facilities (60,470,000) (40,500,000)
Repayments of secured borrowings (5,000,000) —
Proceeds from issuance of notes payable 7,500,000
 29,715,000
Repayments of notes payable (5,700,000) (36,081,000)
Repurchases of common stock under dividend reinvestment plan (208,742) (563,844)
Deferred financing costs paid (125,000) (450,374)
Net cash used by financing activities (41,922,395) (47,539,442)
Net decrease in cash and cash equivalents (519,859) (26,365,561)
Cash and cash equivalents, beginning of period 19,778,841
 41,433,301
Cash and cash equivalents, end of period $19,258,982
 $15,067,740
Supplemental information:    
Cash paid for interest $6,920,272
 $6,349,834
Non-cash operating activities:    
Purchase of investment from restructuring $—
 $(12,559,122)
Proceeds from investment restructuring $—
 $12,559,122
Non-cash financing activities:    
Issuance of shares of common stock under dividend reinvestment plan $208,742
 $563,844
Portfolio Company/Type of Investment (1)(2)(9)(10)(14)  Cash Interest Rate (8) Industry Principal (5)
 Cost Fair Value
Control Investments (3)          
 FSFR Glick JV LLC (7)(12)(15)   Multi-sector holdings      
 Subordinated Note, LIBOR+8% cash due 10/20/2021 (8) 9.23%   $64,524,032
 $64,524,032
 $57,180,650
 87.5% equity interest (18)       7,111,751
 —
        71,635,783
 57,180,650
 Total Control Investments (19.7% of net assets)       $71,635,783
 $57,180,650
Affiliate Investments (4)          
 Ameritox Ltd.   Healthcare services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash 3% PIK due 4/11/2021 (8)(13)(17) 6.69%   8,302,941
 $7,904,767
 $1,010,509
 3,309,873.6 Class A Preferred Units in Ameritox Holdings II, LLC       3,309,874
 —
 327,393.6 Class B Preferred Units in Ameritox Holdings II, LLC       327,394
 —
 1,007.36 Class A Units in Ameritox Holdings II, LLC       5,935,698
 —
        17,477,733
 1,010,509
 Total Affiliate Investments (0.3% of net assets)       $17,477,733
 $1,010,509
           
Non-Control/Non-Affiliate Investments (6)          
 Triple Point Group Holdings, Inc.   Application software      
 First Lien Revolver, LIBOR+4.25% (1% floor) cash due 7/10/2018 (8)(11) 4.25%     $—
 $(402,966)
        —
 (402,966)
 New Trident Holdcorp, Inc.   Healthcare services      
 Second Lien Term Loan, LIBOR+9.5% (1.25% floor) cash due 7/31/2020 (8)(17) 11.19%   1,000,000
 893,824
 50,000
        893,824
 50,000
 NextCare, Inc.   Healthcare services      
 Senior Term Loan, LIBOR+6% (1% floor) cash due 7/31/2018 (8)(13) 7.57%   6,926,108
 6,926,108
 6,749,376
Delayed Draw Term Loan, LIBOR+6% (1% floor) cash due 7/31/2018 (8) 7.57%   1,387,506
 1,387,506
 1,343,082
        8,313,614
 8,092,458
 Aptean, Inc.   Internet software & services      
 First Lien Term Loan, LIBOR+4.25% (1% floor) cash due 12/20/2022 (8)(13)(16) 5.95%   8,222,788
 8,172,012
 8,301,603
        8,172,012
 8,301,603
 TravelCLICK, Inc.   Internet software & services      
 Second Lien Term Loan, LIBOR+7.75% (1% floor) cash due 11/6/2021 (8)(13)(16) 9.32%   2,048,485
 2,011,896
 2,058,727
        2,011,896
 2,058,727
 TV Borrower US, LLC (7)   Integrated telecommunication services      
 First Lien Dollar Term B-1 Loan, LIBOR+4.75% (1% floor) cash due 2/22/2024 (8)(16) 6.44%   1,921,161
 1,912,724
 1,931,967
        1,912,724
 1,931,967
 BeyondTrust Software, Inc.   Application software      
 500,000 Class A membership interests in BeyondTrust Holdings LLC       500,000
 642,057
        500,000
 642,057
See notes to Consolidated Financial Statements.
Fifth Street Senior Floating Rate Corp.Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
June 30,December 31, 2017
(unaudited)




Portfolio Company/Type of Investment (1)(2)(9)(10)(14)  Cash Interest Rate (8) Industry Principal (5)
 Cost Fair Value
 Dynatect Group Holdings, Inc.   Industrial machinery      
 First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 9/30/2020 (8) 5.83%   $3,776,203
 $3,776,203
 $3,662,917
        3,776,203
 3,662,917
 Central Security Group, Inc.   Specialized consumer services      
 First Lien Term Loan, LIBOR+5.625% (1% floor) cash due 10/6/2021 (8)(16) 7.19%   1,661,458
 1,657,341
 1,669,765
        1,657,341
 1,669,765
 Kellermeyer Bergensons Services, LLC   Diversified support services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 10/29/2021 (8)(13)(16) 6.48%   5,238,000
 5,196,971
 5,257,642
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 4/29/2022 (8)(13) 9.88%   280,000
 280,000
 271,250
        5,476,971
 5,528,892
 GOBP Holdings Inc.   Food retail      
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 10/21/2022 (8)(13)(16) 9.94%   3,685,714
 3,645,523
 3,700,697
        3,645,523
 3,700,697
 Executive Consulting Group, LLC   Healthcare services      
 First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 11/21/2019 (8)(13) 6.44%   7,000,000
 7,000,000
 6,999,693
 Delayed Draw Term Loan, LIBOR+4.75% (1% floor) cash due 11/21/2019 (8) 6.44%   3,749,980
 3,749,980
 3,749,815
        10,749,980
 10,749,508
 Metamorph US 3, LLC   Internet software & services      
 First Lien Term Loan, LIBOR+5.5% (1% floor) cash 2% PIK due 12/1/2020 (8)(13)(17) 7.07%   14,031,118
 13,136,533
 5,327,616
 First Lien Revolver, LIBOR+6.5% (1% floor) cash due 12/1/2020 (8)(11)(13)(17) 8.07%   1,080,000
 1,014,310
 (36,540)
        14,150,843
 5,291,076
 Compuware Corporation   Internet software & services      
 First Lien Term Loan B3, LIBOR+4.25% (1% floor) cash due 12/15/2021 (8)(13)(16) 5.63%   8,402,243
 8,328,268
 8,467,906
        8,328,268
 8,467,906
 Motion Recruitment Partners LLC   Human resources & employment services      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 2/13/2020 (8)(13) 7.57%   13,411,554
 13,401,393
 13,424,731
 First Lien Revolver, LIBOR+6% (1% floor) cash due 2/13/2020 (8)(11) 7.57%     (960) 2,849
        13,400,433
 13,427,580
 PowerPlan, Inc.   Internet software & services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 2/23/2022 (8)(13) 6.82%   17,834,390
 17,796,463
 17,834,415
 First Lien Revolver, LIBOR+5.25% (1% floor) cash due 2/23/2021 (8) 6.82%     —
 3
        17,796,463
 17,834,418
 Digital River, Inc.   Internet software & services      
 First Lien Term Loan, LIBOR+6.5% (1% floor) cash due 2/12/2021 (8)(13)(16) 8.08%   2,897,412
 2,876,032
 2,904,655
        2,876,032
 2,904,655
See notes to Consolidated Financial Statements.
Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
December 31, 2017
(unaudited)



Portfolio Company/Type of Investment (1)(2)(10)(14) Industry Principal (5)
 Cost Fair Value
Control Investments (3)        
 FSFR Glick JV LLC (7)(12)(15) Multi-sector holdings      
 Subordinated Note, LIBOR+8% cash due 10/20/2021 (8)   $64,005,755
 $64,005,755
 $61,614,406
 87.5% equity interest     7,111,751
 —
      71,117,506
 61,614,406
 Total Control Investments (19.6% of net assets)     $71,117,506
 $61,614,406
Affiliate Investments (4)        
 Ameritox Ltd. Healthcare services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash 3% PIK due 4/11/2021 (8)(13)   $8,443,901
 $8,433,846
 $8,443,901
 3,309,873.6 Class A Preferred Units in Ameritox Holdings II, LLC     3,309,874
 3,334,371
 327,393.6 Class B Preferred Units in Ameritox Holdings II, LLC     327,394
 —
 1,007.36 Class A Units in Ameritox Holdings II, LLC     5,935,698
 —
      18,006,812
 11,778,272
 Total Affiliate Investments (3.8% of net assets)     $18,006,812
 $11,778,272
         
Non-Control/Non-Affiliate Investments (6)        
 Triple Point Group Holdings, Inc. Application software      
 First Lien Revolver, LIBOR+4.25% (1% floor) cash due 7/10/2018 (8)(11)     $—
 $(437,932)
      —
 (437,932)
 New Trident Holdcorp, Inc. (9) Healthcare services      
 First Lien Term Loan B, LIBOR+5.25% (1.25% floor) cash due 7/31/2019 (8)(13)   $13,590,940
 13,286,561
 11,389,208
 Second Lien Term Loan, LIBOR+9% (1.25% floor) cash due 7/31/2020 (8)   1,000,000
 977,880
 740,835
      14,264,441
 12,130,043
 Accruent, LLC Internet software & services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 5/16/2022 (8)(13)   9,900,000
 9,819,870
 9,960,242
 First Lien Revolver, LIBOR+5.25% (1% floor) cash due 5/16/2022 (8)(11)     (685) 517
      9,819,185
 9,960,759
 Survey Sampling International, LLC Research & consulting services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 12/16/2020 (8)(13)   5,683,063
 5,654,610
 5,697,270
 Second Lien Term Loan, LIBOR+9% (1% floor) cash due 12/16/2021 (8)   1,000,000
 987,381
 985,000
      6,641,991
 6,682,270
 Answers Corporation Internet software & services      
 Delayed Draw DIP Facility, LIBOR+7% (1% floor) cash due 4/15/2021 (8)(13)   2,825,332
 2,759,367
 2,842,990
      2,759,367
 2,842,990
 Maxor National Pharmacy Services, LLC Pharmaceuticals      
 First Lien Term Loan, LIBOR+5.25% (1.25% floor) cash due 1/31/2020 (8)(13)   9,092,205
 9,092,205
 9,034,233
      9,092,205
 9,034,233
 NextCare, Inc. Healthcare services      
 Senior Term Loan, LIBOR+6% (1% floor) cash due 7/31/2018 (8)(13)   6,975,766
 6,975,766
 6,598,694
Delayed Draw Term Loan, LIBOR+6% (1% floor) cash due 7/31/2018 (8)   1,397,381
 1,397,381
 1,306,322
      8,373,147
 7,905,016
 Aptean, Inc. Application software      
 First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 12/20/2022 (8)(13)   11,271,750
 11,194,953
 11,331,660
 Second Lien Term Loan, LIBOR+9.5% (1% floor) cash due 12/20/2023 (8)   200,000
 197,214
 200,626
      11,392,167
 11,532,286
 Stratus Technologies, Inc. Computer hardware      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 4/28/2021 (8)(13)   1,340,543
 1,302,855
 1,342,218
      1,302,855
 1,342,218
 TravelCLICK, Inc. Internet software & services      
 Second Lien Term Loan, LIBOR+7.75% (1% floor) cash due 11/6/2021 (8)(13)   2,048,485
 2,008,288
 2,058,727
      2,008,288
 2,058,727
Portfolio Company/Type of Investment (1)(2)(9)(10)(14)  Cash Interest Rate (8) Industry Principal (5)
 Cost Fair Value
 Staples, Inc.    Distributors      
 First Lien Term Loan, LIBOR+4% (1% floor) cash due 9/12/2024 (8)(16) 5.49%   $8,623,000
 $8,602,200
 $8,471,020
        8,602,200
 8,471,020
 Aptos, Inc.   Data processing & outsourced services      
 First Lien Term Loan, LIBOR+6.75% (1% floor) cash due 9/1/2022 (8)(13) 8.44%   5,902,500
 5,807,585
 5,843,475
        5,807,585
 5,843,475
 Zep Inc.    Housewares & specialties      
 First Lien Term Loan, LIBOR+4% (1% floor) cash due 8/12/2024 (8)(16) 5.38%   4,738,125
 4,781,391
 4,783,540
        4,781,391
 4,783,540
 All Web Leads, Inc.   Advertising      
 First Lien Term Loan, LIBOR+7.5% (1% floor) cash due 12/29/2020 (8)(13) 8.02%   25,662,846
 25,662,845
 23,301,864
        25,662,845
 23,301,864
 Allied Universal Holdco, LLC (f/k/a USAGM Holdco, LLC)    Security & alarm services      
 First Lien Term Loan, LIBOR+3.75% (1% floor) cash due 7/28/2022 (8)(16) 5.44%   7,959,494
 7,995,399
 7,908,513
        7,995,399
 7,908,513
 Internet Pipeline, Inc.   Internet software & services      
 First Lien Term Loan, LIBOR+7.25% (1% floor) cash due 8/4/2022 (8)(13) 8.82%   13,081,433
 13,068,600
 13,225,798
 First Lien Revolver, LIBOR+7.25% (1% floor) cash due 8/4/2021 (8) 8.82%     —
 8,000
        13,068,600
 13,233,798
 Valet Merger Sub, Inc.   Environmental & facilities services      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 9/24/2021 (8)(13) 8.57%   5,865,000
 5,838,310
 5,864,905
 First Lien Revolver, LIBOR+7% (1% floor) cash due 9/24/2021 (8)(11) 8.57%   —
 (10,697) (13)
 Incremental Term Loan , LIBOR+7% (1% floor) cash due 9/24/2021 (8) 8.57%   8,386,611
 8,312,611
 8,386,476
        14,140,224
 14,251,368
 DigiCert, Inc.   Internet software & services      
 First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 10/21/2021 (8)(16) 6.13%   11,000,000
 10,945,000
 11,154,660
        10,945,000
 11,154,660
 Lytx, Inc.   Research & consulting services      
 500 Class B Units in Lytx Holdings, LLC       —
 227,980
 500 Class A Units in Lytx Holdings, LLC       292,456
 358,382
        292,456
 586,362
 4 Over International, LLC   Commercial printing      
 First Lien Term Loan, LIBOR+6.0% (1% floor) cash due 6/7/2022 (8)(13) 7.57%   5,850,412
 5,775,859
 5,850,412
 First Lien Revolver, LIBOR+6.0% (1% floor) cash due 6/7/2021 (8)(11) 7.57%     (502) —
        5,775,357
 5,850,412

See notes to Consolidated Financial Statements.
Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
December 31, 2017
(unaudited)



Portfolio Company/Type of Investment (1)(2)(9)(10)(14)  Cash Interest Rate (8) Industry Principal (5)
 Cost Fair Value
 Ancile Solutions, Inc.   Internet software & services      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 6/30/2021 (8)(13) 8.69%   $9,754,628
 $9,551,186
 $9,666,837
        9,551,186
 9,666,837
 Curvature, Inc.    IT consulting & other services      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 10/30/2023 (8)(13)(16) 6.57%   9,900,000
 9,848,644
 8,514,000
        9,848,644
 8,514,000
 Ministry Brands, LLC   Internet software & services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 12/2/2022 (8)(13) 6.38%   9,648,871
 9,569,908
 9,734,153
 First Lien Delayed Draw Term Loan, LIBOR+5% (1% floor) cash due 12/2/2022 (8)(13) 6.38%   4,185,178
 4,142,520
 4,230,369
 Second Lien Term Loan, LIBOR+9.25% (1% floor) cash due 6/2/2023 (8)(13) 10.63%   1,568,067
 1,548,483
 1,575,472
 Second Lien Delayed Draw Term Loan, LIBOR+9.25% (1% floor) cash due 6/2/2023 (8) 10.63%   431,933
 426,538
 433,973
 First Lien Revolver, LIBOR+5% (1% floor) cash due 12/2/2022 (8) 6.57%   100,000
 99,139
 100,884
        15,786,588
 16,074,851
 Impact Sales, LLC   Advertising      
 First Lien Term Loan B, LIBOR+7% (1% floor) cash due 12/30/2021 (8) 8.33%   3,712,500
 3,625,400
 3,701,363
 First Lien Delayed Draw Term Loan, LIBOR+7% (1% floor) cash due 12/30/2021 (8) 8.33%   170,586
 170,586
 166,839
        3,795,986
 3,868,202
 Empower Payments Acquisition, Inc.    Commercial printing      
 First Lien Term Loan B, LIBOR+5.5% (1% floor) cash due 11/30/2023 (8)(13) 7.19%   6,138,000
 6,033,112
 6,138,000
        6,033,112
 6,138,000
 First American Payment Systems, L.P.    Diversified support services      
 First Lien Term Loan B, LIBOR+5.75% (1% floor) cash due 1/8/2024 (8)(13)(16) 7.14%   4,106,250
 4,071,204
 4,131,914
        4,071,204
 4,131,914
 DFT Intermediate LLC    Specialized finance      
 First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 3/1/2023 (8)(13) 6.85%   14,887,500
 14,567,332
 14,779,383
 First Lien Revolver, LIBOR+5.5% (1% floor) cash due 3/1/2022 (8) 7.07%   750,000
 733,438
 744,553
        15,300,770
 15,523,936
 Onvoy, LLC    Integrated telecommunication services      
 First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 2/10/2024 (8)(13) 6.19%   7,940,000
 7,905,112
 6,828,400
        7,905,112
 6,828,400
 Salient CRGT, Inc.    IT consulting & other services      
 First Lien Term Loan, LIBOR+5.75% (1% floor) cash due 2/28/2022 (8)(13)(16) 7.32%   6,254,315
 6,150,338
 6,309,041
        6,150,338
 6,309,041
 MHE Intermediate Holdings, LLC    Diversified support services      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 3/11/2024 (8)(13) 6.69%   11,745,186
 11,535,652
 11,745,187
 First Lien Revolver, LIBOR+5% (1% floor) cash due 3/10/2023 (8) 6.67%   1,353,038
 1,255,454
 1,353,038
 Delayed Draw Term Loan, LIBOR+5% (1% floor) cash due 3/11/2024 (8) 6.69%   1,868,736
 1,792,617
 1,868,736
        14,583,723
 14,966,961

See notes to Consolidated Financial Statements.

Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
December 31, 2017
(unaudited)





Portfolio Company/Type of Investment (1)(2)(9)(10)(14)  Cash Interest Rate (8) Industry Principal (5)
 Cost Fair Value
 Paris Presents Incorporated    Personal Products      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 12/31/2020 (8)(13) 6.57%   $3,126,008
 $3,101,186
 $3,126,009
 Second Lien Term Loan, LIBOR+8.75% (1% floor) cash due 12/31/2021 (8)(13) 10.32%   3,500,000
 3,441,311
 3,482,500
        6,542,497
 6,608,509
 PSI Services LLC    Human Resource & Employment Services      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 1/20/2023 (8)(13) 6.33%   6,736,979
 6,649,112
 6,676,347
        6,649,112
 6,676,347
 MHVC Acquisition Corp.    Aerospace & Defense      
 First Lien Term Loan B, LIBOR+5.25% (1% floor) cash due 4/25/2024 (8)(13)(16) 6.95%   6,467,500
 6,438,297
 6,548,376
        6,438,297
 6,548,376
 Imagine! Print Solutions, LLC    Advertising      
 First Lien Term Loan B, LIBOR+4.75% (1% floor) cash due 6/21/2022 (8)(16) 6.45%   4,952,525
 4,908,085
 4,853,475
        4,908,085
 4,853,475
 Veritas US Inc.    Internet software & services      
 First Lien Term Loan B, LIBOR+4.5% (1% floor) cash due 1/27/2023 (8)(16) 6.19%   13,041,836
 13,181,069
 13,089,438
        13,181,069
 13,089,438
 UOS, LLC   Trucking      
 First Lien Term Loan B, LIBOR+5.5% (1% floor) cash due 4/18/2023 (8)(16) 7.07%   7,969,975
 8,152,865
 8,159,262
        8,152,865
 8,159,262
 Accudyne Industries, LLC    Oil & gas equipment & services      
 First Lien Term Loan, LIBOR+3.75% (1% floor) cash due 8/18/2024 (8)(16) 5.14%   13,965,000
 14,019,903
 14,085,029
        14,019,903
 14,085,029
 Truck Hero, Inc.    Auto parts & equipment      
 First Lien Term Loan, LIBOR+4% (1% floor) cash due 4/22/2024 (8)(16) 5.64%   5,842,640
 5,856,506
 5,850,878
        5,856,506
 5,850,878
 Alphabet Holding Company, Inc.    Healthcare distributors      
 First Lien Term Loan, LIBOR+3.5% (1% floor) cash due 9/26/2024 (8)(16) 5.07%   4,987,500
 4,963,329
 4,837,875
        4,963,329
 4,837,875
 McAfee, LLC    Internet software & services      
 First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 9/30/2024 (8)(16) 6.07%   6,982,500
 6,914,978
 6,970,036
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 9/29/2025 (8)(16) 10.07%   2,000,000
 2,012,500
 2,010,010
        8,927,478
 8,980,046
 99 Cents Only Stores    General merchandise stores      
 First Lien Term Loan, LIBOR+5.0% (1% floor) cash 1.5% PIK due 01/13/2022 (8)(16) 6.48%   1,998,263
 1,820,550
 1,945,809
        1,820,550
 1,945,809

See notes to Consolidated Financial Statements.


Fifth Street Senior Floating Rate Corp.Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
June 30,December 31, 2017
(unaudited)



Portfolio Company/Type of Investment (1)(2)(10)(14) Industry Principal (5)
 Cost Fair Value
 GTCR Valor Companies, Inc. Advertising      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 6/16/2023 (8)(13)   $12,127,508
 $11,582,138
 $12,214,705
      11,582,138
 12,214,705
 Verdesian Life Sciences, LLC Fertilizers & agricultural chemicals      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 7/1/2020 (8)(13)   3,295,860
 3,271,743
 2,776,762
      3,271,743
 2,776,762
 TV Borrower US, LLC (7) Integrated telecommunication services      
 First Lien Dollar Term B-1 Loan, LIBOR+4.75% (1% floor) cash due 2/16/2024 (8)   3,391,500
 3,375,357
 3,415,529
      3,375,357
 3,415,529
 American Dental Partners, Inc. Healthcare services      
 First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 8/19/2021 (8)(13)   5,133,293
 5,118,578
 4,902,295
      5,118,578
 4,902,295
 BeyondTrust Software, Inc. Application software      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 9/25/2019 (8)(13)   16,412,731
 16,303,289
 16,371,697
 First Lien Revolver, LIBOR+7% (1% floor) cash due 9/25/2019 (8)(11)     (20,850) (9,012)
 500,000 Class A membership interests in BeyondTrust Holdings LLC     500,000
 584,914
      16,782,439
 16,947,599
 Dynatect Group Holdings, Inc. Industrial machinery      
 First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 9/30/2020 (8)   3,796,203
 3,796,203
 3,748,751
      3,796,203
 3,748,751
 Idera, Inc. Internet software & services      
 First Lien Term Loan B, L+5% (1% floor) cash due 6/27/2024   3,466,364
 3,431,700
 3,466,364
      3,431,700
 3,466,364
 Central Security Group, Inc. (9) Specialized consumer services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 10/6/2020 (8)   1,670,022
 1,664,536
 1,673,504
      1,664,536
 1,673,504
 Kellermeyer Bergensons Services, LLC Diversified support services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 10/29/2021 (8)(13)   5,265,000
 5,219,193
 5,159,700
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 4/29/2022 (8)(13)   280,000
 280,000
 269,500
      5,499,193
 5,429,200
 GOBP Holdings Inc. Food retail      
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 10/21/2022 (8)(13)   3,685,714
 3,641,981
 3,717,964
      3,641,981
 3,717,964
 NAVEX Global, Inc. Internet software & services      
 Second Lien Term Loan, LIBOR+8.75% (1% floor) cash due 11/18/2022 (8)   910,156
 910,156
 905,605
      910,156
 905,605
 Executive Consulting Group, LLC Healthcare services      
 First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 11/21/2019 (8)(13)   7,000,000
 7,000,000
 6,966,108
 Delayed Draw Term Loan, LIBOR+4.75% (1% floor) cash due 11/21/2019 (8)   3,833,320
 3,833,320
 3,825,481
      10,833,320
 10,791,589
 TIBCO Software, Inc. (9) Internet software & services      
 First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 12/4/2020 (8)   7,859,452
 7,590,772
 7,912,778
      7,590,772
 7,912,778
See notes to Consolidated Financial Statements.
Fifth Street Senior Floating Rate Corp.
Consolidated Schedule of Investments
June 30, 2017
(unaudited)


Portfolio Company/Type of Investment (1)(2)(10)(14) Industry Principal (5)
 Cost Fair Value
 Metamorph US 3, LLC (9) Internet software & services      
 First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 12/1/2020 (8)(13)   $14,108,177
 $13,838,871
 $8,089,530
 First Lien Revolver, LIBOR+5.5% (1% floor) cash due 12/1/2020 (8)(11)(13)   600,000
 572,567
 (167,856)
      14,411,438
 7,921,674
 Compuware Corporation Internet software & services      
 First Lien Term Loan B3, LIBOR+4.25% (1% floor) cash due 12/15/2021 (8)(13)   7,445,002
 7,360,988
 7,510,146
      7,360,988
 7,510,146
 Motion Recruitment Partners LLC Diversified support services      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 2/13/2020 (8)(13)   13,606,554
 13,587,725
 13,539,915
 First Lien Revolver, LIBOR+6% (1% floor) cash due 2/13/2020 (8)(11)   

 (1,680) (14,203)
      13,586,045
 13,525,712
 PowerPlan, Inc. (9) Internet software & services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 2/23/2022 (8)(13)   17,844,314
 17,802,721
 17,788,163
 First Lien Revolver, LIBOR+5.25% (1% floor) cash due 2/23/2021 (8)(11)     —
 (6,608)
      17,802,721
 17,781,555
 Digital River, Inc. Internet software & services      
 First Lien Term Loan, LIBOR+6.5% (1% floor) cash due 2/12/2021 (8)(13)   4,723,868
 4,678,690
 4,747,488
      4,678,690
 4,747,488
 Research Now Group, Inc. Data processing & outsourced services      
 Second Lien Term Loan, LIBOR+8.75% (1% floor) cash due 3/18/2022 (8)   4,000,000
 3,960,000
 3,940,000
      3,960,000
 3,940,000
 My Alarm Center, LLC Security & alarm services      
 First Lien Term Loan A, LIBOR+8% (1% floor) cash due 1/9/2019 (8)(13)   16,047,619
 16,047,619
 16,368,572
 First Lien Term Loan B, LIBOR+8% (1% floor) cash due 1/9/2019 (8)   949,633
 949,633
 968,625
 First Lien Term Loan C, LIBOR+8% (1% floor) cash due 1/9/2019 (8)   864,435
 864,435
 881,724
 First Lien Term Revolver, LIBOR+8% (1% floor) cash due 1/9/2019 (8)   813,333
 813,333
 829,600
      18,675,020
 19,048,521
 Raley's Food retail      
 First Lien Term Loan, LIBOR+6.25% (1% floor) cash due 5/18/2022 (8)(13)   3,237,242
 3,188,990
 3,261,521
      3,188,990
 3,261,521
 Aptos, Inc. Data processing & outsourced services      
 First Lien Term Loan, LIBOR+6.75% (1% floor) cash due 9/1/2022 (8)(13)   5,955,000
 5,851,928
 5,895,450
      5,851,928
 5,895,450
 All Web Leads, Inc. Advertising      
 First Lien Term Loan, LIBOR+6.5% (1% floor) cash due 12/29/2020 (8)(13)   28,105,908
 28,105,908
 24,354,233
      28,105,908
 24,354,233
 USAGM Holdco, LLC  Security & alarm services      
 First Lien Term Loan, LIBOR+3.75% (1% floor) cash due 7/28/2022 (8)   3,000,000
 3,022,137
 3,013,125
      3,022,137
 3,013,125
 Internet Pipeline, Inc. Internet software & services      
 First Lien Term Loan, LIBOR+7.25% (1% floor) cash due 8/4/2022 (8)(13)   11,726,267
 11,726,267
 11,753,451
 First Lien Revolver, LIBOR+7.25% (1% floor) cash due 8/4/2021 (8)     —
 1,855
      11,726,267
 11,755,306
 Poseidon Merger Sub, Inc. Advertising      
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 8/15/2023 (8)   7,000,000
 6,990,363
 7,109,169
      6,990,363
 7,109,169
 American Seafoods Group LLC Food distributors      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 8/19/2021 (8)(13)   2,657,896
 2,621,987
 2,675,624
 Second Lien Term Loan, LIBOR+9% (1% floor) cash due 2/19/2022 (8)   3,000,000
 2,978,793
 2,910,000
      5,600,780
 5,585,624
See notes to Consolidated Financial Statements.
Fifth Street Senior Floating Rate Corp.
Consolidated Schedule of Investments
June 30, 2017
(unaudited)


Portfolio Company/Type of Investment (1)(2)(10)(14) Industry Principal (5)
 Cost Fair Value
 Valet Merger Sub, Inc. Environmental & facilities services      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 9/24/2021 (8)(13)   $5,895,000
 $5,865,296
 $5,947,489
 First Lien Revolver, LIBOR+7% (1% floor) cash due 9/24/2021 (8)   500,000
 488,680
 507,420
      6,353,976
 6,454,909
 DigiCert, Inc. Internet software & services      
 Second Lien Term Loan, LIBOR+9% (1% floor) cash due 10/21/2022 (8)(13)   2,000,000
 1,984,175
 2,003,447
      1,984,175
 2,003,447
 Lytx, Inc. Research & consulting services      
 First Lien Term Loan, LIBOR+8.5% (1% floor) cash due 3/15/2023 (8)   9,876,400
 9,876,400
 10,170,320
 500 Class A Units in Lytx Holdings, LLC     514,743
 699,332
      10,391,143
 10,869,652
 4 Over International, LLC Commercial printing      
 First Lien Term Loan, LIBOR+6.0% (1% floor) cash due 6/7/2022 (8)(13)   5,880,206
 5,831,559
 5,920,300
 First Lien Revolver, LIBOR+6.0% (1% floor) cash due 6/7/2021 (8)(11)     (536) 467
      5,831,023
 5,920,767
 OBHG Management Services, LLC Healthcare services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 6/28/2022 (8)(13)   16,002,000
 15,996,082
 15,898,857
 First Lien Revolver, LIBOR+5.25% (1% floor) cash due 6/28/2021 (8)(11)     (32) (645)
      15,996,050
 15,898,212
 Ancile Solutions, Inc. Internet software & services      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 6/30/2021 (8)(13)   9,944,654
 9,711,690
 10,015,553
      9,711,690
 10,015,553
 Pomeroy Group Holdings, Inc.  IT consulting & other services      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 11/12/2021 (8)(13)   4,454,774
 4,343,940
 4,254,309
      4,343,940
 4,254,309
 Sailpoint Technologies, Inc.  Application software      
 First Lien Term Loan, LIBOR+8% (1% floor) cash due 8/16/2021 (8)   17,391,304
 17,058,234
 17,043,478
 First Lien Revolver, LIBOR+8% (1% floor) cash due 8/16/2021 (8)(11)     (3,267) (600)
      17,054,967
 17,042,878
 SMS Systems Maintenance Services, Inc.  IT consulting & other services      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 10/30/2023 (8)(13)   9,950,000
 9,894,285
 9,943,831
      9,894,285
 9,943,831
 Cardenas Markets LLC Food retail      
 First Lien Term Loan, LIBOR+5.75% (1% floor) cash due 11/29/2023 (8)(13)   3,283,500
 3,253,407
 3,287,605
      3,253,407
 3,287,605
 Ministry Brands, LLC Internet software & services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 12/2/2022 (8)(13)   9,673,175
 9,585,868
 9,750,662
 First Lien Delayed Draw Term Loan, LIBOR+5% (1% floor) cash due 12/2/2022 (8)(13)   2,671,520
 2,647,405
 2,692,922
 Second Lien Term Loan, LIBOR+9.25% (1% floor) cash due 6/2/2023 (8)(13)   1,568,067
 1,546,657
 1,605,798
 Second Lien Delayed Draw Term Loan, LIBOR+9.25% (1% floor) cash due 6/2/2023 (8)   431,933
 426,035
 426,035
 First Lien Revolver, LIBOR+5% (1% floor) cash due 12/2/2022 (8)(11)     (903) 801
      14,205,062
 14,476,218
 Impact Sales, LLC Advertising      
 First Lien Term Loan B, LIBOR+7% (1% floor) cash due 12/30/2021 (8)   3,731,250
 3,632,399
 3,740,083
 First Lien Delayed Draw Term Loan, LIBOR+7% (1% floor) cash due 12/30/2021 (8)   171,445
 171,445
 180,322
      3,803,844
 3,920,405

See notes to Consolidated Financial Statements.
Fifth Street Senior Floating Rate Corp.
Consolidated Schedule of Investments
June 30, 2017
(unaudited)


Portfolio Company/Type of Investment (1)(2)(10)(14) Industry Principal (5)
 Cost Fair Value
 Auction.com, LLC Internet software & services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 5/12/2019 (8)(13)   $198,477
 $198,854
 $200,462
      198,854
 200,462
 Empower Payments Acquisition, Inc.  Commercial printing      
 First Lien Term Loan B, LIBOR+5.5% (1% floor) cash due 11/30/2023 (8)(13)   6,169,000
 6,054,561
 6,222,473
      6,054,561
 6,222,473
 First American Payment Systems, L.P.  Diversified support services      
 First Lien Term Loan B, LIBOR+5.75% (1% floor) cash due 1/8/2024 (8)(13)   4,312,500
 4,272,520
 4,361,016
      4,272,520
 4,361,016
 DFT Intermediate LLC  Specialized finance      
 First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 3/1/2023 (8)(13)   14,962,500
 14,609,258
 14,729,700
 First Lien Revolver, LIBOR+5.5% (1% floor) cash due 3/1/2022 (8)   750,000
 732,500
 738,331
      15,341,758
 15,468,031
 Systems Inc.  Industrial machinery      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 3/3/2022 (8)(13)   9,170,213
 9,041,830
 9,124,362
 First Lien Revolver, LIBOR+5.5% (1% floor) cash due 3/3/2022 (8)(11)     (8,400) (7,920)
      9,033,430
 9,116,442
 Onvoy, LLC  Integrated telecommunication services      
 First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 2/10/2024 (8)(13)   7,980,000
 7,942,025
 8,019,900
      7,942,025
 8,019,900
 Salient CRGT, Inc.  IT consulting & other services      
 First Lien Term Loan, LIBOR+5.75% (1% floor) cash due 2/28/2022 (8)(13)   6,459,375
 6,338,841
 6,443,227
      6,338,841
 6,443,227
 MHE Intermediate Holdings  Diversified support services      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 3/11/2024 (8)(13)   11,804,356
 11,576,722
 11,844,250
 First Lien Revolver, LIBOR+5% (1% floor) cash due 3/10/2023 (8)   656,814
 555,477
 674,128
 Delayed Draw Term Loan, LIBOR+5% (1% floor) cash due 3/11/2024 (8)   1,131,367
 1,036,890
 1,131,367
      13,169,089
 13,649,745
 Paris Presents Incorporated  Personal Products      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 12/31/2020 (8)(13)   3,142,003
 3,112,731
 3,142,003
 Second Lien Term Loan, LIBOR+8.75% (1% floor) cash due 12/31/2021 (8)(13)   3,500,000
 3,433,750
 3,465,000
      6,546,481
 6,607,003
 PSI Services LLC  Human Resource & Employment Services      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 1/20/2023 (8)(13)   6,753,906
 6,656,896
 6,656,896
      6,656,896
 6,656,896
 MHVC Acquisition Corp.  Aerospace & Defense      
 First Lien Term Loan B, LIBOR+5.25% (1% floor) cash due 4/25/2024 (8)(13)   6,500,000
 6,468,283
 6,581,250
      6,468,283
 6,581,250
LSF9 Atlantis Holdings, LLC  Computer & Electronics Retail      
 First Lien Term Loan B, LIBOR+6% (1% floor) cash due 4/21/2023 (8)(13)   7,500,000
 7,427,113
 7,585,950
      7,427,113
 7,585,950
 Everi Payments Inc.  Casinos & gaming      
 First Lien Term Loan B, LIBOR+4.5% (1% floor) cash due 5/9/2024 (8)(13)   5,000,000
 4,975,301
 5,041,425
      4,975,301
 5,041,425
See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.
Consolidated Schedule of Investments
June 30, 2017
(unaudited)


Portfolio Company/Type of Investment (1)(2)(10)(14) Industry Principal (5)
 Cost Fair Value
 BJ's Wholesale Club, Inc.  Hypermarkets & super centers      
 First Lien Term Loan B, LIBOR+3.75% (1% floor) cash due 1/26/2024 (8)   $3,000,000
 $3,003,703
 $2,914,995
      3,003,703
 2,914,995
 Bass Pro Group, LLC  Specialty Stores      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 12/15/2023 (8)   3,000,000
 2,940,769
 2,921,820
      2,940,769
 2,921,820
 Imagine ! Print Solutions, LLC  Advertising      
 First Lien Term Loan B, LIBOR+4.75% (1% floor) cash due 6/21/2022 (8)   6,982,500
 6,912,675
 6,982,500
      6,912,675
 6,982,500
MNO Holdings III Corp.  Specialty Stores      
 First Lien Term Loan B, LIBOR+4.5% (1% floor) cash due 6/19/2024 (8)(13)   2,500,000
 2,487,500
 2,521,875
      2,487,500
 2,521,875
 Total Non-Control/Non-Affiliate Investments (156.8% of net assets)     $500,706,398
 $491,785,575
 Total Portfolio Investments (180.2% of net assets)     $589,830,716
 $565,178,253
Cash and Cash Equivalents        
Wells Fargo Bank Institutional Money Market Fund
     $16,260,430
 $16,260,430
Other cash accounts     2,998,552
 2,998,552
 Total Cash and Cash Equivalents (6.1% of net assets)     $19,258,982
 $19,258,982
Total Portfolio Investments, Cash and Cash Equivalents (186.3% of net assets)     $609,089,698
 $584,437,235
Portfolio Company/Type of Investment (1)(2)(9)(10)(14)  Cash Interest Rate (8) Industry Principal (5)
 Cost Fair Value
 Windstream Services LLC (7)    Integrated telecommunication services      
 First Lien Term Loan B6, LIBOR+4.0% (0.75% floor) cash due 03/29/2021 (8)(13)(16) 5.50%   $7,460,376
 $7,116,628
 $7,029,875
        7,116,628
 7,029,875
 Vine Oil & Gas LP    Oil & gas exploration & production      
 First Lien Term Loan B, LIBOR+6.875% (1% floor) cash due 11/25/2021 (8)(13)(16) 8.44%   10,000,000
 9,913,159
 9,925,000
        9,913,159
 9,925,000
 Uniti Group LP (7)    Specialized REITs      
 First Lien Term Loan B, LIBOR+3.0% (1% floor) cash due 10/24/2022 (8)(13)(16) 4.57%   4,987,406
 4,841,845
 4,830,003
        4,841,845
 4,830,003
 Cadence Aerospace LLC (7)    Aerospace & defense      
 First Lien Term Loan, LIBOR+6.5% cash due 10/27/2023 (8) 7.37%   9,088,235
 8,999,320
 8,997,353
        8,999,320
 8,997,353
 Avantor Inc.    Commodity chemicals      
 First Lien Term Loan, LIBOR+4.0% (1% floor) cash due 11/21/2024 (8)(13)(16) 5.51%   10,000,000
 9,991,297
 10,059,400
        9,991,297
 10,059,400
 CenturyLink, Inc. (7)    Alternative carriers      
 First Lien Term Loan B, LIBOR+2.75% cash due 1/31/2025 (8)(13)(16) 4.32%   5,000,000
 4,806,250
 4,831,250
        4,806,250
 4,831,250
 Intelsat Jackson Holding (7)    Alternative carriers      
 First Lien Term Loan B3, LIBOR+3.75% (1% floor) cash due 11/27/2023 (8)(16) 5.13%   5,000,000
 4,937,500
 4,906,250
        4,937,500
 4,906,250
 Michaels Stores, Inc. (7)    Specialty stores      
 First Lien Term Loan B1, LIBOR+2.75% (1% floor) cash due 1/30/2023 (8)(13)(16) 4.21%   3,000,000
 2,977,500
 3,004,020
        2,977,500
 3,004,020
 Rite Aid Corporation (7)    Drug retail      
 Second Lien Term Loan 1, LIBOR+4.75% (1% floor) cash due 8/21/2020 (8)(13)(16) 6.24%   2,000,000
 2,017,500
 2,010,840
 Second Lien Term Loan 2, LIBOR+3.88% (1% floor) cash due 6/21/2021 (8)(13)(16) 5.37%   2,000,000
 2,012,500
 2,007,500
        4,030,000
 4,018,340
 Avaya Inc. (7)    Communications equipment      
 First Lien Term Loan B, LIBOR+4.75% (1% floor) cash due 11/09/2024 (8)(13)(16) 6.23%   15,000,000
 14,812,970
 14,789,100
        14,812,970
 14,789,100
 Asset International, Inc.    Research & consulting services      
 First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 12/29/2024 (8)(13) 6.19%   14,000,000
 13,720,438
 13,720,000
 First Lien Revolver, LIBOR+4.5% (1% floor) cash due 12/29/2022 (8) 6.19%   625,000
 562,637
 562,500
        14,283,075
 14,282,500
 KIK Custom Products Inc. (7)    Household products      
 First Lien Term Loan B, LIBOR+4.5% (1% floor) cash due 8/26/2022 (8)(13)(16) 6.17%   5,000,000
 5,037,500
 5,040,000
        5,037,500
 5,040,000


See notes to Consolidated Financial Statements.
Fifth Street Senior Floating Rate Corp.Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
June 30,December 31, 2017
(unaudited)



Portfolio Company/Type of Investment (1)(2)(9)(10)(14)  Cash Interest Rate (8) Industry Principal (5)
 Cost Fair Value
 Indivior Finance Sarl (7)    Pharmaceuticals      
 First Lien Term Loan B, LIBOR+4.5% (1% floor) cash due 12/19/2022 (8)(13)(16) 6.11%   $8,500,000
 $8,457,500
 $8,542,500
        8,457,500
 8,542,500
 SUPERVALU Inc. (7)    Food retail      
 First Lien Term Loan B, LIBOR+3.5% (1% floor) cash due 6/08/2024 (8)(16) 5.07%   4,000,000
 3,920,000
 3,920,000
        3,920,000
 3,920,000
 Tribe Buyer LLC    Human resource & employment services      
 First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 2/16/2024 (8)(13)(16) 5.68%   3,000,000
 2,992,500
 3,039,375
        2,992,500
 3,039,375
 Chloe Ox Parent LLC    Health care services      
 First Lien Term Loan B, LIBOR+5.0% (1% floor) cash due 12/14/2024 (8)(13)(16) 6.64%   13,000,000
 12,870,000
 13,048,750
        12,870,000
 13,048,750
 Total Non-Control/Non-Affiliate Investments (166.7% of net assets)       495,206,582
 483,217,174
 Total Portfolio Investments (186.7% of net assets)       584,320,098
 541,408,333
Cash and Cash Equivalents          
Wells Fargo Bank Institutional Money Market Fund
       34,173,201
 34,173,201
Other cash accounts       5,802,299
 5,802,299
 Total Cash and Cash Equivalents (13.8% of net assets)       39,975,500
 39,975,500
Total Portfolio Investments, Cash and Cash Equivalents (200.5% of net assets)       $624,295,598
 $581,383,833

See notes to Consolidated Financial Statements.

Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
December 31, 2017
(unaudited)




(1)All debt investments are income producing unless otherwise noted. EquityAll equity investments are non-income producing unless otherwise noted.
(2)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.
(3)Control Investments generally are defined by the Investment Company Act of 1940, as amended ("1940 Act"), as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.
(4)Affiliate Investments generally are defined by the 1940 Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.
(5)Principal includes accumulated payment in kind ("PIK") interest and is net of repayments, if any.
(6)Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.
(7)Investment is not a qualifying asset as defined 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 June 30,December 31, 2017, qualifying assets represented 88.7%75.6% of the Company's total assets and non-qualifying assets represented 11.3%24.4% of the Company's total assets.
(8)The interest rate on the principal balance outstanding for all floating rate loans is indexed to London Interbank Offered Rate ("LIBOR") and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement.agreement and the cash interest rate as of period end.
(9)Interest rates have beenmay be adjusted from period to period on certain term loans from the stated rates in the original credit agreement as shown in the Consolidated Schedule of Investments.and revolvers. These rate adjustments aremay be either temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements or permanent in nature per loan amendment or waiver documents. The table below summarizes these rate adjustments by portfolio company:
Portfolio CompanyEffective dateCash interestPIK interestReason
 TIBCO Software, Inc.January 18, 2017- 1% on First Lien Term Loan Per loan amendment
 New Trident Holdcorp, Inc.December 9, 2016+ 0.50% on First Lien Term Loan and Second Lien Term Loan Per loan amendment
 Metamorph US 3, LLCOctober 1, 2016+ 1% on First Lien Revolver+ 2.0% on First Lien Term Loan Tier pricing per loan agreement
 PowerPlan, Inc.May 21, 2016- 0.5% on First Lien Term Loan Tier pricing per loan agreement
 Central Security Group, Inc.February 3, 2016+ 0.375% on First Lien Term Loan Per loan amendment
(10)Each of the Company's investments is pledged as collateral under one or more of its credit facilities or its debt securitization. A single investment may be divided into parts that are individually pledged as collateral to separate credit facilities.
(11)Investment has undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.
(12)
As defined in the 1940 Act, the Company is deemed to be both an "Affiliated Person" of and to "Control" this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Schedule 12-14 in the accompanying notes to the Consolidated Financial Statements for transactions during the ninethree months ended June 30,December 31, 2017 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to control.
(13)
Investment pledged as collateral under the Company's 2015 Debt Securitization (as defined in Note 6 - Borrowings), in whole or in part.
(14)Equity ownership may be held in shares or units of companies related to the portfolio companies.
(15)See Note 3 to the Consolidated Financial Statements for portfolio composition.
(16)
As of December 31, 2017, these investments are categorized as Level 2 within the fair value hierarchy established by Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("ASC 820"). All other investments, with the exception of investments valued using net asset value as a practical expedient, are categorized as Level 3 as of December 31, 2017 and were valued using significant unobservable inputs.
(17)This investment was on cash non-accrual status as of December 31, 2017. Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.
(18)This investment was valued using net asset value as a practical expedient for fair value. Consistent with FASB guidance under ASC 820, these investments are excluded from the hierarchical levels.


See notes to Consolidated Financial Statements.
Fifth Street Senior Floating Rate Corp.Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
September 30, 20162017

Portfolio Company/Type of Investment (1)(2)(10)(17) Industry Principal (5)
 Cost Fair Value
Control Investments (3)        
 FSFR Glick JV LLC (7)(12)(18) Multi-sector holdings      
 Subordinated Note, LIBOR+8% cash due 10/20/2021 (8)   $64,005,755
 $64,005,755
 $56,885,646
 87.5% equity interest (14)     7,111,751
 6,431,021
      71,117,506
 63,316,667
 Total Control Investments (19.4% of net assets)     $71,117,506
 $63,316,667
Affiliate Investments (4)        
 Ameritox Ltd. (15) Healthcare services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash 3% PIK due 4/11/2021 (8)(13)   6,387,128
 $6,380,832
 $6,342,286
 3,309,873.6 Class A Preferred Units in Ameritox Holdings II, LLC     3,309,874
 3,626,150
 327,393.6 Class B Preferred Units in Ameritox Holdings II, LLC     327,394
 358,679
 1,007.36 Class A Units in Ameritox Holdings II, LLC     5,935,698
 2,679,343
      15,953,798
 13,006,458
 Total Affiliate Investments (4.0% of net assets)     $15,953,798
 $13,006,458
         
Non-Control/Non-Affiliate Investments (6)        
 Triple Point Group Holdings, Inc. Application software      
 First Lien Revolver, LIBOR+4.25% (1% floor) cash due 7/10/2018 (8)     —
 —
      —
 —
 Blackhawk Specialty Tools, LLC Oil & gas equipment & services      
 First Lien Term Loan, LIBOR+5.25% (1.25% floor) cash due 8/1/2019 (8)(13)   4,249,996
 4,177,081
 4,090,429
      4,177,081
 4,090,429
 New Trident Holdcorp, Inc. Healthcare services      
 First Lien Term Loan B, LIBOR+5.25% (1.25% floor) cash due 7/31/2019 (8)(13)   13,707,532
 13,289,778
 11,788,478
 Second Lien Term Loan, LIBOR+9% (1.25% floor) cash due 7/31/2020 (8)   1,000,000
 972,500
 820,000
      14,262,278
 12,608,478
 NXT Capital, LLC Diversified capital markets      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 9/4/2018 (8)(13)   8,719,887
 8,685,189
 8,763,486
      8,685,189
 8,763,486
 Vitera Healthcare Solutions, LLC Healthcare technology      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 11/4/2020 (8)(13)   4,862,500
 4,856,420
 4,747,016
      4,856,420
 4,747,016
 The Active Network, Inc. Internet software & services      
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 11/15/2021 (8)(13)   2,400,000
 2,314,573
 2,370,000
      2,314,573
 2,370,000
 Accruent, LLC Internet software & services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 5/16/2022 (8)   9,975,000
 9,881,944
 9,994,012
 First Lien Revolver, LIBOR+5.25% (1% floor) cash due 5/16/2022 (8)(11)     (791) —
      9,881,153
 9,994,012
 Survey Sampling International, LLC Research & consulting services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 12/16/2020 (8)(13)   5,726,682
 5,691,793
 5,726,682
 Second Lien Term Loan, LIBOR+9% (1% floor) cash due 12/16/2021 (8)   1,000,000
 985,238
 980,000
      6,677,031
 6,706,682

Portfolio Company/Type of Investment (1)(2)(9)(10)(14)  Cash Interest Rate (8) Industry Principal (5)
 Cost Fair Value
Control Investments (3)          
 FSFR Glick JV LLC (7)(12)(15)   Multi-sector holdings      
 Subordinated Note, LIBOR+8% cash due 10/20/2021 (8) 9.23%   $64,228,881
 $64,228,881
 $57,606,674
 87.5% equity interest (17)       7,111,751
 —
        71,340,632
 57,606,674
 Total Control Investments (19.6% of net assets)       $71,340,632
 $57,606,674
Affiliate Investments (4)          
 Ameritox Ltd.   Healthcare services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash 3% PIK due 4/11/2021 (8)(13)(18) 6.33%   8,071,313
 $7,906,087
 $935,913
 3,309,873.6 Class A Preferred Units in Ameritox Holdings II, LLC       3,309,874
 —
 327,393.6 Class B Preferred Units in Ameritox Holdings II, LLC       327,394
 —
 1,007.36 Class A Units in Ameritox Holdings II, LLC       5,935,698
 —
        17,479,053
 935,913
 Total Affiliate Investments (0.3% of net assets)       $17,479,053
 $935,913
           
Non-Control/Non-Affiliate Investments (6)          
 Triple Point Group Holdings, Inc.   Application software      
 First Lien Revolver, LIBOR+4.25% (1% floor) cash due 7/10/2018 (8)(11) 5.25%     $—
 $(437,932)
        —
 (437,932)
 New Trident Holdcorp, Inc.   Healthcare services      
 First Lien Term Loan B, LIBOR+5.75% (1.25% floor) cash due 7/31/2019 (8)(13)(16) 7.08%   13,552,077
 13,285,041
 9,757,495
 Second Lien Term Loan, LIBOR+9.5% (1.25% floor) cash due 7/31/2020 (8)(16)(18) 10.83%   1,000,000
 950,590
 50,000
        14,235,631
 9,807,495
 Survey Sampling International, LLC   Research & consulting services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 12/16/2020 (8)(13) 6.27%   5,668,523
 5,642,223
 5,583,495
 Second Lien Term Loan, LIBOR+9% (1% floor) cash due 12/16/2021 (8) 10.27%   1,000,000
 988,095
 990,000
        6,630,318
 6,573,495
 Maxor National Pharmacy Services, LLC   Pharmaceuticals      
 First Lien Term Loan, LIBOR+4.75% (1.25% floor) cash due 1/31/2020 (8)(13) 6.08%   9,068,650
 9,068,650
 9,038,634
        9,068,650
 9,038,634
 NextCare, Inc.   Healthcare services      
 Senior Term Loan, LIBOR+6% (1% floor) cash due 7/31/2018 (8)(13) 7.24%   6,957,971
 6,957,970
 6,667,987
Delayed Draw Term Loan, LIBOR+6% (1% floor) cash due 7/31/2018 (8) 7.24%   1,393,853
 1,393,853
 1,322,900
        8,351,823
 7,990,887
 Aptean, Inc.   Application software      
 First Lien Term Loan, LIBOR+4.25% (1% floor) cash due 12/20/2022 (8)(13) 5.59%   11,243,500
 11,170,440
 11,323,161
 Second Lien Term Loan, LIBOR+9.5% (1% floor) cash due 12/20/2023 (8) 10.84%   200,000
 197,320
 201,750
        11,367,760
 11,524,911
 Stratus Technologies, Inc.   Computer hardware      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 4/28/2021 (8)(13) 6.24%   1,315,119
 1,279,988
 1,324,983
        1,279,988
 1,324,983
See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
September 30, 20162017

Portfolio Company/Type of Investment (1)(2)(10)(17) Industry Principal (5)
 Cost Fair Value
 Answers Corporation Internet software & services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 10/3/2021 (8)(13)   $11,820,000
 $11,421,760
 $6,382,800
 Second Lien Term Loan, LIBOR+9% (1% floor) cash due 10/3/2022 (8)   8,000,000
 7,605,257
 773,360
      19,027,017
 7,156,160
 Maxor National Pharmacy Services, LLC Pharmaceuticals      
 First Lien Term Loan, LIBOR+5.25% (1.25% floor) cash due 1/31/2020 (8)(13)   9,162,870
 9,162,870
 9,033,850
      9,162,870
 9,033,850
 NextCare, Inc. (9) Healthcare services      
 Senior Term Loan, LIBOR+6% (1% floor) cash due 7/31/2018 (8)(13)   7,029,160
 7,029,160
 6,744,944
Delayed Draw Term Loan, LIBOR+6% (1% floor) cash due 7/31/2018 (8)   1,407,969
 1,407,969
 1,330,269
      8,437,129
 8,075,213
 Aptean, Inc. Application software      
 Second Lien Term Loan, LIBOR+7.5% (1% floor) cash due 2/26/2021 (8)   1,250,000
 1,240,179
 1,232,038
      1,240,179
 1,232,038
 Stratus Technologies, Inc. Computer hardware      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 4/28/2021 (8)(13)   4,003,658
 3,956,802
 3,903,567
      3,956,802
 3,903,567
 TravelCLICK, Inc. Internet software & services      
 Second Lien Term Loan, LIBOR+7.75% (1% floor) cash due 11/6/2021 (8)(13)   3,380,000
 3,299,165
 3,027,128
      3,299,165
 3,027,128
 GTCR Valor Companies, Inc. Advertising      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 6/16/2023 (8)(13)   12,219,375
 11,607,301
 11,688,626
      11,607,301
 11,688,626
 ConvergeOne Holdings Corp. Integrated telecommunication services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 6/17/2020 (8)(13)   5,343,010
 5,316,746
 5,322,974
      5,316,746
 5,322,974
 Verdesian Life Sciences, LLC Fertilizers & agricultural chemicals      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 7/1/2020 (8)(13)   3,554,890
 3,522,668
 3,377,146
      3,522,668
 3,377,146

Portfolio Company/Type of Investment (1)(2)(9)(10)(14)  Cash Interest Rate (8) Industry Principal (5)
 Cost Fair Value
 TravelCLICK, Inc.   Internet software & services      
 Second Lien Term Loan, LIBOR+7.75% (1% floor) cash due 11/6/2021 (8)(13) 8.99%   $2,048,485
 $2,010,607
 $2,058,727
        2,010,607
 2,058,727
 Verdesian Life Sciences, LLC   Fertilizers & agricultural chemicals      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 7/1/2020 (8)(13) 6.31%   3,295,860
 3,273,753
 2,801,481
        3,273,753
 2,801,481
 TV Borrower US, LLC (7)   Integrated telecommunication services      
 First Lien Dollar Term B-1 Loan, LIBOR+4.75% (1% floor) cash due 2/22/2024 (8) 6.08%   3,383,000
 3,367,510
 3,406,258
        3,367,510
 3,406,258
 BeyondTrust Software, Inc.   Application software      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 9/25/2019 (8)(13) 8.33%   16,384,644
 16,255,828
 16,384,050
 First Lien Revolver, LIBOR+7% (1% floor) cash due 9/25/2019 (8)(11) 8.33%     (21,305) (130)
 500,000 Class A membership interests in BeyondTrust Holdings LLC       500,000
 628,846
        16,734,523
 17,012,766
 Dynatect Group Holdings, Inc.   Industrial machinery      
 First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 9/30/2020 (8) 5.83%   3,786,203
 3,786,203
 3,672,617
        3,786,203
 3,672,617
 Idera, Inc.   Internet software & services      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 6/27/2024 (8) 6.24%   3,457,698
 3,424,359
 3,483,630
        3,424,359
 3,483,630
 Central Security Group, Inc.   Specialized consumer services      
 First Lien Term Loan, LIBOR+5.625% (1% floor) cash due 10/6/2021 (8) 6.86%   1,665,740
 1,660,679
 1,672,677
        1,660,679
 1,672,677
 Kellermeyer Bergensons Services, LLC   Diversified support services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 10/29/2021 (8)(13) 6.32%   5,251,500
 5,208,454
 5,248,218
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 4/29/2022 (8)(13) 9.81%   280,000
 280,000
 274,400
        5,488,454
 5,522,618
 GOBP Holdings Inc.   Food retail      
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 10/21/2022 (8)(13) 9.58%   3,685,714
 3,644,031
 3,717,983
        3,644,031
 3,717,983
 Executive Consulting Group, LLC   Healthcare services      
 First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 11/21/2019 (8)(13) 5.99%   7,000,000
 7,000,000
 6,999,745
 Delayed Draw Term Loan, LIBOR+4.75% (1% floor) cash due 11/21/2019 (8) 5.99%   3,791,650
 3,791,650
 3,791,657
        10,791,650
 10,791,402
 Metamorph US 3, LLC   Internet software & services      
 First Lien Term Loan, LIBOR+5.5% (1% floor) cash 2% PIK due 12/1/2020 (8)(13)(18) 6.74%   14,070,138
 13,488,111
 5,343,093
 First Lien Revolver, LIBOR+6.5% (1% floor) cash due 12/1/2020 (8)(11)(13)(18) 7.74%   1,080,000
 1,037,075
 (36,455)
        14,525,186
 5,306,638
See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
September 30, 20162017

Portfolio Company/Type of Investment (1)(2)(10)(17) Industry Principal (5)
 Cost Fair Value
 PR Wireless, Inc. Wireless telecommunication services      
 First Lien Term Loan, LIBOR+9% (1% floor) cash due 6/29/2020 (7)(8)   $5,836,771
 $5,719,729
 $4,111,317
 35.5263 Common Stock Warrants (exercise price $0.01) expiration date 6/27/2024 (7)     —
 120,342
      5,719,729
 4,231,659
 TV Borrower US, LLC Integrated telecommunication services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 1/8/2021 (7)(8)(13)   6,086,385
 5,973,885
 6,063,561
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 7/8/2021 (7)(8)(13)   3,000,000
 2,921,780
 2,910,000
      8,895,665
 8,973,561
 American Dental Partners, Inc. Healthcare services      
 First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 8/30/2021 (8)(13)   5,880,000
 5,860,000
 5,791,800
      5,860,000
 5,791,800
 BeyondTrust Software, Inc. Application software      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 9/25/2019 (8)(13)   18,381,895
 18,136,331
 18,309,259
 First Lien Revolver, LIBOR+7% (1% floor) cash due 9/25/2019 (8)(11)     (30,304) —
 500,000 Class A membership interests in BeyondTrust Holdings LLC     500,000
 613,869
      18,606,027
 18,923,128
 Hill International, Inc. Construction & engineering      
 First Lien Term Loan, LIBOR+6.75% (1% floor) cash due 9/26/2020 (8)(13)   5,978,000
 5,907,850
 5,768,770
      5,907,850
 5,768,770
 Teaching Strategies, LLC Education services      
 First Lien Term Loan, LIBOR+5.5% (0.5% floor) cash due 10/1/2019 (8)(13)   15,252,341
 15,262,322
 15,293,164
 First Lien Revolver, LIBOR+5.5% (0.5% floor) cash due 10/1/2019 (8)     —
 —
      15,262,322
 15,293,164
 Dynatect Group Holdings, Inc. Industrial machinery      
 First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 9/30/2020 (8)   3,826,203
 3,826,203
 3,778,376
 First Lien Delayed Draw Term Loan, LIBOR+4.5% (1% floor) cash due 9/30/2020 (8)     —
 —
      3,826,203
 3,778,376
 Idera, Inc. Internet software & services      
 First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 4/9/2021 (8)(13)   17,356,053
 16,490,668
 16,878,761
      16,490,668
 16,878,761
 Central Security Group, Inc. (9) Specialized consumer services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 10/6/2020 (8)   2,539,726
 2,532,917
 2,482,582
      2,532,917
 2,482,582
Portfolio Company/Type of Investment (1)(2)(9)(10)(14)  Cash Interest Rate (8) Industry Principal (5)
 Cost Fair Value
 Compuware Corporation   Internet software & services      
 First Lien Term Loan B3, LIBOR+4.25% (1% floor) cash due 12/15/2021 (8)(13) 5.49%   $8,423,623
 $8,345,374
 $8,528,918
        8,345,374
 8,528,918
 Motion Recruitment Partners LLC   Diversified support services      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 2/13/2020 (8)(13) 7.24%   13,509,054
 13,498,295
 13,508,389
 First Lien Revolver, LIBOR+6% (1% floor) cash due 2/13/2020 (8)(11) 7.24%   —
 (960) (143)
        13,497,335
 13,508,246
 PowerPlan, Inc.   Internet software & services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 2/23/2022 (8)(13) 6.49%   17,839,352
 17,800,018
 17,839,013
 First Lien Revolver, LIBOR+5.25% (1% floor) cash due 2/23/2021 (8)(11) 6.49%     —
 (40)
        17,800,018
 17,838,973
 Digital River, Inc.   Internet software & services      
 First Lien Term Loan, LIBOR+6.5% (1% floor) cash due 2/12/2021 (8)(13) 7.82%   4,723,868
 4,681,840
 4,747,488
        4,681,840
 4,747,488
 Research Now Group, Inc.   Data processing & outsourced services      
 Second Lien Term Loan, LIBOR+8.75% (1% floor) cash due 3/18/2022 (8) 10.08%   4,000,000
 3,962,143
 3,960,000
        3,962,143
 3,960,000
 Staples, Inc.    Distributors      
 First Lien Term Loan, LIBOR+4% (1% floor) cash due 9/12/2024 (8)(16) 5.31%   13,000,000
 12,967,500
 12,957,035
        12,967,500
 12,957,035
 Raley's   Food retail      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 5/18/2022 (8)(13) 6.49%   3,209,821
 3,164,432
 3,209,821
        3,164,432
 3,209,821
 Aptos, Inc.   Data processing & outsourced services      
 First Lien Term Loan, LIBOR+6.75% (1% floor) cash due 9/1/2022 (8)(13) 8.08%   5,940,000
 5,842,031
 5,880,600
        5,842,031
 5,880,600
 Zep Inc.    Housewares & specialties      
 First Lien Term Loan, LIBOR+4% (1% floor) cash due 8/12/2024 (8) 5.24%   4,750,000
 4,795,075
 4,771,779
        4,795,075
 4,771,779
 All Web Leads, Inc.   Advertising      
 First Lien Term Loan, LIBOR+7.5% (1% floor) cash due 12/29/2020 (8)(13) 8.77%   25,839,538
 25,839,538
 23,192,266
        25,839,538
 23,192,266
 Allied Universal Holdco, LLC (f/k/a USAGM Holdco, LLC)    Security & alarm services      
 First Lien Term Loan, LIBOR+3.75% (1% floor) cash due 7/28/2022 (8)(16) 5.08%   7,979,747
 8,018,318
 7,972,286
        8,018,318
 7,972,286
 Internet Pipeline, Inc.   Internet software & services      
 First Lien Term Loan, LIBOR+7.25% (1% floor) cash due 8/4/2022 (8)(13) 8.49%   13,081,433
 13,068,115
 13,212,714
 First Lien Revolver, LIBOR+7.25% (1% floor) cash due 8/4/2021 (8) 8.49%     —
 8,029
        13,068,115
 13,220,743
See notes to Consolidated Financial Statements.

Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
September 30, 2017

Portfolio Company/Type of Investment (1)(2)(9)(10)(14)  Cash Interest Rate (8) Industry Principal (5)
 Cost Fair Value
 Poseidon Merger Sub, Inc.   Advertising      
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 8/15/2023 (8) 9.81%   $7,000,000
 $6,980,121
 $7,070,000
        6,980,121
 7,070,000
 Valet Merger Sub, Inc.   Environmental & facilities services      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 9/24/2021 (8)(13) 8.24%   5,880,000
 5,852,065
 5,879,798
 First Lien Revolver, LIBOR+7% (1% floor) cash due 9/24/2021 (8)(11) 8.24%   —
 (10,697) (29)
 Incremental Term Loan , LIBOR+7% (1% floor) cash due 9/24/2021 (8) 8.24%   8,407,683
 8,328,663
 8,407,394
        14,170,031
 14,287,163
 DigiCert, Inc.   Internet software & services      
 Second Lien Term Loan, LIBOR+9% (1% floor) cash due 10/21/2022 (8)(13) 10.24%   2,000,000
 1,984,880
 2,000,000
 First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 10/21/2021 (8) 5.99%   11,000,000
 10,945,000
 11,000,000
        12,929,880
 13,000,000
 Lytx, Inc.   Research & consulting services      
 500 Class B Units in Lytx Holdings, LLC       —
 79,788
 500 Class A Units in Lytx Holdings, LLC       292,459
 351,355
        292,459
 431,143
 4 Over International, LLC   Commercial printing      
 First Lien Term Loan, LIBOR+6.0% (1% floor) cash due 6/7/2022 (8)(13) 7.24%   5,850,412
 5,804,485
 5,850,463
 First Lien Revolver, LIBOR+6.0% (1% floor) cash due 6/7/2021 (8)(11) 7.24%     (502) —
        5,803,983
 5,850,463
 Ancile Solutions, Inc.   Internet software & services      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 6/30/2021 (8)(13) 8.33%   9,881,312
 9,664,392
 9,802,707
        9,664,392
 9,802,707
 Pomeroy Group Holdings, Inc.    IT consulting & other services      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 11/30/2021 (8)(13) 7.59%   4,443,467
 4,339,309
 4,443,467
        4,339,309
 4,443,467
 Sailpoint Technologies, Inc.    Application software      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 8/16/2021 (8) 8.33%   17,391,304
 17,070,160
 17,391,307
 First Lien Revolver, LIBOR+7% (1% floor) cash due 8/16/2021 (8)(11) 8.33%     (3,067) —
        17,067,093
 17,391,307
 Curvature, Inc.    IT consulting & other services      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 10/30/2023 (8)(13) 6.24%   9,925,000
 9,871,624
 9,701,688
        9,871,624
 9,701,688
 Cardenas Markets LLC   Food retail      
 First Lien Term Loan, LIBOR+5.75% (1% floor) cash due 11/29/2023 (8)(13) 7.08%   3,275,250
 3,246,405
 3,254,780
        3,246,405
 3,254,780
See notes to Consolidated Financial Statements.





Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
September 30, 2017

Portfolio Company/Type of Investment (1)(2)(9)(10)(14)  Cash Interest Rate (8) Industry Principal (5)
 Cost Fair Value
 Ministry Brands, LLC   Internet software & services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 12/2/2022 (8)(13) 6.24%   $9,648,871
 $9,565,812
 $9,648,874
 First Lien Delayed Draw Term Loan, LIBOR+5% (1% floor) cash due 12/2/2022 (8)(13) 6.24%   3,354,904
 3,314,185
 3,354,905
 Second Lien Term Loan, LIBOR+9.25% (1% floor) cash due 6/2/2023 (8)(13) 10.49%   1,568,067
 1,547,561
 1,568,067
 Second Lien Delayed Draw Term Loan, LIBOR+9.25% (1% floor) cash due 6/2/2023 (8) 10.49%   431,933
 426,285
 431,933
 First Lien Revolver, LIBOR+5% (1% floor) cash due 12/2/2022 (8)(11) 6.24%     (861) —
        14,852,982
 15,003,779
 Impact Sales, LLC   Advertising      
 First Lien Term Loan B, LIBOR+7% (1% floor) cash due 12/30/2021 (8) 8.30%   3,721,875
 3,628,868
 3,715,131
 First Lien Delayed Draw Term Loan, LIBOR+7% (1% floor) cash due 12/30/2021 (8) 8.30%   171,016
 171,016
 168,751
        3,799,884
 3,883,882
 Empower Payments Acquisition, Inc.    Commercial printing      
 First Lien Term Loan B, LIBOR+5.5% (1% floor) cash due 11/30/2023 (8)(13) 6.83%   6,153,500
 6,043,807
 6,091,669
        6,043,807
 6,091,669
 First American Payment Systems, L.P.    Diversified support services      
 First Lien Term Loan B, LIBOR+5.75% (1% floor) cash due 1/8/2024 (8)(13) 6.98%   4,143,750
 4,106,872
 4,131,319
        4,106,872
 4,131,319
 DFT Intermediate LLC    Specialized finance      
 First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 3/1/2023 (8)(13) 6.74%   14,962,500
 14,624,842
 14,864,020
 First Lien Revolver, LIBOR+5.5% (1% floor) cash due 3/1/2022 (8) 6.74%   750,000
 733,438
 745,064
        15,358,280
 15,609,084
 Systems, Inc.    Industrial machinery      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 3/3/2022 (8)(13) 6.57%   8,831,921
 8,715,152
 8,787,762
 First Lien Revolver, LIBOR+5.5% (1% floor) cash due 3/3/2022 (8)(11) 6.57%     (7,950) (7,920)
        8,707,202
 8,779,842
 Onvoy, LLC    Integrated telecommunication services      
 First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 2/10/2024 (8)(13) 5.83%   7,960,000
 7,923,563
 7,962,507
        7,923,563
 7,962,507
 Salient CRGT, Inc.    IT consulting & other services      
 First Lien Term Loan, LIBOR+5.75% (1% floor) cash due 2/28/2022 (8)(13) 6.99%   6,387,798
 6,275,056
 6,343,083
        6,275,056
 6,343,083
 MHE Intermediate Holdings, LLC    Diversified support services      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 3/11/2024 (8)(13) 6.33%   11,774,771
 11,556,138
 11,774,776
 First Lien Revolver, LIBOR+5% (1% floor) cash due 3/10/2023 (8) 6.33%   1,353,038
 1,255,454
 1,353,038
 Delayed Draw Term Loan, LIBOR+5% (1% floor) cash due 3/11/2024 (8) 6.33%   1,873,430
 1,782,689
 1,873,430
        14,594,281
 15,001,244
See notes to Consolidated Financial Statements.


Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
September 30, 2017

Portfolio Company/Type of Investment (1)(2)(9)(10)(14)  Cash Interest Rate (8) Industry Principal (5)
 Cost Fair Value
 Paris Presents Incorporated    Personal Products      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 12/31/2020 (8)(13) 6.24%   $3,134,006
 $3,106,950
 $3,134,006
 Second Lien Term Loan, LIBOR+8.75% (1% floor) cash due 12/31/2021 (8)(13) 9.99%   3,500,000
 3,437,500
 3,465,000
        6,544,450
 6,599,006
 PSI Services LLC    Human Resource & Employment Services      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 1/20/2023 (8)(13) 6.24%   6,736,979
 6,644,622
 6,616,844
        6,644,622
 6,616,844
 MHVC Acquisition Corp.    Aerospace & Defense      
 First Lien Term Loan B, LIBOR+5.25% (1% floor) cash due 4/25/2024 (8)(13) 6.49%   6,483,750
 6,453,287
 6,556,692
        6,453,287
 6,556,692
LSF9 Atlantis Holdings, LLC    Computer & Electronics Retail      
 First Lien Term Loan B, LIBOR+6% (1% floor) cash due 5/1/2023 (8)(13) 7.24%   7,453,125
 7,383,862
 7,498,142
        7,383,862
 7,498,142
 Everi Payments Inc.    Casinos & gaming      
 First Lien Term Loan B, LIBOR+4.5% (1% floor) cash due 5/9/2024 (8)(13)(16) 5.74%   4,987,500
 4,963,767
 5,038,622
        4,963,767
 5,038,622
 BJ's Wholesale Club, Inc.    Hypermarkets & super centers      
 First Lien Term Loan B, LIBOR+3.75% (1% floor) cash due 1/26/2024 (8)(16) 4.98%   2,992,500
 2,996,051
 2,876,002
        2,996,051
 2,876,002
 Bass Pro Group, LLC    Specialty Stores      
 First Lien Term Loan B, LIBOR+5% (1% floor) cash due 12/15/2023 (8) 6.24%   6,000,000
 5,877,353
 5,667,480
        5,877,353
 5,667,480
 Imagine! Print Solutions, LLC    Advertising      
 First Lien Term Loan B, LIBOR+4.75% (1% floor) cash due 6/21/2022 (8) 6.09%   6,965,000
 6,898,900
 6,999,825
        6,898,900
 6,999,825
MND Holdings III Corp.    Specialty Stores      
 First Lien Term Loan B, LIBOR+4.5% (1% floor) cash due 6/19/2024 (8)(13) 5.83%   2,493,750
 2,481,733
 2,526,480
        2,481,733
 2,526,480
 Veritas US Inc.    Internet software & services      
 First Lien Term Loan B, LIBOR+4.5% (1% floor) cash due 1/27/2023 (8)(16) 5.83%   10,077,193
 10,215,779
 10,189,503
        10,215,779
 10,189,503
 UOS, LLC   Trucking      
 First Lien Term Loan B, LIBOR+5.5% (1% floor) cash due 4/18/2023 (8) 6.74%   3,990,000
 4,079,548
 4,099,725
        4,079,548
 4,099,725
 Accudyne Industries, LLC    Oil & gas equipment & services      
 First Lien Term Loan, LIBOR+3.75% (1% floor) cash due 8/18/2024 (8)(16) 5.01%   14,000,000
 14,057,018
 14,052,500
        14,057,018
 14,052,500

See notes to Consolidated Financial Statements.


Fifth Street Senior Floating Rate Corp.
Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
September 30, 20162017

Portfolio Company/Type of Investment (1)(2)(10)(17) Industry Principal (5)
 Cost Fair Value
 Kellermeyer Bergensons Services, LLC Diversified support services      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 10/29/2021 (8)(13)   $5,265,325
 $5,211,587
 $5,081,038
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 4/29/2022 (8)(13)   280,000
 280,000
 266,000
      5,491,587
 5,347,038
 GOBP Holdings Inc. Food retail      
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 10/21/2022 (8)(13)   3,685,714
 3,635,831
 3,685,714
      3,635,831
 3,685,714
 NAVEX Global, Inc. Internet software & services      
 First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 11/19/2021 (8)(13)   3,450,918
 3,440,820
 3,433,662
 Second Lien Term Loan, LIBOR+8.75% (1% floor) cash due 11/18/2022 (8)   1,438,468
 1,438,468
 1,395,314
      4,879,288
 4,828,976
 Executive Consulting Group, LLC Healthcare services      
 First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 11/21/2019 (8)(13)   7,000,000
 7,000,000
 6,960,668
 Delayed Draw Term Loan, LIBOR+4.75% (1% floor) cash due 11/21/2019 (8)   4,000,000
 4,000,000
 3,979,448
      11,000,000
 10,940,116
 TIBCO Software, Inc. Internet software & services      
 First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 12/4/2020 (8)   7,919,400
 7,590,582
 7,823,932
 First Lien Revolver, LIBOR+4% cash due 11/25/2020 (8)     —
 —
      7,590,582
 7,823,932
 Metamorph US 3, LLC (9) Internet software & services      
 First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 12/1/2020 (8)(13)   14,223,467
 14,181,149
 11,840,322
 First Lien Revolver, LIBOR+5.5% (1% floor) cash due 12/1/2020 (8)(13)   600,000
 573,856
 600,000
      14,755,005
 12,440,322
 Compuware Corporation Internet software & services      
 First Lien Term Loan B1, LIBOR+5.25% (1% floor) cash due 12/15/2019 (8)(13)   7,825,554
 7,720,514
 7,854,900
 First Lien Term Loan B2, LIBOR+5.25% (1% floor) cash due 12/15/2021 (8)   905,896
 889,191
 904,198
      8,609,705
 8,759,098
 AF Borrower, LLC IT consulting & other services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 1/28/2022 (8)(13)   1,036,642
 1,020,406
 1,041,612
      1,020,406
 1,041,612
 TrialCard Incorporated (9) Healthcare services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 12/31/2019 (8)(13)   9,874,962
 9,869,718
 9,827,027
 First Lien Revolver, LIBOR+5.25% (1% floor) cash due 12/31/2019 (8)(11)     (375) —
      9,869,343
 9,827,027
 Motion Recruitment Partners LLC Diversified support services      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 2/13/2020 (8)(13)   14,235,000
 14,224,241
 14,250,584
 First Lien Revolver, LIBOR+6% (1% floor) cash due 2/13/2020 (8)(11)     (960) —
      14,223,281
 14,250,584


See notes to Consolidated Financial Statements.
Fifth Street Senior Floating Rate Corp.
Consolidated Schedule of Investments
September 30, 2016

Portfolio Company/Type of Investment (1)(2)(10)(17) Industry Principal (5)
 Cost Fair Value
 PowerPlan, Inc. (9) Internet software & services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 2/23/2022 (8)(13)   $16,737,833
 $16,710,709
 $16,731,213
 First Lien Revolver, LIBOR+5.25% (1% floor) cash due 2/23/2021 (8)     —
 —
      16,710,709
 16,731,213
 Digital River, Inc. Internet software & services      
 First Lien Term Loan, LIBOR+6.5% (1% floor) cash due 2/12/2021 (8)(13)   4,523,868
 4,349,859
 4,515,386
      4,349,859
 4,515,386
 Research Now Group, Inc. Data processing & outsourced services      
 Second Lien Term Loan, LIBOR+8.75% (1% floor) cash due 3/18/2022 (8)   4,000,000
 3,953,571
 3,880,000
      3,953,571
 3,880,000
 Fineline Technologies, Inc.  Electronic equipment & instruments      
 First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 5/5/2017 (8)(13)   10,942,464
 10,942,464
 10,912,302
      10,942,464
 10,912,302
 My Alarm Center, LLC Security & alarm services      
 First Lien Term Loan A, LIBOR+8% (1% floor) cash due 1/9/2019 (8)(13)   16,047,619
 16,047,619
 16,075,921
 First Lien Term Loan B, LIBOR+8% (1% floor) cash due 1/9/2019 (8)   909,936
 909,936
 911,452
 First Lien Term Loan C, LIBOR+8% (1% floor) cash due 1/9/2019 (8)   757,592
 757,592
 757,750
 First Lien Term Revolver, LIBOR+8% (1% floor) cash due 1/9/2019 (8)   120,000
 120,000
 120,000
      17,835,147
 17,865,123
 Legalzoom.com, Inc. Specialized consumer services      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 5/13/2020 (8)(13)   19,700,000
 19,690,068
 19,659,526
 First Lien Revolver, LIBOR+7% (1% floor) cash due 5/13/2020 (8)(11)     (17,714) —
 First Lien Delayed Draw Term Loan, LIBOR+7% (1% floor) cash due 5/13/2020 (8)   400,000
 400,000
 396,683
      20,072,354
 20,056,209
 Raley's Food retail      
 First Lien Term Loan, LIBOR+6.25% (1% floor) cash due 5/18/2022 (8)(13)   3,319,504
 3,254,099
 3,325,728
      3,254,099
 3,325,728
 Aptos, Inc. Data processing & outsourced services      
 First Lien Term Loan, LIBOR+6.75% (1% floor) cash due 9/1/2022 (8)(13)   6,000,000
 5,881,667
 5,940,000
      5,881,667
 5,940,000
 All Web Leads, Inc. Advertising      
 First Lien Term Loan, LIBOR+6.5% (1% floor) cash due 6/30/2020 (8)(13)   29,808,067
 29,808,066
 29,983,454
 First Lien Revolver, LIBOR+6.5% (1% floor) cash due 6/30/2020 (8)     —
 —
      29,808,066
 29,983,454
 Too Faced Cosmetics, LLC Personal products      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 7/7/2021 (8)(13)   1,285,383
 1,285,383
 1,290,310
      1,285,383
 1,290,310
 Internet Pipeline, Inc. Internet software & services      
 First Lien Term Loan, LIBOR+7.25% (1% floor) cash due 8/4/2022 (8)(13)   11,880,000
 11,880,000
 12,045,801
 First Lien Revolver, LIBOR+7.25% (1% floor) cash due 8/4/2021 (8)     —
 —
      11,880,000
 12,045,801
 Poseidon Merger Sub, Inc. Advertising      
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 8/15/2023 (8)   7,000,000
 6,980,768
 7,012,868
      6,980,768
 7,012,868

Portfolio Company/Type of Investment (1)(2)(9)(10)(14)  Cash Interest Rate (8) Industry Principal (5)
 Cost Fair Value
 DTZ U.S. Borrower, LLC   Real Estate Services      
 First Lien Term Loan, LIBOR+3.25% (1% floor) cash due 11/4/2021 (8)(16) 4.57%   $12,211,343
 $12,247,424
 $12,256,098
        12,247,424
 12,256,098
 Truck Hero, Inc.    Auto parts & equipment      
 First Lien Term Loan, LIBOR+4% (1% floor) cash due 4/22/2024 (8) 5.33%   5,857,320
 5,871,777
 5,798,747
        5,871,777
 5,798,747
 Alphabet Holding Company, Inc.    Healthcare distributors      
 First Lien Term Loan, LIBOR+3.5% (1% floor) cash due 9/26/2024 (8) 4.83%   5,000,000
 4,975,000
 4,948,950
        4,975,000
 4,948,950
 McAfee, LLC    Internet software & services      
 First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 9/30/2024 (8) 5.83%   7,000,000
 6,930,000
 7,072,905
        6,930,000
 7,072,905
 Total Non-Control/Non-Affiliate Investments (170.9% of net assets)       $516,270,639
 $501,894,073
 Total Portfolio Investments (190.9% of net assets)       $605,090,324
 $560,436,660
Cash and Cash Equivalents          
Wells Fargo Bank Institutional Money Market Fund
       $32,214,184
 $32,214,184
JP Morgan Prime Money Market Fund       3,118,675
 3,118,675
Other cash accounts       271,268
 271,268
 Total Cash and Cash Equivalents (12.1% of net assets)       $35,604,127
 $35,604,127
Total Portfolio Investments, Cash and Cash Equivalents (203.0% of net assets)       $640,694,451
 $596,040,787

See notes to Consolidated Financial Statements.




Fifth Street Senior Floating Rate Corp.

Oaktree Strategic Income Corporation
Consolidated Schedule of Investments
September 30, 20162017

Portfolio Company/Type of Investment (1)(2)(10)(17) Industry Principal (5)
 Cost Fair Value
 American Seafoods Group LLC Food distributors      
 First Lien Term Loan, LIBOR+5% (1% floor) cash due 8/19/2021 (8)(13)   $2,780,556
 $2,736,111
 $2,773,604
 Second Lien Term Loan, LIBOR+9% (1% floor) cash due 2/19/2022 (8)   3,000,000
 2,975,385
 2,850,000
      5,711,496
 5,623,604
 CRGT Inc. IT consulting & other services      
 First Lien Term Loan, LIBOR+6.5% (1% floor) cash due 12/19/2020 (8)(13)   3,440,713
 3,433,096
 3,449,315
      3,433,096
 3,449,315
 Valet Merger Sub, Inc. Environmental & facilities services      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 9/24/2021 (8)(13)   5,940,000
 5,905,025
 6,040,239
 First Lien Revolver, LIBOR+7% (1% floor) cash due 9/24/2021 (8)   500,000
 486,811
 500,000
      6,391,836
 6,540,239
 Baart Programs, Inc. Healthcare services      
 First Lien Term Loan, LIBOR+7.75% cash due 10/9/2021 (8)(13)   7,661,077
 7,377,745
 7,647,291
 First Lien Revolver, LIBOR+7.75% cash due 10/9/2021 (8)(11)     (12,500) —
      7,365,245
 7,647,291
 DigiCert, Inc. Internet software & services      
 Second Lien Term Loan, LIBOR+9% (1% floor) cash due 10/21/2022 (8)   2,000,000
 1,982,857
 2,032,529
      1,982,857
 2,032,529
Lytx, Inc. Research & consulting services      
 First Lien Term Loan, LIBOR+8.5% (1% floor) cash due 3/15/2023 (8)   9,951,389
 9,951,389
 9,951,389
 500 Class A Units in Lytx Holdings, LLC     500,000
 504,173
      10,451,389
 10,455,562
 Onvoy, LLC Integrated telecommunication services      
 First Lien Term Loan, LIBOR+6.25% (1% floor) cash due 4/29/2021 (8)(13)   10,368,750
 10,173,233
 10,341,433
      10,173,233
 10,341,433
 4 Over International, LLC Commercial printing      
 First Lien Term Loan, LIBOR+6.0% (1% floor) cash due 6/7/2022 (8)(13)   5,970,000
 5,913,333
 5,929,733
 First Lien Revolver LIBOR+6.0% (1% floor) cash due 6/7/2021 (8)(11)     (639) —
      5,912,694
 5,929,733
 OBHG Management Services, LLC Healthcare services      
 First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 6/28/2022 (8)(13)   16,123,227
 16,117,309
 16,076,397
 First Lien Revolver, LIBOR+5.25% (1% floor) cash due 6/28/2021 (8)(11)     (39) —
      16,117,270
 16,076,397
 Ancile Solutions, Inc. Internet software & services      
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 6/30/2021 (8)(13)   11,000,000
 10,692,000
 10,835,000
      10,692,000
 10,835,000
 Pomeroy Group Holdings, Inc.  IT consulting & other services      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 11/30/2021 (8)(13)   4,488,693
 4,357,979
 4,393,309
      4,357,979
 4,393,309
 Sailpoint Technologies, Inc.  Application software      
 First Lien Term Loan, LIBOR+8% (1% floor) cash due 8/16/2021 (8)   12,500,000
 12,258,333
 12,250,000
 First Lien Revolver, LIBOR+8% (1% floor) cash due 8/16/2021 (8)(11)     (3,867) —
      12,254,466
 12,250,000
 California Pizza Kitchen, Inc. (16)  Restaurants      
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 8/23/2022 (8)   5,000,000
 5,000,000
 4,985,425
      5,000,000
 4,985,425
 Total Non-Control/Non-Affiliate Investments (152.6% of net assets)     $513,397,659
 $497,281,256
 Total Portfolio Investments (176.0% of net assets)     $600,468,963
 $573,604,381
See notes to Consolidated Financial Statements.
Fifth Street Senior Floating Rate Corp.
Consolidated Schedule of Investments
September 30, 2016


Cash and Cash Equivalents        
Wells Fargo Bank Institutional Money Market Fund

     $18,856,559
 $18,856,559
Other cash accounts     922,282
 922,282
 Total Cash and Cash Equivalents (6.1% of net assets)     $19,778,841
 $19,778,841
Total Portfolio Investments, Cash and Cash Equivalents (182.1% of net assets)     $620,247,804
 $593,383,222




See notes to Consolidated Financial Statements.
Fifth Street Senior Floating Rate Corp.
Consolidated Schedule of Investments
September 30, 2016


(1)All debt investments are income producing unless otherwise noted. EquityAll equity investments are non-income producing unless otherwise noted.
(2)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.
(3)Control Investments generally are defined by the 1940 Act as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.
(4)Affiliate Investments generally are defined by the 1940 Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.
(5)Principal includes accumulated PIK interest and is net of repayments, if any.
(6)Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.
(7)Investment is not a qualifying asset as defined 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 SeptemberJune 30, 2016,2017, qualifying assets represented 84.9%89.6% of the Company's total assets and non-qualifying assets represented 15.1%10.4% of the Company's total assets.
(8)The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement.agreement and the cash interest rate as of period end.
(9)Interest rates have beenmay be adjusted from period to period on certain term loans from the stated rates in the original credit agreement as shown in the Consolidated Schedule of Investments.and revolvers. These rate adjustments aremay be either temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements or permanent in nature per loan amendment or waiver documents. The table below summarizes these rate adjustments by portfolio company:
Portfolio CompanyEffective dateCash interestPIK interestReason
 NextCare, Inc.September 2, 2016+ 1% on First Lien Term Loan & Delayed+ 0.5% on First Lien Term Loan & Delayed Draw Term LoanTier pricing per loan agreement
PowerPlan, Inc.May 21, 2016- 0.5% on First Lien Term LoanTier pricing per loan agreement
Metamorph US 3, LLCMarch 29, 2016+ 1.0% on First Lien Term Loan & RevolverPer loan amendment
Central Security Group, Inc.February 3, 2016+ 0.375% on First Lien Term LoanPer loan amendment
TrialCard IncorporatedNovember 3, 2015- 0.75% on Term Loan and RevolverTier pricing per loan agreement
(10)Each of the Company's investments is pledged as collateral under one or more of its credit facilities or its debt securitization. A single investment may be divided into parts that are individually pledged as collateral to separate credit facilities.
(11)Investment has undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.
(12)As defined in the 1940 Act, the Company is deemed to be both an "Affiliated Person" of and to "Control" this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Schedule 12-14 in the accompanying notes to the Consolidated Financial Statements for transactions during the three months ended December 31, 2016 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to control.
(13)
Investment pledged as collateral under the Company's 2015 Debt Securitization (as defined in Note 6 -— Borrowings), in whole or in part.
(14)Income producing through payment of dividends or distributions.
(15)
In April 2016, the Companyrestructured its debt investment in Ameritox Ltd. As a part of the restructuring, the Company exchanged cash and its debt securities for debt and equity securities in the newly restructured entity.
(16)
The sale of this loan does not qualify for true sale accounting under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 860 - Transfers and Servicing ("ASC 860"), and therefore, the entire debt investment remains in the Consolidated Schedule of Investments. Accordingly, the fair value of the Company's debt investments includes $5.0 million related to the Company's secured borrowings. (See Note 6 in the accompanying notes to the Consolidated Financial Statements.)
(17)Equity ownership may be held in shares or units of companies related to the portfolio companies.
(18)(15)See Note 3 to the Consolidated Financial Statements for portfolio composition.
(16)As of September 30, 2017, these investments are categorized as Level 2 within the fair value hierarchy established by ASC 820. All other investments, with the exception of investments valued using net asset value as a practical expedient, are categorized as Level 3 as of September 30, 2017 and were valued using significant unobservable inputs.
(17)This investment was valued using net asset value as a practical expedient for fair value. Consistent with FASB guidance under ASC 820, these investments are excluded from the hierarchical levels.
(18)This investment was on cash non-accrual status as of September 30, 2017. Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.


See notes to Consolidated Financial Statements.
FIFTH STREET SENIOR FLOATING RATE CORP.OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1. Organization
Oaktree Strategic Income Corporation (formerly known as Fifth Street Senior Floating Rate Corp. through October 17, 2017) (together with its consolidated subsidiaries, the "Company") is a specialty finance company that is a closed-end, externally managed, non-diversified management investment company andthat has elected to be regulated as a business development company under the 1940 Act. The Company has qualified and elected to be treated as a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended (the "Code"), for tax purposes.
The Company's investment objective isCompany seeks to maximize its portfolio's total return by generatinggenerate a stable source of current income from its debt investments while seekingminimizing the risk of principal loss and, to preserve its capital. The Company investsa lesser extent, capital appreciation by providing middle-market companies with primarily in senior secured loans, including first lien unitranche and second liensecured debt instruments,financings that pay interest at rates which are determined periodically on the basis of a floating base lending rate, made to private middle market companies whose debt is rated below investment grade.rate. The Company also has an investment in a joint venture that invests in similar types of loans. The Company may also invest in senior unsecured loans issued by private middle marketmiddle-market companies and, to a lesser extent, subordinated loans issued by private middle market companies, senior and subordinated loans issued by public companies and equity investments.
TheAs of October 17, 2017, the Company is externally managed by Oaktree Capital Management, L.P. (“Oaktree” or the “Investment Adviser”), a subsidiary of Oaktree Capital Group, LLC (“OCG”), a global investment manager specializing in alternative investments, pursuant to an investment advisory agreement between the Company and the Investment Adviser (the “New Investment Advisory Agreement”). Oaktree Fund Administration, LLC (“Oaktree Administrator” or “OFA”), a subsidiary of the Investment Adviser, provides certain administrative and other services necessary for the Company to operate pursuant to an administration agreement between the Company and OFA (the “New Administration Agreement”). See Note 11.
Prior to October 17, 2017, the Company was externally managed by Fifth Street Management LLC (the "Investment Adviser"(“FSM”), an indirect, partially-owned subsidiary of Fifth Street Asset Management Inc. ("FSAM"(“FSAM”), a publicly traded alternative asset manager, pursuant to an investment advisory agreement.and FSC CT LLC ("FSC CT" or the "Former Administrator"), a subsidiary of the Investment Adviser,FSM, also providesprovided certain administrative and other services necessary for the Company to operate.operate pursuant to an administration agreement (the “Former Administration Agreement”).

On September 7, 2017, stockholders of the Company approved the New Investment Advisory Agreement to take effect upon the closing of the transactions contemplated by the Asset Purchase Agreement (the “Purchase Agreement”) by and among FSM, and, for certain limited purposes, FSAM, and Fifth Street Holdings L.P., the direct, partial owner of FSM (the “Transaction”). Upon the closing of the Transaction on October 17, 2017, Oaktree became the investment adviser to each of Oaktree Specialty Lending Corporation (formerly known as Fifth Street Finance Corp.) (“OCSL”) and the Company. The closing of the Transaction resulted in an assignment for purposes of the 1940 Act of the investment advisory agreement between FSM and the Company and, as a result, its immediate termination.
Note 2. Significant Accounting Policies
Basis of Presentation:
The Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. In the opinion of management, all adjustments of a normal recurring nature considered necessary for the fair presentation of the Consolidated Financial Statements have been made. All intercompany balances and transactions have been eliminated. The Company is an investment company following the accounting and reporting guidance in FASB ASC Topic 946, Financial Services-InvestmentServices - Investment Companies ("ASC 946").
Use of Estimates:
The preparation of the financial statements in conformity with GAAP requires management to make certain estimates and assumptions affecting amounts reported in the financial statements and accompanying notes. These estimates are based on the information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Changes in the economic and political environments, financial markets and any other parameters used in determining these estimates could cause actual results to differ and such differences could be material. Significant estimates include the valuation of investments and revenue recognition.
Consolidation:
The accompanying Consolidated Financial Statements include the accounts of Fifth Street Senior Floating Rate Corp.Oaktree Strategic Income Corporation and its consolidated subsidiaries. Each consolidated subsidiary is wholly-owned and, as such, consolidated into the Consolidated Financial Statements. Certain of the subsidiaries that hold investments are treated as pass through entities for tax purposes. The assets of certain of the Company's consolidated subsidiaries are not directly available to satisfy the claims of the creditors of the CompanyOaktree Strategic Income Corporation or any
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


of its other subsidiaries. As of June 30,December 31, 2017, the Company's consolidated subsidiaries were FS Senior Funding CLO LLC, FS Senior Funding II LLC and FS Senior Funding Ltd. (“2015 Issuer”).
Since the Company is an investment company, portfolio investments held by the Company are not consolidated into the Consolidated Financial Statements. The portfolio investments held by the Company are included on the Statements of Assets and Liabilities as investments at fair value.

Fair Value Measurements:
The Company is required to report its investments for which current market values are not readily available at fair value. The Company values its investments in accordance with FASB ASC Topic 820,Fair Value Measurements and Disclosures ("ASC 820"), which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A liability's fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. ASC 820 prioritizes the use of observable market prices derived from such prices over entity-specific inputs. Where observable prices or inputs are not
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


available or reliable, valuation techniques are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments' complexity.
Hierarchical levels, defined by ASC 820 and directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:
 
Level 1 — Unadjusted, quoted prices in active markets for identical assets or liabilities atas of the measurement date.
Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data at the measurement date for substantially the full term of the assets or liabilities.
Level 3 — Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
In certain cases, theIf inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases,hierarchy, an investment's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. This includes investment securities that are valued using "bid" and "ask" prices obtained from independent third party pricing services or directly from brokers. These investments are generallymay be classified as Level 3 because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities or may require adjustments for investment-specific factors or restrictions.
Financial instruments with readily available quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. As such, the Investment Adviser's capital markets groupAdviser obtains and analyzes readily available market quotations provided by independent pricing services for all of the Company's first lien and second lien ("senior securedsecured") debt investments for which quotations are available. In determining the fair value of a particular investment, pricing services use observable market information, including both binding and non-binding indicative quotations.
The Investment Adviser evaluates the prices obtained fromquotations provided by independent pricing services based on available market information and company specific data that could affect the credit quality and/or fair value of the investment. Investments for which market quotations are readily available may be valued at such market quotations. In order to validate market quotations, the Investment Adviser looks at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. The Investment Adviser does not adjust the prices unless it has a reason to believe any such market quotations are not reflective of the fair value of an investment. Examples of events that would cause market quotations to not reflect fair value could include cases when a security trades infrequently causing a quoted purchase or sale price to become stale or in the event of a "fire sale" by a distressed seller. In these instances, the Company values such investments by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available (as discussed below).
If the quotation provided by the pricing service is based on only one or two market sources, the Investment AdviserCompany performs a review ofadditional procedures to corroborate such information, which may include the portfolio company to validate the quotes. The review generally includesmarket yield technique discussed below and a quantitative and qualitative assessment of the credit quality and market trends affecting the portfolio company. If the Investment Adviser deems the quote to not be indicative of fair value, the Company values such investments by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available (as discussed below).
The Company performs detailed valuations of its debt and equity investments for which market quotations are not readily available or are deemed not to represent fair value of the investments. The Company typically uses three different valuation techniques. The first valuation technique is the transaction precedent approach,technique, which utilizes recent or expected future transactions of the investment to determine fair value, to the extent applicable. The second valuation technique is an analysis of the enterprise value
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


("EV") of the portfolio company. EV means the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time. The EV analysis is typically performed to determine (i) the value of equity investments, to determine if(ii) whether there is credit impairment for debt investments and to determine(iii) the value for debt investments that the Company is deemed to control under the 1940 Act. To estimate the enterprise valueEV of a portfolio company, the Investment Adviser analyzes various factors, including but not limited to, the portfolio company’s historical and projected financial results, macroeconomic impacts on the company and competitive dynamics in the company’s industry. The Investment Adviser also utilizes some or all of the following information based on the individual circumstances of the portfolio company in order to reach its estimate of a portfolio company’s enterprise value, including:company: (i) valuations of comparable public companies, (ii) recent sales of private and public comparable companies in similar industries or having similar business or earnings characteristics, (iii) purchase price multiples as a multiple of their earnings or cash flow, (iv) the portfolio company’s ability to meet its forecasts and its business prospects, (v) a discounted cash flow analysis, whereby future expected cash flows of the portfolio company are discounted to
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


determine a present value using estimated discount rates (typically a weighted average cost of capital based on costs of debt and equity consistent with current market conditions), (vi) estimated liquidation or collateral value of the portfolio company's assets and (vii) offers from third parties to buy the portfolio company. The Company may probability weight potential sale outcomes with respect to a portfolio company due to thewhen uncertainty that exists as of the valuation date. The third valuation technique is a market yield approach,technique, which is typically performed for non-credit impaired debt investments. To determine fair value using aIn the market yield approach,technique, a current price is imputed for the investment based upon an assessment of the expected market yield for a similarly structured investment with a similar level of risk. In the market yield approach,risk, and the Company considers the current contractual interest rate, the capital structure and other terms of the investment relative to risk of the company and the specific investment. A key determinant of risk, among other things, is the leverage through the investment relative to the EV of the portfolio company. As debt investments held by the Company are substantially illiquid with no active transaction market, the Company depends on primary market data, including newly funded transactions and industry specific market movements, as well as secondary market data with respect to high yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable.
In accordance with ASC 820-10, certain investments that qualify as investment companies in accordance with ASC 946 may be valued using net asset value as a practical expedient for fair value. Consistent with FASB guidance under ASC 820, these investments are excluded from the hierarchical levels.
The Company estimates the fair value of privately held warrants using a Black Scholes pricing model, which includes an analysis of various factors and subjective assumptions including the current stock price (by analyzing the portfolio company's operating performance and financial condition and general market conditions)using an EV analysis as described above), the expected period until exercise, expected volatility of the underlying stock price, expected dividends and the risk free rate. Changes in the subjective input assumptions can materially affect the fair value estimates.
The Company's Board of Directors undertakes a multi-step valuation process each quarter in connection with determining the fair value of the Company's investments:
The quarterly valuation process begins with each portfolio company or investment being initially valued by the Investment Adviser's valuation team in conjunction with the Investment Adviser's portfolio management team and capital markets teams;investment professionals responsible for each portfolio investment;
•Preliminary valuations are then reviewed and discussed with management of the Investment Adviser;
Separately, independent valuation firms engaged by the Board of Directors prepare valuations of the Company's investments, on a selected basis, for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment, and submit the reports to the Company and provide such reports to the Investment Adviser and the Audit Committee of the Board of Directors;
The Investment Adviser compares and contrasts its preliminary valuations to the valuations of the independent valuation firms and prepares a valuation report for the Audit Committee of the Board of Directors;Committee;
The Audit Committee of the Board of Directors reviews the preliminary valuations with the Investment Adviser, and the Investment Adviser responds and supplements the preliminary valuations to reflect any discussions between the Investment Adviser and the Audit Committee;
The Audit Committee of the Board of Directors makes a recommendation to the full Board of Directors regarding the fair value of the investments in the Company's portfolio; and
The Board of Directors discusses valuations and determines the fair value of each investment in the Company's portfolio.
The fair value of each of the Company's investments as of June 30,December 31, 2017 and September 30, 20162017 was determined in good faith by the Board of Directors. The Board of Directors has authorized the engagement of independent valuation firms to provide valuation assistance. The Companyand will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of a portion of the Company's portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter. Asquarter, and the Board of June 30, 2017, 66.0% of the Company's portfolio at fair value was valued either using market quotations or by independent valuation firms. The percentage of our portfolio valued by independent valuation firmsDirectors may vary from period to period basedreasonably rely on the availability of market quotations for our portfolio investments during the respective periods.that assistance. However, the Board of Directors is ultimately and solely responsible for the ultimate valuation of the
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


portfolio investments at fair value as determined in good faith pursuant to the Company's valuation policy and a consistently applied valuation process.
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



With the exception of the line items entitled "deferred financing costs," "other assets," "credit facilities payable" and "notes payable," which are reported at amortized cost, all assets and liabilities approximate fair value on the Consolidated Statements of Assets and Liabilities. The carrying value of the line items titled "interest, dividends, and fees receivable," "due from portfolio companies," "receivables from unsettled transactions," "accounts payable, accrued expenses and other liabilities," "base management fee and incentive fee payable," "due to affiliate," "interest payable," "director fees payable" and "payables from unsettled transactions" approximate fair value due to their short maturities.
Investment Income:
Interest Income
Interest income, adjusted for accretion of original issue discount ("OID"), is recorded on an accrual basis to the extent that such amounts are expected to be collected. The Company stops accruing interest on investments when it is determined that interest is no longer collectible. Investments that are expected to pay regularly scheduled interest in cash are generally placed on non-accrual status when there is reasonable doubt that principal or interest cash payments will be collected. Cash interest payments received on investments may be recognized as income or applied to principala return of capital depending upon management’s judgment. SuchA non-accrual investments areinvestment is restored to accrual status if past due principal and interest are paid in cash, and in management’s judgment, the portfolio company, in management's judgment, is likely to continue timely payment of its remaining interest.obligations.
In connection with its investment in a portfolio company, the Company sometimes receives nominal cost equity that is valued as part of the negotiation process with the particular portfolio company. When the Company receives nominal cost equity, the Company allocates its cost basis in itsthe investment between its debt securities and itsthe nominal cost equity at the time of origination. Any resulting discount from recording the loan, or otherwise purchasing a security at a discount, is accreted into interest income over the life of the loan.
For the Company’s secured borrowings, if any, the interest earned on the entire loan balance is recorded within interest income and the interest earned by the buyer from the partial loan sales is recorded within interest expense in the Consolidated Statements of Operations.
PIK Interest Income
The Company hasCompany's investments in debt securities whichmay contain PIK interest provisions. PIK interest, is computed at the contractual rate specified in each investment agreement and added to the principal balance of the investment and recorded as income.     PIK interest on certain of the Company's debt investments, which represents contractually deferred interest added to the loan balance that is generally due at the end of the loan term, is generally recorded on the accrual basis to the extent such amounts are expected to be collected. The Company generally ceases accruing PIK interest if there is insufficient value to support the accrual or if the Company does not expect the portfolio company to be able to pay all principal and interest due. The Company's decision to cease accruing PIK interest involves subjective judgments and determinations based on available information about a particular portfolio company, including whether the portfolio company is current with respect to its payment of principal and interest on its loans and debt securities; monthly and quarterly financial statements and financial projections for the portfolio company; the Company's assessment of the portfolio company's business development success, including product development, profitability and the portfolio company's overall adherence to its business plan;success; information obtained by the Company in connection with periodic formal update interviews with the portfolio company's management and, if appropriate, the private equity sponsor; and information about the general economic and market conditions in which the portfolio company operates. Based on this and other information, the Company determines whether to cease accruing PIK interest on a loan or debt security. The Company's determination to cease accruing PIK interest on a loan or debt security is generally made well before the Company's full write-down of sucha loan or debt security. In addition, if it is subsequently determined that the Company will not be able to collect any previously accrued PIK interest, the fair value of the loans or debt securities would be reduced by the amount of such previously accrued, but uncollectible, PIK interest. The accrual of PIK interest on the Company’s debt investments increases the recorded cost bases of these investments in the Consolidated Financial Statements and, as a result, increases the cost bases of these investments for purposes of computing the capital gain incentive fee payable by the Company to the Investment Adviser beginning in the fiscal year ending September 30, 2019. To maintain its status as a RIC, income from PIK interest may be required to be distributed to the Company’s stockholders, even though the Company has not yet collected the cash and may never do so.
Fee Income
Fee income consistsThe Company receives a variety of fees in the monthlyordinary course of business, including servicing, fees, advisory, fees, amendment, fees, structuring fees and prepayment fees, that the Company receives in connection with its debt investments. These feeswhich are classified as fee income and recognized as they are earned.
Dividend Income
The Company generally recognizes dividend income on the ex-dividend date. Distributions received from equity investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


record distributions from equity investments as dividend income unless there are sufficient earnings at the portfolio company prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.
During the three and nine months ended June 30, 2017, the Company reversed $0.4 million of dividend income previously recorded in prior periods. The Company determined that such dividend receivable balance may no longer be collectible.


FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Cash and Cash Equivalents and Restricted Cash:
Cash and cash equivalents and restricted cash consist of demand deposits and highly liquid investments with maturities of three months or less when acquired. The Company places its cash and cash equivalents and restricted cash with financial institutions and, at times, cash held in bank accounts may exceed the Federal Deposit Insurance Corporation ("FDIC") insurance limit. Cash and cash equivalents are classified as Level 1 assets and are included on the Company's Consolidated Schedule of Investments.
As of June 30,December 31, 2017, included in restricted cash was $7.7$6.2 million that was held at Wells Fargo Bank, N.A. in connection with the Company's Citibank facility and 2015 Debt Securitization (as defined in Note 6 — Borrowings). Pursuant to the terms of the Citibank facility, the Company was restricted in terms of access to $2.4$1.9 million of that amount until such time asthe occurrence of the Company submitsperiodic distribution dates and, in connection therewith, the Company’s submission of its required monthlyperiodic reporting schedules.schedules and verifications of the Company’s compliance with the terms of the credit agreement. As of June 30,December 31, 2017, $5.2$4.3 million of cash held in connection with the 2015 Debt Securitization was restricted due to the obligation to pay interest on the notes under the terms of the 2015 Debt Securitization.
As of September 30, 2016,2017, included in restricted cash was $9.0$7.4 million that was held at Wells Fargo Bank, N.A. in connection with the Company's Citibank facility and 2015 Debt Securitization.Securitization (as defined in Note 6— Borrowings). Pursuant to the terms of the Citibank facility, the Company was restricted in terms of access to $3.5$2.0 million of that amount until such time asthe occurrence of the Company submitsperiodic distribution dates and, in connection therewith, the Company’s submission of its required monthlyperiodic reporting schedules.schedules and verifications of the Company’s compliance with the terms of the credit agreement. As of September 30, 2016, $5.52017, $5.4 million of cash held in connection with the 2015 Debt Securitization was restricted due to the obligation to pay interest on the notes under the terms of the 2015 Debt Securitization.
Due from Portfolio Companies:
Due from portfolio companies consists of amounts payable to the Company from its portfolio companies, excluding those amounts attributable to interest, dividends or fees receivable. These amounts are recognized as they become payable to the Company (e.g., principal payments on the scheduled amortization payment date).
Receivables/Payables fromFrom Unsettled Transactions:
Receivables/payables from unsettled transactions consists of amounts receivable to or payable by the Company for transactions that have not settled at the reporting date.
Deferred Financing Costs:
In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs which requires debt financing costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the related debt liability, similar to the presentation of debt discounts. Additionally, in August 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which provides further clarification on the same topic and states that the Securities and Exchange Commission ("SEC") would not object to the deferral and presentation of debt issuance costs as an asset and subsequent amortization of the deferred costs over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company adopted the guidance for debt arrangements that are not line-of-credit arrangements for the three months ended December 31, 2016 and applied a retrospective approach. As a result of the adoption, the Company reclassified $2.5 million of deferred financing costs assets to a direct deduction from the related debt liability on the Statement of Assets and Liabilities as of September 30, 2016. The adoption of this guidance had no impact on net assets or the Consolidated Statement of Operations.
Deferred financing costs consist of fees and expenses paid in connection with the closing or amending of credit facilities and debt offerings. Deferred financing costs in connection with credit facilities are capitalized as an asset at the time of payment. Deferred financing costs in connection with all other debt arrangements are a direct deduction from the related debt liability at the time of payment. Deferred financing costs are amortized either using the straight line method or effective interest method over the terms of the respective debt arrangement, as appropriate.arrangement. This amortization expense is included in interest expense in the Company's Consolidated Statements of Operations. Upon early termination or modification of a credit facility, the remaining balanceall or a portion of unamortized fees related to such facility ismay be accelerated into interest expense.
Offering Costs:
Offering costs consist of fees and expenses incurred in connection with the offer and sale of the Company's common stock, including legal, accounting and printing fees. The Company charges offering costs to capital at the time of an offering. There werenooffering costs charged to capital during the nine months ended June 30, 2017 and June 30, 2016.
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Amounts Payable to Syndication Partners:
The Company acts as administrative agent for certain loans it originates and then syndicates. As administrative agent, the Company receives interest, principal and/or other payments from borrowers that get redistributed to syndication partners. If not redistributed by the reporting date, a payable is recorded to syndication partners on the Consolidated Statements of Assets and Liabilities.
Secured Borrowings:
The Company follows the guidance in ASC 860 when accounting for loan participations and other loan sales. Such guidance provides accounting and reporting standards for transfers and servicing of financial assets and requires a participation or other partial loan sales to meet the definition of a "participating interest," as defined in the guidance, in order for sale treatment to be allowed. Participations or other loan sales which do not meet the definition of a participating interest or which are not eligible for sale accounting remain on the Company's Consolidated Statements of Assets and Liabilities and the proceeds are recorded as secured borrowings until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value. See Note 6 for additional information.
Fair Value Option:
The Company elected the fair value option for its secured borrowings under FASB ASC Topic 825 Financial Instruments - Fair Value Option ("ASC 825"). The Company believes that by electing the fair value option for these financial instruments, it provides consistent measurement of the assets and liabilities which relate to the loan sales mentioned above.
However, the Company has not elected the fair value option to report other selected financial assets and liabilities at fair value. With the exception of the line items entitled "deferred financing costs", "credit facilities payable" and "notes payable," which are reported at amortized cost, all assets and liabilities approximate fair value on the Consolidated Statement of Assets and Liabilities. The carrying value of the line items titled "interest, dividends, and fees receivable," "due from portfolio companies," "receivables from unsettled transactions," "accounts payable, accrued expenses and other liabilities," "base management fee and incentive fee payable," "due to FSC CT," "interest payable," "amounts payable to syndication partners," "director fees payable" and "payables from unsettled transactions" approximate fair value due to their short maturities.
Income Taxes:
The Company has elected to be subject to tax as a RIC under Subchapter M of the Code and operates in a manner so as to qualify for the tax treatment applicable to RICs. In order to be subject to tax as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute dividends to its stockholders of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code and determined without regard to any deduction for dividends paid, for each taxable year. As a RIC, the Company is not subject to federal income tax on the portion of its taxable income and gains distributed currently to stockholders as a dividend. Depending on the level of taxable income earned during a taxable year, the Company may choose to retain taxable income in excess of current year dividend distributions and would distribute such taxable income in the next taxable year. The Company would then incur a 4% excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated current calendar year dividend distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. The Company anticipates timely distribution of its taxable income in accordance withwithin the tax rules under
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Subchapter M of the Code. The Company did not incur a U.S. federal excise tax for calendar years 20142015 and 20152016 and does not expect to incur a U.S. federal excise tax for calendar year 2016. The Company may incur a U.S. federal excise tax in future years.2017.
The Company holds certain portfolio investments through taxable subsidiaries. The purpose of the Company's taxable subsidiaries is to permit the Company to hold equity investments in portfolio companies which are "pass through" entities for U.S. federal income tax purposes in order to comply with the RIC tax requirements. The taxable subsidiaries are consolidated for financial reporting purposes, and portfolio investments held by them are included in the Company’s consolidated financial statementsConsolidated Financial Statements as portfolio investments and recorded at fair value. The taxable subsidiaries are not consolidated with the Company for U.S. federal income tax purposes and may generate income tax expense, or benefit, and the related tax assets and liabilities, as a result of their ownership of certain portfolio investments. This income tax expense, if any, would be reflected in the Company's Consolidated Statements of Operations. The Company uses the asset and liability method to account for its taxable subsidiaries' income taxes. Using this method, the Company recognizes deferred tax assets and liabilities for the estimated future tax effects attributable to temporary differences between financial reporting and tax bases of assets and liabilities. In addition, the Company recognizes deferred tax benefits associated with net operating loss carry forwards that it may use to offset future tax obligations. The Company measures deferred tax
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


assets and liabilities using the enacted tax rates expected to apply to taxable income in the years in which it expects to recover or settle those temporary differences.
FASB ASC Topic 740 Accounting for Uncertainty in Income Taxes ("ASC 740"), provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the Company's Consolidated Financial Statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Management's determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including but not limited to, an ongoing analysis of tax laws, regulations and interpretations thereof. The Company recognizes the tax benefits of uncertain tax positions only where the position is "more likely than not" to be sustained assuming examination by tax authorities. Management has analyzed the Company's tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years 2013, 2014, 2015 or 2015.2016. The Company identifies its major tax jurisdictions as U.S. Federal and Connecticut,California, and the Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
Recent Accounting Pronouncements:

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606) - Principal versus Agent Considerations. This ASU is intended to clarify revenue recognition accounting when a third party is involved in providing goods or services to a customer. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing. This ASU is intended to clarify two aspects of Topic 606: identifying performance obligations and licensing implementation guidance. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients. This ASU amends certain aspects of ASU 2014-09, addresses certain implementation issues identified and clarifies the new revenue standards’ core revenue recognition principles. The new standards will be effective for the Company on October 1, 2018 and early adoption is permitted on the original effective date of January 1, 2017. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has not yet selected a transition method nor has it determined the effect of this standard on its Consolidated Financial Statements and related disclosures andon its ongoing financial reporting.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern, which requires management to evaluate, at each annual and interim reporting period, a company's ability to continue as a going concern within one year of the date the financial statements are issued and provide related disclosures. This accounting guidance is effective for the Company on a prospective basis beginning for the annual fiscal 2017 period and is not expected to have a material effect on its consolidated financial statements.

In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). The update eliminates the requirement to categorize investments in the fair value hierarchy if their fair value is measured at net asset value (NAV) per share (or its equivalent) using the practical expedient in the FASB’s fair value measurement guidance. Public companies are required to apply ASU 2015-07 retrospectively for interim and annual reporting periods beginning after December 15, 2015. Accordingly, the Company adopted ASU 2015-07 during the three months ended December 31, 2016 and determined that the adoption did not have a material impact on its consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall ("ASU 2016-01"), which makes limited amendments to the guidance in GAAP on the classification and measurement of financial instruments. The new standard significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods therein.  Early adoption is permitted specifically for the amendments pertaining to the presentation of certain fair value changes for financial liabilities measured at fair value.  Early adoption of all other amendments is not permitted. Upon adoption, the Company will be required to make a cumulative-effect adjustment to the Consolidated Statement of Assets and Liabilities as of the beginning of the first reporting period in which the guidance is effective.  The Company did not early adopt the new guidance during the three months ended June 30, 2017. The Company is evaluating the effect that ASU 2016-01 will have on its Consolidated Financial Statements and related disclosures.

FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included within cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for interim and annual periods beginning after December 15, 2017 and early adoption is permitted. The amendment should be adopted retrospectively. The Company did not early adopt the new guidance during the three and nine months ended June 30,December 31, 2017. The new guidance is not expected to have a material effect on the Company's consolidated financial statements.Consolidated Financial Statements.


OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 3. Portfolio Investments
At June 30,As of December 31, 2017, 180.2%186.7% of net assets at fair value, or $565.2$541.4 million, was invested in 6866 portfolio investments,companies, including 19.6%19.7% of net assets, or $61.6$57.2 million, in subordinated notes and limited liability company ("LLC") equity interests of FSFR Glick JV LLC (together with its consolidated subsidiaries, "FSFR Glickthe "Glick JV"), at fair value, and 8.6%15.9% of net assets, or $26.9$46.2 million, was invested in cash and cash equivalents (including $7.7$6.2 million of restricted cash). In comparison, atas of September 30, 2016, 176.0%2017, 190.9% of net assets at fair value, or $573.6$560.4 million, was invested in 6367 portfolio investments,companies, including 19.4%19.6% of net assets, or $63.3$57.6 million, in subordinated notes and LLClimited liability company ("LLC") equity interests of FSFRthe Glick JV at fair value, and 8.8%14.6% of net assets, or $28.8$43.0 million, was invested in cash and cash equivalents (including $9.0$7.4 million of restricted cash). As of June 30,December 31, 2017, 88.3%89.2% of the Company's portfolio at fair value consisted of senior secured debt investments that bore interest at floating rates and that are secured by first or second priority liens on the assets of the portfolio companies, 10.9%10.6% consisted of investments in the subordinated notes of FSFRthe Glick JV and 0.8%0.2% consisted of equity investments in other portfolio companies. As of September 30, 2016, 87.6%2017, 89.5% of the Company's portfolio at fair value consisted of senior secured debt investments that bore interest at floating rates and that are secured by first or second priority liens on the assets of the portfolio companies, 9.9%10.3% consisted of investments in the subordinated notes of FSFR Glick JV, 1.1% consisted of investments in the LLC equity interests of FSFR Glick JV and 1.4%0.2% consisted of equity investments in other portfolio companies.
During the three and nine months ended June 30,December 31, 2017 and December 31, 2016, the Company recorded net realized gain (loss) on investments and secured borrowings of $(4.4) million and $0.1 million, respectively. During the three months ended December 31, 2017 and 2016, the Company recorded net unrealized appreciation (depreciation) on investments and secured borrowings of $(5.8)$1.7 million and $2.2 million, respectively. During the three and nine months ended June 30, 2016, the Company recorded net unrealized appreciation (depreciation) of $3.3 million and $(18.6)$(5.2) million, respectively.
The composition of the Company's investments as of June 30,December 31, 2017 and September 30, 20162017 at cost and fair value was as follows:
 June 30, 2017 September 30, 2016 December 31, 2017 September 30, 2017
 Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value
Investments in debt securities (senior secured) $508,125,501
 $498,945,230
 $518,778,491
 $502,385,158
 $502,318,893
 $482,999,264
 $523,384,267
 $501,769,997
Investments in equity securities (common stock, preferred stock and warrants) 10,587,709
 4,618,617
 10,572,966
 7,902,556
 10,365,422
 1,228,419
 10,365,425
 1,059,989
Debt investment in FSFR Glick JV 64,005,755
 61,614,406
 64,005,755
 56,885,646
Equity investment in FSFR Glick JV 7,111,751
 —
 7,111,751
 6,431,021
Debt investment in Glick JV 64,524,032
 57,180,650
 64,228,881
 57,606,674
Equity investment in Glick JV 7,111,751
 —
 7,111,751
 —
Total $589,830,716
 $565,178,253
 $600,468,963
 $573,604,381
 $584,320,098
 $541,408,333
 $605,090,324
 $560,436,660
The following table presents the financial instruments carried at fair value as of June 30,December 31, 2017 on the Company's Consolidated StatementsStatement of Assets and Liabilities for each of the three levels of hierarchy established by ASC 820:
 Level 1 Level 2 Level 3 Measured at Net Asset Value (a) Total Level 1 Level 2 Level 3 Measured at Net Asset Value (a) Total
Investments in debt securities (senior secured) $—
 $5,836,815
 $493,108,415
 $—
 $498,945,230
 $—
 $250,899,703
 $232,099,561
 $—
 $482,999,264
Investments in debt securities (subordinated notes of FSFR Glick JV) —
 —
 61,614,406
 —
 61,614,406
Investment in equity securities (common stock, preferred stock and warrants, including LLC equity interests of FSFR Glick JV) —
 —
 4,618,617
 —
 4,618,617
Investments in debt securities (subordinated notes of Glick JV) —
 —
 57,180,650
 —
 57,180,650
Investment in equity securities (common stock, preferred stock and warrants, including LLC equity interests of Glick JV) —
 —
 1,228,419
 —
 1,228,419
Total investments at fair value —
 5,836,815
 559,341,438
 —
 565,178,253
 —
 250,899,703
 290,508,630
 —
 541,408,333
Cash and cash equivalents 19,258,982
 —
 —
 —
 19,258,982
 39,975,500
 —
 —
 —
 39,975,500
Total assets at fair value $19,258,982
 $5,836,815
 $559,341,438
 $—
 $584,437,235
 $39,975,500
 $250,899,703
 $290,508,630
 $—
 $581,383,833
__________ 
(a)In accordance with ASC 820-10, certain investments that are measured using the net asset value per share (or its equivalent) as a practical expedient for fair value have not been classified in the fair value hierarchy. These investments are generally not
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


redeemable. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The following table presents the financial instruments carried at fair value as of September 30, 20162017 on the Company's Consolidated StatementsStatement of Assets and Liabilities for each of the three levels of hierarchy established by ASC 820:
 Level 1 Level 2 Level 3 Measured at Net Asset Value (a) Total Level 1 Level 2 Level 3 Measured at Net Asset Value (a) Total
Investments in debt securities (senior secured) $—
 $—
 $502,385,158
 $—
 $502,385,158
 $—
 $75,149,541
 $426,620,456
 $—
 $501,769,997
Investments in debt securities (subordinated notes of FSFR Glick JV) —
 —
 56,885,646
 —
 56,885,646
Investment in equity securities (common stock, preferred stock and warrants, including LLC equity interests of FSFR Glick JV) —
 —
 7,902,556
 6,431,021
 14,333,577
Investments in debt securities (subordinated notes of Glick JV) —
 —
 57,606,674
 —
 57,606,674
Investment in equity securities (common stock, preferred stock and warrants, including LLC equity interests of Glick JV) —
 —
 1,059,989
 —
 1,059,989
Total investments at fair value —
 —
 567,173,360
 6,431,021
 573,604,381
 —
 75,149,541
 485,287,119
 —
 560,436,660
Cash and cash equivalents 19,778,841
 —
 —
 —
 19,778,841
 35,604,127
 —
 —
 —
 35,604,127
Total assets at fair value $19,778,841
 $—
 $567,173,360
 $6,431,021
 $593,383,222
 $35,604,127
 $75,149,541
 $485,287,119
 $—
 $596,040,787
Secured borrowings —
 —
 4,985,425
 —
 4,985,425
Total liabilities at fair value $—
 $—
 $4,985,425
 $—
 $4,985,425
__________ 
(a)In accordance with ASC 820-10, certain investments that are measured using the net asset value per share (or its equivalent) as a practical expedient for fair value have not been classified in the fair value hierarchy. These investments are generally not redeemable. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.
When a determination is made to classify a financial instrument within Level 3 of the valuation hierarchy, the determination is based upon the fact that the unobservable factors are significant to the overall fair value measurement. However, Level 3 financial instruments typically include, in addition to the unobservable or Level 3 components, observable components (i.e. components that are actively quoted and can be validated by external sources). Accordingly, the appreciation (depreciation) in the tables below includes changes in fair value due in part to observable factors that are part of the valuation methodology.
The following table provides a roll-forward in Transfers between levels are recognized at the changes in fair value from March 31, 2017 to June 30, 2017, for all investments and secured borrowings for whichbeginning of the Company determined fair value using unobservable (Level 3) factors:
  Investments
         
  Senior Secured Debt Subordinated notes of FSFR Glick JV Common stock, preferred stock and warrants Total
Fair value as of March 31, 2017 $478,305,810
 $61,510,851
 $6,104,962
 $545,921,623
New investments & net revolver activity 60,962,165
 —
 —
 60,962,165
Redemptions/repayments (43,405,847) —
 —
 (43,405,847)
Net accrual of PIK interest income 63,551
 —
 —
 63,551
Accretion of original issue discount 1,449,575
 —
 —
 1,449,575
Net change in unearned income 33,983
 —
 —
 33,983
Net unrealized appreciation (depreciation) on investments (4,312,357) 103,555
 (1,486,345) (5,695,147)
Net realized gain on investments 11,535
 —
 —
 11,535
Fair value as of June 30, 2017 $493,108,415
 $61,614,406
 $4,618,617
 $559,341,438
Net unrealized appreciation (depreciation) relating to Level 3 assets and liabilities still held at June 30, 2017 and reported within net unrealized appreciation (depreciation) on investments in the Consolidated Statement of Operations for the three months ended June 30, 2017 $(4,467,057) $103,555
 $(860,902) $(5,224,404)
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The following table provides a roll-forward in the changes in fair value from March 31, 2016 to June 30, 2016 for all investments for which the Company determines fair value using unobservable (Level 3) factors:
  Investments
         
  Senior Secured Debt Subordinated notes of FSFR Glick JV Common stock, preferred stock and warrants Total
Fair value as of March 31, 2016 $513,827,239
 $56,327,567
 $5,234,285
 $575,389,091
New investments & net revolver activity 105,313,380
 4,291,875
 10,049,841
 119,655,096
Redemptions/repayments (91,594,851) (154,217) —
 (91,749,068)
Net accrual of PIK interest income (89,962) —
 —
 (89,962)
Accretion of original issue discount 318,048
 —
 —
 318,048
Net change in unearned income 17,162
 —
 —
 17,162
Net unrealized appreciation (depreciation) on investments 7,087,191
 (2,202,775) (1,624,938) 3,259,478
Net realized loss on investments (8,506,936) —
 —
 (8,506,936)
Fair value as of June 30, 2016 $526,371,271
 $58,262,450
 $13,659,188
 $598,292,909
Net unrealized depreciation relating to Level 3 assets still held at June 30, 2016 and reported within net unrealized appreciation (depreciation) on investments in the Consolidated Statement of Operations for the three months ended June 30, 2016 $(1,959,713) $(2,202,775) $(1,624,938) $(5,787,426)
reporting period.
The following table provides a roll-forward in the changes in fair value from September 30, 20162017 to June 30,December 31, 2017 for all investments and secured borrowings for which the Company determined fair value using unobservable (Level 3) factors:
  Investments Liabilities
           
  Senior Secured Debt Subordinated notes of FSFR Glick JV Common stock, preferred stock and warrants Total Secured Borrowings
Fair value as of September 30, 2016 $502,385,158
 $56,885,646
 $7,902,556
 $567,173,360
 $4,985,425
New investments & net revolver activity 176,224,944
 —
 14,743
 176,239,687
 —
Redemptions/repayments (182,490,619) —
 —
 (182,490,619) (5,000,000)
Net accrual of PIK interest income 185,296
 —
 —
 185,296
 —
Accretion of original issue discount 2,834,590
 —
 —
 2,834,590
 —
Net change in unearned income 50,302
 —
 —
 50,302
 —
Net unrealized appreciation (depreciation) on investments 7,320,719
 4,728,760
 (3,298,682) 8,750,797
 —
Net unrealized appreciation on secured borrowings —
 —
 —
 —
 14,575
Net realized loss on investments (13,401,975) —
 —
 (13,401,975) —
Fair value as of June 30, 2017 $493,108,415
 $61,614,406
 $4,618,617
 $559,341,438
 $—
Net unrealized appreciation (depreciation) relating to Level 3 assets and liabilities still held at June 30, 2017 and reported within net unrealized appreciation (depreciation) on investments and net unrealized appreciation on secured borrowings in the Consolidated Statement of Operations for the nine months ended June 30, 2017 $(7,626,784) $4,728,760
 $(140,318) $(3,038,342) $—
  Investments
         
  Senior Secured Debt Subordinated notes of Glick JV Common stock, preferred stock and warrants Total
Fair value as of September 30, 2017 $426,620,456
 $57,606,674
 $1,059,989
 $485,287,119
New investments & net revolver activity 24,210,128
 —
 —
 24,210,128
Redemptions/repayments/sales (106,793,739) —
 —
 (106,793,739)
Transfers out (a) (112,078,142) —
 —
 (112,078,142)
Net accrual of PIK interest income —
 295,151
 —
 295,151
Accretion of original issue discount 747,346
 —
 —
 747,346
Net unrealized appreciation (depreciation) on investments (416,804) (721,175) 168,430
 (969,549)
Net realized loss on investments (189,684) —
 —
 (189,684)
Fair value as of December 31, 2017 $232,099,561
 $57,180,650
 $1,228,419
 $290,508,630
Net unrealized appreciation (depreciation) relating to Level 3 assets and liabilities still held as of December 31, 2017 and reported within net unrealized appreciation (depreciation) on investments and net unrealized appreciation on secured borrowings in the Consolidated Statement of Operations for the three months ended December 31, 2017 $54,086
 $(721,175) $168,430
 $(498,659)
__________ 
(a)There were transfers out of Level 3 to Level 2 for certain investments during the quarter ended December 31, 2017 as a result of an increased number of market quotes available and/or increased market liquidity.
FIFTH STREET SENIOR FLOATING RATE CORP.
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The following table provides a roll-forward in the changes in fair value from September 30, 20152016 to June 30,December 31, 2016 for all investments and secured borrowings for which the Company determinesdetermined fair value using unobservable (Level 3) factors:
 Investments Investments Liabilities
                  
 Senior Secured Debt Subordinated notes of FSFR Glick JV Common stock, preferred stock and warrants Total Senior Secured Debt Subordinated notes of Glick JV Common stock, preferred stock and warrants Total Secured Borrowings
Fair value as of September 30, 2015 $565,526,453
 $52,603,346
 $5,517,675
 $623,647,474
Fair value as of September 30, 2016 $502,385,158
 $56,885,646
 $7,902,556
 $567,173,360
 $4,985,425
New investments & net revolver activity 250,338,322
 10,985,625
 11,293,591
 272,617,538
 37,633,299
 —
 —
 37,633,299
 —
Redemptions/repayments (267,045,164) (154,217) —
 (267,199,381) (66,713,067) —
 —
 (66,713,067) (5,000,000)
Net accrual of PIK interest income (48,929) —
 —
 (48,929) 59,404
 —
 —
 59,404
 —
Accretion of original issue discount 1,281,598
 —
 —
 1,281,598
 692,196
 —
 —
 692,196
 —
Net change in unearned income (4,191) —
 —
 (4,191) (28,807) —
 —
 (28,807) —
Net unrealized depreciation on investments (10,316,152) (5,172,304) (3,152,078) (18,640,534)
Net realized loss on investments (13,360,666) —
 —
 (13,360,666)
Fair value as of June 30, 2016 $526,371,271
 $58,262,450
 $13,659,188
 $598,292,909
Net unrealized depreciation relating to Level 3 assets still held at June 30, 2016 and reported within net unrealized appreciation (depreciation) on investments in the Consolidated Statement of Operations for the nine months ended June 30, 2016 $(12,043,738) $(5,172,304) $(3,152,077) $(20,368,119)
Net unrealized appreciation (depreciation) on investments (2,392,863) 4,859,827
 (1,263,383) 1,203,581
  
Net unrealized appreciation on secured borrowings —
 —
 —
 —
 14,575
Net realized gain on investments 82,762
 —
 —
 82,762
 —
Fair value as of December 31, 2016 $471,718,082
 $61,745,473
 $6,639,173
 $540,102,728
 $—
Net unrealized appreciation (depreciation) relating to Level 3 assets and liabilities still held as of December 31, 2016 and reported within net unrealized appreciation (depreciation) on investments and net unrealized appreciation on secured borrowings in the Consolidated Statement of Operations for the three months ended December 31, 2016 $(2,657,419) $4,859,827
 $(1,263,383) $939,025
 $—

Significant Unobservable Inputs for Level 3 Investments
The following table provides quantitative information related to the significant unobservable inputs for Level 3 investments, which are carried at fair value as of June 30,December 31, 2017:
Asset Fair Value Valuation Technique Unobservable Input Range 
Weighted
Average (c)
 Fair Value Valuation Technique Unobservable Input Range 
Weighted
Average (c)
Senior secured debt $208,426,106
 Market yield approach Capital structure premium (a)0.0%-2.0% 0.2% $177,181,455
 Market yield technique Market yield (a)6.4%-14.4% 8.9%
   Tranche specific risk premium / (discount) (a)(3.1)%-8.0% (0.2)% 6,301,585
 Enterprise value technique Revenue multiple (b)0.1x-0.6x 0.5x
   Size premium (a)0.0%-1.5% 0.7% 50,000
 Enterprise value technique EBITDA multiple (b)6.6x-7.6x 7.1x
   Industry premium / (discount) (a)(1.3)%-2.9% 0.0% 23,279,853
 Transactions precedent technique Transaction price (d)N/A-N/A N/A
 40,719,808
 Enterprise value approach EBITDA/Revenue multiple (b)0.9x-0.9x 0.9x 25,286,668
 Market quotations Broker quoted price (e)N/A-N/A N/A
Glick JV subordinated notes 57,180,650
 Enterprise value technique N/A (f)N/A-N/A N/A
Preferred & Common Equity 642,057
 Enterprise value technique Revenue multiple (b)0.1x-3.0x 3.0x
 42,748,295
 Transactions precedent approach Transaction price (d)N/A-N/A N/A 586,362
 Enterprise value technique EBITDA multiple (b)15.0x-16.0x 15.5x
 201,214,206
 Market quotations Broker quoted price (e)N/A-N/A N/A
FSFR Glick JV subordinated notes 61,614,406
 Enterprise value approach N/A (f)N/A-N/A N/A
Preferred & Common Equity 4,618,617
 Enterprise value approach EBITDA/Revenue multiple (b)1.0x-17.3x 3.7x
Total $559,341,438
  $290,508,630
 
_____________________
(a) Used when market participant would take into account this premium or discountmarket yield when pricing the investment.
(b) Used when market participant would use such multiples when pricing the investment.
(c) Weighted averages are calculated based on fair value of investments.
(d) Used when there is an observable transaction or pending event for the investment.
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(e) The Company generally uses prices provided by an independent pricing service which are non-binding indicative prices on or near the valuation date as the primary basis for the fair value determinations for quoted senior secured debt investments. Since these prices are non-binding, they may not
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


be indicative of fair value. The company performs additional procedures to corroborate such information, which may include the market yield technique and a quantitative and qualitative assessment of the credit quality and market trends affecting the portfolio company. Each quoted price is evaluated by the Audit Committee of the Company's Board of Directors in conjunction with additional information compiled by the Investment Adviser, including financial performance, recent business developments and various other factors.Adviser.
(f) The Company determined the value based on the total assets less the total liabilities senior to the subordinated notes held at FSFRthe Glick JV in an amount not exceeding par under the enterprise value approach.technique.
Under the market yield technique, the significant unobservable input used in the fair value measurement of the Company's investments in debt securities as of December 31, 2017 is the market yield. Increases or decreases in the market yield may result in a lower or higher fair value measurement, respectively.
Under the enterprise value technique, the significant unobservable input used in the fair value measurement of the Company's investments in debt or equity securities as of December 31, 2017 is the earnings before interest, taxes, depreciation and amortization ("EBITDA")/Revenue multiple. Increases or decreases in the valuation multiples in isolation may result in a higher or lower fair value measurement, respectively.

The following table provides quantitative information related to the significant unobservable inputs for Level 3 investments, and secured borrowings, which are carried at fair value as of September 30, 2016:2017:
Asset Fair Value Valuation Technique Unobservable Input Range 
Weighted
Average (c)
 Fair Value Valuation Technique Unobservable Input Range 
Weighted
Average (c)
Senior secured debt $270,620,843
 Market yield approach Capital structure premium (a)0.0%-2.0% 0.1% $208,118,444
 Market yield technique Capital structure premium (a)0.0%-2.0% 0.2%
   Tranche specific risk premium / (discount) (a)(4.5)%-5.3% (1.4)%   Tranche specific risk premium / (discount) (a)(3.1)%-8.0% 0.2%
   Size premium (a)0.0%-1.5% 0.8%   Size premium (a)0.0%-1.5% 0.7%
   Industry premium / (discount) (a)(1.3)%-5.4% 0.3%   Industry premium / (discount) (a)(1.1)%-2.6% 0.0%
 12,440,322
 Enterprise value approach Weighted average cost of capital 23.0%-23.0% 23.0% 23,192,266
 Enterprise value technique EBITDA multiple (b)5.9x-6.9x 6.4x
   Company specific risk premium (a)15.0%-15.0% 15.0% 6,242,550
 Enterprise value technique Revenue multiple (b)0.2x-0.6x 0.5x
   Revenue growth rate 6.0%-6.0% 6.0% 20,070,000
 Transactions precedent technique Transaction price (d)N/A-N/A N/A
   Revenue multiple (b)1.1x-1.1x 1.1x 168,997,196
 Market quotations Broker quoted price (e)N/A-N/A N/A
 33,036,389
 Transactions precedent approach Transaction price (d)N/A-N/A N/A
 186,287,604
 Market quotations Broker quoted price (e)N/A-N/A N/A
FSFR Glick JV subordinated notes 56,885,646
 Market yield approach Capital structure premium (a)2.0%-2.0% 2.0%
   Tranche specific risk premium / (discount) (a)(1.4)%-(1.4)% (1.4)%
   Size premium (a)2.0%-2.0% 2.0%
   Industry premium / (discount) (a)1.9%-1.9% 1.9%
Glick JV subordinated notes 57,606,674
 Enterprise value technique N/A (f)N/A-N/A N/A
Preferred & Common Equity 7,902,556
 Enterprise value approach Weighted average cost of capital 14.0%-18.0% 14.5% 1,059,989
 Enterprise value technique EBITDA multiple (b)0.2x-15.5x 8.1x
   Company specific risk premium (a)1.0%-2.0% 1.9%
   Revenue growth rate (21.6)%-57.8% (12.0)%
   EBITDA/Revenue multiple (b)1.0x-18.0x 3.1x
Total $567,173,360
  $485,287,119
 
Liabilities Fair Value Valuation Technique Unobservable Input Range 
Weighted
Average
Secured borrowings $4,985,425
 Market quotations Broker quoted price (e)N/A-N/A N/A
Total $4,985,425
 
_____________________
(a) Used when market participant would take into account this premium or discount when pricing the investment.investment based on a market yield.
(b) Used when market participant would use such multiples when pricing the investment.
(c) Weighted averages are calculated based on fair value of investments.
(d) Used when there is an observable transaction or pending event for the investment.
(e) The Company generally uses prices provided by an independent pricing service which are non-binding indicative prices on or near the valuation date as the primary basis for the fair value determinations for quoted senior secured debt investments. Since these prices are non-binding, they may not be indicative of fair value. The company performs additional procedures to corroborate such information, which may include the market yield technique and a quantitative and qualitative assessment of the credit quality and market trends affecting the portfolio company. Each quoted price is evaluated by the Audit Committee of the Company's Board of Directors in conjunction with additional information compiled by the Investment Adviser.
(f) The Company including financial performance, recent business developments and various other factors.determined the value based on the total assets less the total liabilities senior to the subordinated notes held at Glick JV in an amount not exceeding par under the enterprise value technique.
Under the market yield approach,technique, the significant unobservable inputs used in the fair value measurement of the Company's investments in debt securities as of September 30, 2017 are capital structure premium, tranche specific risk premium (discount), size premium and industry
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


premium (discount). Increases or decreases in any of those inputs in isolation may result in a lower or higher fair value measurement, respectively.
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Under the enterprise value approach,technique, the significant unobservable input used in the fair value measurement of the Company's investments in debt or equity securities as of September 30, 2017 is the EBITDA/Revenue multiple. Increases or decreases in the valuation multiples in isolation may result in a higher or lower fair value measurement, respectively.
Financial Instruments Disclosed, But Not Carried, At Fair Value
The following table presents the carrying value and fair value of the Company’s financial liabilities disclosed, but not carried, at fair value as of June 30,December 31, 2017 and the level of each financial liability within the fair value hierarchy: 
 
Carrying
 Value
 Fair Value Level 1 Level 2 Level 3 
Carrying
 Value
 Fair Value Level 1 Level 2 Level 3
Citibank facility payable $73,656,800
 $73,656,800
 $—
 $—
 $73,656,800
 $70,056,800
 $70,056,800
 $—
 $—
 $70,056,800
East West Bank facility payable 13,000,000
 13,000,000
     13,000,000
 4,000,000
 4,000,000
 —
 —
 4,000,000
Notes payable 179,503,342
 181,800,000
 —
 —
 181,800,000
Notes payable (net of unamortized financing costs) 177,848,395
 180,000,000
 —
 —
 180,000,000
Total $266,160,142
 $268,456,800
 $—
 $—

$268,456,800
 $251,905,195
 $254,056,800
 $—
 $—

$254,056,800

The following table presents the carrying value and fair value of the Company’s financial liabilities disclosed, but not carried, at fair value as of September 30, 20162017 and the level of each financial liability within the fair value hierarchy:
 
Carrying
 Value
 Fair Value Level 1 Level 2 Level 3 
Carrying
 Value
 Fair Value Level 1 Level 2 Level 3
Citibank facility payable $107,426,800
 $107,426,800
 $—
 $—
 $107,426,800
 $76,456,800
 $76,456,800
 $—
 $—
 $76,456,800
Notes payable 177,485,764
 180,000,000
 —
 —
 180,000,000
East West Bank facility payable 6,500,000
 6,500,000
 —
 —
 6,500,000
Notes payable (net of unamortized financing costs) 177,775,868
 180,000,000
 —
 —
 180,000,000
Total $284,912,564
 $287,426,800
 $—
 $—
 $287,426,800
 $260,732,668
 $262,956,800
 $—
 $—
 $262,956,800
The principal valuevalues of the credit facilities payable and notes payable approximate their fair values due to their variable interest rates and are included in Level 3 of the hierarchy.

Portfolio Composition
 Summaries of the composition of the Company's investment portfolio at cost as a percentage of total investments and at fair value as a percentage of total investments and total net assets are shown in the following tables:
 
 June 30, 2017 September 30, 2016 December 31, 2017 September 30, 2017
Cost:            % of Total Investments    % of Total Investments
Senior secured debt $508,125,501
 86.14% $518,778,491
 86.40% $502,318,893
 85.97% $523,384,267
 86.50%
Subordinated notes of FSFR Glick JV 64,005,755
 10.85
 64,005,755
 10.66
LLC equity interests of FSFR Glick JV 7,111,751
 1.21
 7,111,751
 1.18
Subordinated notes of Glick JV 64,524,032
 11.04% 64,228,881
 10.61%
LLC equity interests of Glick JV 7,111,751
 1.22% 7,111,751
 1.18%
Purchased equity 10,587,709
 1.80
 10,572,966
 1.76
 10,365,422
 1.77% 10,365,425
 1.71%
Equity grants —
 —
 —
 —
Total $589,830,716
 100.00% $600,468,963
 100.00% $584,320,098
 100.00% $605,090,324
 100.00%
Fair Value:        
Senior secured debt $498,945,230
 88.28% $502,385,158
 87.58%
Subordinated notes of FSFR Glick JV 61,614,406
 10.90
 56,885,646
 9.92
LLC equity interests of FSFR Glick JV —
 —
 6,431,021
 1.12
Purchased equity 4,618,617
 0.82
 7,782,214
 1.36
Equity grants —
 —
 120,342
 0.02
Total $565,178,253
 100.00% $573,604,381
 100.00%
FIFTH STREET SENIOR FLOATING RATE CORP.
  December 31, 2017 September 30, 2017
Fair Value:    % of Total Investments % of Total Net Assets    % of Total Investments % of Total Net Assets
Senior secured debt $482,999,264
 89.21% 166.58% $501,769,997
 89.53% 170.87%
Subordinated notes of Glick JV 57,180,650
 10.56% 19.72% 57,606,674
 10.28% 19.62%
LLC equity interests of Glick JV —
 —
 —
 —
 —
 —
Purchased equity 1,228,419
 0.23% 0.42% 1,059,989
 0.19% 0.36%
Total $541,408,333
 100.00% 186.72% $560,436,660
 100.00% 190.85%

OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The Company primarily invests in portfolio companies located in North America. The following tables show the portfolio composition by geographic region at cost and fair value as a percentage of total investments. The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company's business. The following tables show the portfolio composition by geographic region at cost as a percentage of total investments and at fair value as a percentage of total investments and total net assets:
 June 30, 2017 September 30, 2016 December 31, 2017 September 30, 2017
Cost:            % of Total Investments    % of Total Investments
Northeast U.S. $217,416,392
 36.87% $223,662,953
 37.25% $207,356,367
 35.49% $217,508,260
 35.94%
Midwest U.S. 97,192,327
 16.63% 115,147,194
 19.03%
Southeast U.S. 91,706,668
 15.69% 89,214,997
 14.74%
West U.S. 80,786,530
 13.83% 74,469,039
 12.31%
Southwest U.S. 113,948,774
 19.32
 123,909,372
 20.64
 74,137,676
 12.69% 101,583,440
 16.79%
Southeast U.S. 92,102,014
 15.61
 76,201,785
 12.69
Midwest U.S. 88,275,609
 14.97
 77,086,840
 12.84
West U.S. 70,908,726
 12.02
 84,992,619
 14.15
Northwest 3,803,844
 0.64
 —
 —
International 3,375,357
 0.57
 14,615,394
 2.43
 29,344,544
 5.02% 3,367,510
 0.56%
Northwest U.S. 3,795,986
 0.65% 3,799,884
 0.63%
Total $589,830,716
 100.00% $600,468,963
 100.00% $584,320,098
 100.00% $605,090,324
 100.00%
        
Fair Value:        
Northeast U.S. $193,364,260
 34.22% $208,857,837
 36.41%
Southwest U.S. 110,217,888
 19.50
 124,470,758
 21.70
Southeast U.S. 92,196,223
 16.31
 76,053,964
 13.26
Midwest U.S. 90,013,163
 15.93
 65,672,577
 11.45
West U.S. 72,050,785
 12.75
 85,344,025
 14.88
Northwest 3,920,405
 0.69
 —
 —
International 3,415,529
 0.60
 13,205,220
 2.30
Total $565,178,253
 100.00% $573,604,381
 100.00%
  December 31, 2017 September 30, 2017
Fair Value:    % of Total Investments % of Total Net Assets    % of Total Investments % of Total Net Assets
 Northeast U.S. $166,617,795
 30.78% 57.46% $173,667,526
 30.99% 59.14%
 Midwest U.S. 96,960,068
 17.91% 33.44% 115,780,284
 20.66% 39.43%
 Southeast U.S. 91,006,722
 16.81% 31.39% 89,246,247
 15.92% 30.39%
 West U.S. 81,420,045
 15.04% 28.08% 75,054,066
 13.39% 25.56%
 Southwest U.S. 72,117,431
 13.32% 24.87% 99,398,397
 17.74% 33.85%
 International 29,418,070
 5.43% 10.15% 3,406,258
 0.61% 1.16%
 Northwest U.S. 3,868,202
 0.71% 1.33% 3,883,882
 0.69% 1.32%
Total $541,408,333
 100.00% 186.72% $560,436,660
 100.00% 190.85%

FIFTH STREET SENIOR FLOATING RATE CORP.OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The composition of the Company's portfolio by industry at cost as a percentage of total investments and at fair value as a percentage of total investments and total net assets as of June 30,December 31, 2017 and September 30, 20162017 was as follows:
June 30, 2017 September 30, 2016December 31, 2017 September 30, 2017
Cost:          % of Total Investments    % of Total Investments
Internet software & services$119,991,520
 20.33% $132,462,581
 22.07%$124,795,435
 21.35% $129,816,292
 21.46%
Multi-sector holdings (1)71,635,783
 12.26
 71,340,632
 11.79
Healthcare services72,592,348
 12.31
 88,865,063
 14.80
50,305,151
 8.61
 50,858,157
 8.41
Multi-sector holdings71,117,506
 12.06
 71,117,506
 11.84
Advertising57,394,928
 9.73
 48,396,135
 8.06
34,366,916
 5.88
 43,518,443
 7.19
Diversified support services36,526,847
 6.19
 19,714,868
 3.28
24,131,898
 4.13
 24,189,607
 4.00
Human resources & employment services23,042,044
 3.94
 20,141,957
 3.33
Integrated telecommunication services16,934,464
 2.90
 11,291,073
 1.87
IT consulting & other services15,998,982
 2.74
 20,485,989
 3.39
Aerospace & defense15,437,617
 2.64
 6,453,287
 1.07
Specialized finance15,300,770
 2.62
 15,358,280
 2.54
Communications equipment14,812,970
 2.54
 —
 —
Research & consulting services14,575,531
 2.49
 6,922,777
 1.14
Environmental & facilities services14,140,224
 2.42
 14,170,031
 2.34
Oil & gas equipment & services14,019,903
 2.40
 14,057,018
 2.32
Commercial printing11,808,469
 2.02
 11,847,790
 1.96
Commodity chemicals9,991,297
 1.71
 —
 —
Oil & gas exploration & production9,913,159
 1.70
 —
 —
Alternative carriers9,743,750
 1.67
 —
 —
Distributors8,602,200
 1.47
 12,967,500
 2.14
Pharmaceuticals8,457,500
 1.45
 9,068,650
 1.50
Trucking8,152,865
 1.40
 4,079,548
 0.67
Security & alarm services7,995,399
 1.37
 8,018,318
 1.33
Food retail7,565,523
 1.29
 10,054,868
 1.66
Personal products6,542,497
 1.12
 6,544,450
 1.08
Auto parts & equipment5,856,507
 1.00
 5,871,777
 0.97
Data processing & outsourced services5,807,585
 0.99
 9,804,174
 1.62
Household Products5,037,500
 0.86
 —
 —
Healthcare distributors4,963,329
 0.85
 4,975,000
 0.82
Specialized REITs4,841,845
 0.83
 —
 —
Housewares & specialties4,781,391
 0.82
 4,795,075
 0.79
Drug retail4,030,000
 0.69
 —
 —
Industrial machinery3,776,203
 0.65
 12,493,405
 2.06
Specialty stores2,977,500
 0.51
 8,359,086
 1.38
General merchandise stores1,820,550
 0.31
 —
 —
Specialized consumer services1,657,341
 0.28
 1,660,679
 0.27
Application software33,837,406
 5.74
 32,100,672
 5.35
500,000
 0.09
 33,801,616
 5.59
Security & alarm services21,697,157
 3.68
 17,835,147
 2.97
IT consulting & other services20,577,066
 3.49
 8,811,481
 1.47
Research & consulting services17,033,134
 2.89
 17,128,420
 2.85
Specialized finance15,341,758
 2.60
 —
 —
Industrial machinery12,829,633
 2.18
 3,826,203
 0.64
Commercial printing11,885,584
 2.02
 5,912,694
 0.98
Integrated telecommunication services11,317,382
 1.92
 24,385,644
 4.06
Food retail10,084,378
 1.71
 6,889,930
 1.15
Data processing & outsourced services9,811,928
 1.66
 9,835,238
 1.64
Pharmaceuticals9,092,205
 1.54
 9,162,870
 1.53
Computer & Electronics Retail7,427,113
 1.26
 —
 —
Human resources & employment services6,656,896
 1.13
 —
 —
Personal products6,546,481
 1.11
 1,285,383
 0.21
Aerospace & defense6,468,283
 1.10
 —
 —
Environmental & facilities services6,353,976
 1.08
 6,391,836
 1.06
Food distributors5,600,780
 0.95
 5,711,496
 0.95
Specialty Stores5,428,269
 0.92
 —
 —
Real estate services—
 —
 12,247,424
 2.02
Computer & electronics retail—
 —
 7,383,862
 1.22
Casinos & gaming4,975,301
 0.84
 —
 —
—
 —
 4,963,767
 0.82
Fertilizers & agricultural chemicals3,271,743
 0.55
 3,522,668
 0.59
—
 —
 3,273,753
 0.54
Hypermarkets & super centers3,003,703
 0.51
 —
 —
—
 —
 2,996,051
 0.50
Specialized consumer services1,664,536
 0.28
 22,605,271
 3.76
Computer hardware1,302,855
 0.22
 3,956,802
 0.66
—
 —
 1,279,988
 0.21
Construction and engineering—
 —
 5,907,850
 0.98
Education services—
 —
 15,262,322
 2.54
Electronic equipment & instruments—
 —
 10,942,464
 1.82
Diversified capital markets—
 —
 8,685,189
 1.45
Wireless telecommunication services—
 —
 5,719,729
 0.95
Restaurants—
 —
 5,000,000
 0.83
Healthcare technology—
 —
 4,856,420
 0.81
Oil & gas equipment & services—
 —
 4,177,081
 0.70
Total$589,830,716
 100.00%
$600,468,963
 100.00%$584,320,098
 100.00%
$605,090,324
 100.00%
FIFTH STREET SENIOR FLOATING RATE CORP.OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2017 September 30, 2016December 31, 2017 September 30, 2017
Fair Value:          % of Total Investments % of Total Net Assets    % of Total Investments % of Total Net Assets
Internet software & services$115,091,358
 20.35% $119,438,318
 20.82%$117,058,015
 21.64% 40.36% $121,778,922
 21.72% 41.43%
Multi-sector holdings (1)57,180,650
 10.56
 19.72
 57,606,674
 10.28
 19.62
Healthcare services63,405,427
 11.22
 83,972,780
 14.64
32,951,225
 6.09
 11.36
 29,525,697
 5.27
 10.06
Multi-sector holdings61,614,406
 10.90
 63,316,667
 11.04
Advertising54,581,012
 9.66
 48,684,948
 8.49
32,023,541
 5.91
 11.04
 41,145,973
 7.34
 14.01
Diversified support services36,965,673
 6.54
 19,597,622
 3.42
24,627,767
 4.55
 8.49
 24,655,181
 4.40
 8.40
Human resources & employment services23,143,302
 4.27
 7.98
 20,125,090
 3.59
 6.85
Integrated telecommunication services15,790,242
 2.92
 5.45
 11,368,765
 2.03
 3.87
Aerospace & defense15,545,729
 2.87
 5.36
 6,556,692
 1.17
 2.23
Specialized finance15,523,936
 2.87
 5.35
 15,609,084
 2.79
 5.32
Research & consulting services14,868,862
 2.75
 5.13
 7,004,638
 1.25
 2.39
IT consulting & other services14,823,041
 2.74
 5.11
 20,488,238
 3.66
 6.98
Communications equipment14,789,100
 2.73
 5.10
 —
 —
 —
Environmental & facilities services14,251,368
 2.63
 4.92
 14,287,163
 2.55
 4.87
Oil & gas equipment & services14,085,029
 2.60
 4.86
 14,052,500
 2.51
 4.79
Commercial printing11,988,412
 2.21
 4.13
 11,942,132
 2.13
 4.07
Commodity chemicals10,059,400
 1.86
 3.47
 —
 —
 —
Oil & gas exploration & production9,925,000
 1.83
 3.42
 —
 —
 —
Alternative carriers9,737,500
 1.80
 3.36
 —
 —
 —
Pharmaceuticals8,542,500
 1.58
 2.95
 9,038,634
 1.61
 3.08
Distributors8,471,020
 1.56
 2.92
 12,957,035
 2.31
 4.41
Trucking8,159,262
 1.51
 2.81
 4,099,725
 0.73
 1.40
Security & alarm services7,908,513
 1.46
 2.73
 7,972,286
 1.42
 2.72
Food retail7,620,697
 1.41
 2.63
 10,182,584
 1.82
 3.47
Personal products6,608,509
 1.22
 2.28
 6,599,006
 1.18
 2.25
Auto parts & equipment5,850,878
 1.08
 2.02
 5,798,747
 1.03
 1.97
Data processing & outsourced services5,843,475
 1.08
 2.02
 9,840,600
 1.76
 3.35
Household products5,040,000
 0.93
 1.74
 —
 —
 —
Healthcare distributors4,837,875
 0.89
 1.67
 4,948,950
 0.88
 1.69
Specialized REITs4,830,003
 0.89
 1.67
 —
 —
 —
Housewares & specialties4,783,540
 0.88
 1.65
 4,771,779
 0.85
 1.63
Drug retail4,018,340
 0.74
 1.39
 —
 —
 —
Industrial machinery3,662,917
 0.68
 1.26
 12,452,459
 2.22
 4.24
Specialty stores3,004,020
 0.55
 1.04
 8,193,960
 1.46
 2.79
General merchandise stores1,945,809
 0.36
 0.67
 —
 —
 —
Specialized consumer services1,669,765
 0.31
 0.58
 1,672,677
 0.30
 0.57
Application software33,552,545
 5.94
 32,405,166
 5.65
239,091
 0.04
 0.08
 33,966,141
 6.06
 11.57
Security & alarm services22,061,646
 3.90
 17,865,123
 3.11
IT consulting & other services20,641,367
 3.65
 8,884,236
 1.55
Research & consulting services17,551,922
 3.11
 17,162,244
 2.99
Specialized finance15,468,031
 2.74
 —
 —
Industrial machinery12,865,193
 2.28
 3,778,376
 0.66
Commercial printing12,143,240
 2.15
 5,929,733
 1.03
Integrated telecommunication services11,435,429
 2.02
 24,637,968
 4.30
Food retail10,267,090
 1.82
 7,011,442
 1.22
Data processing & outsourced services9,835,450
 1.74
 9,820,000
 1.71
Pharmaceuticals9,034,233
 1.60
 9,033,850
 1.57
Computer & Electronics Retail7,585,950
 1.34
 —
 —
Human resources & employment services6,656,896
 1.18
 —
 —
Personal products6,607,003
 1.17
 1,290,310
 0.22
Aerospace & defense6,581,250
 1.16
 —
 —
Environmental & facilities services6,454,909
 1.14
 6,540,239
 1.14
Food distributors5,585,624
 0.99
 5,623,604
 0.98
Specialty Stores5,443,695
 0.96
 —
 —
Real estate services—
 —
 —
 12,256,098
 2.19
 4.17
Computer & electronics retail—
 —
 —
 7,498,142
 1.34
 2.55
Casinos & gaming5,041,425
 0.89
 —
 —
—
 —
 —
 5,038,622
 0.90
 1.72
Hypermarkets & super centers2,914,995
 0.52
 —
 —
—
 —
 —
 2,876,002
 0.51
 0.98
Fertilizers & agricultural chemicals2,776,762
 0.49
 3,377,146
 0.59
—
 —
 —
 2,801,481
 0.50
 0.95
Specialized consumer services1,673,504
 0.30
 22,538,791
 3.93
Computer hardware1,342,218
 0.24
 3,903,567
 0.68
—
 —
 —
 1,324,983
 0.24
 0.45
Construction and engineering—
 —
 5,768,770
 1.01
Education services—
 —
 15,293,164
 2.67
Electronic equipment & instruments—
 —
 10,912,302
 1.90
Diversified capital markets—
 —
 8,763,486
 1.53
Restaurants—
 —
 4,985,425
 0.87
Healthcare technology—
 —
 4,747,016
 0.83
Wireless telecommunication services—
 —
 4,231,659
 0.74
Oil & gas equipment & services—
 —
 4,090,429
 0.71
Total$565,178,253
 100.00% $573,604,381
 100.00%$541,408,333
 100.00% 186.72% $560,436,660
 100.00% 190.85%
___________________
(1)This industry includes the Company's investment in the Glick JV.


OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




The Company's investments are generally in middle marketmiddle-market companies in a variety of industries. The Company has one investment that represented greater than 10% of the total investment portfolio at fair value at June 30,as of December 31, 2017 and September 30, 2016,2017, which is as follows:
  June 30, 2017 September 30, 2016
FSFR Glick JV LLC 10.9% 11.0%
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

  December 31, 2017 September 30, 2017
Glick JV LLC 10.6% 10.3%

Income, consisting of interest, dividends, fees, other investment income and realization of gains or losses, can fluctuate upon repayment or sale of an investment and in any given yearperiod can be highly concentrated among several investments. Details of investment income of FSFRthe Glick JV LLC for the three and nine months ended June 30,December 31, 2017 and June 30,December 31, 2016 are as follows:
  Three months ended June 30, 2017 Three months ended June 30, 2016
  Investment Income Percent of Total Investment Income Investment Income Percent of Total Investment Income
FSFR Glick JV LLC $1,031,956
 8.5% $2,051,422
 15.6%
  Nine months ended June 30, 2017 Nine months ended June 30, 2016
  Investment Income Percent of Total Investment Income Investment Income Percent of Total Investment Income
FSFR Glick JV LLC $4,018,138
 11.6% $5,694,441
 14.2%
  Three months ended December 31, 2017 Three months ended December 31, 2016
  Investment Income Percent of Total Investment Income Investment Income Percent of Total Investment Income
Glick JV LLC $1,493,848
 13.9% $1,582,856
 13.7%


FSFR Glick JV LLC
In October 2014, the Company entered into an LLC agreement with GF Equity Funding 2014 LLC ("GF Equity Funding") to form FSFR Glick JV. On April 21, 2015, FSFRthe Glick JV began investing primarily in senior secured loans of middle marketmiddle-market companies. The Company co-invests in these securities with GF Equity Funding through its investment in FSFRthe Glick JV. FSFRThe Glick JV is managed by a four person Boardboard of Directors,directors, two of whom are selected by the Company and two of whom are selected by GF Equity Funding. FSFRThe Glick JV is capitalized as transactions are completed, and portfolio decisions and investment decisions in respect of FSFRthe Glick JV must be approved by anthe Glick JV investment committee of FSFR Glick JV consistingwhich consists of one representative ofselected by the Company and one representative ofselected by GF Equity Funding (with approval from a representative of each required). Since the Company does not have a controlling financial interest in Glick JV, the Company does not consolidate Glick JV. The members provide capital to FSFRthe Glick JV in exchange for LLC equity interests, and the Company and GF Debt Funding 2014 LLC ("GF Debt Funding"), an entity advised by affiliates of GF Equity Funding, provide capital to FSFRthe Glick JV in exchange for subordinated notes (the "Subordinated Notes"). As of June 30,December 31, 2017 and September 30, 2016,2017, the Company and GF Equity Funding owned 87.5% and 12.5%, respectively, of the outstanding LLC equity interests and the Company and GF Debt Funding owned 87.5% and 12.5%, respectively, of the Subordinated Notes. FSFRThe Glick JV is not an "eligible portfolio company" as defined in section 2(a)(46) of the 1940 Act.
The Company has determined that FSFR Glick JV is an investment company under ASC 946; however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a wholly-owned investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company does not consolidate its noncontrolling interest in FSFR Glick JV.
As of June 30, 2017 and September 30, 2016, FSFR Glick JV had total assets of $145.2 million and $201.1 million, respectively. As of June 30, 2017, the Company's investment in FSFR Glick JV consisted of LLC equity interests and Subordinated Notes of $61.6 million in aggregate, at fair value. As of September 30, 2016, the Company's investment consisted of LLC equity interests and Subordinated Notes of $63.3 million in aggregate, at fair value. The Subordinated Notes are junior in right of payment to the repayment of temporary contributions made by the Company to fund investments of FSFR Glick JV that are repaid when GF Equity Funding and GF Debt Funding make their capital contributions and fund their Subordinated Notes, respectively. FSFR Glick JV's portfolio consisted of middle marketmiddle-market and other corporate debt securities of 2825 and 3623 "eligible portfolio companies" (as defined in Section 2(a)(46) of the 1940 Act) as of June 30,December 31, 2017 and September 30, 2016,2017, respectively. The portfolio companies in FSFRthe Glick JV are in industries similar to those in which the Company may invest directly.
As of June 30, 2017 and September 30, 2016, FSFR Glick JV had total capital commitments of $100.0 million, $87.5 million of which was from the Company and the remaining $12.5 million from GF Equity Funding and GF Debt Funding. Approximately $81.3 million in aggregate commitments were funded as of June 30, 2017 and September 30, 2016, of which $71.1 million was from the Company. As of June 30, 2017 and September 30, 2016, the Company had commitments to fund Subordinated Notes to FSFR Glick JV of $78.8 million, of which $14.7 million was unfunded. As of June 30, 2017 and September 30, 2016, the Company had commitments to fund LLC equity interests in FSFR Glick JV of $8.7 million, of which $1.6 million was unfunded.
Additionally, FSFRThe Glick JV has a senior revolving credit facility with Deutsche Bank AG, New York Branch ("Deutsche Bank facility") with a stated maturity date of April 17, 2023, which permitted up to $200.0 million of borrowings as of both June 30,December 31, 2017 and September 30, 2016. Prior to June 29, 2017, this credit facility was with Credit Suisse AG, Cayman Islands Branch. On June 29, 2017, this credit facility was assigned to Deutsche Bank AG, New York Branch.2017. Borrowings under the Deutsche Bank facility are secured by all of the assets of FSFRthe Glick JV and all of the equity interests in FSFRthe Glick JV and bore interest at a rate equal to the 3-
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


month3-month LIBOR plus 2.5% per annum with no LIBOR floor as of June 30,December 31, 2017 and September 30, 2016.2017. Under the Deutsche Bank facility, $71.9 million and $124.6$56.9 million of borrowings were outstanding as of June 30,each of December 31, 2017 and September 30, 2016,2017, respectively.
As of December 31, 2017 and September 30, 2017, the Glick JV had total assets of $151.5 million and $126.7 million, respectively. As of December 31, 2017, the Company's investment in the Glick JV consisted of LLC equity interests and Subordinated Notes of $57.2 million in the aggregate at fair value. As of September 30, 2017, the Company's investment in the Glick JV consisted of LLC equity interests and Subordinated Notes of $57.6 million in the aggregate at fair value. The Subordinated Notes are junior in right of payment to the repayment of temporary contributions made by the Company to fund investments of the Glick JV that are repaid when GF Equity Funding and GF Debt Funding make their capital contributions and fund their Subordinated Notes, respectively.
As of December 31, 2017 and September 30, 2017, the Glick JV had total capital commitments of $100.0 million, $87.5 million of which was from the Company and the remaining $12.5 million of which was from GF Equity Funding and GF Debt Funding. Approximately $81.9 million and $81.6 million in aggregate commitments were funded as of December 31, 2017 and September 30, 2017, respectively, of which $71.7 million and $71.4 million, respectively, was from the Company. As of each of December 31, 2017 and September 30, 2017, the Company had commitments to fund Subordinated Notes to the Glick JV of $78.8 million, of which $14.2 million
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


and $14.5 million, respectively, was unfunded. As of each of December 31, 2017 and September 30, 2017, the Company had commitments to fund LLC equity interests in the Glick JV of $8.7 million, of which $1.6 million was unfunded.
Below is a summary of FSFRthe Glick JV's portfolio, followed by a listing of the individual loans in FSFRthe Glick JV's portfolio as of June 30,December 31, 2017 and September 30, 2016:2017:
 June 30, 2017 September 30, 2016 December 31, 2017 September 30, 2017
Senior secured loans (1) $135,539,080 $194,346,557 $128,805,001 $115,964,537
Weighted average current interest rate on senior secured loans (2) 6.97% 7.08% 7.02% 6.92%
Number of borrowers in FSFR Glick JV 28 36
Number of borrowers in Glick JV 25 23
Largest loan exposure to a single borrower (1) $11,286,839 $12,641,009 $8,597,150 $11,267,524
Total of five largest loan exposures to borrowers (1) $43,022,071 $49,318,344 $38,912,938 $42,833,696
__________
(1) At principal amount.
(2) Computed using the annual interest rate on accruing senior secured loans.

FIFTH STREET SENIOR FLOATING RATE CORP.OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FSFR Glick JV Portfolio as of June 30,December 31, 2017
Portfolio Company Industry Investment Type Maturity Date Current Interest Rate (1)(4) Principal Cost Fair Value (2) Industry Investment Type Maturity Date Current Interest Rate (1)(4)  Cash Interest Rate (1) Principal Cost Fair Value (2)
Ameritox Ltd. (3)(5)  Healthcare services First Lien Term Loan 4/11/2021 LIBOR+5% (1% floor) cash 3% PIK $2,392,766 $2,392,766 $2,392,766  Healthcare services First Lien Term Loan 4/11/2021 LIBOR+5% (1% floor) cash 3% PIK 6.69% $2,353,200
 $2,243,202
 $286,374
  Healthcare services 119,910.76 Class B Preferred Units 
 119,911
 —
  Healthcare services 119,910.76 Class B Preferred Units   

 119,911
 —
  Healthcare services 368.96 Class A Common Units 
 2,174,034
 —
  Healthcare services 368.96 Class A Common Units   

 2,174,034
 —
Total Ameritox Ltd 2,392,766
 4,686,711
 2,392,766
Beyond Trust Software, Inc. (3)  Application software First Lien Term Loan 9/25/2019 LIBOR+7% (1% floor) cash 11,286,839
 11,232,878
 11,258,621
Total Ameritox Ltd.   2,353,200
 4,537,147
 286,374
Compuware Corporation (3)  Internet software & services First Lien Term Loan B3 12/15/2021 LIBOR+4.25% (1% floor) cash 6,295,858
 6,238,542
 6,350,947
  Internet software & services First Lien Term Loan B3 12/15/2021 LIBOR+4.25% (1% floor) cash 5.63% 6,263,981
 6,212,998
 6,312,934
Metamorph US 3, LLC (3)(5)  Internet software & services First Lien Term Loan 12/1/2020 LIBOR+6.5% (1% floor) cash 2% PIK 6,844,354
 6,647,537
 3,924,508
  Internet software & services First Lien Term Loan 12/1/2020 LIBOR+5.5% (1% floor) cash 2% PIK 7.07% 6,806,211
 6,306,815
 2,584,318
Motion Recruitment Partners LLC (3)  Diversified support services First Lien Term Loan 2/13/2020 LIBOR+6% (1% floor) cash 8,722,150
 8,722,150
 8,679,432
  Human resources & employment services First Lien Term Loan 2/13/2020 LIBOR+6% (1% floor) cash 7.57% 8,597,150
 8,597,146
 8,605,596
NAVEX Global, Inc. (3)  Internet software & services First Lien Term Loan 11/19/2021 LIBOR+4.75% (1% floor) cash 2,984,694
 2,974,579
 2,995,886
NAVEX Global, Inc.  Internet software & services First Lien Term Loan 11/19/2021 LIBOR+4.25% (1% floor) cash 5.82% 2,969,388
 2,960,727
 2,984,250
Air Newco LLC  IT consulting & other services First Lien Term Loan B 3/20/2022 LIBOR+5.5% (1% floor) cash 8,228,728
 8,208,051
 8,095,011
  IT consulting & other services First Lien Term Loan B 3/20/2022 LIBOR+5.5% (1% floor) cash 6.94% 8,139,577
 8,121,549
 8,088,704
TIBCO Software, Inc. (3)  Internet software & services First Lien Term Loan 12/4/2020 LIBOR+4.5% (1% floor) cash 3,534,319
 3,537,504
 3,558,300
CM Delaware LLC  Advertising First Lien Term Loan 3/18/2021 LIBOR+5.25% (1% floor) cash 2,080,538
 2,078,879
 1,921,897
  Advertising First Lien Term Loan 3/18/2021 LIBOR+5.25% (1% floor) cash 6.94% 2,069,786
 2,068,356
 2,018,041
New Trident Holdcorp, Inc. (3)  Healthcare services First Lien Term Loan B 7/31/2019 LIBOR+5.25% (1.25% floor) cash 2,023,994
 2,004,237
 1,696,107
Central Security Group, Inc. (3)  Specialized consumer services First Lien Term Loan 10/6/2020 LIBOR+5.625% (1% floor) cash 3,886,031
 3,890,747
 3,894,133
  Specialized consumer services First Lien Term Loan 10/6/2021 LIBOR+5.625% (1% floor) cash 7.19% 3,866,103
 3,870,229
 3,885,433
Auction.com, LLC (3) Internet software & services First Lien Term Loan 5/12/2019 LIBOR+5% (1% floor) cash 3,910,000
 3,900,642
 3,949,100
Aptos, Inc. (3) Data processing & outsourced services First Lien Term Loan B 9/1/2022 LIBOR+6.75% (1% floor) cash 7,940,000
 7,803,303
 7,860,600
 Data processing & outsourced services First Lien Term Loan B 9/1/2022 LIBOR+6.75% (1% floor) cash 8.44% 7,870,000
 7,747,832
 7,791,300
Vubiquity, Inc. Application software First Lien Term Loan 8/12/2021 LIBOR+5.5% (1% floor) cash 4,137,000
 4,107,835
 4,074,945
 Application software First Lien Term Loan 8/12/2021 LIBOR+5.5% (1% floor) cash 7.19% 4,116,000
 4,089,928
 4,085,130
American Seafoods Group LLC (3) Food distributors First Lien Term Loan 8/19/2021 LIBOR+5% (1% floor) cash 3,683,704
 3,670,899
 3,708,274
Worley Claims Services, LLC Internet software & services First Lien Term Loan 10/31/2020 LIBOR+8% (1% floor) cash 5,199,601
 5,182,383
 5,147,605
Poseidon Merger Sub, Inc. (3) Advertising Second Lien Term Loan 8/15/2023 LIBOR+8.5% (1% floor) cash 3,000,000
 2,930,789
 3,046,787
Novetta Solutions, LLC Diversified support services First Lien Term Loan 10/16/2022 LIBOR+5.75% (1% floor) cash 6,006,223
 5,943,606
 5,816,036
 Diversified support services First Lien Term Loan 10/16/2022 LIBOR+5% (1% floor) cash 6.70% 5,975,734
 5,918,766
 5,813,911
SHO Holding I Corporation Footwear First Lien Term Loan 10/27/2022 LIBOR+5% (1% floor) cash 6,402,500
 6,352,245
 6,418,506
 Footwear First Lien Term Loan 10/27/2022 LIBOR+5% (1% floor) cash 6.42% 6,370,000
 6,324,741
 6,147,050
Valet Merger Sub, Inc. (3) Environmental & facilities services First Lien Term Loan 9/24/2021 LIBOR+7% (1% floor) cash 3,930,000
 3,884,887
 3,964,993
 Environmental & facilities services First Lien Term Loan 9/24/2021 LIBOR+7% (1% floor) cash 8.57% 3,910,000
 3,870,466
 3,909,937
 Environmental & facilities services Incremental Term Loan 9/24/2021 LIBOR+7% (1% floor) cash 8.57% 1,024,850
 1,004,945
 1,024,833
Total Valet Merger Sub, Inc.   4,934,850
 4,875,411
 4,934,770
RSC Acquisition, Inc. Insurance brokers First Lien Term Loan 11/30/2022 LIBOR+5.25% (1% floor) cash 3,940,204
 3,921,350
 3,900,802
 Insurance brokers First Lien Term Loan 11/30/2022 LIBOR+5.25% (1% floor) cash 6.94% 3,920,064
 3,897,948
 3,880,863
Integro Parent Inc. Insurance brokers First Lien Term Loan 10/31/2022 LIBOR+5.75% (1% floor) cash 4,926,424
 4,796,594
 4,938,740
 Insurance brokers First Lien Term Loan 10/31/2022 LIBOR+5.75% (1% floor) cash 7.13% 4,901,424
 4,784,962
 4,889,170
TruckPro, LLC Auto parts & equipment First Lien Term Loan 8/6/2018 LIBOR+5% (1% floor) cash 1,834,901
 1,833,006
 1,836,241
 Auto parts & equipment First Lien Term Loan 8/6/2018 LIBOR+5% (1% floor) cash 6.69% 1,811,634
 1,810,641
 1,813,409
Falmouth Group Holdings Corp. Specialty chemicals First Lien Term Loan 12/13/2021 LIBOR+6.75% (1% floor) cash 4,925,000
 4,882,719
 4,885,660
 Specialty chemicals First Lien Term Loan 12/13/2021 LIBOR+6.75% (1% floor) cash 8.44% 4,527,907
 4,491,387
 4,528,532
Sundial Group Holdings LLC Personal products First Lien Term Loan 10/19/2021 LIBOR+6.25% (1% floor) cash 3,750,000
 3,701,693
 3,774,781
Ancile Solutions, Inc. (3)  Internet software & services First Lien Term Loan 6/30/2021 LIBOR+7% (1% floor) cash 4,068,267
 4,018,077
 4,097,271
  Internet software & services First Lien Term Loan 6/30/2021 LIBOR+7% (1% floor) cash 8.69% 3,990,530
 3,947,582
 3,954,615
California Pizza Kitchen, Inc.  Restaurants First Lien Term Loan 8/23/2022 LIBOR+6% (1% floor) cash 4,962,500
 4,949,937
 4,969,745
  Restaurants First Lien Term Loan 8/23/2022 LIBOR+6% (1% floor) cash 7.57% 4,937,500
 4,925,607
 4,851,094
MHE Intermediate Holdings, LLC  Diversified support services First Lien Term Loan 3/11/2024 LIBOR+5% (1% floor) cash 4,239,375
 4,157,660
 4,205,862
MHE Intermediate Holdings, LLC (3)  Diversified support services First Lien Term Loan B 3/11/2024 LIBOR+5% (1% floor) cash 6.69% 4,218,125
 4,142,752
 4,218,125
  Diversified support services Delayed Draw Term Loan 3/11/2024 LIBOR+5% (1% floor) cash 403,110
 369,463
 403,110
  Diversified support services Delayed Draw Term Loan 3/11/2024 LIBOR+5% (1% floor) cash 6.69% 665,837
 633,517
 665,837
Total MHE International Holdings, LLC 4,642,485
 4,527,123
 4,608,972
Total MHE Intermediate Holdings, LLC   4,883,962
 4,776,269
 4,883,962
Chloe Ox Parent LLC (3)  Healthcare services First Lien Term Loan 12/14/2024 LIBOR+5% (1% floor) cash 6.64% 6,000,000
 5,940,000
 6,022,500
Gigamon Inc.  Systems software First Lien Term Loan 12/18/2024 LIBOR+4.5% (1% floor) cash 6.03% 6,000,000
 5,940,000
 5,970,000
Indivior Finance Sarl (3)  Pharmaceuticals First Lien Term Loan 12/19/2022 LIBOR+4.5% (1% floor) cash 6.11% 7,500,000
 7,462,500
 7,537,500
Tribe Buyer LLC (3)  Human resources & employment services First Lien Term Loan 2/16/2024 LIBOR+4.5% (1% floor) cash 5.68% 6,000,000
 5,985,000
 6,078,750
Asset International, Inc. (3)  Research & Consulting Services First Lien Term Loan 12/29/2024 LIBOR+4.5% (1% floor) cash 6.19% 4,000,000
 3,920,125
 3,920,000
Total Portfolio Investments $135,539,080
 $136,628,903
 $131,766,666
   $128,805,001
 $129,513,666
 $121,868,206
FIFTH STREET SENIOR FLOATING RATE CORP.OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


__________
(1) Represents the current interest rate as of June 30,December 31, 2017. All interest rates are payable in cash, unless otherwise noted.
(2) Represents the current determination of fair value as of June 30,December 31, 2017 utilizing a similar approachtechnique as the Company in accordance with ASC 820. However, the determination of such fair value is not included in the Company's Board of Directors' valuation process described elsewhere herein.
(3) This investment is held by both the Company and FSFRthe Glick JV as of June 30,December 31, 2017.
(4) The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement.
(5) This investment was on PIKcash non-accrual status as of June 30,December 31, 2017. Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.


FSFR Glick JV Portfolio as of September 30, 2016
Portfolio Company Industry Investment Type Maturity Date Current Interest Rate (1)(4) Principal Cost Fair Value (2)
 Ameritox Ltd. (3)  Healthcare services First Lien Term Loan 4/11/2021 LIBOR+5% (1% floor) cash 3% PIK $2,339,146 $2,336,840 $2,322,917
   Healthcare services 119,910.76 Class B Preferred Units     —
 119,911
 131,369
   Healthcare services 368.96 Class A Common Units     —
 2,174,034
 981,348
 Total Ameritox Ltd         2,339,146
 4,630,785
 3,435,634
 Answers Corporation (3) (5)  Internet software & services First Lien Term Loan 10/3/2021 LIBOR+5.25% (1% floor) cash 7,899,749
 7,636,708
 4,265,865
 Beyond Trust Software, Inc. (3)  Application software First Lien Term Loan 9/25/2019 LIBOR+7% (1% floor) cash 12,641,009
 12,554,571
 12,538,499
 Compuware Corporation (3)  Internet software & services First Lien Term Loan B1 12/15/2019 LIBOR+5.25% (1% floor) cash 7,392,405
 7,306,444
 7,420,127
 Metamorph US 3, LLC (3)  Internet software & services First Lien Term Loan 12/1/2020 LIBOR+6.5% (1% floor) cash 6,900,283
 6,808,009
 5,744,139
 Motion Recruitment Partners LLC (3)  Diversified support services First Lien Term Loan 2/13/2020 LIBOR+6% (1% floor) cash 9,125,000
 9,125,000
 9,099,254
 NAVEX Global, Inc. (3)  Internet software & services First Lien Term Loan 11/19/2021 LIBOR+4.75% (1% floor) cash 1,793,550
 1,779,633
 1,784,582
 Teaching Strategies, LLC  Education services First Lien Term Loan (3) 10/1/2019 LIBOR+5.5% (0.5% floor) cash 2,570,471
 2,567,575
 2,556,891
  Education services First Lien Delayed Draw Term Loan 10/1/2019 LIBOR+5.5% (0.5% floor) cash 6,840,000
 6,832,715
 6,803,695
 Total Teaching Strategies, LLC         9,410,471
 9,400,290
 9,360,586
 TrialCard Incorporated (3)  Healthcare services First Lien Term Loan 12/31/2019 LIBOR+4.5% (1% floor) cash 7,179,097
 7,144,396
 7,144,248
 Air Newco LLC  IT consulting & other services First Lien Term Loan B 3/20/2022 LIBOR+5.5% (1% floor) cash 8,291,864
 8,267,671
 7,960,189
 Fineline Technologies, Inc. (3)  Electronic equipment & instruments First Lien Term Loan 5/5/2017 LIBOR+5.5% (1% floor) cash 7,034,441
 7,010,963
 7,015,051
 LegalZoom.com, Inc. (3)  Specialized consumer services First Lien Term Loan 5/13/2020 LIBOR+7% (1% floor) cash 9,850,000
 9,672,034
 9,772,706
 GK Holdings, Inc.  IT consulting & other services First Lien Term Loan 1/20/2021 LIBOR+5.5% (1% floor) cash 3,438,750
 3,452,038
 3,412,959
 Vitera Healthcare Solutions, LLC  Healthcare technology Second Lien Term Loan 11/4/2021 LIBOR+8.25% (1% floor) cash 3,000,000
 2,958,409
 2,782,500
 TIBCO Software, Inc. (3)  Internet software & services First Lien Term Loan 12/4/2020 LIBOR+5.5% (1% floor) cash 2,304,900
 2,308,815
 2,277,114
 CM Delaware LLC  Advertising First Lien Term Loan 3/18/2021 LIBOR+5.25% (1% floor) cash 2,096,666
 2,094,658
 1,978,729
 New Trident Holdcorp, Inc. (3)  Healthcare services First Lien Term Loan B 7/31/2019 LIBOR+5.25% (1.25% floor) cash 2,041,357
 2,014,233
 1,755,567
 Central Security Group, Inc. (3)  Specialized consumer services First Lien Term Loan 10/6/2020 LIBOR+5.625% (1% floor) cash 5,909,774
 5,915,626
 5,776,805
Auction.com, LLC Internet software & services First Lien Term Loan 5/12/2019 LIBOR+5% (1% floor) cash 3,940,000
 3,926,700
 3,959,700
Aptos, Inc. (3) Data processing & outsourced services First Lien Term Loan B 9/1/2022 LIBOR+6.75% (1% floor) cash 8,000,000
 7,842,222
 7,920,000
Vubiquity, Inc. Application software First Lien Term Loan 8/12/2021 LIBOR+5.5% (1% floor) cash 4,168,500
 4,133,700
 4,147,658
Too Faced Cosmetics, LLC (3) Personal products First Lien Term Loan B 7/7/2021 LIBOR+5% (1% floor) cash 642,692
 581,620
 645,155
FIFTH STREET SENIOR FLOATING RATE CORP.OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Glick JV Portfolio as of September 30, 2017
Portfolio Company Industry Investment Type Maturity Date Current Interest Rate (1)(4) Principal Cost Fair Value (2) Industry Investment Type Maturity Date Current Interest Rate (1)(4)  Cash Interest Rate (1) Principal Cost Fair Value (2)
American Seafoods Group LLC (3) Food distributors First Lien Term Loan 8/19/2021 LIBOR+5% (1% floor) cash 3,853,704
 3,837,366
 3,844,069
Worley Claims Services, LLC Internet software & services First Lien Term Loan 10/31/2020 LIBOR+8% (1% floor) cash 5,730,937
 5,707,511
 5,702,282
Ameritox Ltd. (3)(5)  Healthcare services First Lien Term Loan 4/11/2021 LIBOR+5% (1% floor) cash 3% PIK 6.33% $2,287,177
 $2,243,202
 $265,211
  Healthcare services 119,910.76 Class B Preferred Units     119,911
 —
  Healthcare services 368.96 Class A Common Units     2,174,034
 —
Total Ameritox Ltd.   2,287,177
 4,537,147
 265,211
Beyond Trust Software, Inc. (3)  Application software First Lien Term Loan 9/25/2019 LIBOR+7% (1% floor) cash 8.33% 11,267,524
 11,220,478
 11,267,116
Compuware Corporation (3)  Internet software & services First Lien Term Loan B3 12/15/2021 LIBOR+4.25% (1% floor) cash 5.49% 6,279,920
 6,225,992
 6,358,419
Metamorph US 3, LLC (3)(5)  Internet software & services First Lien Term Loan 12/1/2020 LIBOR+5.5% (1% floor) cash 2% PIK 6.74% 6,825,900
 6,477,372
 2,592,115
Motion Recruitment Partners LLC (3)  Human resources & employment services First Lien Term Loan 2/13/2020 LIBOR+6% (1% floor) cash 7.24% 8,659,650
 8,659,650
 8,659,223
NAVEX Global, Inc.  Internet software & services First Lien Term Loan 11/19/2021 LIBOR+4.25% (1% floor) cash 5.49% 2,977,041
 2,967,620
 2,988,205
Air Newco LLC  IT consulting & other services First Lien Term Loan B 3/20/2022 LIBOR+5.5% (1% floor) cash 6.82% 8,160,622
 8,141,224
 8,099,417
CM Delaware LLC  Advertising First Lien Term Loan 3/18/2021 LIBOR+5.25% (1% floor) cash 6.58% 2,075,162
 2,073,617
 2,064,786
New Trident Holdcorp, Inc. (3)  Healthcare services First Lien Term Loan B 7/31/2019 LIBOR+5.75% (1.25% floor) cash 7.08% 2,018,206
 2,000,877
 1,453,109
Central Security Group, Inc. (3)  Specialized consumer services First Lien Term Loan 10/6/2021 LIBOR+5.625% (1% floor) cash 6.86% 3,876,067
 3,880,408
 3,892,211
Aptos, Inc. (3) Data processing & outsourced services First Lien Term Loan B 9/1/2022 LIBOR+6.75% (1% floor) cash 8.08% 7,920,000
 7,790,262
 7,840,800
Vubiquity, Inc. Application software First Lien Term Loan 8/12/2021 LIBOR+5.5% (1% floor) cash 6.83% 4,126,500
 4,099,195
 4,095,551
Poseidon Merger Sub, Inc. (3) Advertising Second Lien Term Loan 8/15/2023 LIBOR+8.5% (1% floor) cash $3,000,000
 $2,922,316
 $3,039,954
 Advertising Second Lien Term Loan 8/15/2023 LIBOR+8.5% (1% floor) cash 9.81% 3,000,000
 2,933,633
 3,030,000
AccentCare, Inc. Healthcare services First Lien Term Loan 9/3/2021 LIBOR+5.75% (1% floor) cash 7,850,000
 7,773,386
 7,727,344
Novetta Solutions, LLC Diversified support services First Lien Term Loan 10/17/2022 LIBOR+5.75% (1% floor) cash 6,477,948
 6,392,100
 6,226,928
 Diversified support services First Lien Term Loan 10/16/2022 LIBOR+5% (1% floor) cash 6.34% 5,990,978
 5,932,073
 5,826,226
SHO Holding I Corporation Footwear First Lien Term Loan 10/27/2022 LIBOR+5% (1% floor) cash 6,451,250
 6,393,472
 6,443,186
 Footwear First Lien Term Loan 10/27/2022 LIBOR+5% (1% floor) cash 6.24% 6,386,250
 6,338,479
 6,306,422
Valet Merger Sub, Inc. (3) Environmental & facilities services First Lien Term Loan 9/24/2021 LIBOR+7% (1% floor) cash 3,960,000
 3,906,498
 4,026,826
 Environmental & facilities services First Lien Term Loan 9/24/2021 LIBOR+7% (1% floor) cash 8.24% 3,920,000
 3,877,655
 3,919,865
 Environmental & facilities services Incremental Term Loan 9/24/2021 LIBOR+7% (1% floor) cash 8.24% 1,027,425
 1,006,080
 1,027,390
Total Valet Merger Sub, Inc.   4,947,425
 4,883,735
 4,947,255
RSC Acquisition, Inc. Insurance brokers First Lien Term Loan 11/30/2022 LIBOR+5.25% (1% floor) cash 3,970,390
 3,948,754
 3,950,538
 Insurance brokers First Lien Term Loan 11/30/2022 LIBOR+5.25% (1% floor) cash 6.58% 3,930,134
 3,912,198
 3,890,832
Integro Parent Inc. Insurance brokers First Lien Term Loan 10/31/2022 LIBOR+5.75% (1% floor) cash 4,963,924
 4,814,658
 4,889,465
 Insurance brokers First Lien Term Loan 10/31/2022 LIBOR+5.75% (1% floor) cash 7.06% 4,913,924
 4,790,511
 4,901,639
TruckPro, LLC Auto parts & equipment First Lien Term Loan 8/6/2018 LIBOR+5% (1% floor) cash 1,920,000
 1,916,612
 1,919,232
 Auto parts & equipment First Lien Term Loan 8/6/2018 LIBOR+5% (1% floor) cash 6.24% 1,823,268
 1,821,822
 1,825,054
Falmouth Group Holdings Corp. Specialty chemicals First Lien Term Loan 12/13/2021 LIBOR+6.75% (1% floor) cash 4,962,500
 4,912,596
 4,967,689
 Specialty chemicals First Lien Term Loan 12/13/2021 LIBOR+6.75% (1% floor) cash 8.08% 4,610,174
 4,572,990
 4,610,400
Sundial Group Holdings LLC Personal products First Lien Term Loan 10/19/2021 LIBOR+6.25% (1% floor) cash 3,900,000
 3,839,938
 3,954,402
Onvoy, LLC (3) Integrated telecommunication services First Lien Term Loan 4/29/2021 LIBOR+6.25% (1% floor) cash 7,406,250
 7,261,422
 7,386,738
Ancile Solutions, Inc. (3)  Internet software & services First Lien Term Loan 6/30/2021 LIBOR+7% (1% floor) cash 4,500,000
 4,433,644
 4,432,500
  Internet software & services First Lien Term Loan 6/30/2021 LIBOR+7% (1% floor) cash 8.33% 4,042,355
 3,995,621
 4,010,198
California Pizza Kitchen, Inc.  Restaurants First Lien Term Loan 8/23/2022 LIBOR+6% (1% floor) cash 7.24% 4,950,000
 4,938,077
 4,917,008
MHE Intermediate Holdings, LLC (3)  Diversified support services First Lien Term Loan B 3/11/2024 LIBOR+5% (1% floor) cash 6.33% 4,228,750
 4,150,304
 4,228,752
  Diversified support services Delayed Draw Term Loan 3/11/2024 LIBOR+5% (1% floor) cash 6.33% 667,510
 635,208
 667,510
Total MHE Intermediate Holdings, LLC   4,896,260
 4,785,512
 4,896,262
Total Portfolio Investments $194,346,557
 $194,624,798
 $188,708,220
   $115,964,537
 $116,978,493
 $108,737,459
_________
(1) Represents the current interest rate as of September 30, 2016.2017. All interest rates are payable in cash, unless otherwise noted.
(2) Represents the current determination of fair value as of September 30, 20162017 utilizing a similar approachtechnique as the Company in accordance with ASC 820. However, the determination of such fair value is not included in the Company's Board of Directors' valuation process described elsewhere herein.
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(3) This investment is held by both the Company and FSFRthe Glick JV as of September 30, 2016.2017.
(4) The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement.
(5) This investment was on cash non-accrual status as of September 30, 2016.

2017. Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.
The cost and fair value of the Company's aggregate investment in FSFRthe Glick JV was $71.1$71.6 million and $61.6$57.2 million, respectively, as of June 30,December 31, 2017 and $71.1$71.3 million and $63.3$57.6 million, respectively, as of September 30, 2016.2017. The Subordinated Notes pay a weighted average interest rate of LIBOR plus 8.0% per annum. For the three and nine months ended June 30,December 31, 2017 and December 31, 2016, the Company earned interest income of $1.5 million and $4.3$1.4 million, respectively, on its investment in the Subordinated Notes, respectively. For the three and nine months ended June 30, 2016, the Company earned interest income of $1.4 million and $3.7 million on its investment in the Subordinated Notes, respectively.Notes. The Company did not earn any dividend income for the three months ended June 30,December 31, 2017 with respect to its LLC equity interests. The Companyand earned dividend income of $0.2 million for the ninethree months ended June 30, 2017 with respect to its LLC equity interests. In addition, the Company reversed $0.4 million of dividend income previously recorded in prior periods during the three and nine months ended June 30, 2017 with respect to its LLC equity interests since the Company determined that such dividend receivable balance may no longer be collectible. The Company earned dividend income of $0.7 million and $2.0 million, respectively, for the three and nine months ended June 30,December 31, 2016 with respect to its LLC equity interests. The LLC equity interests are dividendincome producing to the extent there is residual cash to be distributed on a quarterly basis.
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Below is certain summarized financial information for FSFRthe Glick JV as of June 30,December 31, 2017 and September 30, 20162017 and for the three and nine months ended June 30,December 31, 2017 and June 30,December 31, 2016:
 June 30, 2017 September 30, 2016 December 31, 2017 September 30, 2017
Selected Balance Sheet Information:        
Investments in loans at fair value (cost June 30, 2017: $136,628,903; cost September 30, 2016: $194,624,798) $131,766,666
 $188,708,220
Receivable from secured financing arrangement at fair value (September 30, 2016 cost: $5,000,000) —
 4,985,425
Investments in loans at fair value (cost December 31, 2017: $129,513,666; cost September 30, 2017: $116,978,493) $121,868,206
 $108,737,459
Cash and cash equivalents 7,257,936
 980,605
 26,080,455
 13,891,899
Restricted cash 2,314,937
 3,343,303
 1,683,753
 2,249,575
Receivable from unsettled transactions 1,968,738
 952,591
Due from portfolio companies 22,500
 —
 —
 7,653
Other assets 1,862,916
 2,162,942
 1,859,067
 1,791,077
Total assets $145,193,693
 $201,133,086
 $151,491,481
 $126,677,663
        
Senior credit facility payable $71,881,939
 $124,615,636
 $56,881,939
 $56,881,939
Subordinated notes payable at fair value (proceeds June 30, 2017 and September 30, 2016: $73,149,434) 70,416,214
 65,012,167
Subordinated notes payable at fair value (proceeds December 31, 2017: $73,741,750; proceeds September 30, 2017: $73,404,435) 65,319,540
 65,836,199
Other liabilities 2,895,540
 4,196,688
 29,290,002
 3,959,525
Total liabilities $145,193,693
 $193,824,491
 $151,491,481
 $126,677,663
Members' equity —
 7,308,595
 —
 —
Total liabilities and members' equity $145,193,693
 $201,133,086
 $151,491,481
 $126,677,663

 Three months ended
June 30, 2017		 Three months ended
June 30, 2016		 Nine months ended
June 30, 2017		 Nine months ended
June 30, 2016		 Three months ended
December 31, 2017		 Three months ended
December 31, 2016
Selected Statements of Operations Information:            
Interest income $2,490,873
 $3,732,459
 $8,824,724
 $10,606,543
 $1,939,602
 $3,486,810
PIK interest income 18,010
 15,373
 53,620
 15,373
 —
 17,933
Fee income 31,496
 5,687
 150,328
 93,028
 32,802
 99,653
Total investment income 2,540,379
 3,753,519
 9,028,672
 10,714,944
 1,972,404
 3,604,396
Interest expense 2,722,468
 2,850,832
 8,274,454
 7,895,486
 2,736,122
 2,795,065
Other expenses 47,636
 58,600
 181,656
 182,177
 38,146
 75,836
Total expenses (1) 2,770,104
 2,909,432
 8,456,110
 8,077,663
 2,774,268
 2,870,901
Net unrealized appreciation (depreciation) (726,406) 4,030,887
 (4,349,628) 2,170,718
 1,444,107
 (7,384,097)
Realized loss on investments (9,893) (3,098,475) (3,873,454) (3,098,475) (642,243) (32,601)
Net income (loss) $(966,024) $1,776,499
 $(7,650,520) $1,709,524
 $—
 $(6,683,203)
__________
(1) There are no management fees or incentive fees charged at FSFR Glick JV.
FSFR
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Glick JV has elected to fair value the Subordinated Notes issued to the Company and GF Debt Funding under FASB ASC 825.Topic 825, Financial Instruments - Fair Value Options. The Subordinated Notes are valued based on the total assets less the liabilities senior to the subordinated notes of FSFR Glick JVSubordinated Notes in an amount not exceeding par under the enterprise value approach.technique.
During the three and nine months ended June 30,December 31, 2017 and December 31, 2016, the Company did not sell any senior secured debt investments to FSFRthe Glick JV. During the three months ended June 30, 2016, the Company sold $18.2 million of senior secured debt investments at fair value to FSFR Glick JV in exchange for $18.2 million cash consideration. The Company realized a loss of $0.1 million on these transactions. During the nine months ended June 30, 2016, the Company sold $41.2 million of senior secured debt investments at fair value to FSFR Glick JV in exchange for $40.0 million cash consideration, $1.1 million of subordinated notes and $0.1 million of LLC equity interests. The Company realized a loss of $0.4 million on these transactions.
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 4. Fee Income
The Company receives a variety of fees in the ordinary course of business, including servicing, advisory, amendment, structuring and prepayment fees, which are classified as fee income and recognized as they are earned. The majority of fee income is comprised of advisory fees which are recognized at investment close and are non-recurring in nature.
For the three and nine months ended June 30,December 31, 2017, the Company recorded total fee income of $0.5$0.4 million, $0.1 million of which was recurring in nature, and $1.2 million, $0.4 million of which was recurring in nature, respectively.nature. For the three and nine months ended June 30,December 31, 2016, the Company recorded total fee income of $0.8$0.4 million, $0.2 million of which was recurring in nature, and $2.9 million, $0.5 millionnature. Recurring fee income primarily consists of which was recurring in nature, respectively.servicing fees.

FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 5. Share Data and Distributions
Earnings per Share
The following table sets forth the computation of basic and diluted earnings per share, pursuant to FASB ASC Topic 260-10, Earnings per Share, for the three and nine months ended June 30,December 31, 2017 and June 30,December 31, 2016:
  Three months ended
June 30, 2017		 Three months ended
June 30, 2016		 Nine months ended
June 30, 2017		 Nine months ended
June 30, 2016		 
Earnings (loss) per common share — basic and diluted:         
Net increase (decrease) in net assets resulting from operations $139,198
 $916,059
 $5,696,300
 $(13,050,566) 
Weighted average common shares outstanding 29,466,768
 29,466,768
 29,466,768
 29,466,768
 
Earnings (loss) per common share — basic and diluted $ 0.00
 $0.03
 $0.19
 $(0.44) 
  Three months ended
December 31, 2017		 Three months ended
December 31, 2016
Earnings per common share — basic and diluted:    
Net increase in net assets resulting from operations $1,905,968
 $724,797
Weighted average common shares outstanding 29,466,768
 29,466,768
Earnings per common share — basic and diluted $0.06
 $0.02
Distributions
Distributions to common stockholders are recorded on the ex-dividend date. The Company is required to distribute dividends each taxable year to its stockholders of an amount generally at least equal to 90% of its investment company taxable income, determined without regard to any deduction for dividenddividends paid, in order to be eligible for tax benefits allowed to a RIC under Subchapter M of the Code. The Company anticipates paying out as a distribution all or substantially all of those amounts. The amount to be paid out as a dividend is determined by the Board of Directors and is based on management’s estimate of the Company’s annual taxable income. Net realized capital gains, if any, are generally distributed, although the Company may decide to retain such net realized capital gains for investment.
The Company has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of any distributions the Company declares in cash on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, if the Company’s Board of Directors authorizes, and the Company declares, a cash distribution, then the Company’s stockholders who have not “opted out” of the Company’s DRIP will have their cash distributionsdistribution automatically reinvested in additional shares of the Company’s common stock, rather than receiving the cash distribution. If the Company’s shares are trading at a premium to net asset value, the Company typically issues new shares to implement the DRIP.DRIP with such shares issued at the greater of the most recently computed net asset value per share of common stock or 95% of the current market price per share of common stock on the payment date for such distribution (or such lesser discount that still exceeds the most recently computed net asset value per share of common stock). If the Company’s shares are trading at a discount to net asset value, the Company typically purchases shares in the open market in connection with the Company’s obligations under the DRIP.
For income tax purposes, the Company estimates that its distributions for the 2017 calendar year will be composed primarily of ordinary income and the actual character of such distributions will be appropriately reported to the Internal Revenue Service and stockholders for the 2017 calendar year. To the extent that the Company’s taxable earnings fall below the amount of distributions paid, a portion of the total amount of the Company’s distributions for the fiscal year may be deemed a return of capital for tax purposes to the Company’s stockholders.
The following table reflects the dividend distributions per share that our Board of Directors has paid, including shares issued under our DRIP on our common stock during the nine months ended June 30, 2017 and June 30, 2016:
Frequency Date Declared Record Date Payment Date Amount
per Share		 Cash Distribution DRIP Shares Issued (1) DRIP Shares Value
Monthly August 4, 2016 October 14, 2016 October 31, 2016 $0.075
 $2,183,023
 3,146 $26,985
Monthly August 4, 2016 November 15, 2016 November 30, 2016 0.075
 2,183,100
 2,986 26,908
Monthly October 19, 2016 December 15, 2016 December 30, 2016 0.075
 2,179,421
 3,438 30,586
Monthly October 19, 2016 January 31, 2017 January 31, 2017 0.075
 2,180,645
 2,905 29,363
Monthly October 19, 2016 February 15, 2017 February 28, 2017 0.075
 2,183,581
 2,969 26,427
Monthly February 6, 2017 March 15, 2017 March 31, 2017 0.04
 1,165,417
 1,508 13,253
Quarterly February 6, 2017 June 15, 2017 June 30, 2017 0.19
 5,543,465
 6,840 55,221
Total for the nine months ended June 30, 2017   $0.605
 $17,618,653
 23,792 $208,742
FIFTH STREET SENIOR FLOATING RATE CORP.OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The following table reflects the distributions per share that the Company has paid, including shares issued under the DRIP, on its common stock during the three months ended December 31, 2017 and December 31, 2016:
Frequency Date Declared Record Date Payment Date Amount
per Share		 Cash Distribution DRIP Shares Issued (1) DRIP Shares Value (2)
Monthly July 10, 2015 October 6, 2015 October 15, 2015 $0.075
 $2,101,445
 12,080 $108,563
Monthly July 10, 2015 November 5, 2015 November 16, 2015 0.075
 2,093,278
 13,269 116,730
Monthly November 30, 2015 December 11, 2015 December 22, 2015 0.075
 2,115,444
 11,103 94,563
Monthly November 30, 2015 January 4, 2016 January 15, 2016 0.075
 2,148,928
 8,627 61,079
Monthly November 30, 2015 February 5, 2016 February 16, 2016 0.075
 2,177,085
 4,542 32,923
Monthly February 8, 2016 March 15, 2016 March 31, 2016 0.075
 2,175,431
 4,383 34,577
Monthly February 8, 2016 April 15, 2016 April 29, 2016 0.075
 2,174,974
 4,452 35,033
Monthly February 8, 2016 May 13, 2016 May 31, 2016 0.075
 2,176,513
 4,256 33,494
Monthly May 6, 2016 June 15, 2016 June 30, 2016 0.075
 2,163,126
 5,822 46,881
Total for the nine months ended June 30, 2016   $0.675
 $19,326,224
 68,534 $563,844
Frequency Date Declared Record Date Payment Date Amount
per Share		 Cash Distribution DRIP Shares Issued (1) DRIP Shares Value
Quarterly August 7, 2017 December 15, 2017 December 29, 2017 $0.19
 $5,439,519
 18,809 $159,167
Total for the three months ended December 31, 2017   $0.19
 $5,439,519
 18,809 $159,167
Frequency Date Declared Record Date Payment Date Amount
per Share		 Cash Distribution DRIP Shares Issued (1) DRIP Shares Value
Monthly August 4, 2016 October 14, 2016 October 31, 2016 $0.075
 $2,183,023
 3,146 $26,985
Monthly August 4, 2016 November 15, 2016 November 30, 2016 0.075
 2,183,100
 2,986 26,908
Monthly October 19, 2016 December 15, 2016 December 30, 2016 0.075
 2,179,421
 3,438 30,586
Total for the three months ended December 31, 2016   $0.23
 $6,545,544
 9,570 $84,479
 __________
(1) Shares were purchased on the open market and distributed.
(2) Totals do not sum due to rounding
Common Stock Offering
There were no common stock offerings during the three and nine months ended June 30,December 31, 2017 and June 30,December 31, 2016.
Note 6. Borrowings
Citibank Facility
On January 15, 2015, FS Senior Funding II LLC, the Company's wholly-owned, special purpose financing subsidiary, entered into a $175 million revolving credit facility (as amended, the "Citibank facility") with the lenders referred to therein, Citibank, N.A., as administrative agent, and Wells Fargo Bank, N.A., as collateral agent and custodian.custodian, which permitted up to $125 million of borrowings as of both December 31, 2017 and September 30, 2017.
Borrowings under the Citibank facility are subject to certain customary advance rates and accrued interest at a rate equal to LIBOR plus 2.00%2.25% per annum on broadly syndicated loans and LIBOR plus 2.25%2.50% per annum on all other eligible loans during the reinvestment period, and rates equal to LIBOR plus 3.50% per annum and LIBOR plus 4.00% per annum during the subsequent two years, respectively. In addition, there is a commitment fee payable on the undrawn amount under the Citibank facility of either 0.50% per annum on the unused amount of the Citibank facility (if the advances outstanding on the Citibank facility exceed 50% of the aggregate commitments by lenders to make advances on such day) or 0.75% per annum on the unused amount of the credit facility (if the advances outstanding on the Citibank facility do not exceed 50% of the aggregate commitments by lenders to make advances on such day) for the duration of the reinvestment period. Interest and commitment fees are payable quarterly in arrears. The reinvestment period under the Citibank facility ends January 15, 2018 and the Citibank facility will mature on January 15, 2020. See "Note 14 - Subsequent Events." The Citibank facility requires the Company to comply with certain affirmative and negative covenants and other customary requirements for similar credit facilities.
On March 23, 2017, FS Senior Funding II LLC entered into an amendment to the documents governing the Citibank facility.  The amendment was effective as of March 23, 2017 and, among other things, decreased the size of the Citibank facility from $175 million to $125 million.  The interest rate, reinvestment period and maturity date were not modified as part of this amendment. The Company accelerated deferred financing costs of $406,230 in connection with the amendment. 
As of June 30,December 31, 2017 and September 30, 2016,2017, the Company had $73.7$70.1 million and $107.4$76.5 million outstanding under the Citibank facility, respectively. Borrowings under the Citibank facility are secured by all of the assets of FS Senior Funding II LLC and all of the Company's equity interests in FS Senior Funding II LLC. The Company may use the Citibank facility to fund a portion of its loan origination activities and for general corporate purposes. Each loan origination under the Citibank facility is subject to the satisfaction of certain conditions. The Company's borrowings under the Citibank facility bore interest at a weighted average interest rate of 3.447%3.919% and 2.770%3.213% for the ninethree months ended June 30,December 31, 2017 and June 30,December 31, 2016, respectively. For the three and nine months ended June 30,December 31, 2017 and December 31, 2016, the Company recorded interest expense of $0.9 million and $3.3 million, respectively, related to the Citibank facility. For the three and nine months ended June 30, 2016, the Company recorded interest expense of $1.0 million and $3.1 million, respectively, related to the Citibank facility.
East West Bank Facility
On January 6, 2016, the Company entered into a five-year $25 million senior secured revolving credit facility with the lenders referenced therein, U.S. Bank National Association, as Custodian, and East West Bank as Secured Lender (the "East West Bank facility"). The East West Bank facility bears an interest rate of either (i) LIBOR plus 3.75% per annum for borrowings in year one,
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


3.50% per annum for borrowings in year two, 3.25% per annum for borrowings in years three and four and 3.00% per annum for borrowings in year five, or (ii) East West Bank’s prime rate plus 0.75% per annum for borrowings in year one, 0.50% per annum for borrowings in year two, 0.25% per annum for borrowings in years three and four, and 0.00% per annum for borrowings in year five.
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The East West Bank facility matures on January 6, 2021. The East West Bank facility requires the Company to comply with certain affirmative and negative covenants and other customary requirements for similar credit facilities.
As of JuneDecember 31, 2017 and September 30, 2017, the Company had $13.0$4.0 million and $6.5 million outstanding under the East West Bank facility. As of September 30, 2016, the Company had no borrowings outstanding under the East West Bank facility.facility, respectively. Borrowings under the East West Bank facility are secured by the loans pledged as collateral thereunder from time to time as well as certain other assets of the Company. The Company may use the East West Bank facility to fund a portion of its loan origination activities and for general corporate purposes. The Company’s borrowings under the East West Bank facility bore interest at a weighted average interest rate of 4.579%5.088% and 3.498% for the ninethree months ended June 30, 2017. The Company’s borrowings under the East West Bank facility bore interest at a weighted average interest rate of 4.202% for the period from January 6,December 31, 2017 and December 31, 2016, through June 30, 2016.respectively. For the three and nine months ended June 30,December 31, 2017 the Company recorded interest expense of $0.2 million and $0.3 million, respectively, related to the East West Bank facility. For the three and nine months ended June 30,December 31, 2016, the Company recorded interest expense of $0.2 million and $0.3$0.1 million, respectively, related to the East West Bank Facility.facility.
2015 Debt Securitization
On May 28, 2015, the Company completed its $309.0 million debt securitization ("2015 Debt Securitization") consisting of $222.6 million in senior secured notes ("2015 Notes") and $86.4 million of unsecured subordinated notes ("Subordinated 2015 Notes"). The notes offered in the 2015 Debt Securitization were issued by FS Senior Funding Ltd. (the "2015 Issuer"),the 2015 Issuer, a wholly-owned subsidiary of the Company, through a private placement. The 2015 Notes are secured by the assets held by the 2015 Issuer. The 2015 Debt Securitization consists of $126.0 million Class A-T Senior Secured 2015 Notes, which bear interest at three-month LIBOR plus 1.80% per annum; $29.0 million Class A-S Senior Secured 2015 Notes, which bore interest at a rate of three-month LIBOR plus 1.55% per annum, until a step-up in spread to 2.10% occurred in October 2016; $20.0 million Class A-R Senior Secured Revolving 2015 Notes, which bear interest at a rate of Commercial Paper ("CP") plus 1.80% per annum collectively,(collectively, the "Class A Notes;"Notes") and $25.0 million Class B Senior Secured 2015 Notes, which bear interest at a rate of three-month LIBOR plus 2.65% per annum (the "Class B Notes"). In partial consideration for the loans transferred to the 2015 Issuer as part of the 2015 Debt Securitization, the Company currently retains the entire $22.6 million of the Class C Senior Secured 2015 Notes (which the Company purchased at 98.0% of par value) (the "Class C Notes") and the entire $86.4 million of the Subordinated 2015 Notes. The Class A Notes and Class B Notes are included in the Company's June 30,December 31, 2017 Consolidated Statements of Assets and Liabilities as notes payable. As of June 30,December 31, 2017, the Class C Notes and the Subordinated 2015 Notes were eliminated in consolidation.
    
The Company serves as collateral manager to the 2015 Issuer under a collateral management agreement. The Company is entitled
to a fee for its services as collateral manager. The Company has retained Fifth Street Management LLC,a sub-collateral manager, which, as of October 17, 2017, was the Company’s investment adviser,Investment Adviser and, prior to furnishOctober 17, 2017, was FSM, to provide collateral management sub-advisory services to the Company pursuant to a sub-collateral management agreement. Fifth Street Management LLC hasThe sub-collateral manager is entitled to receive 100% of the collateral management fees paid to the Company under the collateral management agreement, but each of the Investment Adviser and FSM irrevocably waived and, in the case of the Investment Adviser, intends to continue to irrevocably waive its right to such sub-collateral management fees in respect of the 2015 Debt Securitization.

The collateral management agreement does not include any incentive fee payable to the Company as collateral manager or payable to Fifth Street Management LLCthe sub-collateral manager as sub-advisor under the sub-collateral management agreement.

Through May 28, 2019, all principal collections received on the underlying collateral may be used by the 2015 Issuer to purchase new collateral under the direction of the Investment Adviser in its capacity as sub-collateral manager of the 2015 Issuer and in accordance with the Company's investment strategy. All 2015 Notes are scheduled to mature on May 28, 2025.
 
As of June 30,December 31, 2017, there were 5652 investments in portfolio companies with a total fair value of $275.9$263.6 million, securing the 2015 Notes. The pool of loans in the 2015 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

For the three and nine months ended June 30,December 31, 2017 and June 30,December 31, 2016, the components of interest expense, cash paid for interest, average interest rates and average outstanding balances for the 2015 Debt Securitization were as follows:
FIFTH STREET SENIOR FLOATING RATE CORP.OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


 Three months ended June 30, 2017 Three months ended June 30, 2016 Nine months ended June 30, 2017 Nine months ended June 30, 2016 Three months ended December 31, 2017 Three months ended December 31, 2016
Interest expense $1,472,696
 $1,179,015
 $4,200,225
 $3,448,626
 $1,567,772
 $1,306,035
Loan administration fees 16,992
 17,488
 51,480
 61,941
 18,241
 18,330
Amortization of debt issuance costs 72,526
 72,526
 217,578
 217,578
 72,526
 72,526
Total interest and other debt financing expenses $1,562,214
 $1,269,029
 $4,469,283
 $3,728,145
 $1,658,539
 $1,396,891
Cash paid for interest expense $1,394,676
 $1,188,596
 $3,976,651
 $3,891,220
 $1,566,749
 $1,222,675
Annualized average interest rate 3.138% 2.528% 2.992% 2.528% 3.446% 2.902%
Average outstanding balance $181,300,000
 $182,380,887
 $180,433,333
 $182,380,887
 $181,467,391
 $180,000,000
 
The classes, interest rates, spread over LIBOR, cash paid for interest and interest expense of each of the Class A-T, A-S, A-R, B and C 2015 Notes for the three and nine months ended June 30,December 31, 2017 is as follows:
  Three months ended June 30, 2017 Nine months ended June 30, 2017

 Stated Interest Rate LIBOR Spread (basis points) Cash Paid for Interest Interest Expense Cash Paid for Interest Interest Expense Stated Interest Rate LIBOR Spread (basis points) Cash Paid for Interest Interest Expense
Class A-T Notes 2.9551% 180 $888,861

$935,602
 $2,546,066
 $2,671,836
 3.1035% 180 $999,327
 $999,327
Class A-S Notes 3.2551% 210(1)226,329
 237,329
 611,455
 675,598
 3.4035% 210(1)252,237
 252,237
Class A-R Notes 2.9551% 180(2)50,000
 60,414
 152,222
 161,525
 3.1838% 180(2)62,600
 63,623
Class B Notes 3.8051% 265 229,486
 239,351
 666,908
 691,266
 3.9535% 265 252,585
 252,585
Class C Notes 4.4051% 325(3)—
 —
 —
 —
 4.5535% 325(3)—
 —
Total    $1,394,676
 $1,472,696
 $3,976,651
 $4,200,225
    $1,566,749
 $1,567,772
_______________________
(1) Spread increased to 2.10% in October 2016 from 1.55%.
(2) Interest expense includes 1.0% undrawn fee.
(3) The Company holds all Class C Notes outstanding and thus has not recorded any related interest expense as they are eliminated in consolidation.

The classes, amounts, ratings and interest rates (expressed as a spread to three-month LIBOR) of the Class A, B, C and Subordinated 2015 Notes as of December 31, 2017 are as follows:
Description Class A-T Notes Class A-S Notes Class A-R
Notes		 Class B Notes Class C Notes Subordinated Notes Class A-T Notes Class A-S Notes Class A-R
Notes		 Class B Notes Class C Notes Subordinated Notes
Type Senior Secured Floating Rate Term Debt Senior Secured Floating Rate Term Debt Senior Secured Floating Rate Revolver Senior Secured Floating Rate Term Debt Senior Secured Floating Rate Term Debt Subordinated Term Notes Senior Secured Floating Rate Term Debt Senior Secured Floating Rate Term Debt Senior Secured Floating Rate Revolver Senior Secured Floating Rate Term Debt Senior Secured Floating Rate Term Debt Subordinated Term Notes
Amount Outstanding $126,000,000 $29,000,000 $1,800,000 $25,000,000 $22,575,680 $86,400,000 $126,000,000 $29,000,000 $— $25,000,000 $22,575,680 $86,400,000
Moody's Rating "Aaa" "Aaa" "Aaa" "Aa2" "Aa2" NR "Aaa" "Aaa" "Aaa" "Aa2" "Aa2" NR
S&P Rating "AAA" "AAA" "AAA" NR NR NR "AAA" "AAA" "AAA" NR NR NR
Interest Rate LIBOR + 1.80% LIBOR + 2.10%* CP + 1.80% ** LIBOR + 2.65% LIBOR + 3.25% NA LIBOR + 1.80% LIBOR + 2.10%* CP + 1.80% ** LIBOR + 2.65% LIBOR + 3.25% NA
Stated Maturity May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025
_______________________
* Spread increased to 2.10% in October 2016 from 1.55%.
** Carries a 1.0% undrawn fee.

     The proceeds of the private placement of the Class A Notes and the Class B Notes of the 2015 Issuer, net of debt issuance costs, were used to fund a portion of the 2015 Issuer's loan origination activities and for general corporate purposes. The creditors of the 2015 Issuer have received security interests in the assets owned by the 2015 Issuer and such assets are not intended to be available to the creditors of the Company (or any other affiliate of the Company). As part of the 2015 Debt Securitization, the Company entered into master loan sale agreements under which the Company agreed to directly or indirectly sell or contribute certain senior secured debt investments (or participation interests therein) to the 2015 Issuer, and to purchase or otherwise acquire the Subordinated 2015 Notes, as applicable. The 2015 Notes are the secured obligations of the 2015 Issuer and the indenture governing the 2015 Notes includes customary covenants and events of default. The 2015 Debt Securitization requires the Company to comply with certain monthly financial covenants, including overcollateralization and interest coverage tests.

FIFTH STREET SENIOR FLOATING RATE CORP.
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Secured Borrowings

See Note 2 "Secured Borrowings" for a description of the Company's accounting treatment of secured borrowings.

As of September 30, 2016, secured borrowings at fair value totaled $5.0 million and the fair value of the investment that is associated with these secured borrowings was $5.0 million. These secured borrowings were the result of the Company's completion of a loan sale of a senior secured debt investment that did not meet the definition of a participating interest. As a result, sale treatment was not allowed and this loan sale was treated as a secured borrowing. No secured borrowings were outstanding as of June 30, 2017.

During the three months ended December 31, 2016, the Company repaid the $5.0 million of secured borrowings in connection with the sale of the investment associated with these secured borrowings.
Note 7. Interest and Dividend Income
See Note 2 "Investment Income" for a description of the Company's accounting treatment of investment income.

    Accumulated PIK interest activity for the ninethree months ended June 30,December 31, 2017 and June 30,December 31, 2016 was as follows:
 Nine months ended
June 30, 2017		 Nine months ended
June 30, 2016		  Three months ended
December 31, 2017		 Three months ended
December 31, 2016
PIK balance at beginning of period $88,839
 $—
  $497,260
 $88,839
Gross PIK interest accrued 400,785
 105,288
  601,294
 132,216
PIK income reserves (1) (215,489) —
  (302,880) (72,812)
PIK interest received in cash —
 —
  —
 —
Loan exits and other PIK adjustments —
 —
 
PIK balance at end of period $274,135
 $105,288
  $795,674
 $148,243
 ___________________
(1)PIK income is generally reserved for when a loan is placed on PIK non-accrual status.

As of each of JuneDecember 31, 2017 and September 30, 2017, September 30, 2016 and June 30, 2016, there was one investmentwere three investments on which the Company had stopped accruing cash and/or PIK interest or OID income.

The percentages of the Company's debt investments at cost and fair value by accrual status as of JuneDecember 31, 2017 and September 30, 2017 September 30, 2016 and June 30, 2016 were as follows:
 June 30, 2017 September 30, 2016 June 30, 2016 December 31, 2017 September 30, 2017
 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio
Accrual $557,719,818
 97.48% $552,637,962
 98.59% $563,757,229
 96.74% $552,114,644
 98.72% $601,521,703
 98.75% $583,433,721
 99.79% $543,893,491
 95.95% $533,828,329
 98.82% $564,231,285
 96.02% $553,084,120
 98.88%
PIK non-accrual (paying) (1) 14,411,438
 2.52
 7,921,674
 1.41
 —
 —
 —
 —
 7,605,257
 1.25
 1,200,000
 0.21
Cash non-accrual (nonpaying) (2) —
 —
 —
 —
 19,027,017
 3.26
 7,156,160
 1.28
 —
 —
 —
 —
PIK non-accrual (1) —
 —
 —
 —
 —
 —
 —
 —
Cash non-accrual (2) 22,949,434
 4.05
 6,351,585
 1.18
 23,381,863
 3.98
 6,292,551
 1.12
Total $572,131,256
 100.00% $560,559,636
 100.00% $582,784,246
 100.00% $559,270,804
 100.00% $609,126,960
 100.00% $584,633,721
 100.00% $566,842,925
 100.00% $540,179,914
 100.00% $587,613,148
 100.00% $559,376,671
 100.00%
  __________________
(1)PIK non-accrual status is inclusive of other noncashnon-cash income, where applicable.
(2)Cash non-accrual status is inclusive of PIK and other noncashnon-cash income, where applicable.
The non-accrual status of the Company's portfolio investments as of June 30, 2017, September 30, 2016 and June 30, 2016 was as follows:
:
June 30, 2017September 30, 2016June 30, 2016
Answers Corporation (2)—Cash non-accrual (1)PIK non-accrual (1)
Metamorph US 3, LLCPIK non-accrual (1)——
 __________________
(1)PIK non-accrual status is inclusive of other noncash income, where applicable. Cash non-accrual status is inclusive of PIK and other noncash income, where applicable.
(2)As of June 30, 2017, the Company no longer held the first and second lien term loans in this investment. As of September 30, 2016, the Company's investments in both the first and second lien term loans of the Answers Corporation were on cash non-accrual status. As of June 30, 2016, only the Company's investment in the second lien term loan of the Answers Corporation was on PIK non-accrual status.

Income non-accrual amounts for the three and nine months ended June 30, 2017 and June 30, 2016 are presented in the following table.
  Three months ended
June 30, 2017		 Three months ended
June 30, 2016		 Nine months ended
June 30, 2017		 Nine months ended
June 30, 2016
Cash interest income $36,512
 $50,277
 $871,220
 $1,008,423
PIK interest income 71,636
 —
 215,489
 —
OID income 3,814
 13,816
 83,979
 41,447
Total $111,962
 $64,093
 $1,170,688
 $1,049,870

Note 8. Taxable/Distributable Income and Dividend Distributions
Taxable income may differdiffers from net increase (decrease) in net assets resulting from operations primarily due to: (1) unrealized appreciation (depreciation) on investments and secured borrowings, as gains and losses are not included in taxable income until they are realized; (2) origination fees received in connection with investments in portfolio companies; (3) recognition of interest income on certain loans; and (4) income or loss recognition on exited investments.
Listed below is a reconciliation of net increasedecrease in net assets resulting from operations to taxable income for the three and nine months ended June 30,December 31, 2017:
 Three months ended
June 30, 2017		 Nine months ended
June 30, 2017
Net increase in net assets resulting from operations $139,198
 $5,696,300
 $1,905,968
Net unrealized appreciation (depreciation) on investments and secured borrowings 5,802,804
 (2,197,544)
Net unrealized appreciation on investments and secured borrowings (1,741,899)
Book/tax difference due to deferred loan fees (239,305) (239,305) (245,015)
Book/tax difference due to interest income on certain loans 594,334
Book/tax difference due to capital losses not recognized (11,535) 13,401,975
 4,382,706
Other book/tax differences 420,192
 232,722
 (356,968)
Taxable/Distributable Income (1) $6,111,354
 $16,894,148
 $4,539,126
 
__________________
(1)The Company's taxable income for the three and nine months ended June 30,December 31, 2017 is an estimate and will not be finally determined until the Company files its tax return for the fiscal and taxable year ending September 30, 2017.return. Therefore, the final taxable income may be different than the estimate.
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


As of September 30, 2016,2017, the most recent tax year end, the components of accumulated undistributed income on a tax basis were as follows:
Undistributed ordinary income, net$2,459,655
$2,808,747
Net realized capital losses(12,690,311)28,564,899
Unrealized losses, net(16,980,523)(46,826,393)
The effect of the permanent book/tax reclassifications during the fiscal year ended September 30, 2016 resulted in an increase (decrease) to the components of net assets on the Consolidated Statements of Assets and Liabilities asAs of September 30, 2016 as follows:
Undistributed net investment income$2,640,496
Accumulated net realized loss on investments(3,755,949)
Additional paid-in capital(1,115,453)
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


For financial reporting purposes,2017, the Company had net capital accounts have been adjustedloss carryforwards of $28,564,899 to reflect the tax character of permanent book/tax differences.  Reclassifications are primarily dueoffset net capital gains, to the extent available and permitted by U.S. federal income tax treatment of prepayment fees, nondeductible excise taxes paid, reclassification of distributions paid. 
law. Of the capital loss carryforwards, $2,699,949 are available to offset future short-term capital gains and $25,864,950 are available to offset future long-term capital gains. The Company is permitted to carry forward net capital losses, if any, incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during such taxable years will be required to be utilized prior to the capital losses incurred in taxable years ended prior to the Company's tax year ended September 30, 2011, which are subject to an expiration date. As a result of this ordering rule, capital loss carryforwards from the Company's tax year ended prior to its tax year ended September 30, 2011 may be more likely to expire unused.
As a RIC, the Company is also subject to a U.S. federal excise tax based on distribution requirements of its taxable income on a calendar year basis. The Company anticipates timely distribution of its taxable income in accordance with tax rules. The Company did not incur a U.S. federal excise tax for calendar years 20142015 and 20152016 and does not expect to incur a U.S. federal excise tax for calendar year 2016.2017.
The aggregate cost of investments for income tax purposes was $607.3 million as of September 30, 2017. As of September 30, 2017, the aggregate gross unrealized appreciation for all investments in which there was an excess of value over cost for income tax purposes was $4.6 million. As of September 30, 2017, the aggregate gross unrealized depreciation for all investments in which there was an excess of cost for income tax purposes over value was $51.4 million. Net unrealized depreciation based on the aggregate cost of investments for income tax purposes was $46.8 million.

Note 9. Realized Gains or Losses and Net Unrealized Appreciation or Depreciation on Investments
Realized Gains or Losses
Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption and the cost basis of the investment without regard to unrealized appreciation or depreciation previously recognized, and include investments written-off during the period, net of recoveries. Realized losses may also be recorded in connection with the Company's determination that certain investments are considered worthless securities and/or meet the conditions for loss recognition per the applicable tax rules.
During the three months ended December 31, 2017, the Company recorded an aggregate net realized loss of $4.4 million in connection with the sale of various debt investments in the open market, including a $4.2 million realized loss in connection with the sale of the Company's first lien term loan investment in New Trident Holdcorp.
During the three months ended December 31, 2016, the Company recorded an aggregate net realized gain of $0.1 million in connection with the sale of various debt investments in the open market.
Net Unrealized Appreciation or Depreciation on Investments
Net unrealized appreciation or depreciation reflects the net change in the valuation of the portfolio pursuant to the Company's valuation guidelines and the reclassification of any prior period unrealized appreciation or depreciation.
A summary ofFor the Company's recorded investment realization events during the ninethree months ended June 30, 2017 is shown in the table below:
DatePortfolio CompanyInvestment TypeConsideration at ExitRealized Gain (Loss)Transaction
October 2016 TrialCard IncorporatedDebt$ 9.9 million$—
Full payoff
November 2016 Blackhawk Specialty Tools, LLCDebt4.2 million—
Full payoff
November 2016 NXT Capital, LLCDebt8.7 million—
Full payoff
November 2016 The Active Network, Inc. (a)Debt2.4 million—
Full payoff
November 2016 Fineline Technologies, Inc.Debt10.5 million—
Full payoff
November 2016 Legalzoom.com, Inc. (a)Debt20.1 million—
Full payoff
December 2016 Aptean, Inc.Debt1.2 million—
Full payoff
December 2016 Too Faced Cosmetics, LLCDebt1.3 million—
Full payoff
February 2017 Vitera Healthcare Solutions, LLCDebt4.7 million—
Full payoff
February 2017 TV Borrower US, LLC (a)Debt9.1 million—
Full payoff
February 2017 Teaching Strategies, LLCDebt15.1 million—
Full payoff
February 2017 AF Borrower, LLCDebt1.1 million0.1 million
Full payoff
February 2017 CRGT Inc.Debt3.2 million—
Full payoff
February 2017 Onvoy Merger Sub, LLCDebt10.2 million—
Full payoff
March 2017 NAVEX Global, Inc.Debt5.0 million—
Full payoff
May 2017 Hill International, Inc.Debt5.9 million—
Full payoff
May 2017 Baart Programs, Inc. (a)Debt8.3 million—
Full payoff
June 2017 ConvergeOne Holdings Corp. (a)Debt5.3 million—
Full payoff
June 2017 Idera, Inc.Debt17.3 million—
Full payoff
$ 0.1 million
__________ 
(a)The Company also received prepayment fees in connection with the exit of these portfolio investments.
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


During the nine months ended June 30,December 31, 2017, the Company received cash paymentsrecorded net unrealized appreciation of $26.9$1.7 million. This consisted of $3.2 million in connection with syndications and sales of debt investments and recorded a net reclassifications to realized loss (resulting in unrealized appreciation) and $0.2 million of $13.5net unrealized appreciation on equity investment, offset by $1.7 million including a realized loss of $13.4 million from the sale of the Company's investment in the first and second lien term loans of Answers Corporation.
A summary of the Company's recorded investment realization events during the nine months ended June 30, 2016 is shown in the table below:
DatePortfolio CompanyInvestment TypeConsideration at ExitRealized Gain (Loss)Transaction
October 2015Reliant Hospital Partners, LLCDebt$ 7.4 million$—
Full payoff
October 2015Idera, Inc.Debt16.8 million—
Full payoff
October 2015Novetta Solutions, LLCDebt5.7 million—
Full payoff
December 2015All Web Leads, Inc.Debt17.6 million—
Full payoff
January 2016TWCC Holding Corp.Debt6.4 million—
Full payoff
February 2016B&H Education Inc.Debt1.4 million   (4.3 million)
Partial payoff
March 2016Pacific Architects and Engineers IncorporatedDebt3.4 million—
Full payoff
April 2016 Ameritox Ltd.Debt12.6 million   (8.7 million)
Restructuring
May 2016 Accruent, LLCDebt20.8 million—
Full payoff
June 2016 GTCR Valor Companies, Inc.Debt13.3 million—
Partial payoff
 $ (13.0 million)
During the nine months ended June 30, 2016, the Company received cash payments of $139.3 million in connection with syndications and sales ofnet unrealized depreciation on debt investments and recorded a net realized loss of $0.4 million.investments.
For the ninethree months ended June 30, 2017 and June 30,December 31, 2016, the Company recorded net unrealized appreciation (depreciation)depreciation of $5.2 million. This consisted of $7.7 millionof net unrealized depreciation on equity investments, offset by $2.2 million of net unrealized appreciation on debt investments and $(18.6) million, respectively. For the nine months ended June 30, 2017, this consisted of $11.7$0.3 million of net reclassifications to realized loss (resulting in unrealized appreciation), offset by $3.0 million.of net unrealized depreciation on debt investments and $6.5 million of net unrealized depreciation on equity investments.
For the nine months ended June 30, 2016, this consisted of $17.2 million of net unrealized depreciation on debt investments and $3.1 million of net unrealized depreciation on equity investments, offset by $1.7 million of net reclassifications to realized loss (resulting in unrealized appreciation).

Note 10. Concentration of Credit Risks
The Company deposits its cash with financial institutions and at times such balances may be in excess of the FDIC insurance limit. The Company limits its exposure to credit loss by depositing its cash with high credit quality financial institutions and monitoring their financial stability.
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 11. Related Party Transactions
The
As of December 31, 2017 and September 30, 2017, the Company has entered into an investment advisory agreementhad a liability on its Consolidated Statements of Assets and Liabilities in the amount of $1.6 million and $2.2 million, respectively, reflecting the unpaid portion of the base management fees and incentive fees payable to Oaktree and FSM.
New Investment Advisory Agreement
Effective October 17, 2017 and as of December 31, 2017, the Company is party to the New Investment Advisory Agreement with the Investment Adviser.Oaktree. Under the investment advisory agreement,New Investment Advisory Agreement, the Company pays the Investment AdviserOaktree a fee for its services under the New Investment Advisory Agreement consisting of two components —components: a base management fee and an incentive fee. The cost of both the base management fee payable to Oaktree and any incentive fees earned by Oaktree is ultimately borne by common stockholders of the Company.
Unless earlier terminated as described below, the New Investment Advisory Agreement will remain in effect until October 17, 2019 and thereafter from year-to-year if approved annually by the Company's Board of Directors or by the affirmative vote of the holders of a majority of the outstanding voting securities of the Company, including, in either case, approval by a majority of directors of the Company who are not interested persons. The New Investment Advisory Agreement will automatically terminate in the event of its assignment. The New Investment Advisory Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other. The New Investment Advisory Agreement may also be terminated, without penalty, upon the vote of a majority of the outstanding voting securities of the Company.
Base Management Fee
TheUnder the New Investment Advisory Agreement, the base management fee is calculated at an annual rate of 1% of the Company'son total gross assets, (i.e., total assets held before deduction ofincluding any liabilities), which includes any investments acquiredinvestment made with the use of leverageborrowings, but excluding cash and excludes any cash, cash equivalents, and restricted cash. The base management fee is calculated based on the average value of the Company's gross assets at the end of the two most recently completed quarters.1.00%. The base management fee is payable quarterly in arrears and the fee for any partial month or quarter is appropriately prorated.
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


For the three and nine months ended June 30,period from October 17, 2017 to December 31, 2017, the base management fees (net of waivers, if any) were $1.4fee incurred under the New Investment Advisory Agreement was $1.2 million, and $4.2 million, respectively. For the three and nine months ended June 30, 2016, base management fees (net of waivers, if any) were $1.5 million and $4.6 million, respectively.which was payable to Oaktree.
Incentive Fee
The incentive fee portionconsists of two parts. Under the New Investment Advisory Agreement, the first part of the investment advisory agreement has two parts. The first part ("Part I incentive fee")fee (the “incentive fee on income) is calculated and payable quarterly in arrears based onupon the Company's "Pre-Incentive Fee Net Investment Income"“pre-incentive fee net investment income” of the Company for the immediately preceding fiscal quarter. The payment of the incentive fee on income is subject to payment of a preferred return to investors each quarter (i.e., a “hurdle rate”), expressed as a rate of return on the value of the Company’s net assets at the end of the most recently completed quarter, of 1.50%, subject to a “catch up” feature.
For this purpose, "Pre-Incentive Fee Net Investment Income"“pre-incentive fee net investment income” means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies)companies, other than fees for providing managerial assistance) accrued during the fiscal quarter, minus the Company'sCompany’s operating expenses for the quarter (including the base management fee, expenses payable under the Company's administration agreement,New Administration Agreement and any interest expense and dividends paid on any issued and outstanding indebtedness or preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment IncomePre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-Incentive Fee Net Investment IncomePre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee Net
Under the New Investment Income, expressed as a rate of return onAdvisory Agreement, the value of the Company's net assets at the end of the immediately preceding fiscal quarter, will be compared to a "hurdle rate" of 1.5% per quarter, subject to a "catch-up" provision measured as of the end of each fiscal quarter. The Company's net investment income used to calculate this partcalculation of the incentive fee is also included in the amount of its gross assets used to calculate the 1% base management fee. The operation of the incentive fee with respect to the Company's Pre-Incentive Fee Net Investment Incomeon income for each quarter is as follows:
No incentive fee is payable to the Investment AdviserOaktree in any fiscal quarter in which the Company's Pre-Incentive Fee Net Investment IncomeCompany’s pre-incentive fee net investment income does not exceed the hurdlepreferred return rate of 1.5%1.50% (the "preferred return" or "hurdle"“preferred return”); on net assets;
50%100% of the Company's Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income,Company’s pre-incentive fee net investment income, if any, that exceeds the hurdle ratepreferred return but is less than or equal to 2.5%1.8182% in any fiscal quarter is payable to the Investment Adviser. The Company refers to thisOaktree. This portion of its Pre-Incentive Fee Net Investment Income (which exceeds the hurdle rate butincentive fee on income is less than or equalreferred to 2.5%) as the "catch-up." The "catch-up"“catch-up” provision, and it is intended to provide the Investment AdviserOaktree with an incentive fee of 20%17.5% on all of the Company's Pre-Incentive Fee Net Investment Income as if a hurdle rate did not applyCompany’s pre-
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


incentive fee net investment income when the Company's Pre-Incentive Fee Net Investment IncomeCompany’s pre-incentive fee net investment income exceeds 2.5%1.8182% on net assets in any fiscal quarter; and
20%For any quarter in which the Company’s pre-incentive fee net investment income exceeds 1.8182% on net assets, the subordinated incentive fee on income is equal to 17.5% of the amount of the Company's Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.5% in any fiscal quarter is payable toCompany’s pre-incentive fee net investment income, as the Investment Adviser once the hurdle is reachedpreferred return and the catch-up iswill have been achieved.
There is no accumulation of amounts on the hurdle rate from quarter to quarter and accordingly there is no clawback of amounts previously paid if subsequent quarters are below the quarterly hurdle and there is no delay of payment if prior quarters are below the quarterly hurdle.
For the three and nine months ended June 30,period from October 17, 2017 to December 31, 2017, the Part I incentive fee was $1.1 million and $2.4 million, respectively. For the three and nine months ended June 30, 2016, the Part I incentive fee was $1.2 million and $3.7 million, respectively.
The secondfirst part ("Part II incentive fee" or "capital gain incentive fee") of the incentive fee is(net of waivers) incurred under the New Investment Advisory Agreement was $0.1 million. To ensure compliance of the transactions contemplated by that certain asset purchase agreement, dated as of July 13, 2017 by and among Oaktree, FSM, and, for certain limited purposes, FSAM and Fifth Street Holdings L.P., Oaktree entered into a two-year contractual fee waiver with the Company that will waive, to the extent necessary, any management or incentive fees payable under the New Investment Advisory Agreement that exceed what would have been paid to the Former Adviser in the aggregate under the Former Investment Advisory Agreement described below. Amounts potentially subject to waiver are accrued quarterly on a cumulative basis and, to the extent required, any fees will be waived or reimbursed as soon as practicable after the end of the two-year period. As of December 31, 2017, Oaktree had accrued an aggregate amount of $0.1 million of incentive fees potentially subject to waiver.
Under the New Investment Advisory Agreement, the second part of the incentive fee will be determined and payable in arrears as of the end of each fiscal year (or upon termination of the investment advisory agreement, as of the termination date) commencing with the fiscal year ending September 30, 2019 and equals 20%will equal 17.5% of the Company'sCompany’s realized capital gains, if any, on a cumulative basis from inceptionthe beginning of the fiscal year ending September 30, 2019 through the end of each fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. Forfees under the nine months ended June 30, 2017New Investment Advisory Agreement. Any realized capital gains, realized capital losses, unrealized capital appreciation and June 30, 2016, there was no Part II incentive fee. From inception to date, the Company has paid aggregate Part II incentive fees of approximately $0.1 million.
GAAP requires the Company to accrue for the theoreticalunrealized capital gain incentive fee that would be payable after giving effectdepreciation with respect to the net unrealized capital appreciation. A fee so calculated and accrued would not be payable underCompany’s portfolio as of the investment advisory agreement, and may never be paid based uponend of the computation of capital gain incentive fees in subsequent periods. Amounts ultimately paid under the investment advisory agreementfiscal year ending September 30, 2018 will be consistent withexcluded from the formula reflected in the investment advisory agreement. The Company does not currently accrue for capital gain incentive fees due to the accumulated realized and unrealized losses in the portfolio.
As of June 30, 2017 and September 30, 2016, the Company had a liability on its Consolidated Statements of Assets and Liabilities in the amount of $2.2 million and $3.0 million, respectively, reflecting the unpaid portioncalculations of the base management fee andsecond part of the incentive fees payable to the Investment Adviser.
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


fee.
Indemnification
The investment advisoryNew Investment Advisory agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of their respective duties or by reason of the reckless disregard of their respective duties and obligations, the Investment AdviserOaktree and its officers, managers, partners, members (and their members, including the owners of their members), agents, employees, controlling persons and any other person or entity affiliated with it, are entitled to indemnification from the Company for any damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in settlement) arising from the rendering of the Investment Adviser's services under the investment advisory agreement or otherwise as the Investment Adviser.
AdministrationCollection and Disbursement of Fees Owed to FSM
Under the Former Investment Advisory Agreement described below, both the base management fee and incentive fee on income were calculated and paid to FSM at the end of each quarter. In order to ensure that FSM receives the compensation earned during the quarter ending December 31, 2017, the initial payment of the base management fee and incentive fee on income under the New Investment Advisory Agreement will cover the entire quarter in which the New Investment Advisory Agreement became effective, and be calculated at a blended rate that will reflect fee rates under the respective investment advisory agreements for the portion of the quarter in which FSM and Oaktree were serving as investment adviser. This structure will allow Oaktree to pay FSM in early 2018 the pro rata portion of the fees that were earned by, but not paid to, FSM for services rendered to the Company prior to October 17, 2017.
Prior Investment Advisory Agreement
On JanuaryThe following is a description of the investment advisory agreement between FSM and the Company (the “Former Investment Advisory Agreement”), which was terminated on October 17, 2017. The Former Investment Advisory Agreement, dated June 27, 2013 was most recently approved by the Company’s Board of Directors on August 7, 2017, and was effective June 27, 2013 through its termination on October 17, 2017.
Through October 17, 2017, the Company paid FSM a fee for its services under the Former Investment Advisory Agreement consisting of two components: a base management fee and an incentive fee. The cost of both the base management fee paid to FSM and any incentive fees earned by FSM were ultimately borne by common stockholders of the Company.
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Base Management Fee
The base management fee was calculated at an annual rate of 1.0% of the Company’s gross assets, including any borrowings for investment purposes but excluding cash and cash equivalents. The base management fee was payable quarterly in arrears and the fee for any partial month or quarter was appropriately prorated.
For the period from October 1, 2015,2017 to October 17, 2017 and the three months ended December 31, 2016, the base management fee incurred under the Former Investment Advisory Agreement with FSM was $0.2 million and $1.4 million (net of waivers), respectively, all of which were payable to FSM. For the three months ended December 31, 2016, FSM voluntarily waived a portion of the base management fee, which resulted in waivers of less than $0.1 million.
Incentive Fee
The incentive fee paid to the Former Adviser had two parts. The first part was calculated and payable quarterly in arrears based on the Company’s pre-incentive fee net investment income for the immediately preceding fiscal quarter. 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 quarter, was compared to a “hurdle rate” of 1.5% per quarter, subject to a “catch-up” provision measured as of the end of each quarter. The Company’s net investment income used to calculate this part of the incentive fee was also included in the amount of its gross assets used to calculate the 1.0% base management fee. The operation of the incentive fee with respect to the Company’s pre-incentive fee net investment income for each quarter was as follows:
No incentive fee was payable to the Former Adviser in any fiscal quarter in which the Company’s pre-incentive fee net investment income did not exceed the preferred return rate of 1.5% (the “preferred return”);
50% of the Company’s pre-incentive fee net investment income, if any, that exceeded the preferred return rate but was less than or equal to 2.5% in any fiscal quarter was payable to the Former Adviser. The Company’s refers to this portion of its pre-incentive fee net investment income (which exceeds the preferred return rate but is less than or equal to 2.5%) as the “catch-up.” The “catch-up” provision was intended to provide the Former Adviser with an incentive fee of 20% on all of the Company’s pre-incentive fee net investment income as if a preferred return rate did not apply when the Company’s pre-incentive fee net investment income exceeded 2.5% in any quarter; and
20% of the amount of the Company’s pre-incentive fee net investment income, if any, that exceeded 2.5% in any quarter was payable to the Former Adviser once the preferred return was reached and the catch-up was achieved (20% of all pre-incentive fee net investment income thereafter was allocated to FSM).

There was no accumulation of amounts on the hurdle rate from quarter to quarter and accordingly there was no clawback of amounts previously paid if subsequent quarters were below the quarterly hurdle, and there was no delay of payment if prior quarters were below the quarterly hurdle.
The second part of the incentive fee was determined and payable in arrears as of the end of each fiscal year (or upon termination of the Former Investment Advisory Agreement, as of the termination date) commencing on September 30, 2013 and equaled 20% of the Company’s realized capital gains, if any, on a cumulative basis from inception through the end of each fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees.
For the period from October 1, 2017 to October 17, 2017 and for the three months ended December 31, 2016, incentive fees incurred under the Former Investment Advisory Agreement with FSM were less than $0.1 million and $1.0 million, respectively.
GAAP Accruals

GAAP requires the Company to accrue for the theoretical capital gain incentive fee that would be payable after giving effect to the net unrealized capital appreciation. A fee so calculated and accrued would not be payable under either the New Investment Advisory Agreement or the Former Investment Advisory Agreement and may never be paid based upon the computation of capital gain incentive fees in subsequent periods. Amounts ultimately paid under the New Investment Advisory Agreement will be consistent with the formula reflected in the New Investment Advisory Agreement. The Company did not accrue for capital gain incentive fees as of December 31, 2017 because the capital gain incentive fee under the New Investment Advisory Agreement will not be charged until the fiscal year ending September 30, 2019.

OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Administrative Services
The Company entered into an administration agreementthe New Administration Agreement with its administrator, FSC CT LLC, a wholly-owned subsidiary ofOaktree Administrator on October 17, 2017. Pursuant to the Investment Adviser ("FSC CT"), under substantially similar terms as its prior administration agreement with FSC CT, Inc. Under the administration agreement, FSC CTNew Administration Agreement, Oaktree Administrator provides administrative services to the Company necessary for the Company, including providingoperations of the Company, withwhich include providing office facilities, including its principal executive offices, and equipment, and clerical, bookkeeping and recordkeepingrecord keeping services at such facilities. Underfacilities and such other services as Oaktree Administrator, subject to review by the administration agreement, FSC CT also performsCompany’s Board of Directors, shall from time to time deem to be necessary or overseesuseful to perform its obligations under the New Administration Agreement. Oaktree Administrator may, on behalf of the Company, conduct relations and negotiate agreements with custodians, trustees, depositories, attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable. Oaktree Administrator makes reports to the Company’s Board of Directors of its performance of obligations under the Company'sNew Administration Agreement and furnishes advice and recommendations with respect to such other aspects of the Company’s business and affairs, in each case, as it shall determine to be desirable or as reasonably required administrative services, which includes beingby the Company’s Board of Directors; provided that Oaktree Administrator shall not provide any investment advice or recommendation.
Oaktree Administrator also provides portfolio collection functions for interest income, fees and warrants and is responsible for the financial and other records whichthat the Company is required to maintain and preparingprepares, prints and disseminates reports to the Company'sCompany’s stockholders and reportsall other materials filed with the SEC. In addition, FSC CTOaktree Administrator assists the Company in determining and publishing the Company'sCompany’s net asset value, overseeing the preparation and filing of the Company'sCompany’s tax returns, and the printing and dissemination of reports to the Company's stockholders, and generally overseeing the payment of the Company'sCompany’s expenses and the performance of administrative and professional services rendered to the Company by others. FSC CTOaktree Administrator may also offer to provide, on behalf of the Company,Company’s behalf, managerial assistance to itsthe Company’s portfolio companies.
For providing these services, facilities and personnel, the Company reimburses FSC CTOaktree Administrator the allocable portion of overhead and other expenses incurred by FSC CTOaktree Administrator in performing its obligations under the administration agreement,New Administration Agreement, including the Company’s allocable portion of the rent of the Company'sCompany’s principal executive offices at market rates and the Company’s allocable portion of the costs of compensation and related expenses of its Chief Financial Officer, Chief Compliance Officer, their staffs and other non-investment professionals at Oaktree that perform duties for the Company's chief financial officer and chief compliance officer and their staffs.Company. Such reimbursement is at cost, with no profit to, or markup by, FSC CT.Oaktree Administrator. The Company utilizes office space in Greenwich, CT that is leasedNew Administration Agreement may be terminated by FSC CT from an affiliate controlled byeither party without penalty upon 60 days’ written notice to the chief executive officerother. The New Administration Agreement may also be terminated, without penalty, upon the vote of a majority of the Investment AdviserCompany’s outstanding voting securities.
Prior to its termination by its terms on October 17, 2017 and FSC CT, Mr. Leonard M. Tannenbaum.throughout the Company’s 2017 fiscal year, the Company was party to the Former Administration Agreement with the Former Administrator. The Former Administrator was a wholly-owned subsidiary of FSM. Pursuant to the Former Administration Agreement, the Former Administrator provided services substantially similar to those provided by Oaktree Administrator as described above. For providing these services, facilities and personnel, the Company also utilizes additional office space that is leasedreimbursed the Former Administrator the allocable portion of overhead and other expenses incurred by affiliates ofit in performing its obligations under the Investment AdviserFormer Administration Agreement, including rent and FSC CT in Chicago, IL. Any reimbursement for athe allocable portion of the rent at this location iscosts of compensation and related expenses of its Chief Financial Officer and Chief Compliance Officer and their staffs. Such reimbursement was at cost, with no profit to, or markup by, FSC CT.the Former Administrator. The Former Administration Agreement with FSC CT may also provide, on the Company's behalf, managerial assistance to the Company's portfolio companies. The administration agreement may be terminatedwas terminable by either party without penalty upon 60 days' written notice to the other party.
For the three and nine months ended June 30,December 31, 2017, the Company accrued administrative expenses of $0.4 million, and $1.4 million, respectively, including $0.3 million and $0.9$0.1 million of general and administrative expenses. Of these amounts, $0.1 million was due to the Former Administrator for administrative expenses respectively.incurred prior to October 17, 2017 and $0.3 million was due to Oaktree Administrator. For the three and nine months ended June 30,December 31, 2016, the Company accrued administrative expenses of $0.3$0.5 million, including $0.2$0.4 million of general and administrative expenses, and $0.9 million, including $0.5 million of general and administrative expenses, respectively. which were due to the Former Administrator.
As of each of June 30,December 31, 2017 and September 30, 2016, $0.42017, $0.7 million and $0.5 million was included in Due“Due to FSC CTaffiliate” in the Consolidated Statements of Assets and Liabilities.
Common stock held by FSAMLiabilities, respectively, reflecting the unpaid portion of administrative expenses payable to the Former Administrator and Principals
As of June 30, 2017, a subsidiary of FSAM held 2,677,519 shares of the Company's common stock, which represents approximately 9.1% of the Company's common stock outstanding. As of June 30, 2017, Mr. Tannenbaum directly and indirectly held 5,249,026 shares of the Company's common stock, which represents approximately 17.8% of the Company's common stock outstanding.Oaktree Administrator.
FIFTH STREET SENIOR FLOATING RATE CORP.OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 12. Financial Highlights
  Three months ended
June 30, 2017		 Three months ended
June 30, 2016		 Nine months ended
June 30, 2017		 Nine months ended
June 30, 2016		 
Net asset value at beginning of period $10.83
 $11.18
 $11.06
 $12.11
 
Net investment income (5) 0.20
 0.21
 0.57
 0.64
 
Net unrealized appreciation (depreciation) on investments and secured borrowings (5) (0.20) 0.12
 0.07
 (0.63) 
Net realized gain (loss) on investments (5) 0.01
 (0.29) (0.44) (0.45) 
Distributions to stockholders (5) (0.19) (0.23) (0.61) (0.68) 
Net asset value at end of period $10.65
 $10.99
 $10.65
 $10.99
 
Per share market value at beginning of period $8.82
 $7.93
 $8.56
 $8.73
 
Per share market value at end of period $8.15
 $7.96
 $8.15
 $7.96
 
Total return (1) (5.42)% 3.25% 2.01% (0.82)% 
Common shares outstanding at beginning of period 29,466,768
 29,466,768
 29,466,768
 29,466,768
 
Common shares outstanding at end of period 29,466,768
 29,466,768
 29,466,768
 29,466,768
 
Net assets at beginning of period $319,157,787
 $329,580,431
 $325,829,394
 $356,807,103
 
Net assets at end of period $313,698,299
 $323,866,469
 $313,698,299
 $323,866,469
 
Average net assets (2) $318,305,291
 $326,522,054
 $320,109,788
 $335,051,091
 
Ratio of net investment income to average net assets (3) 7.47 % 7.57% 7.06% 7.53 % 
Ratio of total expenses to average net assets (excluding base management fee waiver and insurance recovery) (3) 7.86 % 8.54% 7.56% 8.46 % 
Ratio of net expenses to average net assets (3) 7.86 % 8.54% 7.46% 8.46 % 
Ratio of portfolio turnover to average investments at fair value 7.39 % 8.12% 26.60% 23.12 % 
Weighted average outstanding debt (4) $275,584,273
 $297,089,437
 $269,448,668
 $304,125,103
 
Average debt per share (5) $9.35
 $10.08
 $9.14
 $10.32
 
_______________
  Three months ended
December 31, 2017		 Three months ended
December 31, 2016
Net asset value at beginning of period $9.97
 $11.06
Net investment income (5) 0.15
 0.20
Net unrealized appreciation (depreciation) on investments and secured borrowings (5) 0.06
 (0.18)
Net realized gain (loss) on investments (5) (0.15) 0.01
Distributions to stockholders (5) (0.19) (0.23)
Net asset value at end of period $9.84
 $10.86
Per share market value at beginning of period $8.80
 $8.56
Per share market value at end of period $8.40
 $8.71
Total return (1) (2.40)% 4.37%
Common shares outstanding at beginning of period 29,466,768
 29,466,768
Common shares outstanding at end of period 29,466,768
 29,466,768
Net assets at beginning of period $293,636,434
 $325,829,394
Net assets at end of period $289,943,716
 $319,924,168
Average net assets (2) $293,615,733
 $322,852,759
Ratio of net investment income to average net assets (3) 6.14 % 7.23%
Ratio of total expenses to average net assets (3) 8.51 % 7.29%
Ratio of net expenses to average net assets (3) 8.36 % 6.98%
Ratio of portfolio turnover to average investments at fair value 22.79 % 10.51%
Weighted average outstanding debt (4) $269,289,409
 $271,725,061
Average debt per share (5) $9.14
 $9.22
Asset coverage ratio 214.13 % 224.65%
(1)Total return equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming dividend reinvestment prices obtained under the Company's DRIP. Total return is not annualized during interim periods.
(2)Calculated based upon the weighted average net assets for the period.
(3)Periods less than twelve monthsInterim periods are annualized.
(4)Calculated based upon the weighted average of loans payable for the period.
(5)Calculated based upon weighted average shares outstanding for the period.

Note 13. Commitments and Contingencies

SEC Examination and Investigation
On March 23, 2016, the Division of Enforcement of the Securities and Exchange Commission (the “SEC”"SEC") sent document subpoenas and document-preservation notices to the Company, FSAM, FSCO GP LLC - General Partner of Fifth Street Opportunities Fund, L.P. (“FSOF”), and Fifth Street Finance Corp. (“FSC”).OCSL. The subpoenas sought production of documents relating to a variety of issues principally related to the activities of FSM, including those raised in an ordinary-course examination of the Investment AdviserFSM by the SEC’s Office of Compliance Inspections and Examinations that began in October 2015, and in certain previously disclosed FSCOCSL and FSAM securities class actions and FSCOCSL derivative actions. The subpoenas were issued pursuant to a formal order of private investigation captioned In the Matter of the Fifth Street Group of Companies, No. HO-12925, dated March 23, 2016, which addresses (among other things) (i) the valuation of the Company's portfolio companies and investments, (ii) the expenses allocated or charged to the Company and FSC,OCSL, (iii) FSOF’s trading in the securities of publicly traded business-development companies, (iv) statements to the board of directors, other representatives of pooled investment vehicles, investors, or prospective investors concerning the fair value of the Company's portfolio companies or investments as well as expenses allocated or charged to the Company and FSC,OCSL, (v) various issues relating to adoption and implementation of policies and procedures under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), (vi) statements and/or
FIFTH STREET SENIOR FLOATING RATE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


potential omissions in the entities’ SEC filings, (vii) the entities’ books, records, and accounts and whether they fairly and accurately reflected the entities’ transactions and dispositions of assets, and (viii) several other issues relating to corporate books
OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


and records. The formal order cites various provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Advisers Act, as well as rules promulgated under those Acts, as the bases of the investigation. The subpoenaed Fifth Street entities areCompany is cooperating with the Division of Enforcement investigation, havehas produced requested documents, and havehas been communicating with Division of Enforcement personnel.
During the three months ended December 31, 2016, the Company received insurance reimbursements related The Investment Adviser is not subject to previously incurred legal professional fees of approximately $0.3 million.these subpoenas.
Off-Balance Sheet Arrangements
The Company may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of its portfolio companies. As of June 30,December 31, 2017 and September 30, 2016,2017, off-balance sheet arrangements consisted of $47.4$39.5 million and $52.8$43.5 million, respectively, of unfunded commitments to provide debt and equity financing to certain of the Company's portfolio companies. Such commitments are subject to the portfolio companies' satisfaction of certain financial and nonfinancial covenants and may involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Consolidated Statements of Assets and Liabilities.
A summary of the compositionlist of unfunded commitments by investment (consisting of revolvers, term loans and FSFR Glick JV Subordinated Notes and LLC equity interests) as of June 30,December 31, 2017 and September 30, 20162017 is shown in the table below:
 June 30, 2017 September 30, 2016 December 31, 2017 September 30, 2017
FSFR Glick JV LLC $16,382,494
 $16,382,494
 $15,864,217
 $16,159,368
MHE Intermediate Holdings 8,190,816
 —
 6,749,698
 6,749,698
Triple Point Group Holdings, Inc. 4,968,590
 4,968,590
 4,968,590
 4,968,590
Motion Recruitment Partners LLC 2,900,000
 2,900,000
Asset International 2,500,000
 —
PowerPlan, Inc. 2,100,000
 2,100,000
Impact Sales, LLC 1,078,555
 1,078,125
Ministry Brands, LLC 927,693
 1,857,967
Valet Merger Sub, Inc. 833,333
 833,333
Internet Pipeline, Inc. 800,000
 800,000
Metamorph US 3, LLC (1) 720,000
 720,000
4 Over International, LLC 68,452
 68,452
BeyondTrust Software, Inc. 3,605,000
 3,605,000
 —
 3,605,000
All Web Leads, Inc. 3,458,537
 3,458,537
Motion Recruitment Partners LLC 2,900,000
 2,900,000
PowerPlan, Inc. 2,100,000
 2,100,000
Metamorph US 3, LLC 1,200,000
 1,800,000
Impact Sales, LLC 1,078,125
 —
Executive Consulting Group, Inc. 800,000
 800,000
 —
 800,000
Internet Pipeline, Inc. 800,000
 800,000
Sailpoint Technologies, Inc. —
 300,000
Systems Inc. 600,000
 —
 —
 600,000
My Alarm Center, LLC 372,599
 1,212,472
Valet Merger Sub, Inc. 333,333
 333,333
Sailpoint Technologies, Inc. 300,000
 200,000
OBHG Management Services, LLC 100,000
 100,000
Ministry Brands, LLC 100,000
 —
Accruent, LLC 85,000
 85,000
4 Over International, LLC 68,452
 68,452
TIBCO Software, Inc. —
 5,300,000
Baart Programs, Inc. —
 1,000,000
Legalzoom.com, Inc. —
 2,607,018
Teaching Strategies, LLC —
 2,400,000
Dynatect Group Holdings, Inc. —
 1,800,000
TrialCard Incorporated —
 850,000
Total $47,442,946
 $52,770,896
 $39,510,538
 $43,540,533
_______ 
(1) This investment was on cash non-accrual status as of December 31, 2017 and September 30, 2017.

Note 14. Subsequent Events
The Company's management evaluatesevaluated subsequent events through the date of issuance of the Consolidated Financial Statements. There have been no subsequent events that occurred during such period that would require disclosure in, or would be required to be recognized in, the Consolidated Financial Statements as of and for the ninethree months ended JuneDecember 31, 2017, except as discussed below.
Dividend Declaration
On February 5, 2018, the Company’s Board of Directors declared a quarterly dividend of $0.14 per share, payable on March 30, 2017.2018 to stockholders of record on March 15, 2018.
Asset Purchase AgreementChange in Investment Policy
Effective January 19, 2018, the Company was no longer subject to a policy to invest, under normal market conditions, at least 80% of the value of its net assets (plus borrowings for investment purposes) in floating rate senior loans.
Citibank Facility Amendment
FIFTH STREET SENIOR FLOATING RATE CORP.OAKTREE STRATEGIC INCOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


On July 13, 2017, the Investment Adviser entered into an asset purchase agreement (the “Purchase Agreement”), with Oaktree Capital Management, L.P. (“Oaktree”) and, for certain limited purposes, FSAM, and Fifth Street Holdings L.P. Upon closing of the transactions contemplated by the Purchase Agreement (the “Transaction”), Oaktree would become the investment adviser to each of the Company and Fifth Street Finance Corp. (“FSC”) and Oaktree would pay gross cash consideration of $320 million to the Investment Adviser. The closing of the Transaction would result in an assignment for purposes of the 1940 Act of the current investment advisory agreement between the Company and the Investment Adviser and, as a result, its immediate termination.
The closing of the Transaction is conditioned on, among other things: (i) the approval of a new investment advisory agreement between the Company and Oaktree by the Company’s stockholders; (ii) the approval of a new investment advisory agreement by the stockholders of FSC; (iii) the election to the Company’s Board of Directors of five new directors by the Company’s stockholders; (iv) the election to the board of directors of FSC of five new directors by FSC’s stockholders; (v) the approval of the Transaction by the stockholders of FSAM; and (vi) the receipt of any required regulatory and other approvals. The Company has scheduled a special meeting of its stockholders for September 7, 2017 to consider a proposal to approve a new investment advisory agreement between the Company and Oaktree and, contingent upon approval of such proposal, the election of five new director nominees to the Company’s board of directors. Beneficial owners holding approximately 26.9% of the Company’s outstanding stock, including Leonard M. Tannenbaum, the chief executive officer of the Investment Adviser, and a subsidiary of FSAM have agreed to vote in favor of the proposals at the special meeting and take certain other actions at the direction of Oaktree.
In connection with the Transaction and due to a closing condition related to the election of five new directors, on July 13, 2017, each of Messrs. Bernard D. Berman, James Castro-Blanco, Richard P. Dutkiewicz, Alexander C. Frank and Jeffrey R. Kay executed resignation letters pursuant to which each will resign as a member of the Company’s Board of Directors contingent upon and effective as of the closing of the Transaction. In addition, each of Mr. Berman, the Company’s Chief Executive Officer, Mr. Steven Noreika, the Company’s Chief Financial Officer, and Ms. Kerry Acocella, the Company’s Secretary and Chief Compliance Officer, is expected to resign from his or her respective roles as officers of the Company effective upon closing of the Transaction.
In connection with the Transaction, each of the Company and GF Equity Funding, in their capacity as members of Glick JV, consented to the assignment by FSC CT of the administrative and loan services agreement between Glick JV and FSC CT to Oaktree Fund Administration, LLC, an affiliate of Oaktree, effective upon the closing of the Transaction.
Citibank Amendment
In connection with the Transaction, on July 13, 2017,January 31, 2018, the Company entered into an amendment (the “Citibank Amendment”) to its revolving credit facility (the “Citibank facility”) that amends theAmended and Restated Loan and Security Agreement dated as of January 15, 2015, by and among the Company, as the collateral manager and as the seller,with OCSI Senior Funding II LLC (formerly FS Senior Funding II LLC,LLC), the Company’s wholly-owned, special purpose financing subsidiary, as the borrower, the lenders from time to time party thereto, Citibank, N.A., as administrative agent, and Wells Fargo Bank, National Association, as collateral agent (the “Restated Citibank N.A., as the sole lender (as amended, the “Citibank Agreement”Facility”). Under the
The Restated Citibank Amendment, certain eventsFacility permits up to $100 million of default that would result from the closing of the Transaction are waived and the ability to borrow amountsborrowings. Borrowings under the Restated Citibank facility for investment was revisedFacility are subject to requirecertain customary advance rates and accrue interest at a rate equal to LIBOR plus 1.70% per annum on broadly syndicated loans and LIBOR plus 2.25% per annum on all other eligible loans during the consentreinvestment period. Following termination of the lenders prior to the closing of the Transaction and completion of satisfactory due diligence by the lenders on Oaktree. In addition, the Citibank Amendment provides that if the closing of the Transaction does not occur by December 31, 2017, the reinvestment period, borrowings under the Restated Citibank Facility accrue interest at rates equal to LIBOR plus 3.50% per annum and LIBOR plus 4.00% per annum during the subsequent two years, respectively. In addition, for the duration of the reinvestment period there is a non-usage fee payable of 0.50% per annum on the undrawn amount under the Restated Citibank facility would terminateFacility. The non-usage fee is increased pursuant to a formula if, after the ramp up period, the advances outstanding on the Restated Citibank Facility do not exceed 70% of the aggregate commitments by lenders.
The reinvestment period under the Restated Citibank Facility ends January 30, 2021 and the final maturity date is January 31, 2023. The Restated Citibank Facility requires the Company would be required to pay down any amounts outstanding under the Citibank facility as set forth in the Citibank Amendment.comply with certain affirmative and negative covenants and other customary requirements for similar credit facilities.








Schedule 12-14
Fifth Street Senior Floating Rate Corp.Oaktree Strategic Income Corporation
Schedule of Investments in and Advances to Affiliates
NineThree months ended June 30,December 31, 2017
Portfolio Company/Type of Investment (1) Amount of
Interest,
Fees or
Dividends
Credited in
Income (2)		 Fair Value
at October  1, 2016		 Gross
Additions (3)		 Gross
Reductions (4)		 
Fair Value at 
June 30, 2017
  Cash Interest Rate Industry Principal Net Realized Gain (Loss) Amount of
Interest,
Fees or
Dividends
Credited in
Income (2)		 Fair Value
at October  1, 2017		 Gross
Additions (3)		 Gross
Reductions (4)		 
Fair Value at 
December 31, 2017
 % of Total Net Assets
Control Investments                            
FSFR Glick JV LLC            Multi-sector holdings               
Subordinated Note, LIBOR+8% cash due 10/20/2021 $4,250,910
 $56,885,646
 $4,963,382
 $(234,622) $61,614,406
 9.23% $64,524,032
 $—
 $1,493,848
 $57,606,674
 $295,151
 $(721,175) $57,180,650
 19.7%
87.5% LLC equity interest (5) (232,772) 6,431,021
 —
 (6,431,021) —
   —
 —
 —
 —
 —
 —
 —%
Total Control Investments $4,018,138
 $63,316,667
 $4,963,382
 $(6,665,643) $61,614,406
 $64,524,032
 $—
 $1,493,848
 $57,606,674
 $295,151
 $(721,175) $57,180,650
 19.7%
                         
Affiliate Investments                         
Ameritox Ltd.(6)           Healthcare services               
First Lien Term Loan, LIBOR+5% (1% floor) cash 3% PIK due 4/11/2021 $505,782
 $6,342,286
 $2,118,168
 $(16,553) $8,443,901
 6.69% $8,302,941
 $28
 $—
 $935,913
 $75,916
 $(1,320) $1,010,509
 0.3%
3,309,873.6 Class A Preferred Units —
 3,626,150
 169,172
 (460,951) 3,334,371
   —
 —
 —
 —
 —
 —
 —%
327,393.6 Class B Preferred Units —
 358,679
 198,597
 (557,276) —
   —
 —
 —
 —
 —
 —
 —%
1,007.36 Class A Units —
 2,679,343
 —
 (2,679,343) —
   —
 —
 —
 —
 —
 —
 —%
Total Affiliate Investments $505,782
 $13,006,458
 $2,485,937
 $(3,714,123) $11,778,272
 $8,302,941
 $28
 $—
 $935,913
 $75,916
 $(1,320) $1,010,509
 0.3%
          
Total Control & Affiliate Investments $4,523,920
 $76,323,125
 $7,449,319
 $(10,379,766) $73,392,678
 $72,826,973
 $28
 $1,493,848
 $58,542,587
 $371,067
 $(722,495) $58,191,159
 20.1%

This schedule should be read in connection with the Company's Consolidated Financial Statements, including the Consolidated Schedules of Investments and Notes to the Consolidated Financial Statements.
______________________
(1)The principal amount and ownership detail asare shown in the Company's Consolidated Schedules of Investments.
(2)Represents the total amount of interest, fees and dividends credited to income for the portion of the yearquarter an investment was included in the Control or Affiliate categories.
(3)Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest (net of non-accrual amounts), and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation as well as the movement of an existing portfolio company into this category or out of a different category.
(4)Gross reductions include decreases in the cost basis of investment resulting from principal payments or sales and exchanges of one or more existing securities for one or more new securities. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category.
(5)Together with GF Equity Funding, the Company co-invests through FSFRthe Glick JV. FSFRThe Glick JV is capitalized as transactions are completed and all portfolio and investment decisions in respect to FSFRthe Glick JV must be approved by the FSFR Glick JV investment committee consisting of representatives of the Company and GF Equity Funding (with approval from a representative of each required).
(6)This investment was on cash non-accrual status as of December 31, 2017.



Schedule 12-14
Fifth Street Senior Floating Rate Corp.Oaktree Strategic Income Corporation
Schedule of Investments in and Advances to Affiliates
NineThree months ended June 30,December 31, 2016


Portfolio Company/Type of Investment (1) Amount of
Interest,
Fees or
Dividends
Credited in
Income (2)		 Fair Value
at October  1, 2015		 Gross
Additions (3)		 Gross
Reductions (4)		 
Fair Value at 
June 30, 2016
  Cash Interest Rate Industry Principal Net Realized Gain (Loss) Amount of
Interest,
Fees or
Dividends
Credited in
Income (2)		 Fair Value
at October  1, 2016		 Gross
Additions (3)		 Gross
Reductions (4)		 
Fair Value at 
December 31, 2016
 % of Total Net Assets
Control Investments                              
FSFR Glick JV LLC            Multi-sector holdings               
Subordinated Note, LIBOR+8% cash due 10/20/2021 $3,681,941
 $52,603,346
 $10,831,408
 $(5,172,304) $58,262,450
 8.50% $64,005,755
 $—
 $1,395,436
 $56,885,646
 $4,859,827
 $—
 $61,745,473
 19.3%
87.5% equity interest (5) 2,012,500
 4,553,575
 3,651,781
 (3,024,574) 5,180,782
87.5% LLC equity interest (5) —
 —
 187,420
 6,431,021
 —
 (6,431,021) —
 —%
Total Control Investments $5,694,441
 $57,156,921
 $14,483,189
 $(8,196,878) $63,443,232
 $64,005,755
 $—
 $1,582,856
 $63,316,667
 $4,859,827
 $(6,431,021) $61,745,473
 19.3%
                         
Affiliate Investments                         
Ameritox Ltd.           Healthcare services               
First Lien Term Loan, LIBOR+5% (1% floor) cash 3% PIK due 4/11/2021 $130,653
 $—
 $6,351,124
 $(12,592) $6,338,532
 6.00% $6,436,100
 $—
 $150,056
 $6,342,286
 $93,814
 $—
 $6,436,100
 2.0%
3,309,873.6 Class A Preferred Units —
 —
 3,456,979
 —
 3,456,979
 —
 —
 —
 3,626,150
 169,172
 —
 3,795,322
 1.2%
327,393.6 Class B Preferred Units —
 —
 341,945
 —
 341,945
 —
 —
 —
 358,679
 16,733
 —
 375,412
 0.1%
1,007.36 Class A Units —
 —
 5,935,698
 (2,551,834) 3,383,864
 —
 —
 —
 2,679,343
 —
 (1,415,004) 1,264,339
 0.4%
Total Affiliate Investments $130,653
 $—
 $16,085,746
 $(2,564,426) $13,521,320
 $6,436,100
 $—
 $150,056
 $13,006,458
 $279,719
 $(1,415,004) $11,871,173
 3.7%
          
Total Control & Affiliate Investments $5,825,094
 $57,156,921
 $30,568,935
 $(10,761,304) $76,964,552
 $70,441,855
 $—
 $1,732,912
 $76,323,125
 $5,139,546
 $(7,846,025) $73,616,646
 23.0%

This schedule should be read in connection with the Company's Consolidated Financial Statements, including the Consolidated Schedules of Investments and Notes to the Consolidated Financial Statements.
______________________
(1)The principal amount and ownership detail asare shown in the Company's Consolidated Schedules of Investments.
(2)Represents the total amount of interest, fees and dividends credited to income for the portion of the yearquarter an investment was included in the Control or Affiliate categories.
(3)Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on Investmentsinvestments and accrued PIK interest (net of non-accrual amounts), and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation as well as the movement of an existing portfolio company into this category or out of a different category.
(4)Gross reductions include decreases in the cost basis of investment resulting from principal payments or sales and exchanges of one or more existing securities for one or more new securities. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category.
(5)Together with GF Equity Funding, the Company co-invests through FSFRthe Glick JV. FSFRThe Glick JV is capitalized as transactions are completed and all portfolio and investment decisions in respect to FSFRthe Glick JV must be approved by the FSFR Glick JV investment committee consisting of representatives of the Company and GF Equity Funding (with approval from a representative of each required).




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

our future operating results and dividenddistribution projections;
the ability of Oaktree Capital Management, L.P., or Oaktree or our Investment Adviser, to reposition our portfolio and to implement our Investment Adviser’s future plans with respect to our business;
our business prospects and the prospects of our portfolio companies;
the impact of the investments that we expect to make;
the ability of our portfolio companies to achieve their objectives;
our expected financings and investments;
the adequacy of our cash resources and working capital;
the timing of cash flows, if any, from the operations of our portfolio companies; and
the cost or potential outcome of any litigation to which we may be a party.
In addition, words such as "anticipate," "believe," "expect," "seek," "plan," "should," "estimate," "project"“anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and "intend"“intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in "Item“Item 1A. Risk Factors"Factors” in our annual report on Form 10-K for the year ended September 30, 20162017 and elsewhere in this quarterly report on Form 10-Q.
Other factors that could cause actual results to differ materially include:
 
changes in the economy, financial markets and political environment;
risks associated with possible disruption in our operations or the economy generally due to terrorism or natural disasters;
the timing of any assignment of the current investment advisory agreement with Fifth Street Management LLC, or the Investment Adviser, and whether and when the new investment advisory agreement with Oaktree Capital Management, L.P., or Oaktree, will become effective;
future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our operating areas, particularly with respect to business development companies or regulated investment companies, or RICs; and
other considerations that may be disclosed from time to time in our publicly disseminated documents and filings.
We have based the forward-looking statements included in this quarterly report on Form 10-Q on information available to us on the date of this quarterly report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the Securities and Exchange Commission, or the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
Except as otherwise specified, references to the "Company," "we," "us,"“Company,” “we,” “us,” and "our,"“our,” refer to Fifth Street Senior Floating Rate Corp.Oaktree Strategic Income Corporation and its consolidated subsidiaries.
All amounts are in dollars, except share amounts, percentages and as otherwise indicated.
Business Overview
We are a specialty finance company that isdedicated to providing customized capital solutions for middle-market companies in both the syndicated and private placement markets. We are a closed-end, externally managed, non-diversified management investment company. We havecompany that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, or the 1940 Act. WeIn addition, we have qualified and elected to be treated as a RIC under the Internal Revenue Code of 1986, as amended, or the Code, for tax purposes.
OurAs of October 17, 2017, we are externally managed by Oaktree, a subsidiary of Oaktree Capital Group, LLC, or OCG, a global investment objective ismanager specializing in alternative investments, pursuant to maximize our portfolio's total returnan investment advisory agreement between us and the Investment Adviser, or the New Investment Advisory Agreement. Oaktree Fund Administration, LLC, or Oaktree Administrator or OFA, also provides certain administrative and other services necessary for us to operate pursuant to an administration agreement, or the New Administration Agreement. Prior to October 17, 2017, we were externally managed and advised by generatingFifth Street Management LLC, or FSM or the Former Adviser, and we were named Fifth Street Senior Floating Rate Corp.
We seek to generate a stable source of current income from our debt investments while seekingminimizing the risk of principal loss and, to preserve our capital.a lesser extent, capital appreciation by providing innovative first-lien financing solutions to companies across a wide variety of industries. We invest primarilyin

companies across a variety of industries that typically possess business models we expect to be resilient in the future with underlying fundamentals that will provide strength in future downturns. We intend to deploy capital across credit and economic cycles with a focus on long-term results, which we believe will enable us to build lasting partnerships with financial sponsors and management teams. Under normal market conditions, through January 18, 2018, at least 80% of the value of our net assets plus borrowings for investment purposes will be invested in floating rate senior secured loans, includingwhich include both first lien, unitranche and second lien secured debt instruments, that pay interest at rates which are determined periodically onfinancings. Effective January 19, 2018, the basisCompany is no longer subject to this policy. We invest in unsecured loans, including subordinated loans, issued by private middle-market companies and, to a lesser extent, senior and subordinated loans issued by public companies and equity investments.
Our Investment Adviser intends to reposition our portfolio in the near-term in order to (1) rotate out of a small number of investments that it views as challenged, (2) focus on increasing the size of our core private investments and (3) supplement the portfolio with broadly syndicated and select privately placed loans. We expect that our Investment Adviser will focus on middle-market companies, which we define as companies with enterprise values of between $100 million and $750 million. Going forward, we expect our portfolio to include primarily first lien floating base lending rate madesenior secured financings. We expect to private middle market companies whose debt istarget investments of $10 million to $20 million, on average, although we may invest more or less in certain portfolio companies. We generally invest in securities that are rated below investment grade by rating agencies or that

would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as “high yield” and “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.
Since becoming our investment adviser, Oaktree has performed a comprehensive review of our portfolio and categorized our portfolio into core investments, non-core performing investments and non-accrual investments. Certain additional information on such categorization and our portfolio composition will be included in our investor presentation to be filed with the SEC.
Oaktree also intends to rotate us out of approximately $84 million of investments it has identified as non-core investments and investments with spreads over LIBOR of less than 4.0%. Over time, Oaktree intends to modestly increase our investments in second lien secured financings to approximately 10%, at fair value, of our portfolio. Oaktree will seek to redeploy capital from realization of existing investments into Oaktree-originated investments with higher yields.
During the three months ended December 31, 2017, the integration of our operational infrastructure, including accounting, valuation, compliance and information technology processes and systems, into the Oaktree platform was completed, and we believe that we will realize synergies and cost savings, including from trade settlement and internal audit functions, as a result of this integration.
Business Environment and Developments
The opportunity set in credit is still dominated by the search for yield as central banks in Japan and Europe continue their accommodative monetary policies. This glut of capital is resulting in significant inflows into sub-investment grade credit from investors, including private equity sponsors, seeking higher spreads as investment grade and highly rated sub-investment grade credit trade at close-to-historically tight levels.
During the quarter ended December 31, 2017, the spread on the BAML High Yield Single B Index ranged between 3.34% and 3.99% and was 3.69% as of December 31, 2017. In addition, during the quarter ended December 31, 2017, the Credit Suisse Leveraged Loan Index spread ranged between 3.70% and 3.88% and was 3.75% as of December 31, 2017. The weighted average annual yield on our portfolio of 7.2% as of December 31, 2017 compares favorably in the current environment.
We also have an investmentbelieve that the fundamentals of middle-market companies remain strong, which drove the highest lending level in a joint venturethree years. In this environment, we believe attractive risk-adjusted returns can be achieved by investing in companies that investscannot efficiently access traditional debt capital markets. We believe that the Company has the resources and experience to source, diligence and structure investments in similar types of loans. We may also invest in senior unsecured loans issued by private middle marketthese companies and is well placed to a lesser extent, subordinated loans issued by private middle market companies, senior and subordinated loans issued by public companies and equity investments.generate attractive returns for investors.
We are externally managed
New Investment Advisory Agreement with Oaktree
Upon the closing of the transactions, or the Transaction, contemplated by the investment adviser, a subsidiary ofAsset Purchase Agreement, or the Purchase Agreement, by and among Oaktree, our Former Adviser and, for certain limited purposes, Fifth Street Asset Management Inc., or FSAM, a publicly traded alternative asset manager, pursuant to an investment advisory agreement. FSC CT LLC, or FSC CT, a subsidiary of our investment adviser, also provides certain administrative and other services necessary for us to operate.
Asset Purchase Agreement
On July 13, 2017, the Investment Adviser, entered into an asset purchase agreement, or the Purchase Agreement, with Oaktree and, for certain limited purposes, FSAM, the indirect, partial owner of the Investmentour Former Adviser, and Fifth Street Holdings L.P. Upon closing, the direct, partial owner of the transactions contemplated by the Purchase Agreement, or the Transaction,our Former Adviser, on October 17, 2017, Oaktree would becomebecame the investment adviser to each of Oaktree Specialty Lending Corporation, or OCSL, and us, and Fifth Street Finance Corp., or FSC, and Oaktree would paypaid gross cash consideration of $320 million to the Investmentour Former Adviser. The closing of the Transaction would resultresulted in an assignment for purposes of the 1940 Act of the currentour investment advisory agreement between us andwith FSM, or the Former Investment AdviserAdvisory Agreement, and, as a result, its immediate termination. The material terms of the services to be provided under the New Investment Advisory Agreement, other than the fee structure, are substantially the same as the Former Investment Advisory Agreement, except that services are provided by Oaktree. See “Note 11. Related Party Transactions-New Investment Advisory Agreement” and “-Administrative Services” in the notes to the accompanying Consolidated Financial Statements.
TheIn order to ensure that the Transaction complied with Section 15(f) of the 1940 Act, Oaktree and our Former Adviser agreed to certain conditions. First, for a period of three years after the closing of the Transaction, is conditioned on, among other things: (i) the approval of a new investment advisory agreement between us and Oaktree by our stockholders; (ii) the approval of a new investment advisory agreement by the stockholders of FSC; (iii) the election to our Board of Directors of five new directors by our stockholders; (iv) the election to the board of directors of FSC of five new directors by FSC’s stockholders; (v) the approvalat least 75% of the Transaction by the stockholders of FSAM; and (vi) the receipt of any required regulatory and other approvals. We have scheduled a special meeting of our stockholders for September 7, 2017 to consider a proposal to approve a new investment advisory agreement between us and Oaktree and, contingent upon approval of such proposal, the election of five new director nominees to our board of directors. Beneficial owners holding approximately 26.9% of the Company’s outstanding stock, including Leonard M. Tannenbaum, the chief executive officer of the Investment Adviser, and a subsidiary of FSAM have agreed to vote in favor of the proposals at the special meeting and take certain other actions at the direction of Oaktree.
In connection with the Transaction and due to a closing condition related to the election of five new directors, on July 13, 2017, each of Messrs. Bernard D. Berman, James Castro-Blanco, Richard P. Dutkiewicz, Alexander C. Frank and Jeffrey R. Kay executed resignation letters pursuant to which each will resign as a membermembers of our Board of

Directors contingent upon and effectivemust not be interested persons of Oaktree or our Former Adviser. Second, an “unfair burden” must not be imposed on us as a result of the closing of the Transaction. In addition, each of Mr. Berman, our Chief Executive Officer, Mr. Steven Noreika, our Chief Financial Officer, and Ms. Kerry Acocella, our Secretary and Chief Compliance Officer, is expected to resign from hisTransaction or her respective roles as officers of us effective upon closing ofany express or implied terms, conditions or understandings applicable thereto during the Transaction.
In connection with the Transaction, we and GF Equity Funding, in their capacity as members of Glick JV, consented to the assignment by FSC CT of the administrative and loan services agreement between Glick JV and FSC CT to Oaktree Fund Administration, LLC, an affiliate of Oaktree, effective upontwo-year period after the closing of the Transaction.
Critical Accounting Policies
Basis of Presentation

Our Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. In the opinion of management, all adjustments of a normal recurring nature considered necessary for the fair presentation of the Consolidated Financial Statements have been made. All intercompany balances and transactions have been eliminated. We are an investment company following the accounting and reporting guidance in Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 946, FinancialServices-Investment Companies, or ASC 946.
Investment Valuation
We are required to report our investments that are not publicly traded or for which current market values are not readily available at fair value. The fair value is deemed to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
We value our investments in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820, which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A liability's fair value is defined as the amount that would be

paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. ASC 820 prioritizes the use of observable market prices derived from such prices over entity-specific inputs. Where observable prices or inputs are not available or reliable, valuation techniques are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments' complexity.

Hierarchical levels, defined by ASC 820 and directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:follow:

Level 1 - Unadjusted, quoted prices in active markets for identical assets or liabilities atas of the measurement date.

Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data at the measurement date for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
In certain cases, theIf inputs used to measure fair value may fall into different levels of the fair value hierarchy, established by ASC 820. In such cases, an investment's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. This includes investment securities that are valued using "bid" and "ask" prices obtained from independent third party pricing services or directly from brokers. These investments are generallymay be classified as Level 3 because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities or may require adjustments for investment-specific factors or restrictions.
Financial instruments with readily available quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. As such, our investment adviser's capital markets groupInvestment Adviser obtains and analyzes readily available market quotations provided by independent pricing services for all of our senior secured debt investments for which quotations are available. In determining the fair value of a particular investment, pricing services use observable market information, including both binding and non-binding indicative quotations.
Our investment adviserInvestment Adviser evaluates the prices obtained fromquotations provided by independent pricing services based on available market information and company specific data that could affect the credit quality and/or fair value of the investment. Investments for which market quotations are readily available may be valued at such market quotations. In order to validate market quotations, our investment adviserInvestment Adviser looks at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. Our investment adviserInvestment Adviser does not adjust the prices unless it has a reason to believe any such market quotations are not reflective of the fair value of an investment. Examples of events that would cause market quotations to not reflect fair value could include cases when a security trades infrequently causing a quoted purchase or sale price to become stale or in the event of a "fire sale" by a distressed seller. In these instances, we value such investments by using the valuation procedure that it useswe use with respect to assets for which market quotations are not readily available (as discussed below).

If the quotation provided by the pricing service is based on only one or two market sources, we perform additional procedures to corroborate such information, which may include the market yield approachtechnique discussed below and a quantitative and qualitative assessment of the credit quality and market trends affecting the portfolio company.
We perform detailed valuations of our debt and equity investments for which market quotations are not readily available or are deemed not to represent fair value of the investments. We typically use three different valuation techniques. The first valuation technique is the transaction precedent approach,technique, which utilizes recent or expected future transactions of the investment to determine fair value, to the extent applicable. The second valuation technique is an analysis of the enterprise value, or EV, of the portfolio company. EV means the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time. The EV analysis is typically performed to determine (i) the value of equity investments, to determine if(ii) whether there is credit impairment for debt investments and to determine(iii) the value for debt investments that we are deemed to control under the 1940 Act. To estimate the enterprise valueEV of a portfolio company, the investment adviserInvestment Adviser analyzes various factors, including but not limited to, the portfolio company’s historical and projected financial results, macroeconomic impacts on the company, and competitive dynamics in the company’s industry. The investment adviserInvestment Adviser also utilizes some or all of the following information based on the individual circumstances of the portfolio company in order to reach its estimate of a portfolio company’s enterprise value,

including:company: (i) valuations of comparable public companies, (ii) recent sales of private and public comparable companies in similar industries or having similar business or earnings characteristics, (iii) purchase price multiples as a multiple of their earnings or cash flow, (iv) the portfolio company’s ability to meet its forecasts and its business prospects, (v) a discounted cash flow analysis, whereby future expected cash flows of the portfolio company are discounted to determine a present value using estimated discount rates (typically a weighted average cost of capital based on costs of debt and equity consistent with current market conditions), (vi) estimated liquidation or collateral value of the portfolio company's assets and (vii) offers from third parties to buy the portfolio company. We may probability weight potential sale outcomes with respect to a portfolio company due to thewhen uncertainty that exists as of the valuation date. The third valuation technique is a market yield approach,technique, which is typically performed for non-credit impaired debt investments. To determine fair value using aIn the market yield approach,technique, a current price is imputed for the investment based upon an assessment of the expected market yield for a similarly structured investment with a similar level of risk. In the market yield approach,risk, and we consider the current contractual interest rate, the capital structure and other terms of the investment relative to risk of the company and the specific investment. A key determinant of risk, among other things, is the leverage through the investment relative to the EV of the portfolio company. As debt investments held by us are substantially illiquid with no active transaction market, we depend on primary market data, including newly funded transactions and industry specific market movements, as well as secondary market data with respect to high yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable.
In accordance with ASC 820-10, certain investments that qualify as investment companies in accordance with ASC 946 may be valued using net asset value as a practical expedient for fair value. Consistent with FASB guidance under ASC 820, these investments are excluded from the hierarchical levels.
We estimate the fair value of privately held warrants using a Black Scholes pricing model, which includes an analysis of various factors and subjective assumptions, including but not limited to, the current stock price (by analyzing the portfolio company's operating performance and financial condition and general market conditions)using an EV analysis as described above), the expected period until exercise, expected volatility of the underlying stock price, expected dividends and the risk freerisk-free rate. Changes in the subjective input assumptions can materially affect the fair value estimates.
Our Board of Directors undertakes a multi-step valuation process each quarter in connection with determining the fair value of our investments:
The quarterly valuation process begins with each portfolio company or investment being initially valued by our investment adviser'sInvestment Adviser’s valuation team in conjunction with the investment adviser'sInvestment Adviser’s portfolio management team and capital markets teams;investment professionals responsible for each portfolio investment;
•Preliminary valuations are then reviewed and discussed with management of our investment adviser;Investment Adviser;
Separately, independent valuation firms engaged by our Board of Directors prepare valuations of our investments, on a selected basis, for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment, and submit the reports to us and provide such reports to our investment adviserInvestment Adviser and the Audit Committee of our Board of Directors;
The investment adviserInvestment Adviser compares and contrasts its preliminary valuations to the valuations of the independent valuation firms and prepares a valuation report for the Audit Committee of our Board of Directors;Committee;
The Audit Committee of our Board of Directors reviews the preliminary valuations with the portfolio managers of the investment adviser,our Investment Adviser, and our investment adviserInvestment Adviser responds and supplements the preliminary valuations to reflect any discussions between our investment adviserInvestment Adviser and the Audit Committee;
The Audit Committee of our Board of Directors makes a recommendation to our full Board of Directors regarding the fair value of the investments in our portfolio; and
Our Board of Directors discusses valuations and determines the fair value of each investment in our portfolio.
The fair value of our investments at June 30,as of December 31, 2017 and September 30, 20162017 was determined in good faith by our Board of Directors. Our Board of Directors has authorized the engagement of independent valuation firms to provide valuation assistance. Weand will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of a portion of our portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter.quarter, and the Board of Directors may reasonably rely on that

assistance. As of June 30,December 31, 2017, 29.4%77.7% of our portfolio at fair value was valued either based on market quotations, the transactions precedent approach or by independent valuation firms. The percentage of our portfolio valued by independent valuation firms may vary from period to period based on the availability of market quotations for our portfolio investments during the respective periods. However, our Board of Directors is ultimately and solely responsible for the ultimate valuation of the portfolio investments at fair value as determined in good faith pursuant to our valuation policy and a consistently applied valuation process.

The percentages of our portfolio, at fair value, valued by independent valuation firms as of the end of each period during the current quarter and two preceding fiscal years were as follows:
As of December 31, 201454.1%
As of March 31, 2015 (1)32.1%
As of June 30, 201523.8%
As of September 30, 2015 (2)76.5%
As of December 31, 201529.3%
As of March 31, 201625.0%
As of June 30, 201632.0%
As of September 30, 2016 (2)73.5%
As of December 31, 201629.6%
As of March 31, 201730.1%
As of June 30, 201729.4%
__________
(1) The decrease from prior quarters is primarily related to the increased use of market quotations to value certain of our portfolio investments beginning in the quarter ended March 31, 2015.
(2) Valuations performed by independent valuation firms as of September 30, 2016 and 2015 were higher primarily due to additional year-end procedures related to portfolio investments that were valued using market quotations based on only one source.
As of June 30, 2017 and September 30, 2016,2017, approximately 94.5%88.7% and 92.2%92.1%, respectively, of our total assets represented investments in portfolio companies valued at prices equal to fair value.
Revenue Recognition
Interest and Dividend Income
Interest income, adjusted for accretion of original issue discount, or OID, is recorded on the accrual basis to the extent that such amounts are expected to be collected. We stop accruing interest on investments when it is determined that interest is no longer collectible. Investments that are expected to pay regularly scheduled interest in cash are generally placed on non-accrual status when there is reasonable doubt that principal or interest cash payments will be collected. Cash interest payments received on investments may be recognized as income or applied to principala return of capital depending upon management’s judgment. SuchA non-accrual investments areinvestment is restored to accrual status if past due principal and interest are paid in cash, and the portfolio company, in management’s judgment, the portfolio company is likely to continue timely payment of its remaining interest.obligations. As of June 30,December 31, 2017, there was one investmentwere three investments on which we had stopped accruing cash and/or payment in kind, or PIK, interest or OID income.
In connection with our investment in a portfolio company, we sometimes receive nominal cost equity that is valued as part of the negotiation process with the particular portfolio company. When we receive nominal cost equity, we allocate our cost basis in the investment between debt securities and the nominal cost equity at the time of origination. Any resulting discount from recording the loan, or otherwise purchasing a security at a discount, is accreted into interest income over the life of the loan.
We generally recognize dividend income on the ex-dividend date. Distributions received from equity investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, we will not record distributions from such equity investments as dividend income unless there are sufficient earnings at the portfolio company prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.
Fee Income
We receive a variety of fees in the ordinary course of business, including servicing, advisory, amendment, structuring and prepayment fees, which are classified as fee income and recognized as they are earned.
PIK Interest Income
Our loansinvestments in debt securities may contain contractual PIK interest provisions. The PIK interest, which represents contractually deferred interest added to the loan balance that is generally due at the end of the loan term, is generally recorded on the accrual basis to the extent such amounts are expected to be collected. We generally cease accruing PIK interest if there is insufficient value to support the accrual or if we do not expect the portfolio company to be able to pay all principal and interest due. Our decision to cease accruing PIK interest involves subjective judgments and determinations based on available information about a particular portfolio company, including whether the portfolio company is current with respect to its payment of principal and interest on

its loans and debt securities; monthly and quarterly financial statements and financial projections for the portfolio company; our assessment of the portfolio company's business development success, including product development, profitability and the portfolio company's overall adherence to its business plan;success; information obtained by us in connection with periodic formal update interviews with the portfolio company's management and, if appropriate, the private equity sponsor; and information about the general economic and market conditions in which the portfolio company operates. Based on this and other information, we determine whether to cease accruing PIK interest on a loan or debt security.security when it is determined that PIK interest is no longer collectible. Our determination to cease accruing PIK interest on a loan or debt security is generally made well before our full write-down of such loan or debt security when it is determined that PIK interest is no longer collectible.security. In addition, if it is subsequently determined that we will not be able to collect any previously accrued PIK interest, the fair value of our loans or debt securities would declinebe reduced by the amount of such previously accrued, but uncollectible, PIK interest. The accrual of PIK interest on our debt investments increases the recorded cost basisbases of these investments in our Consolidated Financial Statements and, as a result, increases the cost basisbases of these investments for purposes of computing the capital gains incentive fee payable by us to our investment adviser.
For a discussion of risks we are subject to as a result of our use of PIK interest in connection with our investments, see "Risk Factors — Risks Relating to Our Business and Structure — We may have difficulty paying our required distributions if we are required to recognize income for U.S. federal income tax purposes before or without receiving cash representing such income," "— We may in the future choose to pay distributions partly in our own stock, in which case you may be subject to tax in excess of the cash you receive" and "— Our incentive fee may induce our investment adviser to make speculative investments" in our annual report on Form 10-K for the year ended September 30, 2016. In addition, if it is subsequently determined that we will not be able to collect any previously accrued PIK interest, the fair value of our loans or debt securities would decline by the amount of such previously accrued, but uncollectible, PIK interest. The accrual of PIK interest on our debt investments increases the recorded cost basis of these investments both in our Consolidated Financial Statements and for purposes of computing the capital gains incentive fee payable by us to our investment adviser.Investment Adviser.
To maintain our status as a RIC, certain income from PIK interest mustmay be paid outrequired to be distributed to our stockholders as distributions even though we have not yet collected the cash and may never collect the cash relating to the PIK interest.do so. Accumulated PIK interest was $0.3$0.8 million and $0.1$0.5 million as of June 30,December 31, 2017 and September 30, 2016,2017, respectively. The net increases in loan balances as a result of contractual PIK arrangements are separately identified in our Consolidated Statements of Cash Flows.

Portfolio Composition
Our investments principally consist of senior loans in private middle marketmiddle-market companies and investments in FSFR Glick JV LLC, or together with its consolidated subsidiaries, FSFRthe Glick JV. OurAs of December 31, 2017, our senior loans arewere typically secured by a first or second lien on the assets of the portfolio company and generally have terms of up to seventen years (but an expected average life of between three and four years). We are currently focusingbelieve the environment for direct lending remains active, and, as a result, a number of our origination efforts on a prudent mixportfolio companies were able to refinance and repay their loans during the three months ended December 31, 2017.
During the three months ended December 31, 2017, we originated $136.2 million of first lieninvestment commitments in 17 new and second lien loans whichthree existing portfolio companies and funded $143.9 million of investments.
During the three months ended December 31, 2017, we believe will provide attractive risk-adjusted returns while maintaining adequate credit protection. The mix may change over time based on market conditionsreceived $71.3 million in connection with the full repayments and management's viewexits of where the best risk-adjusted returns are available.eight of our investments and an additional $90.1 million in connection with other paydowns and sales of investments.
A summary of the composition of our investment portfolio at cost and fair value as a percentage of total investments is shown in the following tables:
  June 30, 2017 September 30, 2016
Cost:    
Senior secured debt 86.14% 86.40%
Subordinated notes of FSFR Glick JV 10.85
 10.66
LLC equity interests of FSFR Glick JV 1.21
 1.18
Purchased equity 1.80
 1.76
Equity grants —
 —
Total 100.00% 100.00%

  December 31, 2017 September 30, 2017
Cost:    
Senior secured debt 85.97% 86.50%
Subordinated notes of Glick JV 11.04
 10.61
LLC equity interests of Glick JV 1.22
 1.18
Purchased equity 1.77
 1.71
Total 100.00% 100.00%
 June 30, 2017 September 30, 2016 December 31, 2017 September 30, 2017
Fair value:        
Senior secured debt 88.28% 87.58% 89.21% 89.53%
Subordinated notes of FSFR Glick JV 10.90
 9.92
LLC equity interests of FSFR Glick JV —
 1.12
Subordinated notes of Glick JV 10.56
 10.28
LLC equity interests of Glick JV —
 —
Purchased equity 0.82
 1.36
 0.23
 0.19
Equity grants —
 0.02
Total 100.00% 100.00% 100.00% 100.00%

The industry composition of our portfolio at cost and fair value as a percentage of total investments was as follows:
  June 30, 2017 September 30, 2016
Cost:    
 Internet software & services 20.33% 22.07%
 Healthcare services 12.31
 14.80
 Multi-sector holdings 12.06
 11.84
 Advertising 9.73
 8.06
 Diversified support services 6.19
 3.28
 Application software 5.74
 5.35
 Security & alarm services 3.68
 2.97
 IT consulting & other services 3.49
 1.47
 Research & consulting services 2.89
 2.85
 Specialized finance 2.60
 —
 Industrial machinery 2.18
 0.64
 Commercial printing 2.02
 0.98
 Integrated telecommunication services 1.92
 4.06
 Food retail 1.71
 1.15
 Data processing & outsourced services 1.66
 1.64
 Pharmaceuticals 1.54
 1.53
 Computer & Electronics Retail 1.26
 —
 Human resources & employment services 1.13
 —
 Personal products 1.11
 0.21
 Aerospace & defense 1.10
 —
 Environmental & facilities services 1.08
 1.06
 Food distributors 0.95
 0.95
 Specialty Stores 0.92
 —
 Casinos & gaming 0.84
 —
 Fertilizers & agricultural chemicals 0.55
 0.59
 Hypermarkets & super centers 0.51
 —
 Specialized consumer services 0.28
 3.76
 Computer hardware 0.22
 0.66
 Construction and engineering —
 0.98
 Education services —
 2.54
 Electronic equipment & instruments —
 1.82
 Diversified capital markets —
 1.45
 Wireless telecommunication services —
 0.95
 Restaurants —
 0.83
 Healthcare technology —
 0.81
 Oil & gas equipment & services —
 0.70
  100.00% 100.00%


 June 30, 2017 September 30, 2016 December 31, 2017 September 30, 2017
Fair value:

    
Cost:    
Internet software & services 20.35% 20.82% 21.35% 21.46%
Multi-sector holdings (1) 12.26
 11.79
Healthcare services 11.22
 14.64
 8.61
 8.41
Multi-sector holdings 10.90
 11.04
Advertising 9.66
 8.49
 5.88
 7.19
Diversified support services 6.54
 3.42
 4.13
 4.00
Human resources & employment services 3.94
 3.33
Integrated telecommunication services 2.90
 1.87
IT consulting & other services 2.74
 3.39
Aerospace & defense 2.64
 1.07
Specialized finance 2.62
 2.54
Communications equipment 2.54
 —
Research & consulting services 2.49
 1.14
Environmental & facilities services 2.42
 2.34
Oil & gas equipment & services 2.40
 2.32
Commercial printing 2.02
 1.96
Commodity chemicals 1.71
 —
Oil & gas exploration & production 1.70
 —
Alternative carriers 1.67
 —
Distributors 1.47
 2.14
Pharmaceuticals 1.45
 1.50
Trucking 1.40
 0.67
Security & alarm services 1.37
 1.33
Food retail 1.29
 1.66
Personal products 1.12
 1.08
Auto parts & equipment 1.00
 0.97
Data processing & outsourced services 0.99
 1.62
Household Products 0.86
 —
Healthcare distributors 0.85
 0.82
Specialized REITs 0.83
 —
Housewares & specialties 0.82
 0.79
Drug retail 0.69
 —
Industrial machinery 0.65
 2.06
Specialty stores 0.51
 1.38
General merchandise stores 0.31
 —
Specialized consumer services 0.28
 0.27
Application software 5.94
 5.65
 0.09
 5.59
Security & alarm services 3.90
 3.11
IT consulting & other services 3.65
 1.55
Research & consulting services 3.11
 2.99
Specialized finance 2.74
 —
Industrial machinery 2.28
 0.66
Commercial printing 2.15
 1.03
Integrated telecommunication services 2.02
 4.30
Food retail 1.82
 1.22
Data processing & outsourced services 1.74
 1.71
Pharmaceuticals 1.60
 1.57
Computer & Electronics Retail 1.34
 —
Human resources & employment services 1.18
 —
Personal products 1.17
 0.22
Aerospace & defense 1.16
 —
Environmental & facilities services 1.14
 1.14
Food distributors 0.99
 0.98
Specialty Stores 0.96
 —
Real estate services —
 2.02
Computer & electronics retail —
 1.22
Casinos & gaming 0.89
 —
 —
 0.82
Fertilizers & agricultural chemicals —
 0.54
Hypermarkets & super centers 0.52
 —
 —
 0.50
Fertilizers & agricultural chemicals 0.49
 0.59
Specialized consumer services 0.30
 3.93
Computer hardware 0.24
 0.68
 —
 0.21
Construction and engineering —
 1.01
Education services —
 2.67
Electronic equipment & instruments —
 1.90
Diversified capital markets —
 1.53
Restaurants —
 0.87
Healthcare technology —
 0.83
Wireless telecommunication services —
 0.74
Oil & gas equipment & services —
 0.71
 100.00% 100.00% 100.00% 100.00%
Portfolio Asset Quality
We employ a ranking system to assess and monitor the credit risk of our investment portfolio. We rank all debt investments on a scale from 1 to 4. The system is intended to reflect the performance of the borrower's business, the collateral coverage of the loan, and other factors considered relevant to making a credit judgment. We have determined that there should be an individual ranking assigned to each tranche of securities in the same portfolio company where appropriate. This may arise when the perceived risk of loss on the investment varies significantly between tranches due to their respective seniority in the capital structure.
Investment Ranking 1 is used for debt investments that are performing above expectations and/or capital gains are expected.

Investment Ranking 2 is used for debt investments that are performing substantially within our expectations, and whose risks remain materially consistent with the potential risks at the time of the original or restructured investment. All new debt investments are initially ranked 2.
Investment Ranking 3 is used for debt investments that are performing below our expectations and for which risk has materially increased since the original or restructured investment. The portfolio company may be out of compliance with debt covenants and may require closer monitoring. To the extent that the underlying agreement has a PIK interest provision, debt investments with a ranking of 3 are generally those on which we are not accruing PIK interest.
Investment Ranking 4 is used for debt investments that are performing substantially below our expectations and for which risk has increased substantially since the original or restructured investment. Debt investments with a ranking of 4 are those for which some loss of principal is expected and are generally those on which we are not accruing cash interest.
The following table shows the distribution of our investments on the 1 to 4 investment ranking scale at fair value as of June 30, 2017 and September 30, 2016:
Investment Ranking June 30, 2017 September 30, 2016(2) 
 Fair Value % of Portfolio Leverage Ratio Fair Value % of Portfolio Leverage Ratio 
1 $19,048,520
 3.40% 2.33
 $20,056,209
 3.59% 3.80
 
2 492,886,292
 87.93
 4.00
 519,618,113
 92.91
 4.20
 
3 40,703,150
 7.26
 NM
(1)12,440,322
 2.22
 NM
(1)
4 7,921,674
 1.41
 NM
(1)7,156,160
 1.28
 NM
(1)
Total $560,559,636
 100.00% 3.94
 $559,270,804
 100.00% 4.18
 
___________________________________
(1)Due to operating performance this ratio is not measurable and, as a result, is excluded fromThis industry includes our investment in the total portfolio calculation.Glick JV.


  December 31, 2017 September 30, 2017
Fair value:

    
 Internet software & services 21.64% 21.72%
 Multi-sector holdings (1) 10.56
 10.28
 Healthcare services 6.09
 5.27
 Advertising 5.91
 7.34
 Diversified support services 4.55
 4.40
 Human resources & employment services 4.27
 3.59
 Integrated telecommunication services 2.92
 2.03
 Aerospace & defense 2.87
 1.17
 Specialized finance 2.87
 2.79
 Research & consulting services 2.75
 1.25
 IT consulting & other services 2.74
 3.66
 Communications equipment 2.73
 —
 Environmental & facilities services 2.63
 2.55
 Oil & gas equipment & services 2.60
 2.51
 Commercial printing 2.21
 2.13
 Commodity chemicals 1.86
 —
 Oil & gas exploration & production 1.83
 —
 Alternative carriers 1.80
 —
 Pharmaceuticals 1.58
 1.61
 Distributors 1.56
 2.31
 Trucking 1.51
 0.73
 Security & alarm services 1.46
 1.42
 Food retail 1.41
 1.82
 Personal products 1.22
 1.18
 Auto parts & equipment 1.08
 1.03
 Data processing & outsourced services 1.08
 1.76
 Household products 0.93
 —
 Healthcare distributors 0.89
 0.88
 Specialized REITs 0.89
 —
 Housewares & specialties 0.88
 0.85
 Drug retail 0.74
 —
 Industrial machinery 0.68
 2.22
 Specialty stores 0.55
 1.46
 General merchandise stores 0.36
 —
 Specialized consumer services 0.31
 0.30
 Application software 0.04
 6.06
 Real estate services —
 2.19
 Computer & electronics retail —
 1.34
 Casinos & gaming —
 0.90
 Hypermarkets & super centers —
 0.51
 Fertilizers & agricultural chemicals —
 0.50
 Computer hardware —
 0.24
  100.00% 100.00%
___________________
(2)(1)Beginning as of December 31, 2016, we have revisedThis industry includes our investment ranking scale to include only debt investments. Accordingly, in order to make the table comparative, we revised the investment ranking table as of September 30, 2016 to exclude equity investments.Glick JV.
We may from time to time modify the payment terms of our investments, either in response to current economic conditions and their impact on certain of our portfolio companies or in accordance with tier pricing provisions in certain loan agreements. Such modified terms may include increased PIK interest provisions and reduced cash interest rates. Any modifications to our loan agreements may limit the amount of interest income that we recognize from the modified investments, which may, in turn, limit our ability to make distributions to our stockholders. As of each of June 30, 2017 and September 30, 2016, we had modified the payment terms of our investments in five portfolio companies.


Loans and Debt Securities on Non-Accrual Status
As of each of JuneDecember 31, 2017 and September 30, 2017, September 30, 2016 and June 30, 2016, there was one investmentwere three investments on which we stopped accruing cash and/or PIK interest or OID income.
The percentages of our debt investments at cost and fair value by accrual status as of JuneDecember 31, 2017 and September 30, 2017 September 30, 2016 and June 30, 2016 were as follows:
 June 30, 2017 September 30, 2016 June 30, 2016 December 31, 2017 September 30, 2017
 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio		 Cost % of Debt
Portfolio		 Fair
Value		 % of Debt
Portfolio
Accrual $557,719,818
 97.48% $552,637,962
 98.59% $563,757,229
 96.74% $552,114,644
 98.72% $601,521,703
 98.75% $583,433,721
 99.79% $543,893,491
 95.95% $533,828,329
 98.82% $564,231,285
 96.02% $553,084,120
 98.88%
PIK non-accrual (paying) (1) 14,411,438
 2.52
 7,921,674
 1.41
 —
 —
 —
 —
 7,605,257
 1.25
 1,200,000
 0.21
Cash non-accrual (nonpaying) (2) —
 —
 —
 —
 19,027,017
 3.26
 7,156,160
 1.28
 —
 —
 —
 —
PIK non-accrual (1) —
 —
 —
 —
 —
 —
 —
 —
Cash non-accrual (2) 22,949,434
 4.05
 6,351,585
 1.18
 23,381,863
 3.98
 6,292,551
 1.12
Total $572,131,256
 100.00% $560,559,636
 100.00% $582,784,246
 100.00% $559,270,804
 100.00% $609,126,960
 100.00% $584,633,721
 100.00% $566,842,925
 100.00% $540,179,914
 100.00% $587,613,148
 100.00% $559,376,671
 100.00%
  __________________
(1)PIK non-accrual status is inclusive of other non-cash income, where applicable.
(2)Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.


The non-accrual status of our portfolio investments as of June 30, 2017, September 30, 2016 and June 30, 2016 was as follows:
June 30, 2017September 30, 2016June 30, 2016
Answers Corporation (2)—Cash non-accrual (1)PIK non-accrual (1)
Metamorph US 3, LLCPIK non-accrual (1)——
 __________________
(1)PIK non-accrual status is inclusive of other non-cash income, where applicable. Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.
(2)As of June 30, 2017, we no longer held the first and second lien term loans in this investment. As of September 30, 2016, our investments in both the first and second lien term loans of the Answers Corporation were on cash non-accrual status. As of June 30, 2016, only our investment in the second lien term loan of the Answers Corporation was on PIK non-accrual status.
Income non-accrual amounts for the three and nine months ended June 30, 2017 and June 30, 2016 are presented in the following table.
  Three months ended
June 30, 2017		 Three months ended
June 30, 2016		 Nine months ended
June 30, 2017		 Nine months ended
June 30, 2016
Cash interest income $36,512
 $50,277
 $871,220
 $1,008,423
PIK interest income 71,636
 —
 215,489
 —
OID income 3,814
 13,816
 83,979
 41,447
Total $111,962
 $64,093
 $1,170,688
 $1,049,870
FSFR Glick JV LLC
In October 2014, we entered into a limited liability company, or LLC, agreement with GF Equity Funding 2014 LLC, or GF Equity Funding, to form FSFRthe Glick JV. On April 21, 2015, FSFR Glick JV began investing in senior secured loans of middle marketmiddle-market companies. We co-invest in these securities with GF Equity Funding through FSFRthe Glick JV. FSFRThe Glick JV is managed by a four person Boardboard of Directors,directors, two of whom are selected by us and two of whom are selected by GF Equity Funding. FSFRThe Glick JV is capitalized as transactions are completed, and portfolio decisions and investment decisions in respect of FSFRthe Glick JV must be approved by anthe Glick JV investment committee, of FSFR Glick JV consisting of one representative ofselected by us and one representative ofselected by GF Equity Funding (with approval from a representative of each required). The members provide capital to FSFRthe Glick JV in exchange for LLC equity interests, and we and GF Debt Funding 2014 LLC, or GF Debt Funding, an entity advised by affiliates of GF Equity Funding, provide capital to FSFRthe Glick JV in exchange for subordinated notes, or the Subordinated Notes. As of June 30,December 31, 2017 and September 30, 2016,2017, we and GF Equity Funding owned 87.5% and 12.5%, respectively, of the outstanding LLC equity interests, and we and GF Debt Funding owned 87.5% and 12.5%, respectively, of the Subordinated Notes. FSFRThe Glick JV is not an "eligible portfolio company" as defined in section 2(a)(46) of the 1940 Act.
We have determined that FSFR Glick JV is an investment company under ASC 946; however, in accordance with such guidance, we will generally not consolidate our investment in a company other than a wholly-owned investment company subsidiary or a controlled operating company whose business consists of providing services to us. Accordingly, we do not consolidate our noncontrolling interest in FSFR Glick JV.
As of June 30, 2017 and September 30, 2016, FSFR Glick JV had total assets of $145.2 million and $201.1 million, respectively. Our investment in FSFR Glick JV consisted of LLC equity interests and Subordinated Notes of $61.6 million in aggregate, at fair value as of June 30, 2017. As of September 30, 2016, our investment consisted of LLC equity interests and Subordinated Notes of $63.3 million in aggregate, at fair value. The Subordinated Notes are junior in right of payment to the repayment of temporary contributions made by us to fund investments of FSFR Glick JV that are repaid when GF Equity Funding and GF Debt Funding make their capital contributions and fund their Subordinated Notes, respectively. FSFR Glick JV's portfolio consisted of middle marketmiddle-market and other corporate debt securities of 2825 and 3623 "eligible portfolio companies" (as defined in sectionSection 2(a)(46) of the 1940 Act) as of June 30,December 31, 2017 and September 30, 2016,2017, respectively. The portfolio companies in FSFRthe Glick JV are in industries similar to those in which we may invest directly.
As of June 30, 2017 and September 30, 2016, FSFR Glick JV had total capital commitments of $100.0 million. $87.5 million of which was from us and the remaining $12.5 million from GF Equity Funding and GF Debt Funding. Approximately $81.3 million in aggregate commitments was funded as of June 30, 2017 and September 30, 2016, of which $71.1 million was from us. As of June 30, 2017 and September 30, 2016, we had commitments to fund Subordinated Notes to FSFR Glick JV of

$78.8 million, of which $14.7 million was unfunded. As of June 30, 2017 and September 30, 2016, we had commitments to fund LLC equity interests in FSFR Glick JV of $8.7 million, of which $1.6 million was unfunded.
Additionally, FSFRThe Glick JV has a senior revolving credit facility with Deutsche Bank AG, New York Branch, or the Deutsche Bank facility, with a stated maturity date of April 17, 2023, which permitted up to $200.0 million of borrowings as of both June 30,December 31, 2017 and September 30, 2016. Prior to June 29, 2017, this credit facility was with Credit Suisse AG, Cayman Islands Branch. On June 29, 2017, this credit facility was assigned to Deutsche Bank AG, New York Branch.2017. Borrowings under the Deutsche Bank facility are secured by all of the assets of FSFRthe Glick JV and all of the equity interests in FSFRthe Glick JV and bore interest at a rate equal to the 3-month London Interbank Offered Rate, or LIBOR, plus 2.5% per annum with no LIBOR floor as of June 30,December 31, 2017 and September 30, 2016.2017. Under the Deutsche Bank facility, $71.9 million and $124.6$56.9 million in borrowings were outstanding as of June 30,each of December 31, 2017 and September 30, 2016,2017.
As of December 31, 2017 and September 30, 2017, the Glick JV had total assets of $151.5 million and $126.7 million, respectively. Our investment in the Glick JV consisted of LLC equity interests and Subordinated Notes of $57.2 million in the aggregate at fair value as of December 31, 2017. As of September 30, 2017, our investment consisted of LLC equity interests and Subordinated Notes of $57.6 million in the aggregate at fair value. The Subordinated Notes are junior in right of payment to the repayment of temporary contributions made by us to fund investments of the Glick JV that are repaid when GF Equity Funding and GF Debt Funding make their capital contributions and fund their Subordinated Notes, respectively.
As of December 31, 2017 and September 30, 2017, the Glick JV had total capital commitments of $100.0 million. $87.5 million of which was from us and the remaining $12.5 million from GF Equity Funding and GF Debt Funding. Approximately $81.9 million and $81.6 million in aggregate commitments was funded as of December 31, 2017 and September 30, 2017, respectively, of which $71.7 million and $71.4 million, respectively, was from us. As of each of December 31, 2017 and September 30, 2017, we had commitments to fund Subordinated Notes to the Glick JV of $78.8 million, of which $14.2 million and $14.5 million, respectively, was unfunded. As of each of December 31, 2017 and September 30, 2017, we had commitments to fund LLC equity interests in the Glick JV of $8.7 million, of which $1.6 million was unfunded.

Below is a summary of FSFRthe Glick JV's portfolio, followed by a listing of the individual loans in FSFRthe Glick JV's portfolio as of June 30,December 31, 2017 and September 30, 2016:

2017:
  December 31, 2017 September 30, 2017
Senior secured loans (1) $128,805,001 $115,964,537
Weighted average current interest rate on senior secured loans (2) 7.02% 6.92%
Number of borrowers in Glick JV 25 23
Largest loan exposure to a single borrower (1) $8,597,150 $11,267,524
Total of five largest loan exposures to borrowers (1) $38,912,938 $42,833,696
  June 30, 2017 September 30, 2016
Senior secured loans (1) $135,539,080 $194,346,557
Weighted average current interest rate on senior secured loans (2) 6.97% 7.08%
Number of borrowers in FSFR Glick JV 28 36
Largest loan exposure to a single borrower (1) $11,286,839 $12,641,009
Total of five largest loan exposures to borrowers (1) $43,022,071 $49,318,344
__________
(1) At principal amount.
(2) Computed using the annual interest rate on accruing senior secured loans.


Glick JV Portfolio as of December 31, 2017
Portfolio Company Industry Investment Type Maturity Date Current Interest Rate (1)(4) Principal Cost Fair Value (2) Industry Investment Type Maturity Date Current Interest Rate (1)(4)  Cash Interest Rate (1) Principal Cost Fair Value (2)
Ameritox Ltd. (3)(5)  Healthcare services First Lien Term Loan 4/11/2021 LIBOR+5% (1% floor) cash 3% PIK $2,392,766
 $2,392,766
 $2,392,766
  Healthcare services First Lien Term Loan 4/11/2021 LIBOR+5% (1% floor) cash 3% PIK 6.69% $2,353,200
 $2,243,202
 $286,374
  Healthcare services 119,910.76 Class B Preferred Units 
 119,911
 —
  Healthcare services 119,910.76 Class B Preferred Units   
 119,911
 —
  Healthcare services 368.96 Class A Common Units 
 2,174,034
 —
  Healthcare services 368.96 Class A Common Units   
 2,174,034
 —
Total Ameritox Ltd. 2,392,766
 4,686,711
 2,392,766
   2,353,200
 4,537,147
 286,374
Beyond Trust Software, Inc. (3)  Application software First Lien Term Loan 9/25/2019 LIBOR+7% (1% floor) cash 11,286,839
 11,232,878
 11,258,621
Compuware Corporation (3)  Internet software & services First Lien Term Loan B3 12/15/2021 LIBOR+4.25% (1% floor) cash 6,295,858
 6,238,542
 6,350,947
  Internet software & services First Lien Term Loan B3 12/15/2021 LIBOR+4.25% (1% floor) cash 5.63% 6,263,981
 6,212,998
 6,312,934
Metamorph US 3, LLC (3)(5)  Internet software & services First Lien Term Loan 12/1/2020 LIBOR+6.5% (1% floor) cash 2% PIK 6,844,354
 6,647,537
 3,924,508
  Internet software & services First Lien Term Loan 12/1/2020 LIBOR+5.5% (1% floor) cash 2% PIK 7.07% 6,806,211
 6,306,815
 2,584,318
Motion Recruitment Partners LLC (3)  Diversified support services First Lien Term Loan 2/13/2020 LIBOR+6% (1% floor) cash 8,722,150
 8,722,150
 8,679,432
  Human resources & employment services First Lien Term Loan 2/13/2020 LIBOR+6% (1% floor) cash 7.57% 8,597,150
 8,597,146
 8,605,596
NAVEX Global, Inc. (3)  Internet software & services First Lien Term Loan 11/19/2021 LIBOR+4.75% (1% floor) cash 2,984,694
 2,974,579
 2,995,886
NAVEX Global, Inc.  Internet software & services First Lien Term Loan 11/19/2021 LIBOR+4.25% (1% floor) cash 5.82% 2,969,388
 2,960,727
 2,984,250
Air Newco LLC  IT consulting & other services First Lien Term Loan B 3/20/2022 LIBOR+5.5% (1% floor) cash 8,228,728
 8,208,051
 8,095,011
  IT consulting & other services First Lien Term Loan B 3/20/2022 LIBOR+5.5% (1% floor) cash 6.94% 8,139,577
 8,121,549
 8,088,704
TIBCO Software, Inc. (3)  Internet software & services First Lien Term Loan 12/4/2020 LIBOR+4.5% (1% floor) cash 3,534,319
 3,537,504
 3,558,300
CM Delaware LLC  Advertising First Lien Term Loan 3/18/2021 LIBOR+5.25% (1% floor) cash 2,080,538
 2,078,879
 1,921,897
  Advertising First Lien Term Loan 3/18/2021 LIBOR+5.25% (1% floor) cash 6.94% 2,069,786
 2,068,356
 2,018,041
New Trident Holdcorp, Inc. (3)  Healthcare services First Lien Term Loan B 7/31/2019 LIBOR+5.25% (1.25% floor) cash 2,023,994
 2,004,237
 1,696,107
Central Security Group, Inc. (3)  Specialized consumer services First Lien Term Loan 10/6/2020 LIBOR+5.625% (1% floor) cash 3,886,031
 3,890,747
 3,894,133
  Specialized consumer services First Lien Term Loan 10/6/2021 LIBOR+5.625% (1% floor) cash 7.19% 3,866,103
 3,870,229
 3,885,433
Auction.com, LLC (3) Internet software & services First Lien Term Loan 5/12/2019 LIBOR+5% (1% floor) cash 3,910,000
 3,900,642
 3,949,100
Aptos, Inc. (3) Data processing & outsourced services First Lien Term Loan B 9/1/2022 LIBOR+6.75% (1% floor) cash 7,940,000
 7,803,303
 7,860,600
 Data processing & outsourced services First Lien Term Loan B 9/1/2022 LIBOR+6.75% (1% floor) cash 8.44% 7,870,000
 7,747,832
 7,791,300
Vubiquity, Inc. Application software First Lien Term Loan 8/12/2021 LIBOR+5.5% (1% floor) cash 4,137,000
 4,107,835
 4,074,945
 Application software First Lien Term Loan 8/12/2021 LIBOR+5.5% (1% floor) cash 7.19% 4,116,000
 4,089,928
 4,085,130
American Seafoods Group LLC (3) Food distributors First Lien Term Loan 8/19/2021 LIBOR+5% (1% floor) cash 3,683,704
 3,670,899
 3,708,274
Worley Claims Services, LLC Internet software & services First Lien Term Loan 10/31/2020 LIBOR+8% (1% floor) cash 5,199,601
 5,182,383
 5,147,605
Poseidon Merger Sub, Inc. (3) Advertising Second Lien Term Loan 8/15/2023 LIBOR+8.5% (1% floor) cash 3,000,000
 2,930,789
 3,046,787
Novetta Solutions, LLC Diversified support services First Lien Term Loan 10/16/2022 LIBOR+5.75% (1% floor) cash 6,006,223
 5,943,606
 5,816,036
 Diversified support services First Lien Term Loan 10/16/2022 LIBOR+5% (1% floor) cash 6.70% 5,975,734
 5,918,766
 5,813,911
SHO Holding I Corporation Footwear First Lien Term Loan 10/27/2022 LIBOR+5% (1% floor) cash 6,402,500
 6,352,245
 6,418,506
 Footwear First Lien Term Loan 10/27/2022 LIBOR+5% (1% floor) cash 6.42% 6,370,000
 6,324,741
 6,147,050
Valet Merger Sub, Inc. (3) Environmental & facilities services First Lien Term Loan 9/24/2021 LIBOR+7% (1% floor) cash 3,930,000
 3,884,887
 3,964,993
 Environmental & facilities services First Lien Term Loan 9/24/2021 LIBOR+7% (1% floor) cash 8.57% 3,910,000
 3,870,466
 3,909,937
 Environmental & facilities services Incremental Term Loan 9/24/2021 LIBOR+7% (1% floor) cash 8.57% 1,024,850
 1,004,945
 1,024,833
Total Valet Merger Sub, Inc. (3)   4,934,850
 4,875,411
 4,934,770
RSC Acquisition, Inc. Insurance brokers First Lien Term Loan 11/30/2022 LIBOR+5.25% (1% floor) cash 3,940,204
 3,921,350
 3,900,802
 Insurance brokers First Lien Term Loan 11/30/2022 LIBOR+5.25% (1% floor) cash 6.94% 3,920,064
 3,897,948
 3,880,863
Integro Parent Inc. Insurance brokers First Lien Term Loan 10/31/2022 LIBOR+5.75% (1% floor) cash 4,926,424
 4,796,594
 4,938,740
 Insurance brokers First Lien Term Loan 10/31/2022 LIBOR+5.75% (1% floor) cash 7.13% 4,901,424
 4,784,962
 4,889,170
TruckPro, LLC Auto parts & equipment First Lien Term Loan 8/6/2018 LIBOR+5% (1% floor) cash 1,834,901
 1,833,006
 1,836,241
 Auto parts & equipment First Lien Term Loan 8/6/2018 LIBOR+5% (1% floor) cash 6.69% 1,811,634
 1,810,641
 1,813,409
Falmouth Group Holdings Corp. Specialty chemicals First Lien Term Loan 12/13/2021 LIBOR+6.75% (1% floor) cash 4,925,000
 4,882,719
 4,885,660
 Specialty chemicals First Lien Term Loan 12/13/2021 LIBOR+6.75% (1% floor) cash 8.44% 4,527,907
 4,491,387
 4,528,532
Sundial Group Holdings LLC Personal products First Lien Term Loan 10/19/2021 LIBOR+6.25% (1% floor) cash 3,750,000
 3,701,693
 3,774,781
Ancile Solutions, Inc. (3)  Internet software & services First Lien Term Loan 6/30/2021 LIBOR+7% (1% floor) cash 4,068,267
 4,018,077
 4,097,271
  Internet software & services First Lien Term Loan 6/30/2021 LIBOR+7% (1% floor) cash 8.69% 3,990,530
 3,947,582
 3,954,615
California Pizza Kitchen, Inc.  Restaurants First Lien Term Loan 8/23/2022 LIBOR+6% (1% floor) cash 4,962,500
 4,949,937
 4,969,745
  Restaurants First Lien Term Loan 8/23/2022 LIBOR+6% (1% floor) cash 7.57% 4,937,500
 4,925,607
 4,851,094
MHE Intermediate Holdings, LLC  Diversified support services First Lien Term Loan 3/11/2024 LIBOR+5% (1% floor) cash 4,239,375
 4,157,660
 4,205,862
MHE Intermediate Holdings, LLC (3)  Diversified support services First Lien Term Loan B 3/11/2024 LIBOR+5% (1% floor) cash 6.69% 4,218,125
 4,142,752
 4,218,125
  Diversified support services Delayed Draw Term Loan 3/11/2024 LIBOR+5% (1% floor) cash 403,110
 369,463
 403,110
  Diversified support services Delayed Draw Term Loan 3/11/2024 LIBOR+5% (1% floor) cash 6.69% 665,837
 633,517
 665,837
Total MHE International Holdings, LLC 4,642,485
 4,527,123
 4,608,972
Total MHE Intermediate Holdings, LLC   4,883,962
 4,776,269
 4,883,962
Chloe Ox Parent LLC (3)  Healthcare services First Lien Term Loan 12/14/2024 LIBOR+5% (1% floor) cash 6.64% 6,000,000
 5,940,000
 6,022,500
Gigamon Inc.  Systems software First Lien Term Loan 12/18/2024 LIBOR+4.5% (1% floor) cash 6.03% 6,000,000
 5,940,000
 5,970,000
Indivior Finance Sarl (3)  Pharmaceuticals First Lien Term Loan 12/19/2022 LIBOR+4.5% (1% floor) cash 6.11% 7,500,000
 7,462,500
 7,537,500
Tribe Buyer LLC (3)  Human resources & employment services First Lien Term Loan 2/16/2024 LIBOR+4.5% (1% floor) cash 5.68% 6,000,000
 5,985,000
 6,078,750
Asset International, Inc. (3)  Research & Consulting Services First Lien Term Loan 12/29/2024 LIBOR+4.5% (1% floor) cash 6.19% 4,000,000
 3,920,125
 3,920,000
Total Portfolio Investments $135,539,080
 $136,628,903
 $131,766,666
   $128,805,001
 $129,513,666
 $121,868,206

__________
(1) Represents the current interest rate as of June 30,December 31, 2017. All interest rates are payable in cash, unless otherwise noted.
(2) Represents the current determination of fair value as of June 30,December 31, 2017 utilizing a similar approachtechnique as us in accordance with ASC 820. However, the determination of such fair value is not included in our Board of Directors' valuation process described elsewhere herein.
(3) This investment is held by both us and FSFRthe Glick JV at June 30,as of December 31, 2017.
(4) The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, we have provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement.
(5) This investment was on PIKcash non-accrual status as of June 30,December 31, 2017. Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.



FSFR Glick JV Portfolio as of September 30, 20162017
Portfolio Company Industry Investment Type Maturity Date Current Interest Rate (1)(4) Principal Cost Fair Value (2)
 Ameritox Ltd. (3)  Healthcare services First Lien Term Loan 4/11/2021 LIBOR+5% (1% floor) cash 3% PIK $2,339,146
 $2,336,840
 $2,322,917
   Healthcare services 119,910.76 Class B Preferred Units     —
 119,911
 131,369
   Healthcare services 368.96 Class A Common Units     —
 2,174,034
 981,348
Total Ameritox Ltd.         2,339,146
 4,630,785
 3,435,634
 Answers Corporation (3) (5)  Internet software & services First Lien Term Loan 10/3/2021 LIBOR+5.25% (1% floor) cash 7,899,749
 7,636,708
 4,265,865
 Beyond Trust Software, Inc. (3)  Application software First Lien Term Loan 9/25/2019 LIBOR+7% (1% floor) cash 12,641,009
 12,554,571
 12,538,499
 Compuware Corporation (3)  Internet software & services First Lien Term Loan B1 12/15/2019 LIBOR+5.25% (1% floor) cash 7,392,405
 7,306,444
 7,420,127
 Metamorph US 3, LLC (3)  Internet software & services First Lien Term Loan 12/1/2020 LIBOR+6.5% (1% floor) cash 6,900,283
 6,808,009
 5,744,139
 Motion Recruitment Partners LLC (3)  Diversified support services First Lien Term Loan 2/13/2020 LIBOR+6% (1% floor) cash 9,125,000
 9,125,000
 9,099,254
 NAVEX Global, Inc. (3)  Internet software & services First Lien Term Loan 11/19/2021 LIBOR+4.75% (1% floor) cash 1,793,550
 1,779,633
 1,784,582
 Teaching Strategies, LLC  Education services First Lien Term Loan (3) 10/1/2019 LIBOR+5.5% (0.5% floor) cash 2,570,471
 2,567,575
 2,556,891
  Education services First Lien Delayed Draw Term Loan 10/1/2019 LIBOR+5.5% (0.5% floor) cash 6,840,000
 6,832,715
 6,803,695
 Total Teaching Strategies, LLC         9,410,471
 9,400,290
 9,360,586
 TrialCard Incorporated (3)  Healthcare services First Lien Term Loan 12/31/2019 LIBOR+4.5% (1% floor) cash 7,179,097
 7,144,396
 7,144,248
 Air Newco LLC  IT consulting & other services First Lien Term Loan B 3/20/2022 LIBOR+5.5% (1% floor) cash 8,291,864
 8,267,671
 7,960,189
 Fineline Technologies, Inc. (3)  Electronic equipment & instruments First Lien Term Loan 5/5/2017 LIBOR+5.5% (1% floor) cash 7,034,441
 7,010,963
 7,015,051
 LegalZoom.com, Inc. (3)  Specialized consumer services First Lien Term Loan 5/13/2020 LIBOR+7% (1% floor) cash 9,850,000
 9,672,034
 9,772,706
 GK Holdings, Inc.  IT consulting & other services First Lien Term Loan 1/20/2021 LIBOR+5.5% (1% floor) cash 3,438,750
 3,452,038
 3,412,959
 Vitera Healthcare Solutions, LLC  Healthcare technology Second Lien Term Loan 11/4/2021 LIBOR+8.25% (1% floor) cash 3,000,000
 2,958,409
 2,782,500
 TIBCO Software, Inc. (3)  Internet software & services First Lien Term Loan 12/4/2020 LIBOR+5.5% (1% floor) cash 2,304,900
 2,308,815
 2,277,114
 CM Delaware LLC  Advertising First Lien Term Loan 3/18/2021 LIBOR+5.25% (1% floor) cash 2,096,666
 2,094,658
 1,978,729
 New Trident Holdcorp, Inc. (3)  Healthcare services First Lien Term Loan B 7/31/2019 LIBOR+5.25% (1.25% floor) cash 2,041,357
 2,014,233
 1,755,567
 Central Security Group, Inc. (3)  Specialized consumer services First Lien Term Loan 10/6/2020 LIBOR+5.625% (1% floor) cash 5,909,774
 5,915,626
 5,776,805
Auction.com, LLC Internet software & services First Lien Term Loan 5/12/2019 LIBOR+5% (1% floor) cash 3,940,000
 3,926,700
 3,959,700
Aptos, Inc. (3) Data processing & outsourced services First Lien Term Loan B 9/1/2022 LIBOR+6.75% (1% floor) cash 8,000,000
 7,842,222
 7,920,000
Vubiquity, Inc. Application software First Lien Term Loan 8/12/2021 LIBOR+5.5% (1% floor) cash 4,168,500
 4,133,700
 4,147,658

Portfolio Company Industry Investment Type Maturity Date Current Interest Rate (1)(4) Principal Cost Fair Value (2) Industry Investment Type Maturity Date Current Interest Rate (1)(4)  Cash Interest Rate (1) Principal Cost Fair Value (2)
Too Faced Cosmetics, LLC (3) Personal products First Lien Term Loan B 7/7/2021 LIBOR+5% (1% floor) cash 642,692
 581,620
 645,155
American Seafoods Group LLC (3) Food distributors First Lien Term Loan 8/19/2021 LIBOR+5% (1% floor) cash 3,853,704
 3,837,366
 3,844,069
Worley Claims Services, LLC Internet software & services First Lien Term Loan 10/31/2020 LIBOR+8% (1% floor) cash 5,730,937
 5,707,511
 5,702,282
Ameritox Ltd. (3)(5)  Healthcare services First Lien Term Loan 4/11/2021 LIBOR+5% (1% floor) cash 3% PIK 6.33% $2,287,177
 $2,243,202
 $265,211
  Healthcare services 119,910.76 Class B Preferred Units     119,911
 —
  Healthcare services 368.96 Class A Common Units     2,174,034
 —
Total Ameritox Ltd.   2,287,177
 4,537,147
 265,211
Beyond Trust Software, Inc. (3)  Application software First Lien Term Loan 9/25/2019 LIBOR+7% (1% floor) cash 8.33% 11,267,524
 11,220,478
 11,267,116
Compuware Corporation (3)  Internet software & services First Lien Term Loan B3 12/15/2021 LIBOR+4.25% (1% floor) cash 5.49% 6,279,920
 6,225,992
 6,358,419
Metamorph US 3, LLC (3)(5)  Internet software & services First Lien Term Loan 12/1/2020 LIBOR+5.5% (1% floor) cash 2% PIK 6.74% 6,825,900
 6,477,372
 2,592,115
Motion Recruitment Partners LLC (3)  Human resources & employment services First Lien Term Loan 2/13/2020 LIBOR+6% (1% floor) cash 7.24% 8,659,650
 8,659,650
 8,659,223
NAVEX Global, Inc.  Internet software & services First Lien Term Loan 11/19/2021 LIBOR+4.25% (1% floor) cash 5.49% 2,977,041
 2,967,620
 2,988,205
Air Newco LLC  IT consulting & other services First Lien Term Loan B 3/20/2022 LIBOR+5.5% (1% floor) cash 6.82% 8,160,622
 8,141,224
 8,099,417
CM Delaware LLC  Advertising First Lien Term Loan 3/18/2021 LIBOR+5.25% (1% floor) cash 6.58% 2,075,162
 2,073,617
 2,064,786
New Trident Holdcorp, Inc. (3)  Healthcare services First Lien Term Loan B 7/31/2019 LIBOR+5.75% (1.25% floor) cash 7.08% 2,018,206
 2,000,877
 1,453,109
Central Security Group, Inc. (3)  Specialized consumer services First Lien Term Loan 10/6/2021 LIBOR+5.625% (1% floor) cash 6.86% 3,876,067
 3,880,408
 3,892,211
Aptos, Inc. (3) Data processing & outsourced services First Lien Term Loan B 9/1/2022 LIBOR+6.75% (1% floor) cash 8.08% 7,920,000
 7,790,262
 7,840,800
Vubiquity, Inc. Application software First Lien Term Loan 8/12/2021 LIBOR+5.5% (1% floor) cash 6.83% 4,126,500
 4,099,195
 4,095,551
Poseidon Merger Sub, Inc. (3) Advertising Second Lien Term Loan 8/15/2023 LIBOR+8.5% (1% floor) cash 3,000,000
 2,922,316
 3,039,954
 Advertising Second Lien Term Loan 8/15/2023 LIBOR+8.5% (1% floor) cash 9.81% 3,000,000
 2,933,633
 3,030,000
AccentCare, Inc. Healthcare services First Lien Term Loan 9/3/2021 LIBOR+5.75% (1% floor) cash 7,850,000
 7,773,386
 7,727,344
Novetta Solutions, LLC Diversified support services First Lien Term Loan 10/17/2022 LIBOR+5.75% (1% floor) cash 6,477,948
 6,392,100
 6,226,928
 Diversified support services First Lien Term Loan 10/16/2022 LIBOR+5% (1% floor) cash 6.34% 5,990,978
 5,932,073
 5,826,226
SHO Holding I Corporation Footwear First Lien Term Loan 10/27/2022 LIBOR+5% (1% floor) cash 6,451,250
 6,393,472
 6,443,186
 Footwear First Lien Term Loan 10/27/2022 LIBOR+5% (1% floor) cash 6.24% 6,386,250
 6,338,479
 6,306,422
Valet Merger Sub, Inc. (3) Environmental & facilities services First Lien Term Loan 9/24/2021 LIBOR+7% (1% floor) cash 3,960,000
 3,906,498
 4,026,826
 Environmental & facilities services First Lien Term Loan 9/24/2021 LIBOR+7% (1% floor) cash 8.24% 3,920,000
 3,877,655
 3,919,865
 Environmental & facilities services Incremental Term Loan 9/24/2021 LIBOR+7% (1% floor) cash 8.24% 1,027,425
 1,006,080
 1,027,390
Total Valet Merger Sub, Inc. (3)   4,947,425
 4,883,735
 4,947,255
RSC Acquisition, Inc. Insurance brokers First Lien Term Loan 11/30/2022 LIBOR+5.25% (1% floor) cash 3,970,390
 3,948,754
 3,950,538
 Insurance brokers First Lien Term Loan 11/30/2022 LIBOR+5.25% (1% floor) cash 6.58% 3,930,134
 3,912,198
 3,890,832
Integro Parent Inc. Insurance brokers First Lien Term Loan 10/31/2022 LIBOR+5.75% (1% floor) cash 4,963,924
 4,814,658
 4,889,465
 Insurance brokers First Lien Term Loan 10/31/2022 LIBOR+5.75% (1% floor) cash 7.06% 4,913,924
 4,790,511
 4,901,639
TruckPro, LLC Auto parts & equipment First Lien Term Loan 8/6/2018 LIBOR+5% (1% floor) cash 1,920,000
 1,916,612
 1,919,232
 Auto parts & equipment First Lien Term Loan 8/6/2018 LIBOR+5% (1% floor) cash 6.24% 1,823,268
 1,821,822
 1,825,054
Falmouth Group Holdings Corp. Specialty chemicals First Lien Term Loan 12/13/2021 LIBOR+6.75% (1% floor) cash 4,962,500
 4,912,596
 4,967,689
 Specialty chemicals First Lien Term Loan 12/13/2021 LIBOR+6.75% (1% floor) cash 8.08% 4,610,174
 4,572,990
 4,610,400
Sundial Group Holdings LLC Personal products First Lien Term Loan 10/19/2021 LIBOR+6.25% (1% floor) cash 3,900,000
 3,839,938
 3,954,402
Onvoy, LLC (3) Integrated telecommunication services First Lien Term Loan 4/29/2021 LIBOR+6.25% (1% floor) cash 7,406,250
 7,261,422
 7,386,738
Ancile Solutions, Inc. (3)  Internet software & services First Lien Term Loan 6/30/2021 LIBOR+7% (1% floor) cash 4,500,000
 4,433,644
 4,432,500
  Internet software & services First Lien Term Loan 6/30/2021 LIBOR+7% (1% floor) cash 8.33% 4,042,355
 3,995,621
 4,010,198
California Pizza Kitchen, Inc.  Restaurants First Lien Term Loan 8/23/2022 LIBOR+6% (1% floor) cash 7.24% 4,950,000
 4,938,077
 4,917,008
MHE Intermediate Holdings, LLC (3)  Diversified support services First Lien Term Loan B 3/11/2024 LIBOR+5% (1% floor) cash 6.33% 4,228,750
 4,150,304
 4,228,752
  Diversified support services Delayed Draw Term Loan 3/11/2024 LIBOR+5% (1% floor) cash 6.33% 667,510
 635,208
 667,510
Total MHE Intermediate Holdings, LLC   4,896,260
 4,785,512
 4,896,262
Total Portfolio Investments $194,346,557
 $194,624,798
 $188,708,220
   $115,964,537
 $116,978,493
 $108,737,459
__________
(1) Represents the current interest rate as of September 30, 2016.2017. All interest rates are payable in cash, unless otherwise noted.
(2) Represents the current determination of fair value as of September 30, 20162017 utilizing a similar approachtechnique as us in accordance with ASC 820. However, the determination of such fair value is not included in our Board of Directors' valuation process described elsewhere herein.

(3) This investment is held by both us and FSFRthe Glick JV atas of September 30, 2016.2017.
(4) The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, we have provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement.
(5) This investment was on cash non-accrual status as of September 30, 2016.2017. Cash non-accrual status is inclusive of PIK and other non-cash income, where applicable.

The cost and fair value of our aggregate investment in FSFRthe Glick JV held by us was $71.1$71.6 million and $61.6$57.2 million, respectively, as of June 30,December 31, 2017 and $71.1$71.3 million and $63.3$57.6 million, respectively, as of September 30, 2016.2017. The Subordinated Notes pay a weighted average interest rate of LIBOR plus 8.0% per annum. For the three and nine months ended June 30,December 31, 2017 weand December 31, 2016, the Company earned interest income of $1.5 million and $4.3$1.4 million, respectively, on ourits investment in the Subordinated Notes, respectively. For the three and nine months ended June 30, 2016, we earned interest income of $1.4 million and $3.7 million on our investment in the Subordinated Notes, respectively. We did not earn dividend income for the three months ended June 30, 2017 with respect to our LLC equity interests. We earned dividend income of $0.2 million for the nine months ended June 30, 2017 with respect to our LLC equity interests. In addition, we reversed $0.4 million of dividend income previously recorded in prior periods during the three and nine months ended June 30, 2017 with respect to our LLC equity interests since we determined that such dividend payments may no longer be collectible. We earned dividend income of $0.7 million and $2.0 million, respectively, for the three and nine months ended June 30, 2016 with respect to our LLC equity interests.Notes. The LLC equity interests are dividend producing to the extent there is residual cash to be distributed on a quarterly basis.

We did not earn any dividend income for the three months ended December 31, 2017 and earned dividend income of $0.2 million for the three months ended December 31, 2016 with respect to the Glick JV LLC equity interests.
Below is certain summarized financial information for FSFRthe Glick JV as of June 30,December 31, 2017 and September 30, 20162017 and for the three and nine months ended June 30,December 31, 2017 and June 30,December 31, 2016:
 June 30, 2017 September 30, 2016 December 31, 2017 September 30, 2017
Selected Balance Sheet Information:        
Investments in loans at fair value (cost June 30, 2017: $136,628,903; cost September 30, 2016: $194,624,798) $131,766,666
 $188,708,220
Receivable from secured financing arrangement at fair value (September 30, 2016 cost: $5,000,000) —
 4,985,425
Investments in loans at fair value (cost December 31, 2017: $129,513,666; cost September 30, 2017: $116,978,493) $121,868,206
 $108,737,459
Cash and cash equivalents 7,257,936
 980,605
 26,080,455
 13,891,899
Restricted cash 2,314,937
 3,343,303
 1,683,753
 2,249,575
Receivable from unsettled transactions 1,968,738
 952,591
Due from portfolio companies 22,500
 —
 —
 7,653
Other assets 1,862,916
 2,162,942
 1,859,067
 1,791,077
Total assets $145,193,693
 $201,133,086
 $151,491,481
 $126,677,663
        
Senior credit facility payable $71,881,939
 $124,615,636
 $56,881,939
 $56,881,939
Subordinated notes payable at fair value (proceeds June 30, 2017 and September 30, 2016: $73,149,434) 70,416,214
 65,012,167
Subordinated notes payable at fair value (proceeds December 31, 2017: $73,741,750; proceeds September 30, 2017: $73,404,435) 65,319,540
 65,836,199
Other liabilities 2,895,540
 4,196,688
 29,290,002
 3,959,525
Total liabilities $145,193,693
 $193,824,491
 $151,491,481
 $126,677,663
Members' equity —
 7,308,595
 —
 —
Total liabilities and members' equity $145,193,693
 $201,133,086
 $151,491,481
 $126,677,663

 Three months ended
June 30, 2017		 Three months ended
June 30, 2016		 Nine months ended
June 30, 2017		 Nine months ended
June 30, 2016		 Three months ended
December 31, 2017		 Three months ended
December 31, 2016
Selected Statements of Operations Information:            
Interest income $2,490,873
 $3,732,459
 $8,824,724
 $10,606,543
 $1,939,602
 $3,486,810
PIK interest income 18,010
 15,373
 53,620
 15,373
 —
 17,933
Fee income 31,496
 5,687
 150,328
 93,028
 32,802
 99,653
Total investment income 2,540,379
 3,753,519
 9,028,672
 10,714,944
 1,972,404
 3,604,396
Interest expense $2,722,468
 $2,850,832
 $8,274,454
 $7,895,486
 2,736,122
 2,795,065
Other expenses 47,636
 58,600
 181,656
 182,177
 38,146
 75,836
Total expenses (1) 2,770,104
 2,909,432
 8,456,110
 8,077,663
 2,774,268
 2,870,901
Net unrealized appreciation (depreciation) $(726,406) $4,030,887
 $(4,349,628) $2,170,718
 1,444,107
 (7,384,097)
Realized loss on investments (9,893) (3,098,475) (3,873,454) (3,098,475) (642,243) (32,601)
Net income (loss) $(966,024) $1,776,499
 $(7,650,520) $1,709,524
 $—
 $(6,683,203)
 __________
(1) There are no management fees or incentive fees charged at FSFRthe Glick JV.
FSFR
The Glick JV has elected to fair value the Subordinated Notes issued to the Company and GF Debt Funding under FASB ASC Topic 825, — Financial Instruments.Instruments - Fair Value Options. The subordinated notes are valued based on the total assets less the liabilities senior to the subordinated notes of FSFRthe Glick JV in an amount not exceeding par under the enterprise value approach.technique.
During the three and nine months ended June 30,December 31, 2017 and December 31, 2016, we did not sell any senior secured debt investments to FSFRthe Glick JV. During the three months ended June 30, 2016, we sold $18.2 million of senior secured debt investments at fair value to FSFR Glick JV in exchange for $18.2 million cash consideration. We realized a loss of $0.1 million on these transactions. During the nine months ended June 30, 2016, we sold $41.2 million of senior secured debt investments at fair value to FSFR Glick JV in exchange for $40.0 million cash consideration, $1.1 million of subordinated notes and $0.1 million of LLC equity interests. We realized a loss of $0.4 million on these transactions.


 Discussion and Analysis of Results and Operations
Results of Operations
The principal measure of our financial performance is the net increase (decrease) in net assets resulting from operations, which includes net investment income, (loss), net realized gain (loss) and net unrealized appreciation (depreciation). Net investment income is the difference between our income from interest, dividends, fees, and other investment income and total expenses. Net realized gain (loss) on investments and secured borrowings is the difference between the proceeds received from dispositions or other realizations of portfolio investments and secured borrowings and their stated costs. Net unrealized appreciation (depreciation) is the net change in the fair value of our investment portfolio and secured borrowings during the reporting period, including the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized.
Comparison of the three and nine months ended June 30,December 31, 2017 and June 30,December 31, 2016
Total Investment Income
Total investment income includes interest income on our investments, fee income and other investment income. Fee income consists principally of servicing, advisory, structuring, amendment and prepayment fees that we receive in connection with our debt investments. These fees are recognized as earned. Other investment income consists primarily of dividend income received from certain of our equity investments.
Total investment income for the three months ended June 30,December 31, 2017 and June 30,December 31, 2016 was $12.2$10.7 million and $13.1$11.6 million, respectively. For the three months ended June 30,December 31, 2017, this amount primarily consisted of $12.1$10.3 million of interest income from portfolio investments (which included $0.1$0.3 million of PIK interest) and $0.5$0.4 million of fee income, offset by a $0.4 million reversal of dividend income. For the three months ended June 30,December 31, 2016, this amount primarily consisted of $11.6$11.0 million of interest income from portfolio investments (which included $0.1 million of PIK interest), $0.8$0.4 million of fee income and $0.7$0.2 million of dividend and other income. The decrease of $0.9$0.8 million in our total investment income for the three months ended June 30,December 31, 2017, as compared to the three months ended June 30,December 31, 2016, was primarily attributable to a lower weighted average levelsannual yield on our debt investments and lower dividend income earned on our investment in the Glick JV. The weighted average annual yield on our debt investments as of outstanding debt investments.
TotalDecember 31, 2017, including the return on our subordinated note investment income forin the nine months ended June 30, 2017 and June 30, 2016Glick JV, was $34.8 million and $40.2 million, respectively. For the nine months ended June 30, 2017, this amount primarily consisted of $33.8 million of interest income from portfolio investments (which included $0.2 million of PIK interest) and $1.2 million of fee income. For the nine months ended June 30, 2016, this amount primarily consisted of $35.3 million of interest income from portfolio investments, $2.9 million of fee income and $2.0 million of dividend income. The decrease of $5.5 million in our total investment income for the nine months ended June 30, 2017,approximately 7.06%, as compared to the nine months ended June 30, 2016, was primarily attributable to lower average levels8.49% as of outstanding debt investments.December 31, 2016.
Expenses
Net expenses (expenses net of fee waivers and insurance recoveries) for the three months ended June 30,December 31, 2017 and June 30,December 31, 2016 were $6.2 million and $7.0$5.7 million, respectively. The decreaseincrease of $0.7$0.5 million in our net expenses for the three months ended June 30,December 31, 2017, as compared to the three months ended June 30,December 31, 2016, was primarily due to a $0.6$1.0 million decreaseincrease in professional fees due(net of insurance recoveries), $0.3 million increase in interest expense attributable to proxy-related matters.
Net expenses (expenses net of base management fee waivers and insurance recoveries) forhigher interest rates in the nine months ended June 30, 2017 and June 30, 2016 were $17.9 million and $21.3 million, respectively. The decrease of $3.4 million in our net expenses for the nine months ended June 30, 2017, as compared to the nine months ended June 30, 2016, was primarily due tocurrent quarter, partially offset by a $1.3$0.8 million decrease in Part I incentive fees payable to our investment adviser,Investment Adviser, which was attributable to a reduction of our interest-generating portfolio, and a $2.8 million decrease in professional fees (net of insurance recoveries) due to proxy-related matters, partially offset by a $1.1 million increase in interest expenseprimarily attributable to lower levels of outstanding debt inpre-incentive fee net investment income for the currentyear-over-year period.
Net Investment Income
As a result of the $0.9$0.8 million decrease in total investment income, offset by the $0.7$0.5 million decreaseincrease in net expenses, net investment income for the three months ended June 30,December 31, 2017 reflected an approximate $0.2$1.3 million decrease, as compared to the three months ended June 30,December 31, 2016.
As a result of the $5.5 million decrease in total investment income, offset by the $3.4 million decrease in net expenses, net investment income for the nine months ended June 30, 2017 reflected an approximate $2.0 million decrease, as compared to the nine months ended June 30, 2016.


Realized Gain (Loss) on Investments
Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption of portfolio investments and the cost basis of the investmentinvestments without regard to unrealized appreciation or depreciation previously recognized, and includes investments written-off during the period, net of recoveries. Realized losses may also be recorded in connection with the Company'sour determination that certain investments are considered worthless securities and/or meet the conditions for loss recognition per the applicable tax rules.
See Note 9 inFor the consolidated financial statements for more details regarding investment realization events for the ninethree months ended June 30,December 31, 2017, realized loss on investments and June 30, 2016.secured borrowings was $4.4 million, which was primarily attributable to the sale of our first lien term loan investment in New Trident Holdcorp, Inc. For the three months ended December 31, 2016, realized gain on investments and secured borrowings was $0.1 million.

Net Unrealized Appreciation (Depreciation) on Investments and Secured Borrowings
Net unrealized appreciation or depreciation is the net change in the fair value of our investments and secured borrowings during the reporting period, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.

Net unrealized appreciation on investments and secured borrowings was $1.7 million for the three months ended December 31, 2017, which was primarily driven by a $3.5 million reversal of previously recorded unrealized depreciation as a result of the sale of our first lien term loan investment in New Trident Holdcorp, Inc., partially offset by other write-downs across our investment portfolio.
See Note 9“Note 9. Realized Gains or Losses and Net Unrealized Appreciation or Depreciation on Investments” in the consolidated financial statementsConsolidated Financial Statements for more details regarding unrealized appreciation (depreciation) on investments and secured borrowings for the three and nine months ended June 30,December 31, 2017 and June 30,December 31, 2016.
Financial Condition, Liquidity and Capital Resources
Cash Flows
We have a number of alternatives available to fund our investment portfolio and our operations, including raising equity, increasing or refinancing debt and funding from operational cash flow. Additionally, to generate liquidity we may reduce investment size by syndicating a portion of any given transaction. We intend to continue to generate cash primarily from cash flows from operations, including interest earned and future borrowings. We may also from time to time issue securities in public or private offerings, which offerings will depend on future market conditions, funding needs and other factors. We intend to fund our future distribution obligations through operating cash flow or with funds obtained through future equity and debt offerings or credit facilities, as we deem appropriate.
For the nine months ended June 30, 2017, we experienced a net decrease in cash and cash equivalents of $0.5 million. During that period, $41.4 million of cash was provided by operating activities, primarily consisting of $182.5 million of principal payments and proceeds from the sale of investments and cash activities related to $16.9 million of net investment income, partially offset by cash used to fund $182.2 million of investments and net revolvers. During the same period, cash used by financing activities was $41.9 million, primarily consisting of $20.8 millionof net repayments under our credit facilities, $17.6 million of cash distributions paid to our stockholders and $5.0 million of repayments of secured borrowings.
For the nine months ended June 30, 2016, we experienced a net decrease in cash and cash equivalents of $26.4 million. During that period, $21.2 million of cash was provided by operating activities, primarily consisting of $254.8 million of principal payments, PIK payments and proceeds from the sale of investments and cash activities related to $19.0 million of net investment income, partially offset by cash used to fund $260.1 million of investments and net revolvers. During the same period, cash used by financing activities was $47.5 million, primarily consisting of $20.8 million of net repayments under our credit facilities, $19.3 million of cash distributions paid to our shareholders and $6.4 million of net repayments of notes payable.
As of June 30, 2017, we had $26.9 million of cash and cash equivalents (including $7.7 million of restricted cash), portfolio investments (at fair value) of $565.2 million, $2.9 million of interest, dividends and fees receivable, $12.0 million of net payables from unsettled transactions, $86.7 million of borrowings outstanding under our revolving credit facilities, $179.5 million of borrowings outstanding under our 2015 Debt Securitization (net of unamortized financing costs) and unfunded commitments of $47.4 million. Pursuant to the terms of the Citibank facility, we are restricted in terms of access to $2.4 million until such time as we submit required monthly reporting schedules. As of June 30, 2017, $5.2 million of cash held in connection with the 2015 Debt Securitization was restricted.

As of September 30, 2016, we had $28.8 million of cash and cash equivalents (including $9.0 million of restricted cash), portfolio investments (at fair value) of $573.6 million, $4.6 million of interest, dividends and fees receivable, $12.9 million receivables from unsettled transactions, $107.4 million of borrowings outstanding under our revolving credit facilities, $177.5 million of borrowings outstanding under our 2015 Debt Securitization (net of unamortized financing costs) and unfunded commitments of $52.8 million. Pursuant to the terms of the Citibank facility, we are restricted in terms of access to $3.5 million until such time as we submit required monthly reporting schedules. As of September 30, 2016, $5.5 million of cash held in connection with the 2015 Debt Securitization was restricted.


Other Sources of Liquidity
We intend to continue to generate cash primarily from cash flows from operations, including interest earned and future borrowings. We may also from time to time issue securities pursuant to a shelf registration statement or otherwise pursuant to private offerings. The issuance of debt or equity securities will depend on future market conditions, funding needs and other factors and there can be no assurance that any such issuance will occur or be successful. In the future, we may also securitize a portion of our investments to the extent permitted by applicable law and regulation. To securitize investments, we would likely create a wholly-owned subsidiary and contribute a pool of loans to the subsidiary. We would then sell interests in the subsidiary on a non-recourse basis to purchasers and we would retain all or a portion of the equity in the subsidiary. Our primary uses of funds are investments in our targeted asset classes and cash distributions to holders of our common stock. We generally expect to target a debt to equity ratio of 0.80x to 0.90x (i.e., one dollar of equity for each $0.80 to $0.90 of debt outstanding).
Although we expect tomay fund the growth of our investment portfolio through the net proceeds from future equity offerings, and issuances of senior securities or future borrowings to the extent permitted by the 1940 Act, our plans to raise capitaldo so may not be successful. In this regard, because our common stock has at times traded at a price below our then-current net asset value per share (which has primarily been the case for several years) and we are limited in our ability to sell our common stock at a price below net asset value per share, we may beare currently limited in our ability to raise equity capital.
In addition, we intendcapital absent stockholder approval to distribute at least 90% of our taxable income as dividends to our stockholders each taxable year in connection with satisfying the requirements applicable to entities subject to tax as RICs under Subchapter M of the Code. See "Regulated Investment Company Status and Distributions" below. Consequently, we may not have the funds or the ability to fund new investments, to make additional investments in our portfolio companies, to fund our unfunded commitments to portfolio companies or to repay borrowings. In addition, the illiquidity of our portfolio investments may make it difficult for us to sell these investments when desired and, if we are required to sell these investments, we may realize significantly less than their recorded value.
As a business development company, under the 1940 Act, we generally are not permitted to incur indebtedness unless immediately after such borrowing we have an asset coverage for total borrowings of at least 200% (i.e., the amount of debt may not exceed 50% of the value of our assets). This requirement limits the amount that we may borrow. As of June 30, 2017, we were in compliance with this asset coverage requirement. The amount of leverage that we employ will depend on our assessment of market conditions and other factors at the time of any proposed borrowing, such as the maturity, covenant package and rate structure of the proposed borrowings, our ability to raise funds through the issuance ofissue shares of our common stock at prices below the then-current net asset value per share.
For the three months ended December 31, 2017, we experienced a net increase in cash and cash equivalents of $4.4 million. During that period, $18.9 million of cash was provided by operating activities, primarily consisting of $161.4 million of principal payments and proceeds from the riskssale of suchinvestments and cash activities related to $4.5 million of net investment income, partially offset by cash used to fund $143.9 million of investments and net revolvers. During the same period, cash used by financing activities was $14.5 million, primarily consisting of $8.9 millionof net repayments under our credit facilities and $5.4 million of cash distributions paid to our stockholders.
For the three months ended December 31, 2016, we experienced a net increase in cash and cash equivalents of $16.4 million. During that period, $63.2 million of cash was provided by operating activities, primarily consisting of $66.7 million of principal payments and proceeds from the sale of investments and cash activities related to $5.9 million of net investment income, partially offset by cash used to fund $37.6 million of investments and net revolvers. During the same period, cash used by financing activities was $46.8 million, primarily consisting of $35.2 millionof net repayments under our credit facilities, $6.5 million of cash distributions paid to our shareholders and $5.0 million of repayments of secured borrowings.
As of December 31, 2017, we had $46.2 million of cash and cash equivalents (including $6.2 million of restricted cash), portfolio investments (at fair value) of $541.4 million, $2.7 million of interest, dividends and fees receivable, $45.1 million of net payables from unsettled transactions, $74.1 million of borrowings withinoutstanding under our revolving credit facilities, $177.8 million of borrowings outstanding (net of unamortized financing costs) under our $309.0 million debt securitization, or the context2015 Debt Securitization, and unfunded commitments of $39.5 million. Pursuant to the terms of the revolving credit facility with the lenders referred to therein, Citibank, N.A., as administrative agent, and Wells Fargo Bank, N.A., as collateral agent and custodian, or the Citibank facility, we are restricted in terms of access to $1.9 million until the occurrence of the periodic distribution dates and, in connection therewith, our submission of our investment outlook. Ultimately,required periodic reporting schedules and verifications of our compliance with the terms of the credit agreement. As of December 31, 2017, $4.3 million of cash held in connection with the 2015 Debt Securitization was restricted.


As of September 30, 2017, we only intendhad $43.0 million of cash and cash equivalents (including $7.4 million of restricted cash), portfolio investments (at fair value) of $560.4 million, $3.0 million of interest, dividends and fees receivable, $48.5 million of net payables from unsettled transactions, $83.0 million of borrowings outstanding under our revolving credit facilities, $177.8 million of borrowings outstanding under our 2015 Debt Securitization (net of unamortized financing costs) and unfunded commitments of $43.5 million. Pursuant to use leverage if the expected returns from borrowingterms of the Citibank facility, we are restricted in terms of access to make investments will exceed$2.0 million until the occurrence of the costperiodic distribution dates and, in connection therewith, our submission of such borrowing. Toour required periodic reporting schedules and verifications of our compliance with the extent we anticipate needing to raise additional capital from various sources, includingterms of the equity markets andcredit agreement. As of September 30, 2017, $5.4 million of cash held in connection with the securitization or other debt-related markets, we cannot assure you that we will be able to do so on favorable terms, if at all.

2015 Debt Securitization was restricted.
Significant Capital Transactions
The following table reflects the distributions per share that our Board of Directors has declared, including shares issued under our dividend reinvestment plan, or DRIP, on our common stock since October 1, 2015:2016:
Frequency Date Declared Record Date Payment Date Amount
per Share		 Cash Distribution DRIP Shares Issued (1) DRIP Shares Value Date Declared Record Date Payment Date Amount
per Share		 Cash Distribution DRIP Shares Issued (1) DRIP Shares Value
Monthly July 10, 2015 October 6, 2015 October 15, 2015 $0.075
 $2,101,445
 12,080 $108,563
 August 4, 2016 October 14, 2016 October 31, 2016 $0.075
 $2,183,023
 3,146 $26,985
Monthly July 10, 2015 November 5, 2015 November 16, 2015 0.075
 2,093,278
 13,269 116,730
 August 4, 2016 November 15, 2016 November 30, 2016 0.075
 2,183,100
 2,986 26,908
Monthly November 30, 2015 December 11, 2015 December 22, 2015 0.075
 2,115,444
 11,103 94,563
 October 19, 2016 December 15, 2016 December 30, 2016 0.075
 2,179,421
 3,438 30,586
Monthly November 30, 2015 January 4, 2016 January 15, 2016 0.075
 2,148,928
 8,627 61,079
 October 19, 2016 January 31, 2017 January 31, 2017 0.075
 2,180,645
 2,905 29,363
Monthly November 30, 2015 February 5, 2016 February 16, 2016 0.075
 2,177,085
 4,542 32,923
 October 19, 2016 February 15, 2017 February 28, 2017 0.075
 2,183,581
 2,969 26,427
Monthly February 8, 2016 March 15, 2016 March 31, 2016 0.075
 2,175,431
 4,383 34,577
 February 6, 2017 March 15, 2017 March 31, 2017 0.04
 1,165,417
 1,508 13,253
Monthly February 8, 2016 April 15, 2016 April 29, 2016 0.075
 2,174,974
 4,452 35,033
Monthly February 8, 2016 May 13, 2016 May 31, 2016 0.075
 2,176,513
 4,256 33,494
Monthly May 6, 2016 June 15, 2016 June 30, 2016 0.075
 2,163,126
 5,822 46,881
Monthly May 6, 2016 July 15, 2016 July 29, 2016 0.075
 2,179,263
 3,627 30,745
Monthly May 6, 2016 August 15, 2016 August 31, 2016 0.075
 2,181,006
 3,260 29,002
Monthly August 4, 2016 September 15, 2016 September 30, 2016 0.075
 2,183,197
 3,078 26,811
Monthly August 4, 2016 October 14, 2016 October 31, 2016 0.075
 2,183,023
 3,146 26,985
Monthly August 4, 2016 November 15, 2016 November 30, 2016 0.075
 2,183,100
 2,986 26,908
Monthly October 19, 2016 December 15, 2016 December 30, 2016 0.075
 2,179,421
 3,438 30,586
Monthly October 19, 2016 January 31, 2017 January 31, 2017 0.075
 2,180,645
 2,905 29,363
Monthly October 19, 2016 February 15, 2017 February 28, 2017 0.075
 2,183,581
 2,969 26,427
Monthly February 6, 2017 March 15, 2017 March 31, 2017 0.04
 1,165,417
 1,508 13,253
Quarterly February 6, 2017 June 15, 2017 June 30, 2017 0.19
 5,543,465
 6,840 55,221
 February 6, 2017 June 15, 2017 June 30, 2017 0.19
 5,543,465
 6,840 55,221
Quarterly August 7, 2017 September 15, 2017 September 29, 2017 0.19
     August 7, 2017 September 15, 2017 September 29, 2017 0.19
 5,536,798
 6,991 61,888
Quarterly August 7, 2017 December 15, 2017 December 29, 2017 0.19
     August 7, 2017 December 15, 2017 December 29, 2017 0.19
 5,439,519
 18,809 159,167
______________
(1) Shares were purchased on the open market and distributed.
BorrowingsIndebtedness
See “Note 6. Borrowings” in the Consolidated Financial Statements for more details regarding our indebtedness and secured borrowings.
Citibank Facility
On January 15, 2015, FS Senior Funding II LLC, our wholly-owned, special purpose financing subsidiary, entered into a $175 million revolving credit facility, or, as amended,As of December 31, 2017, the Citibank facility with the lenders referredpermitted up to therein, Citibank, N.A., as administrative agent, and Wells Fargo Bank, N.A., as collateral agent and custodian.
Borrowings$125.0 million of borrowings. As of December 31, 2017, borrowings under the Citibank facility are subject to certain customary advance rates and accrue interest at a rate equal to LIBOR plus 2.00%2.25% per annum on broadly syndicated loans and LIBOR plus 2.25%2.50% per annum on all other eligible loans during the reinvestment period, and rates equal to LIBOR plus 3.50% per annum and LIBOR plus 4.00% per annum during the subsequent two years, respectively. In addition, as of December 31, 2017, there is a commitment fee payable on the undrawn amount under the Citibank facility of either 0.50% per annum on the unused amount of the Citibank facility (if the advances outstanding on the Citibank facility exceed 50% of the aggregate commitments by lenders to make advances on such day) or 0.75% per annum on the unused amount of the Citibank facility (if the advances outstanding on the Citibank facility do not exceed 50% of the aggregate commitments by lenders to make advances on such day) for the duration of the reinvestment period. Interest and commitment fees are payable quarterly in arrears. TheAs of December 31, 2017, the reinvestment period under the Citibank facility endswould have ended on January 15,31, 2018 and the credit facility will mature onfinal maturity date was January 15, 2020. The Citibank facility requires us to comply with certain affirmative and negative covenants and other customary requirements for similar credit facilities.
On March 23, 2017, FS Senior Funding II LLC entered into an amendment to the documents governing the Citibank facility.  The amendment was effective as of March 23, 2017 and, among other things, decreased the size of the Citibank facility from $175 million to $125 million.  The interest rate, reinvestment period and maturity date were not modified as part of this amendment. We accelerated deferred financing costs of $406,230 in connection with the amendment. 
As of June 30,December 31, 2017 and September 30, 2016, the Company2017, we had $73.7$70.1 million and $107.4$76.5 million outstanding under the Citibank facility, respectively. Borrowings under the Citibank facility are secured by all of the assets of FS Senior Funding II

LLC and all of the Company's equity interests in FS Senior Funding II LLC. The Company may use the Citibank facility to fund a portion of its loan origination activities and for general corporate purposes. Each loan origination under the Citibank facility is subject to the satisfaction of certain conditions. Our borrowings under the Citibank facility bore interest at a weighted average interest rate of 3.447%3.919% and 2.770%3.213% for the ninethree months ended June 30,December 31, 2017 and June 30,December 31, 2016, respectively.  For the three and nine months ended June 30,December 31, 2017 and December 31, 2016, we recorded interest expense of $0.9 million and $3.3 million, respectively, related to the Citibank facility. For the three and nine months ended June 30, 2016, we recorded interest expense of $1.0 million and $3.1 million, respectively, related to the Citibank facility.
East West Bank Facility
On January 6, 2016, we entered into a five-year, $25 million senior secured revolving credit facility with the lenders referenced therein, U.S. Bank National Association, as Custodian,custodian, and East West Bank as Secured Lender,secured lender, or the East West Bank Facility. TheBorrowings under the East West Bank Facility bearsbear an interest rate of either (i) LIBOR plus 3.75% per annum for borrowings in year one, 3.50% per annum for borrowings in year two, 3.25% per annum for borrowings in years three and four and 3.00% per annum for borrowings in year five, or (ii) East West Bank’s prime rate plus 0.75% per annum for borrowings in year one, 0.50% per annum for borrowings in year two, 0.25% per annum for borrowings in years three and four, and 0.00% per annum for borrowings in year five. The East West Bank Facility

matures on January 6, 2021. The East West Bank Facility requires us to comply with certain affirmative and negative covenants and other customary requirements for similar credit facilities.
As of JuneDecember 31, 2017 and September 30, 2017, the Company had $13.0 million outstanding under the East West Bank facility. As of September 30, 2016, we had no$4.0 million and $6.5 million of borrowings outstanding under the East West Bank facility. Borrowings under the East West Bank facility, are secured by the loans pledged as collateral thereunder from time to time as well as certain of our other assets. We may use the East West Bank facility to fund a portion of its loan origination activities and for general corporate purposes.respectively. Our borrowings under the East West Bank facility bore interest at a weighted average interest rate of 4.579%5.088% and 3.498% for the ninethree months ended June 30, 2017. Our borrowings under the East West Bank facility bore interest at a weighted average interest rate of 4.202% for the period from January 6,December 31, 2017 and December 31, 2016, through June 30, 2016.respectively. For the three and nine months ended June 30,December 31, 2017 we recorded interest expense of $0.2 million and $0.3 million, respectively, related to the East West Bank facility. For the three and nine months ended June 30,December 31, 2016, we recorded interest expense of $0.2 million and $0.3$0.1 million, respectively, related to the East West Bank Facility, respectively.facility.
Debt Securitization
On May 28, 2015, we completed our $309.0 millionAs of December 31, 2017, the 2015 Debt Securitization consistingconsists of $222.6 million in senior secured notes, or the 2015 Notes, and $86.4 million of unsecured subordinated notes, or the Subordinated 2015 Subordinated Notes. The notes offered in the 2015 Debt Securitization were issued by FS Senior Funding Ltd., or the 2015 Issuer, a wholly-owned subsidiary of us, through a private placement. The 2015 Notes are secured by
As of December 31, 2017, the assets held by the 2015 Issuer. The 2015 Debt Securitization consists of $126.0 million Class A-T Senior Secured 2015 Notes which borebear interest at three-month LIBOR plus 1.80%; $29.0 million Class A-S Senior Secured 2015 Notes which bore interest at a rate of three-month LIBOR plus 1.55%, until a step-up in spread to 2.10% occurred in October 2016; $20.0 million Class A-R Senior Secured Revolving 2015 Notes which bear interest at a rate of commercial paper, or CP, plus 1.80%, or, collectively, the Class A 2015 Notes; and $25.0 million Class B Senior Secured 2015 Notes which bear interest at a rate of three-month LIBOR plus 2.65% per annum. In partial consideration for the loans transferred to the 2015 Issuer as part of the 2015 Debt Securitization, weannum, which were issued in a private placement. We currently retain the entire $22.6 million of the Class C Senior Secured 2015 Notes (which we purchased at 98.0% of par value) and the entire $86.4 million of the 2015 Subordinated Notes. The Class A 2015 Notes and Class B 2015 Notes are included in our June 30, 2017 Consolidated Statement of Assets and Liabilities as notes payable. As of June 30, 2017, the Class C 2015 Notes and the 2015 Subordinated Notes were eliminated in consolidation.
We serve as collateral manager to the 2015 Issuer under a collateral management agreement. We are entitled to a fee for our services as collateral manager. The collateral management fee is eliminated in consolidation. We have retained Fifth Street Management LLC, our investment adviser, to furnish collateral management sub-advisory services to us pursuant to a sub-collateral management agreement. Our investment adviser has waived, and intends to continue to waive, its right to such sub-collateral management fees in respect of the 2015 Debt Securitization.
The collateral management agreement does not include any incentive fee payable to us as collateral manager or payable to our investment adviser as sub-advisor under the sub-collateral management agreement.
Through May 28, 2019, all principal collections received on the underlying collateral may be used by the 2015 Issuer to purchase new collateral under the direction of the investment adviser in its capacity as sub-collateral manager of the 2015 Issuer and in accordance with our investment strategy. All classes of 2015 Notes are scheduled to mature on May 28, 2025.
As of June 30, 2017, there were 56 in portfolio companies with a total fair value of $275.9 million, securing the 2015 Notes. The pool of loans in the 2015 Debt Securitization must meetrequires us to comply with certain requirements,monthly financial covenants, including asset mixovercollateralization and concentration, collateralinterest coverage term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

tests.
For the three and nine months ended June 30,December 31, 2017 and December 31, 2016, the components of interest expense, cash paid for interest, average interest rates and average outstanding balances for the 2015 Debt Securitization were as follows: 
 Three months ended June 30, 2017 Three months ended June 30, 2016 Nine months ended June 30, 2017 Nine months ended June 30, 2016 Three months ended December 31, 2017 Three months ended December 31, 2016
Interest expense $1,472,696
 $1,179,015
 $4,200,225
 $3,448,626
 $1,567,772
 $1,306,035
Loan administration fees 16,992
 17,488
 51,480
 61,941
 18,241
 18,330
Amortization of debt issuance costs 72,526
 72,526
 217,578
 217,578
 72,526
 72,526
Total interest and other debt financing expenses $1,562,214
 $1,269,029
 $4,469,283
 $3,728,145
 $1,658,539
 $1,396,891
Cash paid for interest expense $1,394,676
 $1,188,596
 $3,976,651
 $3,891,220
 $1,566,749
 $1,222,675
Annualized average interest rate 3.138% 2.528% 2.992% 2.528% 3.446% 2.902%
Average outstanding balance $181,300,000
 $182,380,887
 $180,433,333
 $182,380,887
 $181,467,391
 $180,000,000
The classes, interest rates, spread over LIBOR, cash paid for interest, stated interest expense and note discount expense of each of the Class A-T, A-S, A-R, B and C 2015 Notes for the three and nine months ended June 30,December 31, 2017 is as follows:
  Three months ended June 30, 2017 Nine months ended June 30, 2017

 Stated Interest Rate LIBOR Spread (basis points) Cash Paid for Interest Interest Expense Cash Paid for Interest Interest Expense Stated Interest Rate LIBOR Spread (basis points) Cash Paid for Interest Interest Expense
Class A-T Notes 2.9551% 180 $888,861
 $935,602
 $2,546,066
 $2,671,836
 3.1035% 180 $999,327
 $999,327
Class A-S Notes 3.2551% 210(1)226,329
 237,329
 611,455
 675,598
 3.4035% 210(1)252,237
 252,237
Class A-R Notes 2.9551% 180(2)50,000
 60,414
 152,222
 161,525
 3.1838% 180(2)62,600
 63,623
Class B Notes 3.8051% 265 229,486
 239,351
 666,908
 691,266
 3.9535% 265 252,585
 252,585
Class C Notes 4.4051% 325(3)—
 —
 —
 —
 4.5535% 325(3)—
 —
Total    $1,394,676
 $1,472,696
 $3,976,651
 $4,200,225
    $1,566,749
 $1,567,772
_______________________
(1) Spread increased to 2.10% in October 2016 from 1.55%.
(2) Interest expense includes 1.0% undrawn fee. Class A-R 2015 Notes were not drawn during the three months ended June 30,December 31, 2017.
(3) We hold all Class C 2015 Notes outstanding and thus have not recorded any related interest expense as it is eliminated in consolidation.


The classes, amounts, ratings and interest rates (expressed as a spread to three-month LIBOR) of the Class A, B, C and Subordinated 2015 Notes as of June 30,December 31, 2017 are as follows:
Description Class A-T Notes Class A-S Notes Class A-R
Notes		 Class B Notes Class C Notes Subordinated Notes Class A-T Notes Class A-S Notes Class A-R
Notes		 Class B Notes Class C Notes Subordinated Notes
Type Senior Secured Floating Rate Term Debt Senior Secured Floating Rate Term Debt Senior Secured Floating Rate Revolver Senior Secured Floating Rate Term Debt Senior Secured Floating Rate Term Debt Subordinated Term Notes Senior Secured Floating Rate Term Debt Senior Secured Floating Rate Term Debt Senior Secured Floating Rate Revolver Senior Secured Floating Rate Term Debt Senior Secured Floating Rate Term Debt Subordinated Term Notes
Amount Outstanding $126,000,000 $29,000,000 $1,800,000 $25,000,000 $22,575,680 $86,400,000 $126,000,000 $29,000,000 $— $25,000,000 $22,575,680 $86,400,000
Moody's Rating "Aaa" "Aaa" "Aaa" "Aa2" "Aa2" NR "Aaa" "Aaa" "Aaa" "Aa2" "Aa2" NR
S&P Rating "AAA" "AAA" "AAA" NR NR NR "AAA" "AAA" "AAA" NR NR NR
Interest Rate LIBOR + 1.80% LIBOR + 2.10%* CP + 1.80% ** LIBOR + 2.65% LIBOR + 3.25% NA LIBOR + 1.80% LIBOR + 2.10%* CP + 1.80% ** LIBOR + 2.65% LIBOR + 3.25% NA
Stated Maturity May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025 May 28, 2025
_______________________
* Spread increased to 2.10% in October 2016 from 1.55%.
** Carries a 1.0% undrawn fee.

 The proceeds of the private placement of the Class A 2015 Notes and the Class B 2015 Notes, net of debt issuance costs, may be used to fund a portion of the 2015 Issuer's loan origination activities and for general corporate purposes. The creditors of the 2015 Issuer have received security interests in the assets owned by the 2015 Issuer and such assets are not intended to be available to our creditors (or any of our other affiliates). As part of the 2015 Debt Securitization, we entered into master loan sale agreements under which we agreed to directly or indirectly sell or contribute certain senior secured debt investments (or participation interests therein) to the 2015 Issuer, and to purchase or otherwise acquire the 2015 Subordinated Notes of the 2015

Issuer, as applicable. The 2015 Notes (other than the Class C 2015 Notes) are the secured obligations of the 2015 Issuer and indentures governing the 2015 Notes include customary covenants and events of default. The 2015 Debt Securitization requires us to comply with certain monthly financial covenants, including overcollateralization and interest coverage tests.
Off-Balance Sheet Arrangements
We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of June 30,December 31, 2017 and September 30, 2016,2017, our only off-balance sheet arrangements consisted of $47.4$39.5 million and $52.8$43.5 million, respectively, of unfunded commitments to provide debt and equity financing to certain of our portfolio companies. Such commitments are subject to our portfolio companies' satisfaction of certain financial and nonfinancial covenants and may involve, to varying degrees, elements of credit risk in excess of the amount recognized in theour Consolidated Statements of Assets and Liabilities.
A summary of the compositionlist of unfunded commitments by investment (consisting of revolvers, term loans with delayed draw components and FSFR Glick JV Subordinated Notes and LLC equity interests) as of June 30,December 31, 2017 and September 30, 20162017 is shown in the table below:
 June 30, 2017 September 30, 2016 December 31, 2017 September 30, 2017
FSFR Glick JV LLC $16,382,494
 $16,382,494
 $15,864,217
 $16,159,368
MHE Intermediate Holdings 8,190,816
 —
 6,749,698
 6,749,698
Triple Point Group Holdings, Inc. 4,968,590
 4,968,590
 4,968,590
 4,968,590
Motion Recruitment Partners LLC 2,900,000
 2,900,000
Asset International 2,500,000
 —
PowerPlan, Inc. 2,100,000
 2,100,000
Impact Sales, LLC 1,078,555
 1,078,125
Ministry Brands, LLC 927,693
 1,857,967
Valet Merger Sub, Inc. 833,333
 833,333
Internet Pipeline, Inc. 800,000
 800,000
Metamorph US 3, LLC (1) 720,000
 720,000
4 Over International, LLC 68,452
 68,452
BeyondTrust Software, Inc. 3,605,000
 3,605,000
 —
 3,605,000
All Web Leads, Inc. 3,458,537
 3,458,537
Motion Recruitment Partners LLC 2,900,000
 2,900,000
PowerPlan, Inc. 2,100,000
 2,100,000
Metamorph US 3, LLC 1,200,000
 1,800,000
Impact Sales, LLC 1,078,125
 —
Executive Consulting Group, Inc. 800,000
 800,000
 —
 800,000
Internet Pipeline, Inc. 800,000
 800,000
Sailpoint Technologies, Inc. —
 300,000
Systems Inc. 600,000
 —
 —
 600,000
My Alarm Center, LLC 372,599
 1,212,472
Valet Merger Sub, Inc. 333,333
 333,333
Sailpoint Technologies, Inc. 300,000
 200,000
OBHG Management Services, LLC 100,000
 100,000
Ministry Brands, LLC 100,000
 —
Accruent, LLC 85,000
 85,000
4 Over International, LLC 68,452
 68,452
TIBCO Software, Inc. —
 5,300,000
Baart Programs, Inc. —
 1,000,000
Legalzoom.com, Inc. —
 2,607,018
Teaching Strategies, LLC —
 2,400,000
Dynatect Group Holdings, Inc. —
 1,800,000
TrialCard Incorporated —
 850,000
Total $47,442,946
 $52,770,896
 $39,510,538
 $43,540,533
_______ 
(1) This investment was on cash non-accrual status as of December 31, 2017 and September 30, 2017.

Contractual Obligations
The following table reflects information pertaining to our debt outstanding under the Citibank facility, the East West Bank Facility and the 2015 Debt Securitization and our secured borrowings:Securitization:
 Debt Outstanding
as of
September 30, 2016		 Debt Outstanding
as of June 30,
2017		 Weighted average  debt
outstanding for the
nine months ended
June 30, 2017		 Maximum debt
outstanding
for the nine months ended
June 30, 2017		 Debt Outstanding
as of
September 30, 2017		 Debt Outstanding
as of December 31,
2017		 Weighted average  debt
outstanding for the
three months ended
December 31, 2017		 Maximum debt
outstanding
for the three months ended
December 31, 2017
Citibank facility $107,426,800
 $73,656,800
 $82,356,727
 $107,426,800
 $76,456,800
 $70,056,800
 $75,343,757
 $76,456,800
2015 Debt Securitization 180,000,000
 181,800,000
 180,433,333
 187,500,000
 180,000,000
 180,000,000
 181,467,391
 183,000,000
East West Bank Facility —
 13,000,000
 6,585,348
 16,600,000
 6,500,000
 4,000,000
 12,478,261
 22,000,000
Secured borrowings 5,000,000
 —
 73,260
 5,000,000
Total debt $292,426,800
 $268,456,800
 $269,448,668
   $262,956,800
 $254,056,800
 $269,289,409
  

The following table reflects our contractual obligations arising from the Citibank facility, 2015 Debt Securitization and East West Bank Facility:
  Payments due by period as of June 30, 2017
  Total < 1 year 1-3 years 3-5 years > 5 years
Citibank facility (1) $73,656,800
 $—
 $73,656,800
 $—
 $—
Interest due on Citibank facility 6,760,885
 2,656,322
 4,104,563
 —
 —
2015 Debt Securitization 181,800,000
 —
 —
 —
 181,800,000
Interest due on 2015 Debt Securitization 44,893,398
 5,671,891
 11,343,782
 11,343,782
 16,533,943
East West Bank Facility 13,000,000
 —
 —
 13,000,000
 —
Interest due on East West Bank Facility 2,089,750
 593,125
 1,186,250
 310,375
 —
Total $322,200,833
 $8,921,338
 $90,291,395
 $24,654,157
 $198,333,943
 ___________ 
(1) In connection with the Transaction, on July 13, 2017, we entered into an amendment (the “Citibank Amendment”) to the Citibank facility. The Citibank Amendment provides that if the closing of the Transaction does not occur by December 31, 2017, the reinvestment period for the Citibank facility would terminate and we would be required to pay down any amounts outstanding under the Citibank facility as set forth in the Citibank Amendment. See "Recent Developments."
  Payments due by period as of December 31, 2017
  Total < 1 year 1-3 years 3-5 years > 5 years
Citibank facility $70,056,800
 $—
 $70,056,800
 $—
 $—
Interest due on Citibank facility 5,481,423
 2,685,529
 2,795,894
 —
 —
2015 Debt Securitization 180,000,000
 —
 —
 —
 180,000,000
Interest due on 2015 Debt Securitization 43,619,422
 5,885,800
 11,771,600
 11,771,600
 14,190,422
East West Bank Facility 4,000,000
 —
 —
 4,000,000
 —
Interest due on East West Bank Facility 603,836
 200,000
 400,000
 3,836
 —
Total $303,761,481
 $8,771,329
 $85,024,294
 $15,775,436
 $194,190,422
Regulated Investment Company Status and Distributions
We have elected to be treated as a RIC under Subchapter M of the Code. As long as we continue to qualify as a RIC, we will not be subject to tax on our investment company taxable income (determined without regard to any deduction for dividends paid) or realized net capital gains, to the extent that such taxable income or gains is distributed, or deemed to be distributed as dividends, to stockholders on a timely basis.
Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation. Distributions declared and paid by us in a taxable year may differ from taxable income for that taxable year as such distributions may include the distribution of taxable income derived from the current taxable year or the distribution of taxable income derived from the prior taxable year carried forward into and distributed in the current taxable year. Distributions also may include returns of capital.
To maintain RIC tax treatment, we must, among other things, distribute dividends, with respect to each taxable year, of an amount generally at least equal to 90% of our investment company taxable income (i.e., our net ordinary income and our realized net short-term capital gains in excess of realized net long-term capital losses, if any) determined without regard to any deduction for dividends paid. As a RIC, we are also subject to a federal excise tax, based on distribution requirements of our taxable income on a calendar year basis. We anticipate timely distribution of our taxable income in accordance with tax rules; however, we incurred a de minimis U.S. federal excise tax for calendar year 2013.rules. We did not incur a U.S. federal excise tax for calendar years 20142015 and 20152016 and do not expect to incur a U.S. federal excise tax for the calendar year 2016.2017. We may incur a U.S. federal excise tax in future years.
We intend to distribute to our stockholders at least 90% of our annual taxable income (which includes our taxable interest and fee income). to our stockholders. The covenants under the respective documents governing the Citibank facility, the East West Bank facility and the 2015 Debt Securitization could, under certain circumstances, hinder our ability to satisfy the distribution requirement associated with our ability to be subject to tax as a RIC. In addition, we may retain for investment some or all of our net taxable capital gains (i.e., realized net long-term capital gains in excess of realized net short-term capital losses) and treat such amounts as deemed distributions to our stockholders. If we do this, our stockholders will be treated as if they received actual distributions of the capital gains we retained and then reinvested the net after-tax proceeds in our common stock. Our stockholders also may be eligible to claim tax credits (or, in certain circumstances, tax refunds) equal to their allocable share of the tax we paid on the capital gains deemed distributed to them. To the extent our taxable earnings for a fiscal and taxable year fall below the total amount of our dividend distributions for that fiscal and taxable year, a portion of those distributions may be deemed a return of capital to our stockholders.
We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage test for borrowings applicable to us as a business development company under the 1940 Act and due to provisions in our Citibank facility, the East West Bank Facilitycredit facilities and the 2015 Debt Securitization.

debt instruments. If we do not distribute a certain percentage of our taxable income annually, we will suffer adverse tax consequences, including possible loss of our ability to be subject to tax as a RIC. We cannot assure stockholders that they will receive any distributions or distributions at a particular level.

A RIC may treat a distribution of its own stock as fulfilling its RIC distribution requirements if each stockholder may electelects to receive his or her entire distribution in either cash or stock of the RIC, subject to certain limitations regarding the aggregate amount of cash to be distributed to all stockholders. If these and certain other requirements are met, for U.S federal income tax purposes, the amount of the dividend paid in stock will be equal to the amount of cash that could have been received instead of stock. We have no current intention of paying dividends in shares of our stock in accordance with these guidelines.
We may generate qualified net interest income or qualified net short-term capital gains that may be exempt from United StatesU.S. withholding tax when distributed to foreign stockholders. A RIC is permitted to designate distributions of qualified net interest income and qualified short-term capital gains as exempt from U.S. withholding tax when paid to non-U.S. shareholders with proper documentation. The following table, which may be subject to change as we finalize our annual tax filings, lists the percentage of qualified net interest income and qualified short-term capital gains for the three months ended December 31, 2016, March 31,as of September 30, 2017, and June 30, 2017.
our last tax year end.
Three MonthsYear Ended Qualified Net Interest IncomeQualified Short-Term Capital Gains
December 31, 201684.1%—
March 31, 201788.8%—
JuneSeptember 30, 2017 84.886.7%—

Related Party Transactions
We have entered into an investment advisory agreementthe New Investment Advisory Agreement with Fifth Street Management LLC, or Fifth Street Management. Messrs. Bermanour Investment Adviser and the New Administration Agreement with Oaktree Administrator, a wholly-owned subsidiary of the Investment Adviser. Mr. John B. Frank, each an interested member of our Board of Directors, have a direct orhas an indirect pecuniary interest in Fifth Street Management. Fifth Street Managementour Investment Adviser. The Investment Adviser is a registered investment adviser under the Investment Advisers Act of 1940, as amended, or the Advisers Act, that is partially and indirectly owned by FSAM. PursuantOCG. See “Note 11. Related Party Transactions-New Investment Advisory Agreement” and “-Administrative Services” in the notes to the investment advisory agreement, fees payableaccompanying Consolidated Financial Statements.
Prior to October 17, 2017, we were externally managed and advised by our investment adviser are equal to (a)Former Adviser, and our administrator was FSC CT LLC, a base management fee of 1.0% of the average valuewholly-owned subsidiary of our gross assets at the end of the two most recently completed quarters, which includes any borrowings for investment purposesFormer Adviser. Messrs. Bernard D. Berman, Patrick J. Dalton, Ivelin M. Dimitrov, Alexander C. Frank and excludes cash, cash equivalents and restricted cash and (b)Todd G. Owens, each an incentive fee based on our performance. The incentive fee consists of two parts. The Part I incentive fee is calculated and payable quarterly in arrears and equals 20%interested member of our Pre-Incentive Fee Net Investment Income for the immediately preceding quarter, subject toBoard of Directors for all or a preferred return, or "hurdle," and a "catch up" feature. The Part II incentive fee is determined and payable in arrears asportion of the end of eachour fiscal year (or upon termination of the investment advisory agreement) and equals 20% of realized capital gains on a cumulative basis from inception through the end of the year, if any, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid Part II incentive fee. From inception to date, the Company has paid aggregate Part II incentive fees of approximately $0.1 million. The investment advisory agreement may be terminated by either party without penalty upon no fewer than 60 days' written notice to the other. During the three and nine months ended JuneSeptember 30, 2017 we accrued fees of $2.6 million and $6.7 million, respectively, under the investment advisory agreement. During the three and nine months ended June 30, 2016, we incurred fees of $2.7 million and $8.4 million, respectively, under the investment advisory agreement.prior to October 17, 2017, had a direct or indirect pecuniary interest in our Former Adviser.
We serve as collateral manager to the 2015 Issuer under a collateral management agreement in connection with the 2015 Debt Securitization and are entitled to receive a fee for providing these services. We have retained Fifth Street Managementa sub-collateral manager, which, as of October 17, 2017, was the Investment Adviser and, prior to furnishOctober 17, 2017, was the Former Adviser, to provide collateral management sub-advisory services to us pursuant to a sub-collateral management agreement. Fifth Street ManagementThe sub-collateral manager is entitled to receive 100% of the collateral management fees paid to us under the collateral management agreement, but haseach of our Investment Adviser and the Former Adviser irrevocably waived and, in the case of the Investment Adviser, intends to continue to irrevocably waive its right to such sub-collateral management fees in respect of the 2015 Debt Securitization.
We have also entered into an administration agreement with FSC CT, a wholly-owned subsidiary of our investment adviser, under which FSC CT provides administrative services for us, including facilities, including our principal executive offices, and equipment and clerical, bookkeeping and recordkeeping services at such facilities. Under the administration agreement, FSC CT also performs, or oversees the performance of, our required administrative services, which includes being responsible for the financial records which we are required to maintain and preparing reports to our stockholders and reports filed with the SEC. In addition, FSC CT assists us in determining and publishing our net asset value, overseeing the preparation and filing of our tax returns and the printing and dissemination of reports to our stockholders, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others. FSC CT may also provide on our behalf managerial assistance to our portfolio companies. For providing these services, facilities and personnel, we reimburse FSC CT the allocable portion of overhead and other expenses incurred by FSC CT in performing its obligations under the administration agreement, including our allocable portion of rent at market rates and the costs of compensation and related expenses of our chief financial officer and chief compliance officer and their respective staffs. Such

reimbursement is at cost, with no profit to, or markup by, FSC CT. Our allocable portion of FSC CT’s costs is determined based upon costs attributable to our operations versus costs attributable to the operations of other entities for which FSC CT provides administrative services. We utilize office space in Greenwich, CT that is leased by our administrator from an affiliate controlled by the chief executive officer of our investment adviser and administrator, Mr. Tannenbaum.  We also utilize additional office space that is leased by affiliates of our investment adviser and administrator in Chicago, IL.  Any reimbursement for a portion of the rent at these locations is at cost with no profit to, or markup by, FSC CT.
The administration agreement may be terminated by either party without penalty upon no fewer than 60 days' written notice to the other. For the three and nine months ended June 30, 2017, we accrued administrative expenses of $0.4 million and$1.4 million, respectively, including $0.3 million and $0.9 million of general and administrative expenses, respectively. For the three and nine months ended June 30, 2016, we accrued administrative expenses of $0.3 million, including $0.2 million of general and administrative expenses, and $0.9 million, including $0.5 million of general and administrative expenses, respectively. At June 30, 2017 and September 30, 2016, $0.4 million was included in Due to FSC CT in the Consolidated Statements of Assets and Liabilities.
We have also entered into a license agreement with Fifth Street Capital LLC pursuant to which Fifth Street Capital LLC has agreed to grant us a non-exclusive, royalty-free license to use the name "Fifth Street." Under this agreement, we will have a right to use the "Fifth Street" name for so long as Fifth Street Management or one of its affiliates remains our investment adviser. Other than with respect to this limited license, we will have no legal right to the "Fifth Street" name. Fifth Street Capital LLC is controlled by Mr. Tannenbaum, our investment adviser's chief executive officer.
Common stock held by FSAM and Principals
As of June 30, 2017, a subsidiary of FSAM held 2,677,519 shares of our common stock, which represents approximately 9.1% of our common stock outstanding. As of June 30, 2017, Mr. Tannenbaum directly and indirectly held 5,249,026 shares of our common stock, which represents approximately 17.8% of our common stock outstanding.
Recent Developments

Dividend Declaration
On August 7, 2017,February 5, 2018, our Board of Directors declared the following distributions:
$0.19a quarterly dividend of $0.14 per share, payable on September 29, 2017March 30, 2018 to stockholders of record on SeptemberMarch 15, 2017;2018.
$0.19 per share, payable on December 29, 2017Change in Investment Policy
Effective January 19, 2018, we were no longer subject to stockholdersa policy to invest, under normal market conditions, at least 80% of record on September 15, 2017.the value of our net assets (plus borrowings for investment purposes) in floating rate senior loans.
Citibank Facility Amendment
In connection with the Transaction, on July 13, 2017,On January 31, 2018, we entered into the Citibank Amendment to the Citibank facility that amends thean Amended and Restated Loan and Security Agreement, dated as of January 15, 2015, by and among us, asor the collateral manager and as the seller,Loan Agreement, with OCSI Senior Funding II LLC (formerly FS Senior Funding II LLC,LLC), our wholly-owned, special purpose financing subsidiary, as the borrower, the lenders from time to time party thereto, Citibank, N.A., as administrative agent, and Wells Fargo Bank, National Association, as collateral agent, or the Restated Citibank N.A., as the sole lender (as amended, the “Citibank Agreement”). Under theFacility.

The Restated Citibank Amendment, certain eventsFacility permits up to $100 million of default that would result from the closing of the Transaction are waived and the ability to borrow amountsborrowings. Borrowings under the Restated Citibank facility for investment was revisedFacility are subject to requirecertain customary advance rates and accrue interest at a rate equal to LIBOR plus 1.70% per annum on broadly syndicated loans and LIBOR plus 2.25% per annum on all other eligible loans during the consentreinvestment period. Following termination of the lenders prior to the closing of the Transaction and completion of satisfactory due diligence by the lenders on Oaktree. In addition, the Citibank Amendment provides that if the closing of the Transaction does not occur by December 31, 2017, the reinvestment period, borrowings under the Restated Citibank Facility accrue interest at rates equal to LIBOR plus 3.50% per annum and LIBOR plus 4.00% per annum during the subsequent two years, respectively. In addition, for the Citibank facility would terminate and we would be required to pay down any amounts outstandingduration of the reinvestment period there is a non-usage fee payable of 0.50% per annum on the undrawn amount under the Restated Citibank facility as set forth inFacility. The non-usage fee is increased pursuant to a formula if, after the ramp up period, the advances outstanding on the Restated Citibank Amendment.Facility do not exceed 70% of the aggregate commitments by lenders.
The reinvestment period under the Restated Citibank Facility ends January 30, 2021, and the final maturity date is January 31, 2023. The Restated Citibank Facility requires us to comply with certain affirmative and negative covenants and other customary requirements for similar credit facilities.
Recently Issued Accounting Standards
See Note 2 to“Note 2. Significant Accounting Policies” in the Consolidated Financial Statements for a description of recent accounting pronouncements, including the expected dates of adoption and the anticipated impact on our Consolidated Financial Statements.


Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are subject to financial market risks, including changes in interest rates. Changes in interest rates may affect both our cost of funding and our interest income from portfolio investments, cash and cash equivalents and idle funds investments. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks and limits by means of reliable administrative and information systems and other policies and programs. Our investment income will be affected by changes in various interest rates, including LIBOR and prime rates, to the extent our debt investments include floating interest rates. In addition, our investments are carried at fair value as determined in good faith by our Board of Directors in accordance with the 1940 Act. Our valuation methodology utilizes discount rates in part in valuing our investments, and changes in those discount rates may have an impact on the valuation of our investments.
As of June 30,December 31, 2017, 100% of our debt investment portfolio (at cost and fair value) bore interest at floating rates and had interest rate floors between 0% and 2%.
Based on our Consolidated Statement of Assets and Liabilities as of June 30,December 31, 2017, the following table shows the approximate annualized increase (decrease) in components of net interest incomeassets resulting from operations of hypothetical base rate changes in interest rates, assuming no changes in our investment and capital structure. However, there can be no assurances our portfolio companies will be able to meet their contractual obligations at any or all levels of increases in interest rates.
 
Basis point increase(1) Interest Income Interest Expense Net increase (decrease) Interest Income Interest Expense Net increase (decrease)
500 $26,555,582
 $(13,422,840) 13,132,742
400 21,229,671
 (10,738,272) 10,491,399
300 15,903,761
 (8,053,704) 7,850,057
 16,473,739
 (7,621,704) 8,852,035
200 10,577,850
 (5,369,136) 5,208,714
 10,982,493
 (5,081,136) 5,901,357
100 5,325,911
 (2,684,568) 2,641,343
 5,491,246
 (2,540,568) 2,950,678

Basis point decrease (1) Interest Income Interest Expense Net increase (decrease)
100 $(3,647,143) $2,540,568
 $(1,106,575)
 __________________
(1)A decline in interest rates of 200 basis points or greater would not have a material incremental impact on our financial statements.Consolidated Financial Statements as compared to a 100 basis point decrease.
We regularly measure exposure to interest rate risk. We assess interest rate risk and manage our interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on this review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates. The following table shows a comparison of the interest rate base for our interest-bearing cash and outstanding investments, at principal, and our outstanding borrowings as of June 30,December 31, 2017 and September 30, 2016.2017:

 June 30, 2017 September 30, 2016 December 31, 2017 September 30, 2017
 Interest Bearing Cash and Investments Borrowings Interest Bearing Cash and Investments Borrowings Interest Bearing Cash and Investments Borrowings Interest Bearing Cash and Investments Borrowings
Money market rate $26,910,860
 $—
 $28,815,679
 $—
 $46,172,171
 $—
 $43,012,387
 $—
Prime rate 442,479
 —
 543,445
 —
 26,231
 —
 490,693
 —
LIBOR:                
30 day 43,987,247
 13,000,000
 —
 —
 313,478,828
 4,000,000
 218,782,104
 6,500,000
60 day —
 —
 —
 —
 25,662,846
   32,508,060
  
90 day 533,056,005
 255,456,800
 588,697,358
 287,426,800
 233,029,140
 250,056,800
 340,420,366
 256,456,800
180 day —
 —
 —
 —
 —
 —
 —
 —
Fixed rate —
 —
 —
 —
 —
 —
 —
 —
Total $604,396,591
 $268,456,800
 $618,056,482
 $287,426,800
 $618,369,216
 $254,056,800
 $635,213,610
 $262,956,800

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30,December 31, 2017. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Based on the evaluation of our disclosure controls and procedures as of June 30,December 31, 2017, our Chief Executive Officer and Chief Financial Officer concluded that as a result of the material weakness in internal control over financial reporting that is described below, our disclosure controls and procedures were not effective.effective, at the reasonable assurance level, in timely identifying, recording, processing, summarizing and reporting any material information relating to us that is required to be disclosed in the reports we file or submit under the Exchange Act.

(b) Management's Report on Internal Control Over Financial Reporting

As of September 30, 2016, management has determined thatEffective October 17, 2017, Oaktree became our investment adviser. During the Company did not design or maintain effectivethree months ended December 31, 2017 in connection with Oaktree assuming its role as our investment adviser, we adopted new controls to internally communicate current accountingand procedures, including formalized policies and procedures including the nature of supporting documentation required to validate certain portfolio company data. This material weakness remained as of June 30, 2017 primarily because the remediation actions described below remain in process.

(c) Remediation of Material Weaknesses in Internal Control Over Financial Reporting
During the fiscal year ended September 30, 2016, we took a number of steps to remediate the aggregated material weakness including formalizing policies and procedures relating to fee income recognition and the communication of these policies and procedures throughout the organization. Further, we added senior experienced accounting and financial reporting personnel with higher levels of experience, outsourced a number of accounting and operation activities, engaged a public accounting firm to assist on technical accounting matters and reallocated existing internal resources. During the fiscal year ending September 30, 2017, we have and will continue to take a number of additional steps to remediate this material weakness, including the formalization of policies and procedures in other significant areas and the implementation of controls over the validation of portfolio company data. Management is committedAs a result of the adoption of such controls and procedures and the changes to improving our internal control processescontrols and believesprocedures that resulted during the measures described above should be sufficient to remediatethree months ended December 31, 2017, management has determined that, as of December 31, 2017, the identifiedpreviously disclosed material weakness and strengthenin our internal control over financial reporting. Based on the steps we have taken to date and the anticipated timing of additional remediation measures and appropriate test work, we expect that the remediation of this material weakness will be completed prior to the end of calendar year 2017. We cannot assure you, however, that the steps taken will remediate such weakness, nor can we be certain of whether additional actions will be required or the costs of any such actions.reporting had been remediated.
(d) Changes in Internal Control over Financial Reporting
Other than the remediation effortschanges described above, there were no changes in our internal control over financial reporting that occurred during the thirdfirst fiscal quarter of 20172018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION


Item 1.     Legal Proceedings
Although we may, from time to time, be involved in litigation arising out of our operations in the normal course of business or otherwise, we are currently not a party to any pending material legal proceedings except as described below.
SEC Examination and Investigation
On March 23, 2016, the Division of Enforcement of the SEC sent document subpoenas and document-preservationdocument preservation notices to us, FSAM, FSCO GP LLC - General Partner of Fifth Street Opportunities Fund, L.P., or FSOF, and Fifth Street Finance Corp., or FSC.OCSL. The subpoenas sought production of documents relating to a variety of issues principally related to the activities of our Former Adviser, including those raised in an ordinary-course examination of Fifth Street Managementthe Former Adviser by the SEC’s Office of Compliance Inspections and Examinations that began in October 2015, and in the previously disclosed FSCOCSL and FSAM securities class actions and FSC derivative actions.

other previously disclosed litigation. The subpoenas were issued pursuant to a formal order of private investigation captioned In the Matter of the Fifth Street Group of Companies, No. HO-12925, dated March 23, 2016, which addresses (among other things) (i) the valuation of our portfolio companies and investments, (ii) the expenses allocated or charged to us and FSC,OCSL, (iii) FSOF’s trading in the securities of publicly traded business-developmentbusiness development companies, (iv) statements to our board of directors, other representatives of pooled investment vehicles, investors, or prospective investors concerning the fair value of our portfolio companies or investments as well as expenses allocated or charged to us and FSC,OCSL, (v) various issues relating to adoption and implementation of policies and procedures under the Advisers Act, (vi) statements and/or potential omissions in the entities’ SEC filings, (vii) the entities’ books, records, and accounts and whether they fairly and accurately reflected the entities’ transactions and dispositions of assets, and (viii) several other issues relating to corporate books and records. The formal order cites various provisions of the Securities Act of 1933, as amended, the Exchange Act, and the Advisers Act, as well as rules promulgated under those acts,Acts, as the bases of the investigation. The subpoenaed Fifth Street entitiesWe are cooperating with the Division of Enforcement investigation, have produced requested documents, and have been communicating with Division of Enforcement personnel. Our Investment Adviser is not subject to these subpoenas.
Item 1A. Risk Factors
Except as described below, thereThere have been no material changes during the three months ended June 30,December 31, 2017 to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended September 30, 2016.2017.

We cannot assure you the Transaction will close.
On July 13, 2017, Fifth Street Management LLC, the Company’s investment adviser (the "Investment Adviser"), entered into an asset purchase agreement (the “Purchase Agreement”) with Oaktree Capital Management, L.P. (“Oaktree”) and, for certain limited purposes, Fifth Street Asset Management Inc. ("FSAM") and Fifth Street Holdings L.P.  Upon closing of the transactions contemplated by the Purchase Agreement (the “Transaction”), Oaktree would become the investment adviser to each of the Company and Fifth Street Finance Corp. ("FSC") and Oaktree would pay gross cash consideration of $320 million to the Investment Adviser. The closing of the Transaction would result in an assignment for purposes of the Investment Company Act of 1940, as amended, of the current investment advisory agreement between the Company and the Investment Adviser and, as a result, its immediate termination.  The closing of the Transaction is conditioned on, among other things: (i) the approval of a new investment advisory agreement between the Company and Oaktree by the Company’s stockholders; (ii) the approval of a new investment advisory agreement by the stockholders of FSC; (iii) the election to the Company’s Board of Directors of five new directors by the Company’s stockholders; (iv) the election to the board of directors of FSC of five new directors by FSC’s stockholders; (v) the approval of the Transaction by the stockholders of FSAM; and (vi) the receipt of any required regulatory and other approvals.  We cannot assure you of the timing of any assignment of the current investment advisory agreement with the Investment Adviser and whether and when the new investment advisory agreement with Oaktree will be effective.  Any failure of the Transaction to close could have a material adverse effect on the Company's business, financial condition and results of operations.   

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

Item 3. Defaults Upon Senior Securities
None.
Item 4.     Mine Safety Disclosures
Not applicable.

Item 5. Other Information
None.

Item 6. Exhibits.Exhibits

Exhibit
Number3.1
  DescriptionAmended and Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit a filed with the Registrant’s Registration Statement on Form N-2 (File No. 333-188904) filed on July 8, 2013).
31.1*
3.2
  Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated as of October 17, 2017 (Incorporated by reference to Exhibit 3.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on October 17, 2017).
3.3
Bylaws of the Registrant (Incorporated by reference to Exhibit 3.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on September 9, 2016).
3.4
Amended and Restated Bylaws of the Registrant (Incorporated by reference to Exhibit 3.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on January 29, 2018)

10.1
Investment Advisory Agreement, dated as of October 17, 2017, between the Registrant and Oaktree Capital Management, L.P. (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on October 17, 2017).
10.2
Administration Agreement, dated as of October 17, 2017, between the Registrant and Oaktree Fund Administration, LLC (Incorporated by reference to Exhibit 10.2 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on October 17, 2017).
10.3
Pledge Agreement, dated as of October 17, 2017, between the Company and Fifth Street Holdings L.P. (Incorporated by reference to Exhibit 10.3 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on October 17, 2017).
10.4
Sixth Amendment to Loan and Security Agreement, dated as of October 25, 2017, by and among Registrant, FS Senior Funding II LLC and Citibank, N.A. (Incorporated by reference to Exhibit 10.22 filed with Registrant’s Annual Report on Form 10-K (File No. 814-01013) filed on December 11, 2017).
10.5
Seventh Amendment to Loan and Security Agreement, dated as of December 6, 2017, by and among Registrant, FS Senior Funding II LLC and Citibank, N.A. (Incorporated by reference to Exhibit 10.23 filed with Registrant’s Annual Report on Form 10-K (File No. 814-01013) filed on December 11, 2017).
10.6*
Eighth Amendment to Loan and Security Agreement, dated as of December 21, 2017, by and among Registrant, FS Senior Funding II LLC and Citibank, N.A.

10.7
Amended and Restated Loan and Security Agreement by and among the Registrant, OCSI Senior Funding II LLC, the lenders referred to therein, Citibank, N.A., and Wells Fargo Bank, National Association, dated as of January 31, 2018. (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K (File No. 814-01013) filed on February 1, 2018).
11.1
Computation of Per Share Earnings (included in the notes to the financial statements contained in this report).
31.1*
Certification of Chief Executive Officer Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act Rule 13a-14 (a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.1934.
31.2*
 Certification of Chief Financial Officer Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act Rule 13a-14 (a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.1934.
32.1*
 Certification of Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuantPursuant to Section 906 of the Sarbanes-Oxley Act of 2002.2002 (18 U.S.C. 1350).
32.2*
 Certification of Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuantPursuant to Section 906 of the Sarbanes-Oxley Act of 2002.2002 (18 U.S.C. 1350).
*Filed herewith.


SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
   
FIFTH STREET SENIOR FLOATING RATE CORP.OAKTREE STRATEGIC INCOME CORPORATION
  
By: /s/   Bernard D. BermanEdgar Lee
  
Bernard D. BermanEdgar Lee



  Chief Executive Officer
  
By: /s/    Steven M. NoreikaMel Carlisle
  Steven M. Noreika
Mel Carlisle

  Chief Financial Officer and Treasurer
Date: August 9, 2017
February 8, 2018

 


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