UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
  
Form 10-Q
 
(Mark One) 
  
ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  
For the Quarterly Period Ended DecemberMarch 31, 20162017
or
  
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from          to
 
Commission file number: 1-35040
 
MEDLEY CAPITAL CORPORATION
 
(Exact Name of Registrant as Specified in its Charter)
 
Delaware 27-4576073
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
   
280 Park Avenue, 6th Floor East, New York, NY 10017 10017
(Address of Principal Executive Offices) (Zip Code)
 
(212) 759-0777
 
(Registrant’s Telephone Number, Including Area Code)
 _____________________________________________________________________________________________________
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ýNo ¨
 
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”,filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer ¨          Accelerated filer ý        Non-accelerated filer ¨ (Do not check if a smaller reporting company)      
Smaller reporting company¨       Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ¨ No ý
 
The Registrant had 54,474,211 shares of common stock, $0.001 par value, outstanding as of February 9,May 8, 2017.



MEDLEY CAPITAL CORPORATION
TABLE OF CONTENTS
 
 
Part I.Financial Information 
   
Item I.Financial Statements 
   
 Consolidated Statements of Assets and Liabilities as of DecemberMarch 31, 20162017 (unaudited) and September 30, 2016
F-1
   
 Consolidated Statements of Operations for the three and six months ended DecemberMarch 31, 20162017 and 20152016 (unaudited)
F-2
   
 Consolidated Statements of Changes in Net Assets for the threesix months ended DecemberMarch 31, 20162017 and 20152016 (unaudited)
F-3
   
 Consolidated Statements of Cash Flows for the threesix months ended DecemberMarch 31, 20162017 and 20152016 (unaudited)
F-4
   
 Consolidated Schedules of Investments as of DecemberMarch 31, 20162017 (unaudited) and September 30, 2016
F-5
   
 Notes to Consolidated Financial Statements (unaudited)
F-20
   
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
1
   
Item 3.Quantitative and Qualitative Disclosures About Market Risk
14
   
Item 4.Controls and Procedures
15
   
Part II.Other Information
16
   
Item 1.Legal Proceedings
16
   
Item 1A.Risk Factors
16
   
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
16
   
Item 3.Defaults Upon Senior Securities
16
   
Item 4.Mine Safety Disclosures
16
   
Item 5.Other Information
16
   
Item 6.Exhibits
16
   
SIGNATURES
20




Medley Capital Corporation
 
Consolidated Statements of Assets and Liabilities
As of
December 31, 2016 September 30, 2016March 31, 2017 September 30, 2016
ASSETS(unaudited)  
(unaudited)  
Investments at fair value 
  
 
  
Non-controlled/non-affiliated investments (amortized cost of $775,077,727 and $813,813,853, respectively)$730,315,622
 $767,302,020
Controlled investments (amortized cost of $228,752,509 and $189,077,188, respectively)177,297,064
 136,882,275
Affiliated investments (amortized cost of $10,000,000 and $10,000,000, respectively)10,000,000
 10,000,000
Non-controlled/non-affiliated investments (amortized cost of $770,315,852 and $813,813,853, respectively)$717,295,079
 $767,302,020
Controlled investments (amortized cost of $236,535,895 and $189,077,188, respectively)176,021,819
 136,882,275
Affiliated investments (amortized cost of $35,350,783 and $10,000,000, respectively)32,824,178
 10,000,000
Total investments at fair value917,612,686

914,184,295
926,141,076

914,184,295
Cash and cash equivalents102,135,006
 104,485,263
83,522,983
 104,485,263
Interest receivable11,006,751
 8,982,154
10,050,136
 8,982,154
Other assets750,073
 893,140
918,148
 893,140
Fees receivable638,859
 1,403,383
882,187
 1,403,383
Receivable for dispositions and investments sold555,748
 689,379
680,071
 689,379
Deferred offering costs244,372
 242,991
306,879
 242,991
Total assets$1,032,943,495

$1,030,880,605
$1,022,501,480

$1,030,880,605
      
LIABILITIES 
  
 
  
Revolving credit facility payable (net of debt issuance costs of $3,210,753 and $3,589,844, respectively)$14,789,247
 $10,410,156
Term loan payable (net of debt issuance costs of $2,017,058 and $2,196,756, respectively)171,982,942
 171,803,244
Notes payable (net of debt issuance costs of $4,647,746 and $4,629,649, respectively)173,244,811
 172,883,176
SBA debentures payable (net of debt issuance costs of $3,353,800 and $3,525,029, respectively)146,646,200
 146,474,971
Revolving credit facility payable (net of debt issuance costs of $1,708,106 and $3,589,844, respectively)$32,291,894
 $10,410,156
Term loan payable (net of debt issuance costs of $1,842,174 and $2,196,756, respectively)172,157,826
 171,803,244
Notes payable (net of debt issuance costs of $4,712,816 and $4,629,649, respectively)172,162,833
 172,883,176
SBA debentures payable (net of debt issuance costs of $3,186,292 and $3,525,029, respectively)146,813,708
 146,474,971
Management and incentive fees payable (See note 6)5,346,682
 4,558,619
4,478,959
 4,558,619
Interest and fees payable4,031,982
 1,714,023
Accounts payable and accrued expenses2,206,792
 2,662,950
2,272,749
 2,662,950
Deferred tax liability2,003,724
 2,003,724
2,003,724
 2,003,724
Interest and fees payable1,843,189
 1,714,023
Administrator expenses payable (See note 6)916,066
 990,236
997,074
 990,236
Deferred revenue310,065
 369,805
282,426
 369,805
Due to affiliate204,597
 90,559
150,015
 90,559
Offering costs payable31,855
 —
Total liabilities$521,683,108

$513,961,463
$535,486,252

$513,961,463
      
Commitments (See note 8) 
  
 
  
      
NET ASSETS 
  
 
  
Common stock, par value $0.001 per share, 100,000,000 common shares authorized, 54,474,211 and 54,474,211 common shares issued and outstanding, respectively$54,474
 $54,474
$54,474
 $54,474
Capital in excess of par value705,326,059
 705,326,059
705,313,281
 705,326,059
Accumulated undistributed net investment income8,962,242
 10,811,762
5,020,181
 10,811,762
Accumulated net realized gain/(loss) from investments(105,298,697) (99,000,266)(105,745,113) (99,000,266)
Net unrealized appreciation/(depreciation) on investments, net of deferred taxes(97,783,691) (100,272,887)(117,627,595) (100,272,887)
Total net assets511,260,387

516,919,142
487,015,228

516,919,142
Total liabilities and net assets$1,032,943,495

$1,030,880,605
$1,022,501,480

$1,030,880,605
      
NET ASSET VALUE PER SHARE$9.39
 $9.49
$8.94
 $9.49
 
See accompanying notes to consolidated financial statements.


Medley Capital Corporation

Consolidated Statements of Operations
 
For the three months ended December 31For the three months ended
March 31		 For the six months ended
March 31
2016 20152017 2016 2017 2016
INVESTMENT INCOME:(unaudited) (unaudited)(unaudited) (unaudited) (unaudited) (unaudited)
Interest from investments 
  
 
  
  
  
Non-controlled/non-affiliated investments: 
  
 
  
  
  
Cash$18,520,378
 $28,126,021
$16,890,427
 $25,273,975
 $35,034,733
 $53,399,996
Payment-in-kind2,962,050
 1,222,112
2,824,976
 2,351,791
 5,685,943
 3,573,903
Affiliated investments: 
  
 
    
  
Cash166,750
 166,750
487,874
 166,750
 1,030,696
 333,500
Payment-in-kind—
 —
100,146
 —
 201,229
 —
Controlled investments: 
  
 
    
  
Cash343,158
 855,626
353,528
 22,477
 696,686
 878,103
Payment-in-kind1,971,560
 995,956
1,071,342
 1,130,729
 3,042,902
 2,126,685
Total interest income23,963,896
 31,366,465
21,728,293
 28,945,722
 45,692,189
 60,312,187
Dividend income, net of provisional taxes ($0 and $0, respectively)644,953
 —
1,050,000
 —
 1,694,953
 —
Interest from cash and cash equivalents23,412
 2,235
40,367
 10,168
 63,779
 12,403
Fee income (See note 9)1,423,804
 3,058,627
1,538,328
 1,757,996
 2,962,132
 4,816,623
Total investment income26,056,065
 34,427,327
24,356,988
 30,713,886
 50,413,053
 65,141,213



 

       
EXPENSES: 
  
 
  
  
  
Base management fees (See note 6)4,514,615
 5,346,758
4,496,286
 4,876,228
 9,010,901
 10,222,986
Incentive fees (See note 6)895,675
 3,916,469
—
 3,148,783
 895,675
 7,065,252
Interest and financing expenses7,773,971
 6,970,085
9,143,488
 7,920,197
 16,917,459
 14,890,282
Administrator expenses (See note 6)916,066
 916,377
997,074
 1,042,519
 1,913,140
 1,958,896
General and administrative697,005
 709,992
783,044
 453,178
 1,480,049
 1,163,170
Professional fees651,111
 632,521
662,693
 555,585
 1,313,804
 1,188,106
Directors fees169,784
 133,841
150,009
 130,062
 319,793
 263,903
Insurance99,455
 135,409
99,455
 135,410
 198,910
 270,819
Expenses before management and incentive fee waivers15,717,682
 18,761,452
16,332,049
 18,261,962
 32,049,731
 37,023,414
Management fee waiver (See note 6)(19,945) —
(17,327) (71,604) (37,272) (71,604)
Incentive fee waiver (See note 6)(43,663) —
—
 (2,051,784) (43,663) (2,051,784)
Total expenses, net of management and incentive fee waivers15,654,074
 18,761,452
16,314,722
 16,138,574
 31,968,796
 34,900,026
Net investment income before excise taxes10,401,991
 15,665,875
8,042,266
 14,575,312
 18,444,257
 30,241,187
Excise tax expense(267,183) —
—
 —
 (267,183) —
NET INVESTMENT INCOME10,134,808
 15,665,875
8,042,266
 14,575,312
 18,177,074
 30,241,187



 

       
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: 
  
 
  
  
  
Net realized gain/(loss) from investments(6,298,431) 5,378,048
9,948
 99,234
 (6,288,483) 5,477,282
Net unrealized appreciation/(depreciation) on investments2,489,196
 (60,023,619)(19,843,904) (14,093,093) (17,354,708) (74,116,712)
Change in provision for deferred taxes on unrealized (appreciation)/depreciation on investments—
 (224,616)—
 (133,490) —
 (358,106)
Loss on extinguishment of debt(456,364) —
 (456,364) —
Net gain/(loss) on investments(3,809,235) (54,870,187)(20,290,320) (14,127,349) (24,099,555) (68,997,536)
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS$6,325,573
 $(39,204,312)$(12,248,054) $447,963
 $(5,922,481) $(38,756,349)



 

       
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS PER COMMON SHARE$0.12
 $(0.70)$(0.22) $0.01
 $(0.11) $(0.69)
WEIGHTED AVERAGE - BASIC AND DILUTED NET INVESTMENT INCOME PER COMMON SHARE$0.19
 $0.28
$0.15
 $0.26
 $0.33
 $0.54
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - BASIC AND DILUTED (SEE NOTE 11)54,474,211
 56,300,067
54,474,211
 55,761,062
 54,474,211
 56,044,037
DIVIDENDS DECLARED PER COMMON SHARE$0.22
 $0.30
$0.22
 $0.30
 $0.44
 $0.60
 
See accompanying notes to consolidated financial statements.


Medley Capital Corporation
 
Consolidated Statements of Changes in Net Assets
 

For the three months ended December 31For the six months ended March 31
2016 20152017 2016
OPERATIONS:(unaudited) (unaudited)(unaudited) (unaudited)
Net investment income$10,134,808
 $15,665,875
$18,177,074
 $30,241,187
Net realized gain/(loss) from investments(6,298,431) 5,378,048
(6,288,483) 5,477,282
Net unrealized appreciation/(depreciation) on investments2,489,196
 (60,023,619)(17,354,708) (74,116,712)
Change in provision for deferred taxes on unrealized appreciation/(depreciation) on investments—
 (224,616)—
 (358,106)
Loss on extinguishment of debt(456,364) —
Net increase/(decrease) in net assets from operations6,325,573
 (39,204,312)(5,922,481) (38,756,349)
SHAREHOLDER DISTRIBUTIONS: 
  
 
  
Distributions from net investment income(11,984,328) (16,901,142)(23,968,655) (33,645,784)
Net decrease in net assets from shareholder distributions(11,984,328) (16,901,142)(23,968,655) (33,645,784)
COMMON SHARE TRANSACTIONS: 
  
 
  
Repurchase of common stock under stock repurchase program (0 and 143,349 shares, respectively)—
 (1,099,932)
Repurchase of common stock under stock repurchase program (0 and 1,573,741 shares, respectively)—
 (10,699,990)
Offering costs(12,778) (46,430)
Net increase/(decrease) in net assets from common share transactions—
 (1,099,932)(12,778) (10,746,420)
Total increase/(decrease) in net assets(5,658,755) (57,205,386)(29,903,914) (83,148,553)
Net assets at beginning of period516,919,142
 619,920,384
516,919,142
 619,920,384
Net assets at end of period including accumulated undistributed net investment income of $8,962,242 and $19,116,562, respectively$511,260,387
 $562,714,998
Net assets at end of period including accumulated undistributed net investment income of $5,020,181 and $16,947,233, respectively$487,015,228
 $536,771,831
      
Net asset value per common share$9.39
 $10.01
$8.94
 $9.80
Common shares outstanding at end of period54,474,211
 56,193,803
54,474,211
 54,763,411
 
See accompanying notes to consolidated financial statements.
 




Medley Capital Corporation
 
Consolidated Statements of Cash Flows
For the three months ended December 31For the six months ended March 31
2016 20152017 2016
Cash flows from operating activities(unaudited) (unaudited)(unaudited) (unaudited)
NET INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS$6,325,573
 $(39,204,312)$(5,922,481) $(38,756,349)
ADJUSTMENTS TO RECONCILE NET INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS TO NET CASH PROVIDED/(USED) BY OPERATING ACTIVITIES: 
  
 
  
Investment increases due to payment-in-kind interest(4,823,083) (3,817,899)(9,332,277) (7,553,996)
Net amortization of premium/(discount) on investments(350,100) (229,653)(680,657) (446,191)
Amortization of debt issuance costs997,329
 788,924
3,157,516
 1,701,963
Net realized (gain)/loss from investments6,298,431
 (5,378,048)6,288,483
 (5,477,282)
Loss on extinguishment of debt456,364
 —
Net deferred income taxes—
 224,616
—
 358,106
Net unrealized (appreciation)/depreciation on investments(2,489,196) 60,023,619
17,354,708
 74,116,712
Proceeds from sale and settlements of investments40,117,661
 97,056,910
75,123,093
 195,075,586
Purchases, originations and participations(42,182,104) (46,686,682)(100,710,131) (75,712,392)
(Increase)/decrease in operating assets: 
  
 
  
Interest receivable(2,024,597) 823,758
(1,067,982) (423,207)
Fees receivable764,524
 (586,474)521,196
 (915,606)
Other assets143,067
 119,967
(25,008) 194,325
Receivable for dispositions and investments sold133,631
 (564,347)9,308
 184,586
Increase/(decrease) in operating liabilities: 
  
 
  
Management and incentive fees payable, net788,063
 (699,307)(79,660) (4,060,911)
Accounts payable and accrued expenses(456,158) (1,027,843)(390,201) (709,609)
Interest and fees payable2,317,959
 1,277,906
129,166
 517,659
Administrator expenses payable(74,170) (83,165)6,838
 41,672
Deferred revenue(59,740) 28,381
(87,379) (42,839)
Due to affiliate114,038
 109,066
59,456
 (109,164)
NET CASH PROVIDED/(USED) BY OPERATING ACTIVITIES5,541,128
 62,175,417
(15,189,648) 137,983,063
      
Cash flows from financing activities 
  
 
  
Repurchase of common stock under stock repurchase program—
 (1,099,932)—
 (10,699,990)
Offering costs paid(1,381) (118,576)(44,811) (24,720)
Borrowings on debt18,379,732
 83,762,825
107,363,443
 118,112,825
Paydowns on debt(14,000,000) (116,500,000)(88,000,000) (211,500,000)
Debt issuance costs paid(285,408) (2,919,544)(1,122,609) (3,232,365)
Payments of cash dividends(11,984,328) (16,901,142)(23,968,655) (33,645,784)
NET CASH PROVIDED/(USED) BY FINANCING ACTIVITIES(7,891,385) (53,776,369)(5,772,632) (140,990,034)
      
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS(2,350,257) 8,399,048
(20,962,280) (3,006,971)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD104,485,263
 15,714,256
104,485,263
 15,714,256
CASH AND CASH EQUIVALENTS, END OF PERIOD$102,135,006
 $24,113,304
$83,522,983
 $12,707,285
      
Supplemental Information: 
  
 
  
Interest paid during the period$4,439,248
 $4,883,873
$13,592,326
 $10,018,155
Supplemental non-cash information: 
  
 
  
Payment-in-kind interest income$4,933,610
 $2,218,068
$8,930,074
 $5,700,588
Net amortization of premium/(discount) on investments$350,100
 $229,653
$680,657
 $446,191
Amortization of debt issuance costs$(997,329) $(788,924)$(3,157,516) $(1,701,963)
Non-cash purchase of investments$58,615,663
 $—
$58,615,663
 $—
Non-cash sale of investments$58,615,663
 $—
$58,615,663
 $—
 
See accompanying notes to consolidated financial statements.


Medley Capital Corporation

Consolidated Schedule of Investments

DecemberMarch 31, 20162017
(unaudited)
Company(1)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of Net Assets(4)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of Net Assets(4)
                
Non-Controlled/Non-Affiliated Investments:
Non-Controlled/Non-Affiliated Investments:
        
Non-Controlled/Non-Affiliated Investments:
        
        
Access Media Holdings, LLC(7)
 Media:  Broadcasting & Subscription Senior Secured First Lien Term Loan (10.00%) 7/22/2020 8,029,730
 8,029,730
 7,849,623
 1.5%
 Preferred Equity Series A 1,600,000
 1,600,000
 —
 0.0%
 Preferred Equity Series AA 740,000
 740,000
 —
 0.0%
 16% of Common Equity of Newco —
 —
 —
 0.0%
 10,369,730
 10,369,730
 7,849,623
  
                
Accupac, Inc. Containers, Packaging & Glass 
Senior Secured Second Lien Term Loan (LIBOR + 10.00% Cash, 1.00% LIBOR Floor)(18)
 7/14/2020 27,000,000
 27,000,000
 27,000,000
 5.3% Containers, Packaging & Glass 
Senior Secured Second Lien Term Loan (LIBOR + 10.00% Cash, 1.00% LIBOR Floor)(13)
 7/14/2020 27,000,000
 27,000,000
 27,000,000
 5.6%
 27,000,000
 27,000,000
 27,000,000
   27,000,000
 27,000,000
 27,000,000
  
                
Advanced Diagnostic Holdings, LLC Healthcare & Pharmaceuticals Senior Secured First Lien Term Loan (LIBOR + 8.75% Cash, 0.875% LIBOR Floor) 12/11/2020 15,262,608
 15,262,608
 15,567,860
 3.1% Healthcare & Pharmaceuticals Senior Secured First Lien Term Loan (LIBOR + 8.75% Cash, 0.875% LIBOR Floor) 12/11/2020 14,970,966
 14,970,966
 15,270,385
 3.1%
 15,262,608
 15,262,608
 15,567,860
   14,970,966
 14,970,966
 15,270,385
  
                
Albertville Quality Foods, Inc.(12)
 Beverage & Food 
Senior Secured First Lien Term Loan (LIBOR + 9.50% Cash, 1.00% LIBOR Floor, 3.00% LIBOR Cap)(18)
 10/31/2018 15,863,017
 15,863,017
 15,863,017
 3.1% Beverage & Food 
Senior Secured First Lien Term Loan (LIBOR + 9.50% Cash, 1.00% LIBOR Floor, 3.00% LIBOR Cap)(13)
 10/31/2018 15,753,937
 15,753,937
 15,753,937
 3.2%
 15,863,017
 15,863,017
 15,863,017
   15,753,937
 15,753,937
 15,753,937
  
                
American Dental Partners, Inc. Healthcare & Pharmaceuticals Senior Secured Second Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor) 9/25/2023 6,500,000
 6,500,000
 6,500,000
 1.3%
 6,500,000
 6,500,000
 6,500,000
  
        
Autosplice, Inc. High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 9.50% Cash, 1.00% LIBOR Floor)(19)
 6/30/2019 14,572,220
 14,572,220
 14,717,942
 2.9% High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 9.50% Cash, 1.00% LIBOR Floor)(14)
 6/30/2019 14,479,608
 14,479,608
 14,624,404
 3.0%
 14,479,608
 14,479,608
 14,624,404
  
        
Avantor Performance Materials Holdings, LLC(7)(9)
 Chemicals, Plastics & Rubber 
Senior Secured Second Lien Term Loan (LIBOR + 8.25% Cash, 1.00% LIBOR Floor)(13)
 3/10/2025 957,895
 947,929
 959,145
 0.2%
 14,572,220
 14,572,220
 14,717,942
   957,895
 947,929
 959,145
  
                
Backcountry.com, LLC Retail 
Senior Secured First Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(19)
 6/30/2020 2,542,969
 2,542,969
 2,568,398
 0.5% Retail 
Senior Secured First Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(14)
 6/30/2020 2,186,391
 2,186,391
 2,208,255
 0.5%
 2,542,969
 2,542,969
 2,568,398
   2,186,391
 2,186,391
 2,208,255
  
                
Be Green Packaging, LLC Containers, Packaging & Glass 
Equity - 417 Common Shares(33)
 —
 416,250
 —
 0.0% Containers, Packaging & Glass Equity - 417 Common Units —
 416,250
 —
 0.0%
 —
 416,250
 —
   —
 416,250
 —
  
                
Black Angus Steakhouses, LLC(7)(9)
 Hotel, Gaming & Leisure 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(18)
 4/24/2020 7,854,911
 7,854,911
 7,634,204
 1.5% Hotel, Gaming & Leisure 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(13)
 4/24/2020 7,803,571
 7,803,571
 7,472,237
 1.5%
 
Senior Secured First Lien Delayed Draw (LIBOR + 9.00%, 1.00% LIBOR Floor)(18)
 4/24/2020 —
 —
 —
 0.0% 
Senior Secured First Lien Delayed Draw (LIBOR + 9.00%, 1.00% LIBOR Floor)(13)
 4/24/2020 —
 —
 —
 0.0%
 
Revolver (LIBOR + 9.00%, 1.00% LIBOR Floor)(18)(27)
 4/24/2020 267,857
 267,857
 267,857
 0.1% 
Revolver (LIBOR + 9.00%, 1.00% LIBOR Floor)(13)(17)
 4/24/2020 267,857
 267,857
 232,804
 0.0%
 8,122,768
 8,122,768
 7,902,061
   8,071,428
 8,071,428
 7,705,041
  
                
Brantley Transportation LLC(7)(12)
 Energy:  Oil & Gas 
Senior Secured First Lien Term Loan (12.00% PIK)(10)
 8/2/2017 10,369,176
 9,037,576
 5,515,054
 1.1%
Comfort Holding, LLC Consumer goods:  Durable 
Senior Secured Second Lien Term Loan (LIBOR + 10.00% Cash, 1.00% LIBOR Floor)(13)
 2/3/2025 1,000,000
 960,151
 960,000
 0.2%
 
Senior Secured First Lien Delayed Draw (LIBOR + 5.00%, 1.00% LIBOR Floor)(19)
 8/2/2017 712,500
 712,500
 712,500
 0.1% 1,000,000
 960,151
 960,000
  
 7.50 Common Units represent 8.04% of the outstanding equity interest of Brantley Trucking, LLC —
 —
 —
 0.0%
 11,081,676
 9,750,076
 6,227,554
  


Company(1)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of Net Assets(4)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of Net Assets(4)
                
ConvergeOne Holdings Corporation Telecommunications 
Senior Secured Second Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(19)
 6/17/2021 12,500,000
 12,410,971
 12,500,000
 2.4% Telecommunications 
Senior Secured Second Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(14)
 6/17/2021 12,500,000
 12,414,987
 12,500,000
 2.6%
 12,500,000
 12,410,971
 12,500,000
   12,500,000
 12,414,987
 12,500,000
  
                
CP OPCO, LLC(7)(9)
 Services:  Consumer 
Senior Secured First Lien Term Loan A (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(19)(31)
 3/31/2019 2,859,385
 2,859,385
 2,859,385
 0.6% Services:  Consumer 
Senior Secured First Lien Term Loan A (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(14)(20)
 3/31/2019 2,913,334
 2,913,334
 2,913,334
 0.6%
 
Senior Secured First Lien Term Loan B (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(19)(31)
 3/31/2019 1,191,410
 1,191,410
 1,191,410
 0.2% 
Senior Secured First Lien Term Loan B (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(14)(20)
 3/31/2019 1,213,889
 1,213,889
 1,213,889
 0.2%
 
Senior Secured First Lien Term Loan C (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(10)(19)(32)
 3/31/2019 8,426,519
 4,060,381
 4,213,260
 0.8% 
Senior Secured First Lien Term Loan C (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(10)(14)(15)
 3/31/2019 8,649,655
 4,060,381
 4,324,827
 0.9%
 
Senior Secured First Lien Term Loan D (LIBOR + 9.50% PIK, 1.25% LIBOR Floor)(10)(19)
 3/31/2019 5,297,476
 —
 —
 0.0% 
Senior Secured First Lien Term Loan D (LIBOR + 9.50% PIK, 1.25% LIBOR Floor)(10)(14)
 3/31/2019 5,297,476
 —
 —
 0.0%
 
Revolving Credit Facility (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(19)
 3/31/2019 725,552
 725,552
 725,552
 0.1% 
Revolving Credit Facility (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(14)
 3/31/2019 1,920,849
 1,920,849
 1,920,849
 0.4%
 
Revolving Credit Facility (ABR + 3.50% Cash, 3.75% ABR Floor)(30)
 3/31/2019 1,195,298
 1,195,298
 1,195,298
 0.2% 
Senior Secured First Lien Term Loan (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(14)
 4/28/2017 116,088
 116,088
 116,088
 0.0%
 
Common Units(29)
 —
 —
 —
 0.0% Equity - 232 Common Units —
 —
 —
 0.0%
 19,695,640
 10,032,026
 10,184,905
   20,111,291
 10,224,541
 10,488,987
  
                
Crow Precision Components, LLC Aerospace & Defense 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(18)
 9/30/2019 13,540,000
 13,540,000
 13,309,278
 2.6% Aerospace & Defense 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(13)
 9/30/2019 13,365,000
 13,365,000
 13,256,209
 2.7%
 350 units of outstanding equity in Wingman Holdings, Inc. —
 700,000
 277,790
 0.1% Equity - 350 Common Units —
 700,000
 273,809
 0.1%
 13,540,000
 14,240,000
 13,587,068
   13,365,000
 14,065,000
 13,530,018
  
                
DHISCO Electronic Distribution, Inc. Hotel, Gaming & Leisure 
Senior Secured First Lien Term Loan A (LIBOR + 6.50%, 1.50% LIBOR Floor)(19)
 11/10/2019 3,809,524
 3,809,524
 3,809,524
 0.8% Hotel, Gaming & Leisure 
Senior Secured First Lien Term Loan A (LIBOR + 6.50%, 1.50% LIBOR Floor)(14)
 11/10/2019 3,809,524
 3,809,524
 3,809,524
 0.8%
 
Senior Secured First Lien Term Loan B (LIBOR + 9.00% PIK, 1.50% LIBOR Floor)(19)
 11/10/2019 13,391,667
 13,391,667
 13,391,667
 2.6% 
Senior Secured First Lien Term Loan B (LIBOR + 9.00% PIK, 1.50% LIBOR Floor)(14)
 11/10/2019 13,870,558
 13,870,558
 13,870,558
 2.8%
 
Senior Secured First Lien Term Loan C (LIBOR + 10.25% PIK, 1.50% LIBOR Floor)(19)
 11/10/2019 11,484,524
 11,484,524
 11,484,524
 2.3% 
Senior Secured First Lien Term Loan C (LIBOR + 10.25% PIK, 1.50% LIBOR Floor)(10)(14)
 11/10/2019 11,944,829
 11,604,473
 5,972,414
 1.2%
 
Senior Secured First Lien Term Loan D (LIBOR + 11.25% PIK, 1.50% LIBOR Floor)(10)(19)
 11/10/2019 10,688,533
 4,705,427
 4,730,424
 0.9% 
Senior Secured First Lien Term Loan D (LIBOR + 11.25% PIK, 1.50% LIBOR Floor)(10)(14)
 11/10/2019 11,153,979
 4,705,427
 —
 0.0%
 
Equity - 1,230,769 Units(22)
 —
 1,230,769
 —
 0.0% Equity - 1,230,769 Class A Units —
 1,230,769
 —
 0.0%
 39,374,248
 34,621,911
 33,416,139
   40,778,890
 35,220,751
 23,652,496
  
                
Dream Finders Homes, LLC Construction & Building Senior Secured First Lien Term Loan B (LIBOR + 14.50% Cash) 10/1/2018 6,346,036
 6,271,605
 6,362,472
 1.2%
 5,000 common units represent 5% of the outstanding equity interest of Dream Finders Holdings, LLC —
 180,000
 2,545,777
 0.5%
 6,346,036
 6,451,605
 8,908,249
  
        
Dynamic Energy Services International LLC Energy:  Oil & Gas 
Senior Secured First Lien Term Loan (13.50% PIK + LIBOR)(18)
 3/6/2018 16,458,105
 16,458,105
 14,009,304
 2.7% Energy:  Oil & Gas 
Senior Secured First Lien Term Loan (13.50% PIK + LIBOR)(13)
 3/6/2018 17,025,910
 17,025,910
 14,492,625
 3.0%
 16,458,105
 16,458,105
 14,009,304
   17,025,910
 17,025,910
 14,492,625
  
                
Essex Crane Rental Corp.(12)
 Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(19)
 5/13/2019 23,991,347
 20,460,116
 112,519
 0.0% Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(14)
 5/13/2019 24,810,848
 20,460,116
 112,641
 0.0%
 23,991,347
 20,460,116
 112,519
   24,810,848
 20,460,116
 112,641
  
         

 

 

  
FKI Security Group, LLC(12)
 Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(19)
 3/30/2020 11,937,500
 11,937,500
 12,088,629
 2.4% Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(14)
 3/30/2020 11,843,750
 11,843,750
 11,843,750
 2.5%
 11,937,500
 11,937,500
 12,088,629
   11,843,750
 11,843,750
 11,843,750
  
        
Footprint Acquisition, LLC Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash)(13)
 2/27/2020 5,183,864
 5,183,864
 5,183,864
 1.1%
 Preferred Equity (8.75% PIK) 6,006,952
 6,006,952
 6,006,950
 1.2%
 Equity - 150 Common Units —
 —
 595,874
 0.1%
 11,190,816
 11,190,816
 11,786,688
  


Company(1)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of Net Assets(4)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of Net Assets(4)
                
Footprint Acquisition, LLC Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash)(18)
 2/27/2020 5,250,102
 5,250,102
 5,322,711
 1.0%
Freedom Powersports, LLC Automotive 
Senior Secured First Lien Term Loan (LIBOR + 10.00% Cash, 1.50% LIBOR Floor)(14)
 9/26/2019 13,150,000
 13,150,000
 13,203,258
 2.7%
 Preferred Equity (8.75% PIK) 5,749,795
 5,749,795
 5,749,508
 1.1% 13,150,000
 13,150,000
 13,203,258
  
 
150.0 units of Common Stock(23)
 —
 —
 1,171,650
 0.2%        
 10,999,897
 10,999,897
 12,243,869
  
        
Freedom Powersports, LLC Automotive 
Senior Secured First Lien Term Loan (LIBOR + 10.75% Cash, 1.50% LIBOR Floor)(19)
 9/26/2019 13,520,000
 13,520,000
 13,574,756
 2.7%
Friedrich Holdings, Inc. Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 7.00% Cash, 1.00% LIBOR Floor)(13)
 2/7/2023 10,000,000
 10,000,000
 10,000,000
 2.1%
 13,520,000
 13,520,000
 13,574,756
   10,000,000
 10,000,000
 10,000,000
  
                
Harrison Gypsum,
LLC(12)
 Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 0.50% PIK, 1.50% LIBOR Floor)(18)
 12/21/2018 53,822,555
 53,822,555
 52,783,780
 10.3% Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 0.50% PIK, 1.50% LIBOR Floor)(13)
 12/21/2018 52,592,777
 52,592,777
 50,523,777
 10.4%
 53,822,555
 53,822,555
 52,783,780
   52,592,777
 52,592,777
 50,523,777
  
                
Heligear Acquisition Co. Aerospace & Defense Senior Secured First Lien Note (10.25% Cash) 10/15/2019 20,000,000
 20,000,000
 21,047,400
 4.1% Aerospace & Defense Senior Secured First Lien Note (10.25% Cash) 10/15/2019 20,000,000
 20,000,000
 21,102,000
 4.3%
 20,000,000
 20,000,000
 21,047,400
   20,000,000
 20,000,000
 21,102,000
  
         

 

 

  
Impact Sales, LLC(7)(37)
 Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 7.00%, 1.00% LIBOR Floor)(19)
 12/30/2021 2,625,000
 2,625,000
 2,625,000
 0.5%
Impact Sales,
LLC(7)(9)(19)
 Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 7.00%, 1.00% LIBOR Floor)(14)
 12/30/2021 2,618,438
 2,618,438
 2,618,438
 0.5%
 
Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 7.00%, 1.00% LIBOR Floor)(14)
 12/30/2021 120,313
 120,313
 120,313
 0.0%
 2,625,000
 2,625,000
 2,625,000
   2,738,751
 2,738,751
 2,738,751
  
                
JD Norman Industries, Inc. Automotive Senior Secured First Lien Term Loan (LIBOR + 12.25% Cash) 3/6/2019 21,000,000
 21,000,000
 20,110,650
 3.9% Automotive Senior Secured First Lien Term Loan (LIBOR + 12.25% Cash) 3/6/2019 20,700,000
 20,700,000
 20,462,571
 4.2%
 21,000,000
 21,000,000
 20,110,650
   20,700,000
 20,700,000
 20,462,571
  
         

 

 

  
Jordan Reses Supply Company, LLC Healthcare & Pharmaceuticals 
Senior Secured Second Lien Term Loan (LIBOR + 11.00%, 1.00% LIBOR Floor)(19)
 4/24/2020 20,000,000
 20,000,000
 20,200,000
 4.0% Healthcare & Pharmaceuticals 
Senior Secured Second Lien Term Loan (LIBOR + 11.00%, 1.00% LIBOR Floor)(14)
 4/24/2020 20,000,000
 20,000,000
 20,200,000
 4.2%
 20,000,000
 20,000,000
 20,200,000
  
        
L & S Plumbing Partnership, Ltd. Construction & Building Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor) 2/15/2022 22,078,125
 22,078,125
 22,078,125
 4.5%
 20,000,000
 20,000,000
 20,200,000
   22,078,125
 22,078,125
 22,078,125
  
                
Lighting Science Group Corporation Containers, Packaging & Glass 
Senior Secured Second Lien Term (LIBOR + 10.00% Cash, 2.00% PIK)(19)
 2/19/2019 16,134,768
 15,645,247
 15,117,471
 3.0% Containers, Packaging & Glass 
Senior Secured Second Lien Term (LIBOR + 10.00% Cash, 2.00% PIK)(14)
 2/19/2019 16,215,576
 15,775,439
 15,369,447
 3.2%
 Warrants to purchase 0.94% of the outstanding equity 2/19/2024 —
 955,680
 45,000
 0.0% Warrants - 0.94% of Outstanding Equity 2/19/2024 —
 955,680
 20,000
 0.0%
 16,134,768
 16,600,927
 15,162,471
   16,215,576
 16,731,119
 15,389,447
  
         

 

 

  
LSF9 Atlantis Holdings, LLC Retail 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(19)
 1/15/2021 9,625,000
 9,540,316
 9,739,634
 1.9% Retail 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(14)
 1/15/2021 9,500,000
 9,419,486
 9,629,675
 2.0%
 9,625,000
 9,540,316
 9,739,634
   9,500,000
 9,419,486
 9,629,675
  
         

 

 

  
Merchant Cash and Capital, LLC Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Delayed Draw (LIBOR + 8.00% Cash, 3.00% LIBOR Floor)(18)
 1/31/2017 15,848,602
 15,848,602
 15,848,602
 3.1% Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Delayed Draw (LIBOR + 8.00% Cash, 5.00% PIK, 3.00% LIBOR Floor)(13)
 5/31/2017 14,096,720
 14,096,720
 14,096,720
 2.9%
 Senior Secured Second Lien Term Loan (12.00% Cash) 5/4/2017 15,000,000
 15,000,000
 15,000,000
 2.9%                                                  Senior Secured Second Lien Term Loan (12.00% Cash, 5% PIK) 5/4/2017 15,000,000
 15,000,000
 15,000,000
 3.1%
 30,848,602
 30,848,602
 30,848,602
   29,096,720
 29,096,720
 29,096,720
  
         

 

 

  
Miratech Intermediate Holdings, Inc.(12)
 Automotive 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(18)
 5/9/2019 12,595,105
 12,595,105
 12,442,326
 2.5%
Nation Safe Drivers Holdings, Inc. Banking, Finance, Insurance & Real Estate 
Senior Secured Second Lien Term Loan (LIBOR + 8.00% Cash, 2.00% LIBOR Floor)(14)
 9/29/2020 35,278,846
 35,278,846
 35,631,635
 7.3%
 12,595,105
 12,595,105
 12,442,326
   35,278,846
 35,278,846
 35,631,635
  
        
Momentum Telecom, Inc. Telecommunications 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(18)
 3/10/2019 11,609,652
 11,609,652
 11,725,748
 2.3%
 11,609,652
 11,609,652
 11,725,748
  


Company(1)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of Net Assets(4)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of Net Assets(4)
        
Nation Safe Drivers Holdings, Inc. Banking, Finance, Insurance & Real Estate 
Senior Secured Second Lien Term Loan (LIBOR + 8.00% Cash, 2.00% LIBOR Floor)(19)
 9/29/2020 35,278,846
 35,278,846
 35,631,635
 7.0%
 35,278,846
 35,278,846
 35,631,635
  
         

 

 

  
Nielsen & Bainbridge, LLC Consumer goods:  Durable 
Senior Secured Second Lien Term Loan (LIBOR + 9.25% Cash, 1.00% LIBOR Floor)(18)
 8/15/2021 25,000,000
 25,000,000
 25,000,000
 4.9% Consumer goods:  Durable 
Senior Secured Second Lien Term Loan (LIBOR + 9.25% Cash, 1.00% LIBOR Floor)(13)
 8/15/2021 25,000,000
 25,000,000
 25,000,000
 5.2%
 25,000,000
 25,000,000
 25,000,000
   25,000,000
 25,000,000
 25,000,000
  
         

 

 

  
NorthStar Group Services, Inc. Construction & Building Unsecured Debt (2.5% Cash, 15.5% PIK) 10/24/2019 27,164,328
 27,164,328
 27,168,946
 5.3% Construction & Building Unsecured Debt (2.5% Cash, 15.5% PIK) 10/24/2019 28,240,337
 28,240,337
 28,240,337
 5.8%
 27,164,328
 27,164,328
 27,168,946
   28,240,337
 28,240,337
 28,240,337
  
         

 

 

  
Oxford Mining Company, LLC Metals & Mining Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 3.00% PIK, 0.75% LIBOR Floor) 12/31/2018 20,756,842
 20,756,843
 20,518,139
 4.0% Metals & Mining Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 3.00% PIK, 0.75% LIBOR Floor) 12/31/2018 20,889,280
 20,889,281
 20,837,057
 4.3%
 20,756,842
 20,756,843
 20,518,139
   20,889,280
 20,889,281
 20,837,057
  
         

 

 

  
The Plastics Group, Inc. Chemicals, Plastics & Rubber Senior Secured First Lien Term Loan (11.00% Cash, 2.00% PIK) 2/28/2019 21,941,676
 21,941,676
 21,675,962
 4.2% Chemicals, Plastics & Rubber Senior Secured First Lien Term Loan (11.00% Cash, 2.00% PIK) 2/28/2019 21,829,737
 21,829,737
 21,708,145
 4.5%
 21,941,676
 21,941,676
 21,675,962
   21,829,737
 21,829,737
 21,708,145
  
         

 

 

  
Path Medical, LLC Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 9.50% Cash, 1.00% LIBOR Floor)(19)
 10/11/2021 9,339,972
 8,856,817
 8,963,758
 1.8% Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 9.50% Cash, 1.00% LIBOR Floor)(14)
 10/11/2021 9,186,194
 8,721,770
 8,816,174
 1.8%
 
Senior Secured First Lien Term Loan A (LIBOR + 9.50% Cash, 1.00% LIBOR Floor)(19)
 10/11/2021 2,808,500
 2,808,500
 2,695,374
 0.5% 
Senior Secured First Lien Term Loan A (LIBOR + 9.50% Cash, 1.00% LIBOR Floor)(14)
 10/11/2021 2,808,500
 2,808,500
 2,695,374
 0.6%
 
Warrants to purchase 1.56% of the outstanding common shares(34)
 1/9/2027 —
 499,751
 499,751
 0.1% Warrants - 1.56% of Outstanding Equity 1/9/2027 —
 499,751
 499,751
 0.1%
 12,148,472
 12,165,068
 12,158,883
   11,994,694
 12,030,021
 12,011,299
  
��        
        
Point.360 Services:  Business Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash) 7/8/2020 1,976,045
 1,976,045
 1,896,884
 0.4% Services:  Business Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash) 7/8/2020 2,022,975
 2,022,976
 1,776,213
 0.4%
 
Equity - 479,283 Common Shares(25)
 —
 129,406
 233,890
 0.1% Equity - 479,283 Common Units —
 129,406
 119,821
 0.1%
 
Warrants to purchase 2.8% of the outstanding common shares(26)
 7/8/2020 —
 52,757
 154,666
 0.0% Warrants - 2.8% of Outstanding Equity 7/8/2020 —
 52,757
 76,238
 0.0%
 1,976,045
 2,158,208
 2,285,440
   2,022,975
 2,205,139
 1,972,272
  
         

 

 

  
Prestige Industries LLC Services:  Business 
Senior Secured Second Lien Term Loan (10.00% Cash, 3.00% PIK)(10)
 11/1/2017 7,738,835
 7,596,890
 2,839,920
 0.6% Services:  Business 
Senior Secured Second Lien Term Loan (10.00% Cash, 3.00% PIK)(10)
 11/1/2017 7,797,021
 7,596,890
 1,949,255
 0.4%
 Warrants to purchase 0.63% of the outstanding common units 11/1/2017 —
 151,855
 —
 0.0% Warrants - 0.63% of Outstanding Equity 11/1/2017 —
 151,855
 —
 0.0%
 7,738,835
 7,748,745
 2,839,920
   7,797,021
 7,748,745
 1,949,255
  
         

 

 

  
Prince Mineral Holding Corp.(8)
 Wholesale Senior Secured First Lien Note (11.50%) 12/15/2019 6,800,000
 6,758,315
 6,664,000
 1.3% Wholesale Senior Secured First Lien Note (11.50%) 12/15/2019 6,800,000
 6,761,307
 6,919,000
 1.4%
 6,800,000
 6,758,315
 6,664,000
   6,800,000
 6,761,307
 6,919,000
  
         

 

 

  
Reddy Ice Corporation Beverage & Food 
Senior Secured Second Lien Term Loan (LIBOR + 9.50% Cash, 1.25% LIBOR Floor)(18)
 11/1/2019 17,000,000
 17,000,000
 14,620,000
 2.9% Beverage & Food 
Senior Secured Second Lien Term Loan (LIBOR + 9.50% Cash, 1.25% LIBOR Floor)(13)
 11/1/2019 17,000,000
 17,000,000
 15,130,000
 3.1%
 17,000,000
 17,000,000
 14,620,000
   17,000,000
 17,000,000
 15,130,000
  
         

 

 

  
Response Team Holdings, LLC Construction & Building 
Preferred Equity (12.00% PIK)(10)
 6,448,253
 5,796,888
 1,612,063
 0.3% Construction & Building 
Preferred Equity (12.00% PIK)(10)
 6,641,700
 5,796,824
 1,660,425
 0.3%
 Warrants to purchase 7.2% of the outstanding common units 3/28/2019 —
 429,012
 —
 0.0% Warrants - 7.2% of Outstanding Equity 3/28/2019 —
 429,012
 —
 0.0%
 6,448,253
 6,225,900
 1,612,063
   6,641,700
 6,225,836
 1,660,425
  
        
Sendero Drilling Company, LLC Energy:  Oil & Gas Senior Secured First Lien Term Loan (LIBOR + 11.00% Cash) 3/18/2019 3,264,874
 2,894,242
 3,264,874
 0.7%
 Warrants - 5.52% of Outstanding Equity 3/18/2019 —
 793,523
 5,399,816
 1.1%
 3,264,874
 3,687,765
 8,664,690
  


Company(1)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of Net Assets(4)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of Net Assets(4)
        
Sendero Drilling Company, LLC Energy:  Oil & Gas Senior Secured First Lien Term Loan (LIBOR + 11.00% Cash) 3/18/2019 3,630,593
 3,219,462
 3,666,899
 0.7%
 Warrants to purchase 5.52% of the outstanding common units 3/18/2019 —
 793,523
 5,399,817
 1.1%
 3,630,593
 4,012,985
 9,066,716
  
         

 

 

  
Seotowncenter, Inc.(12)
 Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(19)
 9/11/2019 24,480,250
 24,480,250
 24,245,729
 4.7% Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(14)
 9/11/2019 24,260,935
 24,260,935
 24,223,330
 5.0%
 
3,249.697 shares of Common
Stock(14)
 —
 500,000
 245,067
 0.0% Equity - 3,249.697 Common Units —
 500,000
 274,838
 0.1%
 24,480,250
 24,980,250
 24,490,796
   24,260,935
 24,760,935
 24,498,168
  
                
Ship Supply Acquisition Corporation Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(19)
 7/31/2020 7,967,498
 7,967,498
 7,808,705
 1.5% Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(14)
 7/31/2020 7,861,264
 7,861,264
 7,531,720
 1.5%
 7,967,498
 7,967,498
 7,808,705
   7,861,264
 7,861,264
 7,531,720
  
                
SMART Financial Operations, LLC(7)
 Retail 
Senior Secured First Lien Term Loan (LIBOR + 10.00% Cash, 1.00% LIBOR Floor)(19)
 11/22/2021 2,775,000
 2,775,000
 2,775,000
 0.5%
SMART Financial Operations, LLC(7)(9)
 Retail 
Senior Secured First Lien Term Loan (LIBOR + 10.00% Cash, 1.00% LIBOR Floor)(14)
 11/22/2021 2,775,000
 2,775,000
 2,775,000
 0.6%
 
700,000 Class A Preferred Units(35)
 —
 700,000
 700,000
 0.1% Equity - 700,000 Class A Preferred Units —
 700,000
 700,000
 0.2%
 2,775,000
 3,475,000
 3,475,000
  
 

 

 

  
SRS Software, LLC High Tech Industries Senior Secured First Lien Term Loan (LIBOR + 7.00% Cash, 1.00% LIBOR Floor) 2/17/2022 7,500,000
 7,500,000
 7,500,000
 1.5%
 2,775,000
 3,475,000
 3,475,000
   7,500,000
 7,500,000
 7,500,000
  
                
Stancor, Inc. Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 0.75% LIBOR Floor)(18)
 8/19/2019 4,900,000
 4,900,000
 4,900,000
 1.0% Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 0.75% LIBOR Floor)(13)
 8/19/2019 4,747,273
 4,747,273
 4,747,273
 1.0%
 
263,814.43 Class A Units(15)
 —
 263,814
 142,066
 0.0% Equity - 263,814.43 Class A Units —
 263,814
 150,166
 0.0%
 4,900,000
 5,163,814
 5,042,066
   4,747,273
 5,011,087
 4,897,439
  
                
T Residential Holdings, LLC Banking, Finance, Insurance & Real Estate Senior Secured First Lien Term Loan (12.00%) 3/28/2019 18,250,000
 18,250,000
 18,302,195
 3.6% Banking, Finance, Insurance & Real Estate Senior Secured First Lien Term Loan (12.00%) 3/28/2019 18,000,000
 18,000,000
 18,000,000
 3.7%
 18,250,000
 18,250,000
 18,302,195
   18,000,000
 18,000,000
 18,000,000
  
                
Taylored Freight Services, LLC Services:  Business 
Senior Secured Second Lien Term Loan (LIBOR + 9.50% Cash, 2.00% PIK, 1.50% LIBOR Floor)(19)
 11/1/2017 15,117,206
 15,117,206
 14,969,964
 2.9% Services:  Business 
Senior Secured Second Lien Term Loan (LIBOR + 9.50% Cash, 2.00% PIK, 1.50% LIBOR Floor)(14)
 11/1/2017 14,892,442
 14,892,442
 14,815,597
 3.0%
 15,117,206
 15,117,206
 14,969,964
   14,892,442
 14,892,442
 14,815,597
  
                
Trans-Fast Remittance LLC(7)(36)
 Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 9.50% Cash, 1.00% LIBOR Floor)(18)
 12/2/2021 3,567,857
 3,567,857
 3,567,857
 0.7%
Trans-Fast Remittance LLC(7)(9)(18)
 Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 9.50% Cash, 1.00% LIBOR Floor)(13)
 12/2/2021 3,567,857
 3,567,857
 3,567,857
 0.7%
 
Revolving Credit Facility (LIBOR + 9.50%, 1.00% LIBOR Floor)(13)
 12/2/2021 1,875,000
 1,875,000
 1,875,000
 0.4%
 3,567,857
 3,567,857
 3,567,857
   5,442,857
 5,442,857
 5,442,857
  
                
Transtelco, Inc. Telecommunications 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.50% LIBOR Floor)(18)
 11/19/2017 18,624,000
 18,624,000
 18,789,009
 3.7% Telecommunications 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.50% LIBOR Floor)(13)
 11/19/2017 18,576,000
 18,576,000
 18,726,094
 3.8%
 18,624,000
 18,624,000
 18,789,009
   18,576,000
 18,576,000
 18,726,094
  
                
Velocity Pooling Vehicle, LLC Automotive 
Senior Secured Second Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(18)
 5/13/2022 24,000,000
 21,421,376
 12,795,840
 2.5% Automotive 
Senior Secured Second Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(13)
 5/13/2022 24,000,000
 21,509,490
 12,795,840
 2.6%
 24,000,000
 21,421,376
 12,795,840
   24,000,000
 21,509,490
 12,795,840
  
                
Watermill-QMC Midco, Inc. Automotive 
1.3% Partnership Interest in Watermill-QMC Midco Inc.(6)
 —
 488,332
 633,367
 0.1% Automotive Equity - 1.3% Partnership Interest —
 488,332
 633,367
 0.1%
 —
 488,332
 633,367
   —
 488,332
 633,367
  


Company(1)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of Net Assets(4)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of Net Assets(4)
         

 

 

  
Wheels Up Partners LLC(12)
 Aerospace & Defense 
Senior Secured First Lien Delayed Draw (LIBOR + 8.55% Cash, 1.00% LIBOR Floor)(19)
 10/15/2021 16,137,554
 16,137,554
 16,191,615
 3.2% Aerospace & Defense 
Senior Secured First Lien Delayed Draw (LIBOR + 8.55% Cash, 1.00% LIBOR Floor)(14)
 10/15/2021 15,661,922
 15,661,922
 15,442,186
 3.2%
 16,137,554
 16,137,554
 16,191,615
   15,661,922
 15,661,922
 15,442,186
  
         

 

 

  
Subtotal Non-Controlled/Non-Affiliated InvestmentsSubtotal Non-Controlled/Non-Affiliated Investments $793,141,698
 $775,077,727
 $730,315,622
  Subtotal Non-Controlled/Non-Affiliated Investments $789,095,836
 $770,315,852
 $717,295,079
  
                
Controlled Investments:(5)
Controlled Investments:(5)
        
Controlled Investments:(5)
        
                
AAR Intermediate Holdings, LLC(7)(9)
 Energy:  Oil & Gas 
Senior Secured First Lien Term Loan A (LIBOR + 5.00%, 1.00% LIBOR Floor)(19)
 9/30/2021 8,984,232
 8,984,232
 8,984,232
 1.8% Energy:  Oil & Gas 
Senior Secured First Lien Term Loan A (LIBOR + 5.00%, 1.00% LIBOR Floor)(14)
 9/30/2021 8,984,232
 8,984,232
 8,984,232
 1.9%
 
Senior Secured First Lien Term Loan B (LIBOR + 8.00% PIK, 1.00% LIBOR Floor)(19)
 9/30/2021 18,451,002
 15,015,132
 14,889,405
 2.9% 
Senior Secured First Lien Term Loan B (LIBOR + 8.00% PIK, 1.00% LIBOR Floor)(14)
 9/30/2021 19,300,053
 15,990,363
 18,045,550
 3.7%
 
Revolving Credit Facility (LIBOR + 5.00%, 1.00% LIBOR Floor)(24)
 9/30/2021 431,243
 431,243
 431,243
 0.1% 
Revolving Credit Facility (LIBOR + 5.00%, 1.00% LIBOR Floor)(14)(16)
 9/30/2021 718,739
 718,739
 718,739
 0.1%
 21.56 Class A Units represents 21.56% of the Outstanding Equity —
 —
 —
 0.0% Equity - 21.56 Class A Units —
 —
 —
 0.0%
 27,866,477
 24,430,607
 24,304,880
   29,003,024
 25,693,334
 27,748,521
  
                
Capstone Nutrition(12)
 Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(19)
 4/28/2019 23,571,244
 20,803,397
 15,120,010
 3.0% Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(14)
 4/28/2019 24,375,733
 20,803,397
 15,636,058
 3.2%
 
Senior Secured First Lien Delayed Draw (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(19)
 4/28/2019 10,199,257
 9,153,997
 6,542,416
 1.3% 
Senior Secured First Lien Delayed Draw (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(14)
 4/28/2019 10,547,359
 9,153,997
 6,765,709
 1.4%
 
4,664.6 Class B Shares and 9,424.4 Class C Shares(28)
 —
 12
 —
 0.0% Equity - 4,664.6 Class B Units and 9,424.4 Class C Units —
 12
 —
 0.0%
 
2,932.3 Units of Common Stock(13)
 —
 400,003
 —
 0.0% Equity - 2,932.3 Common Units —
 400,003
 —
 0.0%
 33,770,501
 30,357,409
 21,662,426
   34,923,092
 30,357,409
 22,401,767
  
                
Lydell Jewelry Design Studio, LLC(12)
 Consumer goods:  Non-durable 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 7.50% PIK, 1.50% LIBOR Floor)(10)(18)
 9/13/2018 15,873,619
 14,269,868
 5,816,412
 1.1% Consumer goods:  Non-durable 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 7.50% PIK, 1.50% LIBOR Floor)(10)(13)
 9/13/2018 16,173,109
 14,269,868
 5,926,150
 1.2%
 
Senior Secured First Lien Term Loan (LIBOR + 5.00% Cash, 1.50% LIBOR Floor)(18)
 9/13/2018 2,150,000
 2,150,000
 2,150,000
 0.4% 
Senior Secured First Lien Term Loan (LIBOR + 5.00% Cash, 1.50% LIBOR Floor)(13)
 9/13/2018 2,600,000
 2,600,000
 2,600,000
 0.5%
 Warrants to Purchase 13.3% of the outstanding membership units 9/13/2018 —
 —
 —
 0.0% Warrants - 13.3% of Outstanding Equity 9/13/2018 —
 —
 —
 0.0%
 
4,324,951.76 shares of Common Stock(20)
 —
 —
 —
 0.0% Equity - 4,324,951.76 Common Units —
 —
 —
 0.0%
 18,023,619
 16,419,868
 7,966,412
   18,773,109
 16,869,868
 8,526,150
  
                
MCC Senior Loan Strategy JV I LLC(11)
 Multisector Holdings Equity - 87.5% ownership of MCC Senior Loan Strategy JV I LLC —
 39,375,000
 39,418,215
 7.7% Multisector Holdings Equity - 87.5% ownership of MCC Senior Loan Strategy JV I LLC —
 43,225,000
 44,570,500
 9.2%
 —
 39,375,000
 39,418,215
   —
 43,225,000
 44,570,500
  
                
NVTN LLC(38)
 Hotel, Gaming & Leisure 
Senior Secured First Lien Term Loan (LIBOR + 4.00%, 1.00% LIBOR Floor)(18)
 11/9/2020 2,755,990
 2,755,990
 2,755,990
 0.5%
NVTN LLC(6)(7)(9)
 Hotel, Gaming & Leisure 
Senior Secured First Lien Term Loan (LIBOR + 4.00%, 1.00% LIBOR Floor)(13)
 11/9/2020 3,505,990
 3,505,990
 3,505,990
 0.7%
 
Senior Secured First Lien Term Loan B (LIBOR + 9.25% PIK, 1.00% LIBOR Floor)(18)
 11/9/2020 9,941,281
 9,941,281
 9,941,281
 1.9% 
Senior Secured First Lien Term Loan B (LIBOR + 9.25% PIK, 1.00% LIBOR Floor)(13)
 11/9/2020 10,288,212
 10,288,212
 10,288,212
 2.1%
 
Senior Secured First Lien Term Loan C (LIBOR + 12.00% PIK, 1.00% LIBOR Floor)(18)
 11/9/2020 5,950,478
 5,950,478
 5,950,478
 1.2% 
Senior Secured First Lien Term Loan C (LIBOR + 12.00% PIK, 1.00% LIBOR Floor)(13)
 11/9/2020 6,214,763
 6,214,763
 6,214,763
 1.3%
 787.40 Class A Units represents 78.74% of the Outstanding Equity 11/9/2020 9,550,922
 9,550,922
 9,550,922
 1.9% Equity - 787.4 Class A Units —
 9,550,922
 9,550,922
 2.0%
 28,198,671
 28,198,671
 28,198,671
   20,008,965
 29,559,887
 29,559,887
  
        
OmniVere, LLC Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 13.00% PIK)(19)
 5/5/2019 22,888,526
 22,606,509
 22,888,526
 4.5%
 
Unsecured Debt (8.00% PIK)(10)
 7/24/2025 25,099,472
 22,727,575
 12,475,692
 2.4%
 
Warrants to purchase outstanding equity(21)
 5/5/2019 —
 872,698
 —
 0.0%
 47,987,998
 46,206,782
 35,364,218
  


Company(1)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of Net Assets(4)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of Net Assets(4)
        
OmniVere, LLC Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 13.00% PIK)(10)(14)
 5/5/2019 23,985,000
 22,606,509
 21,973,618
 4.5%
 Senior Secured First Lien Term Loan (8.00% PIK) 5/5/2019 528,265
 528,265
 528,265
 0.1%
 
Unsecured Debt (8.00% PIK)(10)
 7/24/2025 25,778,492
 22,727,575
 —
 0.0%
 Equity - 5,055.56 Common Units 5/5/2019 —
 872,698
 —
 0.0%
 50,291,757
 46,735,047
 22,501,883
  
                
United Road Towing, Inc. Services:  Business Senior Secured Second Lien Term Loan (LIBOR + 9.00% PIK) 2/21/2020 19,195,974
 19,195,974
 19,195,974
 3.8% Services:  Business 
Senior Secured Second Lien Term Loan (LIBOR + 9.00% PIK)(10)
 2/21/2020 19,526,843
 19,526,843
 19,526,843
 4.0%
 
Preferred Equity Class C (8.00% PIK)(10)
 18,802,789
 15,958,032
 1,186,268
 0.2% 
Preferred Equity Class C (8.00% PIK)(10)
 18,802,789
 15,578,885
 1,186,268
 0.2%
 
Preferred Equity Class C-1 (8.00% PIK)(10)
 3,439,976
 2,844,844
 —
 0.0% 
Preferred Equity Class C-1 (8.00% PIK)(10)
 3,888,488
 3,224,251
 —
 0.0%
 
Preferred Equity Class A-2 (8.00% PIK)(10)
 5,521,071
 4,667,226
 —
 0.0% 
Preferred Equity Class A-2 (8.00% PIK)(10)
 5,632,400
 4,667,275
 —
 0.0%
 
65,809.73 Class B Common Units(16)
 —
 1,098,096
 —
 0.0% Equity - 65,809.73 Class B Common Units —
 1,098,096
 —
 0.0%
 46,959,810
 43,764,172
 20,382,242
   47,850,520
 44,095,350
 20,713,111
  
                
Subtotal Controlled Investments Subtotal Controlled Investments $202,807,076
 $228,752,509
 $177,297,064
  Subtotal Controlled Investments $200,850,467
 $236,535,895
 $176,021,819
  
                
Affiliated Investments:
Affiliated Investments:
        
Affiliated Investments:
        
                
Access Media Holdings, LLC Media:  Broadcasting & Subscription Senior Secured First Lien Term Loan (10.00%) 7/22/2020 8,130,520
 8,130,520
 8,130,520
 1.7%
 Preferred Equity Series A 1,600,000
 1,600,000
 —
 0.0%
 Preferred Equity Series AA 800,000
 800,000
 —
 0.0%
 Equity - 16 Common Units —
 —
 —
 0.0%
 10,530,520
 10,530,520
 8,130,520
  
        
Brantley Transportation LLC(7)(9)(12)
 Energy:  Oil & Gas 
Senior Secured First Lien Term Loan (12.00% PIK)(10)
 8/2/2017 10,683,364
 9,023,999
 6,419,847
 1.3%
 
Senior Secured First Lien Delayed Draw (LIBOR + 5.00%, 1.00% LIBOR Floor)(14)
 8/2/2017 712,500
 712,500
 712,500
 0.1%
 Equity - 7.5 Common Units —
 —
 —
 0.0%
 11,395,864
 9,736,499
 7,132,347
  
        
Dream Finders Homes, LLC Construction & Building Senior Secured First Lien Term Loan B (LIBOR + 14.50% Cash) 10/1/2018 4,968,384
 4,903,764
 5,015,534
 1.0%
 Equity - 5,000 Common Units —
 180,000
 2,545,777
 0.5%
 4,968,384
 5,083,764
 7,561,311
  
        
US Multifamily,
LLC(11)
 Banking, Finance, Insurance & Real Estate Senior Secured First Lien Term Loan (10.00% Cash) 9/10/2019 6,670,000
 6,670,000
 6,670,000
 1.3% Banking, Finance, Insurance & Real Estate Senior Secured First Lien Term Loan (10.00% Cash) 9/10/2019 6,670,000
 6,670,000
 6,670,000
 1.4%
 
Preferred Equity - 33,300 Units(17)
 —
 3,330,000
 3,330,000
 0.7% Equity - 33,300 Preferred Units —
 3,330,000
 3,330,000
 0.7%
 6,670,000
 10,000,000
 10,000,000
   6,670,000
 10,000,000
 10,000,000
  
                
Subtotal Affiliated InvestmentsSubtotal Affiliated Investments $6,670,000
 $10,000,000
 $10,000,000
  Subtotal Affiliated Investments $33,564,768
 $35,350,783
 $32,824,178
  
                
Total Investments, December 31, 2016 $1,002,618,774
 $1,013,830,236
 $917,612,686
 179.5%
Total Investments, March 31, 2017Total Investments, March 31, 2017 $1,023,511,071
 $1,042,202,530
 $926,141,076
 190.2%

(1)All of our investments are domiciled in the United States. Certain investments also have international operations.
(2)Par amount includes accumulated PIK interest and is net of repayments.            
(3)
GrossGross unrealized appreciation, gross unrealized depreciation, and net unrealized depreciation for federal income tax purposes totaled $20.6 million, $104.9 million$22,635,919, $127,088,835, and $84.3 million,$104,452,916, respectively. The tax cost basis of investments is $1,001.9 million$1,030,593,993 as of DecemberMarch 31, 2016.
2017.
(4)Percentage is based on net assets of $511,260,387$487,015,228 as of DecemberMarch 31, 2016.2017.
(5)Control Investments are defined by the Investment Company Act of 1940 ("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.        


(6)12,711 Units represents 1.3% of partnership interest in Watermill-QMC Partners, LP.Investment changed its name from DLR Restaurants LLC during FY 2017.
(7)The investment has an unfunded commitment as of DecemberMarch 31, 20162017 (See note 8).
(8)Securities are exempt from registration under Rule 144a of the Securities Act of 1933. This security represents a fair value of $6.7 million$6,919,000 and 1.3%1.4% of net assets as of DecemberMarch 31, 20162017 and is considered restricted.
(9)Includes an analysis of the value of any unfunded loan commitments.
(10)The investment was on non-accrual status as of DecemberMarch 31, 2016.2017.
(11)The investment is not a qualifying asset as defined under Section 55(a) of 1940 Act, in a whole, or in part. As of DecemberMarch 31, 2016, 5.4%2017, 5.9% of the Company's portfolio investments were non-qualifying assets.
(12)A portion of this investment was sold via a participation agreement (See note 3).
(13)2,932.3 Units represents 3.06% ownership of INI Parent, Inc.
(14)3,249.697 shares of Common Stock represents 2.917% ownership of Boostability Holdings, Inc.    
(15)263,814.43 Class A Units represents 0.882% ownership of Stancor, Inc.
(16)65,809.73 Class B Common Units Represents 65.8% ownership of United Road Towing, Inc.
(17)33,300 Units represents 18.167% ownership of US Multifamily, LLC.
(18)The interest rate on these loans is subject to a base rate plus 1 Month London Interbank Offering Rate ("LIBOR"(''LIBOR''), which at DecemberMarch 31, 20162017 was 0.61%0.98%. As the interest rate is subject to a minimum LIBOR Floor which was greater than the 1 Month LIBOR rate at DecemberMarch 31, 2016,2017, the prevailing rate in effect at DecemberMarch 31, 20162017 was the base rate plus the LIBOR Floor.
(19)(14)The interest rate on these loans is subject to a base rate plus 3 Month LIBOR, which at DecemberMarch 31, 20162017 was 0.94%1.15%. As the interest rate is subject to a minimum LIBOR Floor which was greater than the 3 Month LIBOR rate at DecemberMarch 31, 2016,2017, the prevailing rate in effect at DecemberMarch 31, 20162017 was the base rate plus the LIBOR Floor.
(20)4,324,951.76 Units of Common Stock represents 62.7% of the outstanding equity in Lydell Jewelry Holding Company, LLC.
(21)5,055.56 Units of Common Stock, represents 50.56% of the outstanding equity in Omnivere Holding Company, LLC.    
(22)1,230,769 Units represents 2.94% ownership of Pegasus Solutions, Inc.
(23)150 Units represents 15.0% of Footprint Holding Company, Inc.
(24)The investment earns 0.50% commitment fee on all unused commitment. At December 31, 2016, there was $1,365,603 of unused commitment.    
(25)479,283 Common Shares represents 3.8% of the outstanding common shares in Point.360.
(26)351,713 Units represents 2.8% of the outstanding common shares in Point.360.
(27)The investment earns 0.50% commitment fee on all unused commitment. At December 31, 2016, there was $625,000.01 of unused commitment.
(28)4,664.6 Class B and 9,424.4 Class C Shares represents 4.86% and 9.83% ownership in INI Parent, Inc., respectively.
(29)232 Common Units represents 23.2% of the outstanding shares in CP Midco, LLC.


(30)The interest rate on these loans is subject to a base rate plus the Alternate Base Rate ("ABR"). As the interest rate is subject to a minimum ABR Floor which was greater than the ABR rate at December 31, 2016, the prevailing rate in effect at December 31, 2016 was the base rate plus the ABR Floor.
(31)This investment may accrue PIK interest at the election of the Borrower (LIBOR + 6.50%, 1.00% LIBOR Floor) and is determined at the end of the rate setting period.
(32)(15)This investment may accrue PIK interest at the election of the Borrower (LIBOR + 9.50%, 1.00% LIBOR Floor) and is determined at the end of the rate setting period.
(33)417 shares of Common Stock represents 0.3267% ownership of Be Green Holding Company.
(34)27,398.6252 Units represents 1.56% ownership in Path Medical Center Holdings, Inc.
(35)700,000 Class A Preferred Units represents 1.20% ownership of SMART Financial Holdings, LLC.
(36)(16)The investment earns 0.50% commitment fee on all unused commitment. At DecemberMarch 31, 2016,2017, there was $2,932,142.86$1,078,108 of unused commitment.
(37)(17)The investment earns 0.50% commitment fee on all unused commitment. At March 31, 2017, there was $625,000 of unused commitment.
(18)The investment earns 0.50% commitment fee on all unused commitment. At March 31, 2017, there was $1,057,143 of unused commitment.
(19)The investment earns 1.00% commitment fee on all unused commitment. At DecemberMarch 31, 2016,2017, there was $875,000.00$754,688 of unused commitment.
(38)(20)Investment changed its name from DLR Restaurants LLC during FY 2017.    This investment may accrue PIK interest at the election of the Borrower (LIBOR + 6.50%, 1.00% LIBOR Floor) and is determined at the end of the rate setting period.













































See accompanying notes to consolidated financial statements.


Medley Capital Corporation
  
Consolidated Schedule of Investments
 
September 30, 2016
Company(1)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
                
Non-Controlled/Non-Affiliated Investments:
Non-Controlled/Non-Affiliated Investments:
            
Non-Controlled/Non-Affiliated Investments:
            
                
Access Media Holdings, LLC(7)(9)
 Media:  Broadcasting & Subscription Senior Secured First Lien Term Loan (10.00%) 7/22/2020 7,929,093
 7,929,092
 7,832,358
 1.5% Media:  Broadcasting & Subscription Senior Secured First Lien Term Loan (10.00%) 7/22/2020 7,929,093
 7,929,092
 7,832,358
 1.5%
   Preferred Equity Series A   1,600,000
 1,600,000
 —
 0.0%   Preferred Equity Series A   1,600,000
 1,600,000
 —
 0.0%
   Preferred Equity Series AA   616,000
 616,000
 —
 0.0%   Preferred Equity Series AA   616,000
 616,000
 —
 0.0%
   16% of Common Equity of Newco   —
 —
 —
 0.0%   
Equity - 16 Common Units(17)
   —
 —
 —
 0.0%
       10,145,093
 10,145,092
 7,832,358
  
       10,145,093
 10,145,092
 7,832,358
  
                
Accupac, Inc. Containers, Packaging & Glass 
Senior Secured Second Lien Term Loan (LIBOR + 10.00% Cash, 1.00% LIBOR Floor)(18)
 7/14/2020 27,000,000
 27,000,000
 27,000,000
 5.2% Containers, Packaging & Glass 
Senior Secured Second Lien Term Loan (LIBOR + 10.00% Cash, 1.00% LIBOR Floor)(18)
 7/14/2020 27,000,000
 27,000,000
 27,000,000
 5.2%
       27,000,000
 27,000,000
 27,000,000
  
       27,000,000
 27,000,000
 27,000,000
  
                
Advanced Diagnostic Holdings, LLC Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 8.75% Cash, 0.875% LIBOR Floor)(19)
 12/11/2020 15,262,608
 15,262,608
 15,701,560
 3.0% Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 8.75% Cash, 0.875% LIBOR Floor)(19)
 12/11/2020 15,262,608
 15,262,608
 15,701,560
 3.0%
       15,262,608
 15,262,608
 15,701,560
  
       15,262,608
 15,262,608
 15,701,560
  
                
Albertville Quality Foods, Inc.(12)
 Beverage & Food 
Senior Secured First Lien Term Loan (LIBOR + 9.50% Cash, 1.00% LIBOR Floor, 3.00% LIBOR Cap)(18)
 10/31/2018 15,972,097
 15,972,097
 16,131,818
 3.1% Beverage & Food 
Senior Secured First Lien Term Loan (LIBOR + 9.50% Cash, 1.00% LIBOR Floor, 3.00% LIBOR Cap)(18)
 10/31/2018 15,972,097
 15,972,097
 16,131,818
 3.1%
       15,972,097
 15,972,097
 16,131,818
  
       15,972,097
 15,972,097
 16,131,818
  
                
Autosplice, Inc. High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 9.50% Cash, 1.00% LIBOR Floor)(19)
 6/30/2019 14,441,783
 14,441,784
 14,489,296
 2.8% High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 9.50% Cash, 1.00% LIBOR Floor)(19)
 6/30/2019 14,441,783
 14,441,784
 14,489,296
 2.8%
       14,441,783
 14,441,784
 14,489,296
  
       14,441,783
 14,441,784
 14,489,296
  
                
Backcountry.com, LLC Retail 
Senior Secured First Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(19)
 6/30/2020 2,551,042
 2,551,042
 2,576,552
 0.5% Retail 
Senior Secured First Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(19)
 6/30/2020 2,551,042
 2,551,042
 2,576,552
 0.5%
       2,551,042
 2,551,042
 2,576,552
  
       2,551,042
 2,551,042
 2,576,552
  
                
Be Green Packaging, LLC Containers, Packaging & Glass 
Equity - 417 Common Shares(33)
   —
 416,250
 —
 0.0% Containers, Packaging & Glass 
Equity - 417 Common Units(17)
   —
 416,250
 —
 0.0%
       —
 416,250
 —
  
       —
 416,250
 —
  
                
Black Angus Steakhouses, LLC(7)(9)
 Hotel, Gaming & Leisure 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(18)
 4/24/2020 7,906,250
 7,906,250
 7,721,117
 1.5% Hotel, Gaming & Leisure 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(18)
 4/24/2020 7,906,250
 7,906,250
 7,721,117
 1.5%
   Senior Secured First Lien Delayed Draw (LIBOR + 9.00%, 1.00% LIBOR Floor) 4/24/2020 —
 —
 —
 0.0%   Senior Secured First Lien Delayed Draw (LIBOR + 9.00%, 1.00% LIBOR Floor) 4/24/2020 —
 —
 —
 0.0%
   
Revolver (LIBOR + 9.00%, 1.00% LIBOR Floor)(27)
 4/24/2020 446,429
 446,429
 441,911
 0.1%   
Revolver (LIBOR + 9.00%, 1.00% LIBOR Floor)(15)
 4/24/2020 446,429
 446,429
 441,911
 0.1%
       8,352,679
 8,352,679
 8,163,028
  
       8,352,679
 8,352,679
 8,163,028
  
                
Brantley Transportation LLC(7)(12)
 Energy:  Oil & Gas 
Senior Secured First Lien Term Loan (12.00% PIK)(10)
 8/2/2017 10,060,902
 9,051,055
 5,351,092
 1.0%
Brantley Transportation LLC(7)(9)(12)
 Energy:  Oil & Gas 
Senior Secured First Lien Term Loan (12.00% PIK)(10)
 8/2/2017 10,060,902
 9,051,055
 5,351,092
 1.0%
   Senior Secured First Lien Delayed Draw (LIBOR + 5.00%, 1.00% LIBOR Floor) 8/2/2017 637,500
 637,500
 637,500
 0.1%   Senior Secured First Lien Delayed Draw (LIBOR + 5.00%, 1.00% LIBOR Floor) 8/2/2017 637,500
 637,500
 637,500
 0.1%
   7.50 Common Units represent 8.04% of the outstanding equity interest of Brantley Trucking, LLC 8/2/2017 —
 —
 —
 0.0%   
Equity - 7.5 Common Units(17)
 8/2/2017 —
 —
 —
 0.0%
       10,698,402
 9,688,555
 5,988,592
  
       10,698,402
 9,688,555
 5,988,592
  


Company(1)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
                
ConvergeOne Holdings Corporation Telecommunications 
Senior Secured Second Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(19)
 6/17/2021 12,500,000
 12,406,960
 12,458,500
 2.4% Telecommunications 
Senior Secured Second Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(19)
 6/17/2021 12,500,000
 12,406,960
 12,458,500
 2.4%
       12,500,000
 12,406,960
 12,458,500
  
       12,500,000
 12,406,960
 12,458,500
  
                
CP OPCO LLC(7)(9)
 Services:  Consumer 
Senior Secured First Lien Term Loan A (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(19)(31)
 3/31/2019 2,805,273
 2,805,273
 2,805,273
 0.6% Services:  Consumer 
Senior Secured First Lien Term Loan A (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(19)(31)
 3/31/2019 2,805,273
 2,805,273
 2,805,273
 0.6%
   
Senior Secured First Lien Term Loan B (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(19)(31)
 3/31/2019 1,168,864
 1,168,864
 1,168,864
 0.2%   
Senior Secured First Lien Term Loan B (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(19)(13)
 3/31/2019 1,168,864
 1,168,864
 1,168,864
 0.2%
   
Senior Secured First Lien Term Loan C (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(10)(19)(32)
 3/31/2019 8,204,394
 4,063,090
 4,102,197
 0.8%   
Senior Secured First Lien Term Loan C (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(6)(10)(19)
 3/31/2019 8,204,394
 4,063,090
 4,102,197
 0.8%
   
Senior Secured First Lien Term Loan D (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(10)(19)(32)
 3/31/2019 5,107,884
 —
 —
 0.0%   
Senior Secured First Lien Term Loan D (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(6)(10)(19)
 3/31/2019 5,107,884
 —
 —
 0.0%
   
Revolving Credit Facility (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(19)
 3/31/2019 725,552
 725,552
 725,552
 0.1%   
Revolving Credit Facility (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(19)
 3/31/2019 725,552
 725,552
 725,552
 0.1%
   
Revolving Credit Facility (ABR + 3.50% Cash, 3.50% ABR Floor)(30)
 3/31/2019 638,486
 638,485
 638,486
 0.1%   
Revolving Credit Facility (ABR + 3.50% Cash, 3.50% ABR Floor)(14)
 3/31/2019 638,486
 638,485
 638,486
 0.1%
   
Common Units(29)
 3/31/2019 —
 —
 —
 0.0%   
Equity - 232 Common Units(17)
 3/31/2019 —
 —
 —
 0.0%
       18,650,453
 9,401,264
 9,440,372
  
       18,650,453
 9,401,264
 9,440,372
  
                
Crow Precision Components, LLC Aerospace & Defense 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(18)
 9/30/2019 13,540,000
 13,540,000
 13,540,000
 2.6% Aerospace & Defense 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(18)
 9/30/2019 13,540,000
 13,540,000
 13,540,000
 2.6%
   350 units of outstanding equity in Wingman Holdings, Inc.   —
 700,000
 414,305
 0.1%   
Equity - 350 Common Units(17)
   —
 700,000
 414,305
 0.1%
       13,540,000
 14,240,000
 13,954,305
  
       13,540,000
 14,240,000
 13,954,305
  
                
DHISCO Electronic Distribution, Inc.(7)(12)
 Hotel, Gaming & Leisure Senior Secured First Lien Term Loan A (LIBOR + 9.00%, 1.50% LIBOR Floor) 11/10/2019 31,238,095
 31,238,095
 29,545,615
 5.7%
DHISCO Electronic Distribution, Inc.(7)(9)(12)
 Hotel, Gaming & Leisure Senior Secured First Lien Term Loan A (LIBOR + 9.00%, 1.50% LIBOR Floor) 11/10/2019 31,238,095
 31,238,095
 29,545,615
 5.7%
   Senior Secured First Lien Term Loan B (10.50% PIK) 2/10/2018 6,982,024
 6,982,024
 6,587,260
 1.3%   Senior Secured First Lien Term Loan B (10.50% PIK) 2/10/2018 6,982,024
 6,982,024
 6,587,260
 1.3%
   
Revolving Credit Facility (LIBOR + 9.00%, 1.50% LIBOR Floor)(24)
 5/10/2017 —
 —
 —
 0.0%   
Revolving Credit Facility (LIBOR + 9.00%, 1.50% LIBOR Floor)(16)
 5/10/2017 —
 —
 —
 0.0%
   
Equity - 1,230,769 Units(22)
   —
 1,230,769
 70,624
 0.0%   
Equity - 1,230,769 Class A Units(17)
   —
 1,230,769
 70,624
 0.0%
       38,220,119
 39,450,888
 36,203,499
  
       38,220,119
 39,450,888
 36,203,499
  
                
DLR Restaurants
LLC(12)
 Hotel, Gaming & Leisure Senior Secured First Lien Term Loan (13.00% Cash, 2.50% PIK) 4/18/2018 24,117,310
 24,117,310
 23,958,859
 4.6% Hotel, Gaming & Leisure Senior Secured First Lien Term Loan (13.00% Cash, 2.50% PIK) 4/18/2018 24,117,310
 24,117,310
 23,958,859
 4.6%
   Unsecured Debt (12.00% Cash, 4.00% PIK) 4/18/2018 287,531
 287,531
 279,604
 0.1%   Unsecured Debt (12.00% Cash, 4.00% PIK) 4/18/2018 287,531
 287,531
 279,604
 0.1%
       24,404,841
 24,404,841
 24,238,463
  
       24,404,841
 24,404,841
 24,238,463
  
                
Dream Finders Homes, LLC Construction & Building Senior Secured First Lien Term Loan B (LIBOR + 14.50% Cash) 10/1/2018 7,093,318
 7,009,174
 7,071,897
 1.4% Construction & Building Senior Secured First Lien Term Loan B (LIBOR + 14.50% Cash) 10/1/2018 7,093,318
 7,009,174
 7,071,897
 1.4%
   5,000 common units represent 5% of the outstanding equity interest of Dream Finders Holdings, LLC 10/1/2018 —
 180,000
 1,619,379
 0.3%   
Equity - 5,000 Common Units(17)
 10/1/2018 —
 180,000
 1,619,379
 0.3%
       7,093,318
 7,189,174
 8,691,276
  
       7,093,318
 7,189,174
 8,691,276
  
                
Dynamic Energy Services International LLC Energy:  Oil & Gas 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor, 1.50% PIK)(18)
 3/6/2018 16,046,050
 16,046,050
 13,307,952
 2.6% Energy:  Oil & Gas 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor, 1.50% PIK)(18)
 3/6/2018 16,046,050
 16,046,050
 13,307,952
 2.6%
       16,046,050
 16,046,050
 13,307,952
  
       16,046,050
 16,046,050
 13,307,952
  
                
Essex Crane Rental Corp.(12)
 Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(19)
 5/13/2019 23,190,922
 20,460,116
 1,159,546
 0.2% Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(19)
 5/13/2019 23,190,922
 20,460,116
 1,159,546
 0.2%
       23,190,922
 20,460,116
 1,159,546
  
       23,190,922
 20,460,116
 1,159,546
  


Company(1)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
                
FKI Security Group LLC(12)
 Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(19)
 3/30/2020 14,531,250
 14,531,250
 14,605,650
 2.8% Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(19)
 3/30/2020 14,531,250
 14,531,250
 14,605,650
 2.8%
       14,531,250
 14,531,250
 14,605,650
  
       14,531,250
 14,531,250
 14,605,650
  
                
Footprint Acquisition LLC Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash)(18)
 2/27/2020 5,250,102
 5,250,102
 5,340,509
 1.0% Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash)(18)
 2/27/2020 5,250,102
 5,250,102
 5,340,509
 1.0%
   Preferred Equity  (8.75% PIK)   5,749,795
 5,749,795
 5,749,508
 1.1%   Preferred Equity  (8.75% PIK)   5,749,795
 5,749,795
 5,749,508
 1.1%
 
150.0 units of Common Stock(23)
 —
 —
 1,171,650
 0.2% 
Equity - 150 Common Units(17)
 —
 —
 1,171,650
 0.2%
 10,999,897
 10,999,897
 12,261,667
   10,999,897
 10,999,897
 12,261,667
  
                
Freedom Powersports LLC Automotive 
Senior Secured First Lien Term Loan (LIBOR + 10.75% Cash, 1.50% LIBOR Floor)(19)
 9/26/2019 13,890,000
 13,890,000
 14,167,800
 2.7% Automotive 
Senior Secured First Lien Term Loan (LIBOR + 10.75% Cash, 1.50% LIBOR Floor)(19)
 9/26/2019 13,890,000
 13,890,000
 14,167,800
 2.7%
       13,890,000
 13,890,000
 14,167,800
  
       13,890,000
 13,890,000
 14,167,800
  
                
Harrison Gypsum,
LLC(12)
 Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 0.50% PIK, 1.50% LIBOR Floor)(18)
 12/21/2018 53,776,985
 53,776,985
 51,930,283
 10.1% Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 0.50% PIK, 1.50% LIBOR Floor)(18)
 12/21/2018 53,776,985
 53,776,985
 51,930,283
 10.1%
       53,776,985
 53,776,985
 51,930,283
  
       53,776,985
 53,776,985
 51,930,283
  
                
Heligear Acquisition Co. Aerospace & Defense Senior Secured First Lien Note (10.25% Cash) 10/15/2019 20,000,000
 20,000,000
 21,047,400
 4.1% Aerospace & Defense Senior Secured First Lien Note (10.25% Cash) 10/15/2019 20,000,000
 20,000,000
 21,047,400
 4.1%
       20,000,000
 20,000,000
 21,047,400
  
       20,000,000
 20,000,000
 21,047,400
  
                
JD Norman Industries, Inc. Automotive 
Senior Secured First Lien Term Loan (LIBOR + 12.25% Cash)(18)
 3/6/2019 21,300,000
 21,300,000
 20,219,025
 3.9% Automotive 
Senior Secured First Lien Term Loan (LIBOR + 12.25% Cash)(18)
 3/6/2019 21,300,000
 21,300,000
 20,219,025
 3.9%
       21,300,000
 21,300,000
 20,219,025
  
       21,300,000
 21,300,000
 20,219,025
  
                
Jordan Reses Supply Company, LLC Healthcare & Pharmaceuticals Senior Secured Second Lien Term Loan (LIBOR + 11.00%, 1.00% LIBOR Floor) 4/24/2020 20,000,000
 20,000,000
 20,400,000
 4.0% Healthcare & Pharmaceuticals Senior Secured Second Lien Term Loan (LIBOR + 11.00%, 1.00% LIBOR Floor) 4/24/2020 20,000,000
 20,000,000
 20,400,000
 4.0%
       20,000,000
 20,000,000
 20,400,000
  
       20,000,000
 20,000,000
 20,400,000
  
                
Lighting Science Group Corporation Containers, Packaging & Glass 
Senior Secured Second Lien Term (LIBOR + 10.00% Cash, 2.00% PIK)(19)
 2/19/2019 16,053,472
 15,515,186
 15,077,260
 2.9% Containers, Packaging & Glass 
Senior Secured Second Lien Term (LIBOR + 10.00% Cash, 2.00% PIK)(19)
 2/19/2019 16,053,472
 15,515,186
 15,077,260
 2.9%
   Warrants to purchase 0.98% of the outstanding equity 2/19/2024 —
 955,680
 120,000
 0.0%   
Warrants - 0.98% of Outstanding Equity(17)
 2/19/2024 —
 955,680
 120,000
 0.0%
       16,053,472
 16,470,866
 15,197,260
  
       16,053,472
 16,470,866
 15,197,260
  
                
LSF9 Atlantis Holdings, LLC Retail Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor) 1/15/2021 9,750,000
 9,661,163
 9,988,485
 1.9% Retail Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor) 1/15/2021 9,750,000
 9,661,163
 9,988,485
 1.9%
       9,750,000
 9,661,163
 9,988,485
  
       9,750,000
 9,661,163
 9,988,485
  
                
Merchant Cash and Capital, LLC Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Delayed Draw (LIBOR + 8.00% Cash, 3.00% LIBOR Floor)(18)
 12/4/2016 17,033,522
 17,033,522
 17,033,522
 3.3% Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Delayed Draw (LIBOR + 8.00% Cash, 3.00% LIBOR Floor)(18)
 12/4/2016 17,033,522
 17,033,522
 17,033,522
 3.3%
   Senior Secured Second Lien Term Loan (12.00% Cash) 5/4/2017 15,000,000
 15,000,000
 14,999,250
 2.9%   Senior Secured Second Lien Term Loan (12.00% Cash) 5/4/2017 15,000,000
 15,000,000
 14,999,250
 2.9%
       32,033,522
 32,033,522
 32,032,772
  
       32,033,522
 32,033,522
 32,032,772
  
                
Miratech Intermediate Holdings, Inc.(12)
 Automotive 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(18)
 5/9/2019 12,695,105
 12,695,105
 12,478,272
 2.5% Automotive 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(18)
 5/9/2019 12,695,105
 12,695,105
 12,478,272
 2.5%
       12,695,105
 12,695,105
 12,478,272
  
       12,695,105
 12,695,105
 12,478,272
  
                
Momentum Telecom, Inc. Telecommunications 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(18)
 3/10/2019 12,593,281
 12,593,281
 12,719,213
 2.5% Telecommunications 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(18)
 3/10/2019 12,593,281
 12,593,281
 12,719,213
 2.5%
       12,593,281
 12,593,281
 12,719,213
  
       12,593,281
 12,593,281
 12,719,213
  
                


Company(1)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
                
Nation Safe Drivers Holdings, Inc. Banking, Finance, Insurance & Real Estate 
Senior Secured Second Lien Term Loan (LIBOR + 8.00% Cash, 2.00% LIBOR Floor)(19)
 9/29/2020 35,278,846
 35,278,846
 35,631,635
 6.9% Banking, Finance, Insurance & Real Estate 
Senior Secured Second Lien Term Loan (LIBOR + 8.00% Cash, 2.00% LIBOR Floor)(19)
 9/29/2020 35,278,846
 35,278,846
 35,631,635
 6.9%
       35,278,846
 35,278,846
 35,631,635
  
       35,278,846
 35,278,846
 35,631,635
  
                
Nielsen & Bainbridge, LLC Consumer goods:  Durable 
Senior Secured Second Lien Term Loan (LIBOR + 9.25% Cash, 1.00% LIBOR Floor)(18)
 8/15/2021 25,000,000
 25,000,000
 24,696,000
 4.8% Consumer goods:  Durable 
Senior Secured Second Lien Term Loan (LIBOR + 9.25% Cash, 1.00% LIBOR Floor)(18)
 8/15/2021 25,000,000
 25,000,000
 24,696,000
 4.8%
       25,000,000
 25,000,000
 24,696,000
  
       25,000,000
 25,000,000
 24,696,000
  
                
NorthStar Group Services, Inc. Construction & Building Unsecured Debt (2.5% Cash, 15.5% PIK) 10/24/2019 26,107,691
 26,107,691
 26,042,683
 5.0% Construction & Building Unsecured Debt (2.5% Cash, 15.5% PIK) 10/24/2019 26,107,691
 26,107,691
 26,042,683
 5.0%
       26,107,691
 26,107,691
 26,042,683
  
       26,107,691
 26,107,691
 26,042,683
  
                
Oxford Mining Company, LLC Metals & Mining Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 3.00% PIK, 0.75% LIBOR Floor) 12/31/2018 20,661,469
 20,661,469
 20,245,760
 3.9% Metals & Mining Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 3.00% PIK, 0.75% LIBOR Floor) 12/31/2018 20,661,469
 20,661,469
 20,245,760
 3.9%
       20,661,469
 20,661,469
 20,245,760
  
       20,661,469
 20,661,469
 20,245,760
  
                
The Plastics Group, Inc. Chemicals, Plastics & Rubber Senior Secured First Lien Term Loan (11.00% Cash, 2.00% PIK) 2/28/2019 21,867,506
 21,867,506
 21,457,709
 4.2% Chemicals, Plastics & Rubber Senior Secured First Lien Term Loan (11.00% Cash, 2.00% PIK) 2/28/2019 21,867,506
 21,867,506
 21,457,709
 4.2%
       21,867,506
 21,867,506
 21,457,709
  
       21,867,506
 21,867,506
 21,457,709
  
                
Point.360 Services:  Business Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash) 7/8/2020 1,953,269
 1,953,269
 1,849,160
 0.4% Services:  Business Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash) 7/8/2020 1,953,269
 1,953,269
 1,849,160
 0.4%
   
Equity - 479,283 Common Shares(25)
   —
 129,406
 359,462
 0.1%   
Equity - 479,283 Common Units(17)
   —
 129,406
 359,462
 0.1%
   
Warrants to purchase 2.8% of the outstanding common shares(26)
 7/8/2020 —
 52,757
 243,317
 0.1%   
Warrants - 2.8% of Outstanding Equity(17)
 7/8/2020 —
 52,757
 243,317
 0.1%
       1,953,269
 2,135,432
 2,451,939
  
       1,953,269
 2,135,432
 2,451,939
  
                
Prestige Industries LLC Services:  Business 
Senior Secured Second Lien Term Loan (10.00% Cash, 3.00% PIK)(10)
 11/1/2017 7,679,806
 7,596,895
 2,818,258
 0.6% Services:  Business 
Senior Secured Second Lien Term Loan (10.00% Cash, 3.00% PIK)(10)
 11/1/2017 7,679,806
 7,596,895
 2,818,258
 0.6%
   Warrants to purchase 0.63% of the outstanding common units 11/1/2017 —
 151,855
 —
 0.0%   
Warrants - 0.63% of Outstanding Equity(17)
 11/1/2017 —
 151,855
 —
 0.0%
       7,679,806
 7,748,750
 2,818,258
  
       7,679,806
 7,748,750
 2,818,258
  
                
Prince Mineral Holding Corp.(8)
 Wholesale Senior Secured First Lien Note (11.50%) 12/15/2019 6,800,000
 6,755,409
 6,375,000
 1.2% Wholesale Senior Secured First Lien Note (11.50%) 12/15/2019 6,800,000
 6,755,409
 6,375,000
 1.2%
       6,800,000
 6,755,409
 6,375,000
  
       6,800,000
 6,755,409
 6,375,000
  
                
Reddy Ice Corporation Beverage & Food 
Senior Secured Second Lien Term Loan (LIBOR + 9.50% Cash, 1.25% LIBOR Floor)(18)
 11/1/2019 17,000,000
 17,000,000
 14,092,830
 2.7% Beverage & Food 
Senior Secured Second Lien Term Loan (LIBOR + 9.50% Cash, 1.25% LIBOR Floor)(18)
 11/1/2019 17,000,000
 17,000,000
 14,092,830
 2.7%
       17,000,000
 17,000,000
 14,092,830
  
       17,000,000
 17,000,000
 14,092,830
  
                
Response Team Holdings, LLC Construction & Building 
Preferred Equity (12.00% PIK)(10)
   6,256,390
 5,796,950
 3,262,707
 0.6% Construction & Building 
Preferred Equity (12.00% PIK)(10)
   6,256,390
 5,796,950
 3,262,707
 0.6%
   Warrants to purchase 7.2% of the outstanding common units 3/28/2019 —
 429,012
 —
 0.0%   
Warrants - 7.2% of Outstanding Equity(17)
 3/28/2019 —
 429,012
 —
 0.0%
       6,256,390
 6,225,962
 3,262,707
  
       6,256,390
 6,225,962
 3,262,707
  
                
Safeworks, LLC(12)
 Capital Equipment Unsecured Debt (12.00% Cash) 1/31/2020 15,000,000
 15,000,000
 15,150,000
 2.9% Capital Equipment Unsecured Debt (12.00% Cash) 1/31/2020 15,000,000
 15,000,000
 15,150,000
 2.9%
       15,000,000
 15,000,000
 15,150,000
  
       15,000,000
 15,000,000
 15,150,000
  
                
Sendero Drilling Company, LLC Energy:  Oil & Gas 
Senior Secured First Lien Term Loan (LIBOR + 11.00% Cash)(18)
 3/18/2019 3,996,312
 3,545,039
 4,076,238
 0.8% Energy:  Oil & Gas 
Senior Secured First Lien Term Loan (LIBOR + 11.00% Cash)(18)
 3/18/2019 3,996,312
 3,545,039
 4,076,238
 0.8%
   Warrants to purchase 5.52% of the outstanding common units 3/18/2019 —
 793,523
 5,399,817
 1.1%   
Warrants - 5.52% of Outstanding Equity(17)
 3/18/2019 —
 793,523
 5,399,817
 1.1%
       3,996,312
 4,338,562
 9,476,055
  
       3,996,312
 4,338,562
 9,476,055
  


Company(1)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
                
Seotowncenter, Inc.(12)
 Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(19)
 9/11/2019 24,699,566
 24,699,566
 24,212,737
 4.7% Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(19)
 9/11/2019 24,699,566
 24,699,566
 24,212,737
 4.7%
   
3,249.697 shares of Common
Stock(14)
   —
 500,000
 139,602
 0.0%   
Equity - 3,249.697 Common Units(17)
   —
 500,000
 139,602
 0.0%
       24,699,566
 25,199,566
 24,352,339
  
       24,699,566
 25,199,566
 24,352,339
  
                
Ship Supply Acquisition Corporation Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(19)
 7/31/2020 8,073,731
 8,073,731
 8,151,400
 1.6% Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(19)
 7/31/2020 8,073,731
 8,073,731
 8,151,400
 1.6%
       8,073,731
 8,073,731
 8,151,400
  
       8,073,731
 8,073,731
 8,151,400
  
                
Stancor, Inc. Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 0.75% LIBOR Floor)(18)
 8/19/2019 5,090,909
 5,090,909
 5,090,909
 1.0% Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 0.75% LIBOR Floor)(18)
 8/19/2019 5,090,909
 5,090,909
 5,090,909
 1.0%
   
263,814.43 Class A Units(15)
   —
 263,815
 125,830
 0.0%   
Equity - 263,814.43 Class A Units(17)
   —
 263,815
 125,830
 0.0%
       5,090,909
 5,354,724
 5,216,739
  
       5,090,909
 5,354,724
 5,216,739
  
                
T Residential Holdings, LLC Banking, Finance, Insurance & Real Estate Senior Secured First Lien Term Loan (12.00%) 3/28/2019 18,500,000
 18,500,000
 18,542,920
 3.6% Banking, Finance, Insurance & Real Estate Senior Secured First Lien Term Loan (12.00%) 3/28/2019 18,500,000
 18,500,000
 18,542,920
 3.6%
       18,500,000
 18,500,000
 18,542,920
  
       18,500,000
 18,500,000
 18,542,920
  
                
Taylored Freight Services, LLC Services:  Business 
Senior Secured Second Lien Term Loan (LIBOR + 9.50% Cash, 2.00% PIK, 1.50% LIBOR Floor)(19)
 11/1/2017 15,040,795
 15,040,796
 14,841,956
 2.9% Services:  Business 
Senior Secured Second Lien Term Loan (LIBOR + 9.50% Cash, 2.00% PIK, 1.50% LIBOR Floor)(19)
 11/1/2017 15,040,795
 15,040,796
 14,841,956
 2.9%
       15,040,795
 15,040,796
 14,841,956
  
       15,040,795
 15,040,796
 14,841,956
  
                
Tenere Acquisition Corp.(7)(9)
 Chemicals, Plastics & Rubber Senior Secured First Lien Term Loan (11.00% Cash, 2.00% PIK) 12/15/2017 11,051,371
 11,051,371
 11,181,885
 2.2% Chemicals, Plastics & Rubber Senior Secured First Lien Term Loan (11.00% Cash, 2.00% PIK) 12/15/2017 11,051,371
 11,051,371
 11,181,885
 2.2%
       11,051,371
 11,051,371
 11,181,885
  
       11,051,371
 11,051,371
 11,181,885
  
                
Transtelco, Inc. Telecommunications 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.50% LIBOR Floor)(18)
 11/19/2017 18,672,000
 18,672,000
 18,837,434
 3.7% Telecommunications 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.50% LIBOR Floor)(18)
 11/19/2017 18,672,000
 18,672,000
 18,837,434
 3.7%
       18,672,000
 18,672,000
 18,837,434
  
       18,672,000
 18,672,000
 18,837,434
  
                
Velocity Pooling Vehicle, LLC Automotive 
Senior Secured Second Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(18)
 5/13/2022 24,000,000
 21,333,743
 12,795,840
 2.5% Automotive 
Senior Secured Second Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(18)
 5/13/2022 24,000,000
 21,333,743
 12,795,840
 2.5%
       24,000,000
 21,333,743
 12,795,840
  
       24,000,000
 21,333,743
 12,795,840
  
                
Watermill-QMC Midco, Inc. Automotive 
1.3% Partnership Interest in Watermill-QMC Midco Inc.(6)
   —
 488,332
 641,888
 0.1% Automotive 
Equity - 1.3% Partnership Interest(17)
   —
 488,332
 641,888
 0.1%
       —
 488,332
 641,888
  
       —
 488,332
 641,888
  
                
Wheels Up Partners LLC(12)
 Aerospace & Defense 
Senior Secured First Lien Delayed Draw (LIBOR + 8.55% Cash, 1.00% LIBOR Floor)(19)
 10/15/2021 16,598,494
 16,598,494
 16,654,099
 3.2% Aerospace & Defense 
Senior Secured First Lien Delayed Draw (LIBOR + 8.55% Cash, 1.00% LIBOR Floor)(19)
 10/15/2021 16,598,494
 16,598,494
 16,654,099
 3.2%
       16,598,494
 16,598,494
 16,654,099
  
       16,598,494
 16,598,494
 16,654,099
  
                
Subtotal Non-Controlled/Non-Affiliated InvestmentsSubtotal Non-Controlled/Non-Affiliated Investments   $825,021,074
 $813,813,853
 $767,302,020
  
Subtotal Non-Controlled/Non-Affiliated Investments   $825,021,074
 $813,813,853
 $767,302,020
  
                 


Company(1)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
                
Controlled Investments:(5)
Controlled Investments:(5)
      
  
  
  
Controlled Investments:(5)
      
  
  
  
                
AAR Intermediate Holdings, LLC(7)(12)
 Energy:  Oil & Gas 
Senior Secured First Lien Term Loan A (LIBOR + 5.00%, 1.00% LIBOR Floor)(19)
 9/30/2021 8,984,232
 8,984,232
 8,984,232
 1.7%
AAR Intermediate Holdings, LLC(7)(9)(12)
 Energy:  Oil & Gas 
Senior Secured First Lien Term Loan A (LIBOR + 5.00%, 1.00% LIBOR Floor)(19)
 9/30/2021 8,984,232
 8,984,232
 8,984,232
 1.7%
   
Senior Secured First Lien Term Loan B (LIBOR + 8.00% PIK, 1.00% LIBOR Floor)(19)
 9/30/2021 18,451,002
 14,890,698
 14,889,405
 2.9%   
Senior Secured First Lien Term Loan B (LIBOR + 8.00% PIK, 1.00% LIBOR Floor)(19)
 9/30/2021 18,451,002
 14,890,698
 14,889,405
 2.9%
   Revolving Credit Facility (LIBOR + 5.00%, 1.00% LIBOR Floor) 9/30/2021 —
 —
 —
 0.0%   Revolving Credit Facility (LIBOR + 5.00%, 1.00% LIBOR Floor) 9/30/2021 —
 —
 —
 0.0%
   21.56 Class A Units represents 21.56% of the Outstanding Equity   —
 —
 —
 0.0%   
Equity - 21.56 Class A Units(17)
   —
 —
 —
 0.0%
       27,435,234
 23,874,930
 23,873,637
  
       27,435,234
 23,874,930
 23,873,637
  
                
Capstone Nutrition(12)
 Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(19)
 4/28/2019 22,784,841
 20,803,397
 14,615,564
 2.8% Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(19)
 4/28/2019 22,784,841
 20,803,397
 14,615,564
 2.8%
   
Senior Secured First Lien Delayed Draw (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(19)
 4/28/2019 9,858,981
 9,153,997
 6,324,142
 1.2%   
Senior Secured First Lien Delayed Draw (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(19)
 4/28/2019 9,858,981
 9,153,997
 6,324,142
 1.2%
   
4,664.6 Class B Shares and 9,424.4 Class C Shares(28)
   —
 12
 —
 0.0%   
Equity - 4,664.6 Class B Units and 9,424.4 Class C Units(17)
   —
 12
 —
 0.0%
   
2,932.3 Units of Common Stock(13)
   —
 400,003
 —
 0.0%   
Equity - 2,932.3 Common Units(17)
   —
 400,003
 —
 0.0%
       32,643,822
 30,357,409
 20,939,706
  
       32,643,822
 30,357,409
 20,939,706
  
                
Lydell Jewelry Design Studio, LLC(7)(12)
 Consumer goods:  Non-durable 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 7.50% PIK, 1.50% LIBOR Floor)(10)(18)
 9/13/2018 15,576,447
 14,269,868
 5,707,522
 1.1%
Lydell Jewelry Design Studio, LLC(7)(9)(12)
 Consumer goods:  Non-durable 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 7.50% PIK, 1.50% LIBOR Floor)(10)(18)
 9/13/2018 15,576,447
 14,269,868
 5,707,522
 1.1%
   
Senior Secured First Lien Term Loan (LIBOR + 5.00% Cash, 1.50% LIBOR Floor)(18)
 9/13/2018 1,500,000
 1,500,000
 1,500,000
 0.3%   
Senior Secured First Lien Term Loan (LIBOR + 5.00% Cash, 1.50% LIBOR Floor)(18)
 9/13/2018 1,500,000
 1,500,000
 1,500,000
 0.3%
   Warrants to Purchase 13.3% of the outstanding membership units 9/13/2018 —
 —
 —
 0.0%   
Warrants - 13.3% of Outstanding Equity(17)
 9/13/2018 —
 —
 —
 0.0%
   
4,324,951.76 shares of Common Stock(20)
   —
 —
 —
 0.0%   
Equity - 4,324,951.76 Common Units(17)
   —
 —
 —
 0.0%
       17,076,447
 15,769,868
 7,207,522
  
       17,076,447
 15,769,868
 7,207,522
  
                
MCC Senior Loan Strategy JV I LLC(11)
 Multisector Holdings Equity - 87.5% ownership of MCC Senior Loan Strategy JV I LLC   —
 32,112,500
 31,252,416
 6.0% Multisector Holdings Equity - 87.5% ownership of MCC Senior Loan Strategy JV I LLC   —
 32,112,500
 31,252,416
 6.0%
       —
 32,112,500
 31,252,416
  
       —
 32,112,500
 31,252,416
  
                
OmniVere, LLC Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 13.00% PIK)(19)
 5/5/2019 22,360,258
 22,053,015
 22,360,258
 4.3% Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 13.00% PIK)(19)
 5/5/2019 22,360,258
 22,053,015
 22,360,258
 4.3%
   
Unsecured Debt  (8.00% PIK)(10)
 7/24/2025 22,808,291
 20,754,889
 11,336,861
 2.2%   
Unsecured Debt  (8.00% PIK)(10)
 7/24/2025 22,808,291
 20,754,889
 11,336,861
 2.2%
   
Warrants to purchase outstanding equity(21)
 5/5/2019 —
 872,698
 —
 0.0%   
Equity - 5,055.56 Common Units(17)
 5/5/2019 —
 872,698
 —
 0.0%
       45,168,549
 43,680,602
 33,697,119
  
       45,168,549
 43,680,602
 33,697,119
  
                
United Road Towing, Inc. Services:  Business Senior Secured Second Lien Term Loan (LIBOR + 9.00% PIK) 2/21/2020 18,725,607
 18,725,607
 18,725,607
 3.6% Services:  Business Senior Secured Second Lien Term Loan (LIBOR + 9.00% PIK) 2/21/2020 18,725,607
 18,725,607
 18,725,607
 3.6%
   
Preferred Equity Class C (8.00% PIK)(10)
   18,802,789
 16,337,178
 1,186,268
 0.2%   
Preferred Equity Class C (8.00% PIK)(10)
   18,802,789
 16,337,178
 1,186,268
 0.2%
   
Preferred Equity  Class C-1 (8.00% PIK)(10)
   2,990,965
 2,456,143
 —
 0.0%   
Preferred Equity  Class C-1 (8.00% PIK)(10)
   2,990,965
 2,456,143
 —
 0.0%
   
Preferred Equity  Class A-2 (8.00% PIK)(10)
   5,409,618
 4,664,855
 —
 0.0%   
Preferred Equity  Class A-2 (8.00% PIK)(10)
   5,409,618
 4,664,855
 —
 0.0%
   
65,809.73 Class B Common Units(16)
   —
 1,098,096
 —
 0.0%   
Equity - 65,809.73 Class B Common Units(17)
   —
 1,098,096
 —
 0.0%
       45,928,979
 43,281,879
 19,911,875
  
       45,928,979
 43,281,879
 19,911,875
  
                
Subtotal Controlled InvestmentsSubtotal Controlled Investments     $168,253,031
 $189,077,188
 $136,882,275
  
Subtotal Controlled Investments     $168,253,031
 $189,077,188
 $136,882,275
  
                 


Company(1)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
 Industry Type of Investment Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
                
Affiliated Investments:Affiliated Investments:      
  
  
  
Affiliated Investments:      
  
  
  
                
US Multifamily,
LLC(11)
 Banking, Finance, Insurance & Real Estate Senior Secured First Lien Term Loan (10.00% Cash) 9/10/2019 6,670,000
 6,670,000
 6,670,000
 1.3% Banking, Finance, Insurance & Real Estate Senior Secured First Lien Term Loan (10.00% Cash) 9/10/2019 6,670,000
 6,670,000
 6,670,000
 1.3%
   
Preferred Equity - 33,300 Units(17)
   —
 3,330,000
 3,330,000
 0.7%   
Equity - 33,300 Preferred Units(17)
   —
 3,330,000
 3,330,000
 0.7%
       6,670,000
 10,000,000
 10,000,000
  
       6,670,000
 10,000,000
 10,000,000
  
                
Subtotal Affiliated InvestmentsSubtotal Affiliated Investments     $6,670,000
 $10,000,000
 $10,000,000
  
Subtotal Affiliated Investments     $6,670,000
 $10,000,000
 $10,000,000
  
                
Total Investments, September 30, 2016Total Investments, September 30, 2016     $999,944,105
 $1,012,891,041
 $914,184,295
 176.9%Total Investments, September 30, 2016     $999,944,105
 $1,012,891,041
 $914,184,295
 176.9%

(1)All of our investments are domiciled in the United States. Certain investments also have international operations.
(2)Par amount includes accumulated PIK interest and is net of repayments.
(3)Gross unrealized appreciation, gross unrealized depreciation, and net depreciation for federal income tax purposes totaled $20.6 million, $107.0 million$20,555,594, $106,9247,771 and $86.4 million,$86,369,176, respectively. The tax cost basis of investments is $999.0 million$998,987,296 as of September 30, 2016.
(4)Percentage is based on net assets of $516,919,142 as of September 30, 2016.
(5)Control Investments are defined by the Investment Company Act of 1940 ("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.
(6)12,711 Units represents 1.3%This investment may accrue PIK interest at the election of partnership interest in Watermill-QMC Partners, LP.the Borrower (LIBOR + 9.50%, 1.00% LIBOR Floor) and is determined at the end of the rate setting period.
(7)The investment has an unfunded commitment as of September 30, 2016 (See note 8).
(8)Securities are exempt from registration under Rule 144a of the Securities Act of 1933. This security represents a fair value of $6.4 million$6,375,000 and 1.2% of net assets as of September 30, 2016 and is considered restricted.
(9)Includes an analysis of the value of any unfunded loan commitments.
(10)The investment was on non-accrual status as of September 30, 2016.
(11)The investment is not a qualifying asset as defined under Section 55(a) of 1940 Act, in a whole, or in part.
(12)A portion of this investment was sold via a participation agreement (See note 3).
(13)2,932.3 Units represents 3.06% ownershipThis investment may accrue PIK interest at the election of INI Parent, Inc.the Borrower (LIBOR + 6.50%, 1.00% LIBOR Floor) and is determined at the end of the rate setting period.
(14)3,249.697 shares of Common Stock represents 2.917% ownership of Boostability Holdings, Inc.The interest rate on these loans is subject to a base rate plus ABR. As the interest rate is subject to a minimum ABR Floor which was greater than the ABR rate at September 30, 2016, the prevailing rate in effect at September 30, 2016 was the base rate plus the ABR Floor.
(15)263,814.43 Class A Units represents 0.882% ownershipThe investment earns 0.50% commitment fee on all unused commitment. At September 30, 2016, there was $446,429 of Stancor, Inc.unused commitment.
(16)65,809.73 Class B Common Units Represents 65.8% ownershipThe investment earns 0.50% commitment fee on all unused commitment. At September 30, 2016, there was $1,904,762 of United Road Towing, Inc.unused commitment.
(17)33,300 Units represents 18.167% ownershipThe September 30, 2016 description of US Multifamily, LLC.this investment type has been modified to conform to the March 31, 2017 description.
(18)The interest rate on these loans is subject to a base rate plus 1 Month London Interbank Offering Rate ("LIBOR"), which at September 30, 2016 was 0.52%. As the interest rate is subject to a minimum LIBOR Floor which was greater than the 1 Month LIBOR rate at September 30, 2016, the prevailing rate in effect at September 30, 2016 was the base rate plus the LIBOR Floor.
(19)The interest rate on these loans is subject to a base rate plus 3 Month LIBOR, which at September 30, 2016 was 0.84%. As the interest rate is subject to a minimum LIBOR Floor which was greater than the 3 Month LIBOR rate at September 30, 2016, the prevailing rate in effect at September 30, 2016 was the base rate plus the LIBOR Floor.
(20)4,324,951.76 Units of Common Stock represents 62.7% of the outstanding equity in Lydell Jewelry Holding Company, LLC.
(21)5,055.56 Units of Common Stock, represents 50.56% of the outstanding equity in Omnivere Holding Company, LLC.
(22)1,230,769 Units represents 3.12% ownership of Pegasus Solutions, Inc.
(23)150 Units represents 15.0% of Footprint Holding Company, Inc.
(24)The investment earns 0.50% commitment fee on all unused commitment. At September 30, 2016, there was $1,904,761.91 of unused commitment.
(25)479,283 Common Shares represents 3.8% of the outstanding common shares in Point.360.
(26)351,713 Units represents 2.8% of the outstanding common shares in Point.360.
(27)The investment earns 0.50% commitment fee on all unused commitment. At September 30, 2016, there was $446,428.57 of unused commitment.
(28)4,664.6 Class B and 9,424.4 Class C Shares represents 4.86% and 9.83% ownership in INI Parent, Inc., respectively.
(29)232 Common Units represents 23.2% of the outstanding shares in CP Midco, LLC.
(30)The interest rate on these loans is subject to a base rate plus ABR. As the interest rate is subject to a minimum ABR Floor which was greater than the ABR rate at September 30, 2016, the prevailing rate in effect at September 30, 2016 was the base rate plus the ABR Floor.
(31)This investment may accrue PIK interest at the election of the Borrower (LIBOR + 6.50%, 1.00% LIBOR Floor) and is determined at the end of the rate setting period.
(32)This investment may accrue PIK interest at the election of the Borrower (LIBOR + 9.50%, 1.00% LIBOR Floor) and is determined at the end of the rate setting period.
(33)417 shares of Common Stock represents 0.3267% ownership of Be Green Holding Company.



















See accompanying notes to consolidated financial statements.



MEDLEY CAPITAL CORPORATION
Notes to Consolidated Financial Statements
DecemberMarch 31, 20162017
(unaudited) 
Note 1. Organization
 
Medley Capital Corporation (the “Company”, “we” and “us”) is a non-diversified closed end management investment company incorporated in Delaware that has elected to be treated and is regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). We completed our initial public offering (“IPO”) and commenced operations on January 20, 2011. The Company has elected and qualified to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”) under subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). We are externally managed and advised by MCC Advisors LLC (“MCC Advisors”), a registered investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), pursuant to an investment management agreement. MCC Advisors is a majority owned subsidiary of Medley LLC, which is controlled by Medley Management Inc., a publicly traded asset management firm, which in turn is controlled by Medley Group LLC, an entity wholly-owned by the senior professionals of Medley LLC. We use the term “Medley” to refer collectively to the activities and operations of Medley Capital LLC, Medley LLC, Medley Management Inc., Medley Group LLC, MCC Advisors, associated investment funds and their respective affiliates.
 
Medley Capital BDC LLC (the “LLC”), a Delaware limited liability company, was formed on April 23, 2010. On January 18, 2011, the LLC, in accordance with Delaware law, converted into Medley Capital Corporation, a Delaware corporation, and on January 20, 2011, the Company filed an election to be regulated as a BDC under the 1940 Act.
 
On January 20, 2011, the Company consummated its IPO, sold 11,111,112 shares of common stock at $12.00 per share and commenced its operations and investment activities. On February 24, 2011, an additional 450,000 shares of common stock were issued at a price of $12.00 per share pursuant to the partial exercise of the underwriters’ option to purchase additional shares. Net of underwriting fees and offering costs, the Company received total cash proceeds of approximately $129.6 million.
 
On January 20, 2011, the Company’s shares began trading on the New York Stock Exchange (“NYSE”) under the symbol “MCC”.
 
Prior to the consummation of our IPO, Medley Opportunity Fund LP (“MOF LP”), a Delaware limited partnership, and Medley Opportunity Fund, Ltd. (“MOF LTD”), a Cayman Islands exempted limited liability company, which are managed by an affiliate of MCC Advisors, transferred all of their respective interests in six loan participations in secured loans to middle market companies with a combined fair value, plus payment-in-kind interest and accrued interest thereon, of approximately $84.95 million (the “Loan Assets”) to MOF I BDC LLC (“MOF I BDC”), a Delaware limited liability company, in exchange for membership interests in MOF I BDC. As a result, MOF LTD owned approximately 90% of the outstanding MOF I BDC membership interests and MOF LP owned approximately 10% of the outstanding MOF I BDC membership interests.
 
On January 18, 2011, each of MOF LTD and MOF LP contributed their respective MOF I BDC membership interests to the LLC in exchange for LLC membership interests. As a result, MOF I BDC became a wholly-owned subsidiary of the LLC. As a result of the LLC’s conversion noted above, MOF LTD and MOF LP’s LLC membership interests were exchanged for 5,759,356 shares of the Company’s common stock at $14.75 per share. On February 23, 2012, MOF LTD and MOF LP collectively sold 4,406,301 shares of common stock in an underwritten public offering. See Note 7 for further information.
  
On March 26, 2013, our wholly-owned subsidiary, Medley SBIC LP (“SBIC LP”), a Delaware limited partnership which we own directly and through our wholly-owned subsidiary, Medley SBIC GP LLC, received a license from Small Business Administration (“SBA”) to operate as a Small Business Investment Company (“SBIC”) under Section 301(c) of the Small Business Investment Company Act of 1958.
 
The Company has formed and expects to continue to form certain taxable subsidiaries (the “Taxable Subsidiaries”), which are taxed as corporations for federal income tax purposes. These Taxable Subsidiaries allow us to hold equity securities of portfolio companies organized as pass-through entities while continuing to satisfy the requirements of a RIC under the Code.
 
The Company’s investment objective is to generate current income and capital appreciation by lending to privately-held middle market companies, primarily through directly originated transactions, to help these companies fund acquisitions, growth or refinancing. The portfolio generally consists of senior secured first lien term loans and senior secured second lien term loans. In many of our investments, we will receive warrants or other equity participation features which we believe will have the potential to increase the total investment returns. 

Note 2. Significant Accounting Policies
 
Basis of Presentation
 
The Company follows the accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 946 (“ASC 946”). The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its wholly-owned subsidiary SBIC LP and its Taxable Subsidiaries. All references made to the “Company,” “we,” and “us” herein include Medley Capital Corporation and its consolidated subsidiaries, except as stated otherwise. Additionally, the accompanying consolidated financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X of the Securities Act of 1933. In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications, which are of a normal recurring nature, that are necessary for the fair presentation of financial results as of and for the periods presented. All intercompany balances and transactions have been eliminated. 
 


Cash and Cash Equivalents
 
The Company considers cash equivalents to be highly liquid investments with original maturities of three months or less. Cash and cash equivalents include deposits in a money market account. The Company deposits its cash in a financial institution and, at times, such balance may be in excess of the Federal Deposit Insurance Corporation insurance limits.
 
As of DecemberMarch 31, 2016, $102.12017, $83.5 million is invested in an interest-bearing money market account.
 
Use of Estimates in the Preparation of Financial Statements
 
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 
  
Deferred Offering Costs
 
Deferred offering costs consist of fees and expenses incurred in connection with the public offering and sale of the Company’s common stock, including legal, accounting, printing fees and other related expenses, as well as costs incurred in connection with the filing of a shelf registration statement.
 
Debt Issuance Costs
 
Debt issuance costs, incurred in connection with our credit facilities, unsecured notes and SBA Debentures (see Note 5) are deferred and amortized over the life of the respective facility or instrument.
 
Indemnification
 
In the normal course of business, the Company enters into contractual agreements that provide general indemnifications against losses, costs, claims and liabilities arising from the performance of individual obligations under such agreements. The Company has had no material claims or payments pursuant to such agreements. The Company’s individual maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, based on management’s experience, the Company expects the risk of loss to be remote.
 
Revenue Recognition
 
Interest income, adjusted for amortization of premiums and accretion of discounts, is recorded on an accrual basis. Dividend income, which represents dividends from equity investments and distributions from Taxable Subsidiaries, is recorded on the ex-dividend date and when the distribution is received, respectively.
 
Origination/closing, amendment and transaction break-up fees associated with investments in portfolio companies are recognized as income when we become entitled to such fees. Fee income for the three and six months ended DecemberMarch 31, 2016 and 20152017 was approximately $1.4$1.5 million and $3.0 million, respectively. Fee income for the three and six months ended March 31, 2016 was approximately $1.8 million and $4.8 million, respectively (see Note 9).
 
Prepayment penalties received by the Company for debt instruments paid back to the Company prior to the maturity date are recorded as income upon repayment of debt.
 
Administrative agent fees received by the Company are capitalized as deferred revenue and recorded as fee income when the services are rendered.
 
The Company holds debt investments in its portfolio that contain a payment-in-kind (“PIK”) interest provision. PIK interest, which represents contractually deferred interest added to the investment balance that is generally due at maturity, is recorded on the accrual basis to the extent such amounts are expected to be collected. PIK interest is not accrued if the Company does not expect the issuer to be able to pay all principal and interest when due. For the three and six months ended DecemberMarch 31, 2016 and 2015,2017, the Company earned approximately $4.9$4.0 million, and $2.2$8.9 million in PIK, respectively. For the three and six months ended March 31, 2016, the Company earned approximately $3.5 million, and $5.7 million million in PIK, respectively.
 
Investment transactions are accounted for on a trade date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis of investment, without regard to unrealized gains or losses previously recognized. During the three and six months ended DecemberMarch 31, 2016,2017, we recognized $0.0 million and $6.4 million, respectively, of realized loss related to certain non-cash restructuring transactions, which is recorded on the Consolidated Statements of Operations as a component of net realized gain/(loss) from investments. There were no realized gains or losses related to such non-cash restructuring transactions for the three and six months ended DecemberMarch 31, 2015.2016. The Company reports changes in fair value of investments as a component of the net unrealized appreciation/(depreciation) on investments in the Consolidated Statements of Operations.
 
Management reviews all loans that become 90 days or more past due on principal or interest or when there is reasonable doubt that principal or interest will be collected for possible placement on management’s designation of non-accrual status. Interest receivable is analyzed regularly and may be reserved against when deemed uncollectible. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current, although we may make exceptions to this general rule if the loan has sufficient collateral value and is in the process of collection. At DecemberMarch 31, 2016,2017, certain investments in ten portfolio companies held by the Company were on non-accrual status with a combined fair value of approximately $60.2$91.5 million, or 6.6%9.9% of the fair value of our portfolio. At September 30, 2016, certain investments in nine


portfolio companies held by the Company were on non-accrual status with a combined fair value of approximately $55.9 million, or 6.1% of the fair value of our portfolio.
 


Investment Classification
 
The Company classifies its investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, we would be deemed to “control” a portfolio company if we ownedown more than 25% of its outstanding voting securities and/or hadhave the power to exercise control over the management or policies of such portfolio company. We refer to such investments in portfolio companies that we “control” as “Control Investments.” Under the 1940 Act, we would be deemed to be an “Affiliated Person” of a portfolio company if we own between 5% and 25% of the portfolio company’s outstanding voting securities or we are under common control with such portfolio company. We refer to such investments in Affiliated Persons as “Affiliated Investments.”
 
Valuation of Investments
 
The Company applies fair value accounting to all of its financial instruments in accordance with the 1940 Act and ASC Topic 820 - Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy as discussed in Note 4. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.
 
Investments for which market quotations are readily available are valued at such market quotations, which are generally obtained from an independent pricing service or multiple broker-dealers or market makers. We weight the use of third-party broker quotations, if any, in determining fair value based on our understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer. However, debt investments with remaining maturities within 60 days that are not credit impaired are valued at cost plus accreted discount, or minus amortized premium, which approximates fair value. Investments for which market quotations are not readily available are valued at fair value as determined by the Company’s Board of Directors based upon input from management and third party valuation firms. Because these investments are illiquid and because there may not be any directly comparable companies whose financial instruments have observable market values, these loans are valued using a fundamental valuation methodology, consistent with traditional asset pricing standards, that is objective and consistently applied across all loans and through time.
 
Investments in investment funds are valued at fair value. Fair values are generally determined utilizing the net asset value (“NAV”) supplied by, or on behalf of, management of each investment fund, which is net of management and incentive fees or allocations charged by the investment fund and is in accordance with the “practical expedient”, as defined by FASB Accounting Standards Update (“ASU”) 2009-12,  Investments in Certain Entities that Calculate Net Asset Value per Share . NAVs received by, or on behalf of, management of each investment fund are based on the fair value of the investment funds’ underlying investments in accordance with policies established by management of each investment fund, as described in each of their financial statements and offering memorandum.
 
The methodologies utilized by the Company in estimating itsthe fair value of its investments categorized as Level 3 generally fall into the following two categories:
 
The “Market Approach” uses prices and other relevant information generated by market transactions involving identical or comparable (that is, similar) assets, liabilities, or a group of assets and liabilities, such as a business.
The “Income Approach” converts future amounts (for example, cash flows or income and expenses) to a single current (that is, discounted) amount. When the income approach is used, the fair value measurement reflects current market expectations about those future amounts.
The Company uses third-party valuation firms to assist the board of directors in the valuation of its portfolio investments. The valuation reports generated by the third-party valuation firms consider the evaluation of financing and sale transactions with third parties, expected cash flows and market based information, including comparable transactions, performance multiples, and movement in yields of debt instruments, among other factors. Based on market data obtained from the third-party valuation firms, the Company uses a market yield analysis under the Income Approach or an enterprise model of valuation under the Market Approach, or a combination thereof. In applying the market yield analysis, the value of the Company’s loans is determined based upon inputs such as the coupon rate, current market yield, interest rate spreads of similar securities, the stated value of the loan, and the length to maturity. In applying the enterprise model, the Company uses a waterfall analysis, which takes into account the specific capital structure of the borrower and the related seniority of the instruments within the borrower’s capital structure into consideration. To estimate the enterprise value of the portfolio company, we weigh some or all of the traditional market valuation methods and factors based on the individual circumstances of the portfolio company in order to estimate the enterprise value.
 
The methodologies and information that the Company utilizes when applying the Market Approach for performing investments includes,include, among other things:
 
valuations of comparable public companies (“Guideline Comparable Approach”),
recent sales of private and public comparable companies (“Guideline Comparable Approach”),
recent acquisition prices of the company, debt securities or equity securities (“Acquisition Price Approach”),
external valuations of the portfolio company, offers from third parties to buy the company (“Estimated Sales Proceeds Approach”),
subsequent sales made by the company of its investments (“Expected Sales Proceeds Approach”); and


estimating the value to potential buyers.


The methodologies and information that the Company utilizes when applying the Income Approach for performing investments includes:include:
discounting the forecasted cash flows of the portfolio company or securities (Discounted Cash Flow (“DCF”) Approach); and
Black-Scholes model or simulation models or a combination thereof (Income Approach – Option Model) with respect to the valuation of warrants.
For non-performing investments, we may estimate the liquidation or collateral value of the portfolio company’s assets and liabilities using an expected recovery model (Market Approach – Expected Recovery Analysis or Estimated Liquidation Proceeds).
We undertake a multi-step valuation process each quarter when valuing investments for which market quotations are not readily available, as described below:
our quarterly valuation process begins with each portfolio investment being internally valued by the valuation professionals;
preliminary valuation conclusions are then documented and discussed with senior management; and
an independent valuation firm engaged by our board of directors reviews approximately one third of these preliminary valuations each quarter on a rotating quarterly basis on non-fiscal year-end quarters, such that each of these investments will be valued by independent valuation firms at least twice per annum when combined with the fiscal year-end review of all the investments by independent valuation firms.
In addition, all of our investments are subject to the following valuation process:
the audit committee of our board of directors reviews the preliminary valuations of the investment professionals, senior management and independent valuation firms; and
our board of directors discusses valuations and determines the fair value of each investment in our portfolio in good faith based on the input of MCC Advisors, the respective independent valuation firms and the audit committee.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.
 
Fair Value of Financial Instruments
 
The carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts payable and accrued expenses, approximate fair value due to their short-term nature. The carrying amounts and fair values of our long-term obligations are discussed in Note 5.
 
Recent Accounting Pronouncements
 
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods or services. To achieve this core principle, an entity should apply the following steps: (1) identify the contracts with a customer, (2) identify the performance obligations in the contracts, (3) determine the transaction prices, (4) allocate the transaction prices to the performance obligations in the contracts, and (5) recognize revenue when, or as, the entity satisfies a performance obligation. The guidance also requires advanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarified the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarified the implementation guidance regarding performance obligations and licensing arrangements. The new standard will become effective for the Company on October 1, 2018, with early application permitted to the effective date of October 1, 2017. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.
 
In August 2014, the FASB released Accounting Standards Update 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40) (“ASU 2014-15”). ASU 2014-15 requires the Company to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within the one year period subsequent to the date that the financial statements are issued or within the one year period subsequent the date that the financial statements are available to be issued. ASU 2014-15 went into effect for the annual period ending after December 15, 2016 and annual and interim periods thereafter. The Company concluded that there are no such indicators that would affect its ability to continue as a going concern for the aforementioned period.
  
Federal Income Taxes
 
The Company has elected to be treated 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 qualify as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute to its stockholders at least 90% of the sum of investment company taxable income (“ICTI”) including PIK, as defined by the Code, and net tax exempt interest income (which is the excess of our gross tax exempt interest income over certain disallowed deductions) for each taxable year in order to be eligible for tax treatment under subchapter M of the Code. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year dividend distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.
 


The Company is subject to a nondeductible U.S. federal excise tax of 4% on undistributed income if it does not distribute at least 98% of its ordinary income in any calendar year and 98.2% of its capital gain net income for each one-year period ending on October 31 of such calendar year. To the extent


that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year dividend distributions for excise tax purposes, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. For the calendar year ended December 31, 2016, the Company did not distribute at least 98% of its ordinary income and 98.2% of its capital gains. Accordingly, with respect to the calendar year ended December 31, 2016, a provision was recorded for federalan excise taxestax expense of $0.3 million. Theremillion was no provision for federal excise tax for 2015 accrued at December 31, 2015.recorded.
 
The Company’s Taxable Subsidiaries accrue income taxes payable based on the applicable corporate rates on the unrealized gains generated by the investments held by the Taxable Subsidiaries. As of DecemberMarch 31, 20162017 and September 30, 2016, the Company recorded a deferred tax liability of $2.0 million, and $2.0 million, respectively, on the Consolidated Statements of Assets and Liabilities. The change in provision for deferred taxes is included as a component of net gain/(loss) on investments in the Consolidated Statements of Operations. For the three and six months ended DecemberMarch 31, 2016,2017, there was no change in provision for deferred taxes on the unrealized appreciation on investments. For the three and six months ended DecemberMarch 31, 2015,2016, the change in provision for deferred taxes on the unrealized appreciation on investments was $0.2 million.$0.1 and $0.4 million, respectively.
 
ICTI generally differs from net investment income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. The Company may be required to recognize ICTI in certain circumstances in which it does not receive cash. For example, if the Company holds debt obligations that are treated under applicable tax rules as having original issue discount, the Company must include in ICTI each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by the Company in the same taxable year. The Company may also have to include in ICTI other amounts that it has not yet received in cash, such as 1) PIK interest income and 2) interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. Because any original issue discount or other amounts accrued will be included in the Company’s ICTI for the year of accrual, the Company may be required to make a distribution to its stockholders in order to satisfy the minimum distribution requirements, even though the Company will not have received and may not ever receive any corresponding cash amount. ICTI also excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.
 
The Company accounts for income taxes in conformity with ASC Topic 740 - Income Taxes (“ASC 740”). ASC 740 provides guidelines for how uncertain tax positions should be recognized, measured, presented and disclosed in 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 deemed to meet a “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the current period. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Consolidated Statements of Operations. There were no material uncertain income tax positions at DecemberMarch 31, 2016.2017. Although we file federal and state tax returns, our major tax jurisdiction is federal. The Company’s inception-to-date federal tax years remain subject to examination by the Internal Revenue Service.
 
Segments
 
The Company invests in various industries. The Company separately evaluates the performance of each of its investment relationships. However, because each of these investment relationships has similar business and economic characteristics, they have been aggregated into a single investment segment. All applicable segment disclosures are included in or can be derived from the Company’s financial statements. See Note 3 for further information.
 
Company Investment Risk, Concentration of Credit Risk, and Liquidity Risk
 
MCC Advisors has broad discretion in making investments for the Company. Investments will generally consist of debt instruments that may be affected by business, financial market or legal uncertainties. Prices of investments may be volatile, and a variety of factors that are inherently difficult to predict, such as domestic or international economic and political developments, may significantly affect the results of the Company’s activities and the value of its investments. In addition, the value of the Company’s portfolio may fluctuate as the general level of interest rates fluctuate.
 
The value of the Company’s investments in loans may be detrimentally affected to the extent, among other things, that a borrower defaults on its obligations, there is insufficient collateral and/or there are extensive legal and other costs incurred in collecting on a defaulted loan, observable secondary or primary market yields for similar instruments issued by comparable companies increase materially or risk premiums required in the market between smaller companies, such as our borrowers, and those for which market yields are observable increase materially. MCC Advisors may attempt to minimize this risk by maintaining low loan-to-liquidation values with each loan and the collateral underlying the loan.
 
The Company’s assets may, at any time, include securities and other financial instruments or obligations that are illiquid or thinly traded, making purchase or sale of such securities and financial instruments at desired prices or in desired quantities difficult. Furthermore, the sale of any such investments may be possible only at substantial discounts, and it may be extremely difficult to value any such investments accurately.

Note 3. Investments
 
The composition of our investments as of DecemberMarch 31, 20162017 as a percentage of our total portfolio, at amortized cost and fair value were as follows (dollars in thousands): 


Amortized Cost Percentage Fair Value PercentageAmortized Cost Percentage Fair Value Percentage
Senior Secured First Lien Term Loans$607,039

59.9%
$562,490

61.3%$621,428

59.6%
$568,947

61.4%
Senior Secured Second Lien Term Loans230,666

22.8

214,871

23.4
239,403

23.0

223,338

24.1
Senior Secured First Lien Notes26,758

2.6

27,711

3.0
26,761

2.6

28,021

3.0
Unsecured Debt49,892

4.9

39,645

4.3
50,968

4.9

28,240

3.1
MCC Senior Loan Strategy JV I LLC39,375

3.9

39,418

4.3
43,225

4.1

44,571

4.8
Equity/Warrants60,100

5.9

33,478

3.7
60,418

5.8

33,024

3.6
Total$1,013,830

100.0%
$917,613

100.0%$1,042,203

100.0%
$926,141

100.0%
  
The composition of our investments as of September 30, 2016 as a percentage of our total portfolio, at amortized cost and fair value were as follows (dollars in thousands): 
 
 Amortized Cost Percentage Fair Value Percentage
Senior Secured First Lien Term Loans$612,762

60.5%
$565,329

61.8%
Senior Secured Second Lien Term Loans229,898

22.7

213,537

23.4
Senior Secured First Lien Notes26,755

2.6

27,423

3.0
Unsecured Debt62,150

6.1

52,809

5.8
MCC Senior Loan Strategy JV I LLC32,113

3.2

31,252

3.4
Equity/Warrants49,213

4.9

23,834

2.6
Total$1,012,891

100.0%
$914,184

100.0%
 
In connection with certain of the Company’s investments, the Company receives warrants which are obtained for the objective of increasing the total investment returns and are not held for hedging purposes. At DecemberMarch 31, 20162017 and September 30, 2016, the total fair value of warrants was $6.1$6.0 million and $5.8 million, respectively, and were included in investments at fair value on the Consolidated Statement of Assets and Liabilities. During the three and six months ended DecemberMarch 31, 2016 and 2015,2017, the Company acquired 1zero and 0one warrant positions, respectively. During the three and six months ended March 31, 2016, the Company did not acquire any warrant positions.
 
Total unrealized depreciation related to warrants for the three and six months ended DecemberMarch 31, 2016, and 20152017 was $0.2$0.1 million and $3.4$0.3 million, respectively and was recorded on the Consolidated Statements of Operations in those accounts.as net unrealized appreciation/(depreciation) on investments. Total unrealized depreciation related to warrants for the three and six months ended March 31, 2016 were $0.2 million and $3.6 million, respectively and was recorded on the Consolidated Statements of Operations as net unrealized appreciation/(depreciation) on investments. The warrants are received in connection with individual investments and are not subject to master netting arrangements.

The following table shows the portfolio composition by industry grouping at fair value at DecemberMarch 31, 20162017 (dollars in thousands):
Fair Value PercentageFair Value Percentage
Construction & Building$120,177
 13.0%
Services: Business$128,052
 14.0%113,405
 12.2
Banking, Finance, Insurance & Real Estate98,350
 10.7
98,171
 10.6
Construction & Building90,586
 9.9
Healthcare & Pharmaceuticals69,589
 7.6
76,383
 8.2
Hotel, Gaming & Leisure69,517
 7.6
60,917
 6.6
Automotive59,557
 6.5
Energy: Oil & Gas53,608
 5.8
58,038
 6.3
Aerospace & Defense50,826
 5.5
50,074
 5.4
Automotive47,095
 5.1
Multisector Holdings44,571
 4.8
Containers, Packaging & Glass42,390
 4.6
Telecommunications43,015
 4.7
31,226
 3.4
Containers, Packaging & Glass42,163
 4.6
Multisector Holdings39,418
 4.3
Beverage & Food30,483
 3.3
30,884
 3.3
Consumer goods: Durable25,000
 2.7
25,960
 2.8
Chemicals, Plastics & Rubber21,676
 2.4
22,667
 2.5
High Tech Industries22,124
 2.4
Metals & Mining20,518
 2.2
20,837
 2.2
Retail15,783
 1.7
15,313
 1.7
High Tech Industries14,718
 1.6
Capital Equipment12,089
 1.3
11,844
 1.3
Services: Consumer10,185
 1.1
10,489
 1.1
Consumer goods: Non-durable7,966
 0.9
8,526
 0.9
Media: Broadcasting & Subscription7,850
 0.9
8,131
 0.9
Wholesale6,664
 0.7
6,919
 0.7
Total$917,613

100.0%$926,141

100.0%


The following table shows the portfolio composition by industry grouping at fair value at September 30, 2016 (dollars in thousands):
 
 Fair Value Percentage
Services:  Business$123,703
 13.5%
Banking, Finance, Insurance & Real Estate96,207
 10.5
Construction & Building91,087
 10.0
Hotel, Gaming & Leisure68,605
 7.5
Automotive60,303
 6.6
Healthcare & Pharmaceuticals57,041
 6.2
Energy:  Oil & Gas52,646
 5.8
Aerospace & Defense51,656
 5.6
Telecommunications44,015
 4.8
Containers, Packaging & Glass42,197
 4.6
Chemicals, Plastics & Rubber32,640
 3.6
Multisector Holdings31,252
 3.4
Beverages & Food30,225
 3.3
Capital Equipment29,756
 3.3
Consumer goods:  Durable24,696
 2.7
Metals & Mining20,246
 2.2
High Tech Industries14,489
 1.6
Retail12,565
 1.4
Services:  Consumer9,440
 1.0
Media:  Broadcasting & Subscription7,832
 0.9
Consumer goods:  Non-durable7,208
 0.8
Wholesale6,375
 0.7
Total$914,184
 100.0%
 
The Company invests in portfolio companies principally located in North America. 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 table shows the portfolio composition by geographic location at fair value at DecemberMarch 31, 20162017 (dollars in thousands):
 
Fair Value PercentageFair Value Percentage
Southeast$194,092
 21.0%
Southwest$231,819
 25.3%193,563
 20.9
Midwest198,934
 21.7
186,788
 20.2
Southeast184,440
 20.1
Northeast141,826
 15.4
154,738
 16.7
West125,712
 13.7
139,202
 15.0
Mid-Atlantic34,882
 3.8
57,758
 6.2
Total$917,613
 100.0%$926,141
 100.0%
  
The following table shows the portfolio composition by geographic location at fair value at September 30, 2016 (dollars in thousands):
 
 Fair Value Percentage
Midwest$217,229
 23.8%
Southwest195,672
 21.4
Southeast180,159
 19.7
West136,279
 14.9
Northeast134,781
 14.7
Mid-Atlantic50,064
 5.5
Total$914,184
 100.0%
 


Transactions With Affiliated Companies
 
During the threesix months ended DecemberMarch 31, 20162017 and 2015,2016, the Company had investments in portfolio companies designated as controlled investments and affiliates under the 1940 Act. Transactions with control investments and affiliates were as follows: 

Name of InvestmentFair Value at September 30, 2016 Purchases (Sales) of/Advances to Affiliates Transfers In/(Out) of Affiliates Unrealized Gain/(Loss) Realized Gain/(Loss) Fair Value at December 31, 2016 Interest Income 
Dividend Income(3)
Fair Value at September 30, 2016 
Purchases/(Sales) of or Advances/(Distributions)(2)
 Transfers In/(Out) of Affiliates 
Unrealized Gain
/(Loss)
 
Realized Gain/
(Loss)
 Fair Value at March 31, 2017 Interest Income 
Dividend Income(3)
Controlled Investments 
  
  
  
  
  
  
  
 
  
  
  
  
  
  
  
AAR Intermediate Holdings, LLC$23,873,637
 $431,243
 $—
 $—
 $—
 $24,304,880
 $694,856
 $—
$23,873,637
 $1,818,403
 $—
 $2,056,480
 $—
 $27,748,520
 $1,389,887
 $—
Capstone Nutrition20,939,706
 —
 —
 722,720
 —
 21,662,426
 —
 —
20,939,706
 —
 —
 1,462,061
 —
 22,401,767
 —
 —
Lydell Jewelry Design Studio, LLC7,207,522
 650,000
 —
 108,890
 —
 7,966,412
 29,611
 —
7,207,522
 1,100,000
 —
 218,629
 —
 8,526,151
 71,049
 —
NVTN LLC—
 —
 28,198,671
 —
 —
 28,198,671
 281,014
 —
—
 1,361,215
 28,198,671
 —
 —
 29,559,886
 780,015
 —
MCC Senior Loan Strategy JV I LLC(1)
31,252,416
 7,262,500
 —
 903,299
 —
 39,418,215
 —
 568,750
31,252,416
 11,112,500
 —
 2,205,584
 —
 44,570,500
 —
 1,050,000
OmniVere LLC33,697,119
 2,526,181
 —
 (859,082) —
 35,364,218
 828,405
 —
33,697,119
 3,054,447
 —
 (14,249,682) —
 22,501,884
 829,578
 —
United Road Towing, Inc.19,911,875
 482,292
 —
 (11,925) —
 20,382,242
 480,832
 —
19,911,875
 813,471
 —
 (12,235) —
 20,713,111
 669,059
 —
Total Controlled Investments$136,882,275
 $11,352,216
 $28,198,671
 $863,902
 $—
 $177,297,064
 $2,314,718
 $568,750
$136,882,275
 $19,260,036
 $28,198,671
 $(8,319,163) $—
 $176,021,819
 $3,739,588
 $1,050,000
Affiliated Investments 
  
  
  
  
  
  
  
 
  
  
  
  
  
  
  
Access Media Holdings, LLC$—
 $385,427
 $7,832,358
 $(87,265) $—
 $8,130,520
 $402,458
 $—
Brantley Transportation LLC—
 47,943
 5,988,592
 1,095,812
 —
 7,132,347
 (5,657) —
Dream Finders Homes, LLC—
 (2,105,410) 8,691,276
 975,445
 —
 7,561,311
 501,624
 —
US Multifamily, LLC$10,000,000
 $—
 $—
 $—
 $—
 $10,000,000
 $166,750
 $—
10,000,000
 —
 —
 —
 —
 10,000,000
 333,500
 —
Total Affiliated Investments$10,000,000
 $—
 $—
 $—
 $—
 $10,000,000
 $166,750
 $—
$10,000,000
 $(1,672,040) $22,512,226
 $1,983,992
 $—
 $32,824,178
 $1,231,925
 $—

 
Name of InvestmentFair Value at September 30, 2015 Purchases (Sales) of/Advances to Affiliates Transfers In/(Out) of Affiliates 
Unrealized Gain/(Loss)(2)
 
Realized Gain/(Loss)(2)
 Fair Value at December 31, 2015 
Interest Income(2)
 
Dividend Income(2)
Fair Value at September 30, 2015 
Purchases/(Sales) of or Advances/(Distributions)(2)
 Transfers In/(Out) of Affiliates 
Unrealized Gain
/(Loss)(2)
 
Realized Gain/
(Loss)(2)
 Fair Value at March 31, 2016 
Interest Income(2)
 
Dividend Income(2)
Controlled Investments 
  
  
  
  
  
  
  
 
  
  
  
  
  
  
  
Capstone Nutrition$—
 $4,329,897
 $20,840,795
 $(7,239,419) $—
 $18,453,257
 $783,359
 $—
$—
 $6,804,124
 $20,840,795
 $(11,015,990) $—
 $17,429,206
 $783,359
 $—
MCC Senior Loan Strategy JV I LLC(1)
14,215,834
 8,750,000
 —
 23,106
 —
 22,988,940
 —
 —
14,215,834
 8,750,000
 —
 307,616
 —
 23,273,450
 —
 —
OmniVere LLC24,865,578
 833,333
 —
 (1,971,448) —
 24,382,212
 655,456
 —
24,865,578
 10,000,000
 —
 (1,923,131) —
 34,320,067
 1,379,001
 —
United Road Towing, Inc.35,116,790
 —
 —
 (8,779,789) —
 26,740,909
 412,766
 —
35,116,790
 —
 —
 (16,930,522) —
 19,013,238
 842,428
 —
Total Controlled Investments$74,198,202
 $13,913,230
 $20,840,795
 $(17,967,550) $—
 $92,565,318
 $1,851,581
 $—
$74,198,202
 $25,554,124
 $20,840,795
 $(29,562,027) $—
 $94,035,961
 $3,004,788
 $—
Affiliated Investments 
  
  
  
  
  
  
  
 
  
  
  
  
  
  
  
US Multifamily, LLC$10,000,000
 $—
 $—
 $—
 $—
 $10,000,000
 $166,750
 $—
$10,000,000
 $—
 $—
 $—
 $—
 $10,000,000
 $333,500
 $—
Total Affiliated Investments$10,000,000
 $—
 $—
 $—
 $—
 $10,000,000
 $166,750
 $—
$10,000,000
 $—
 $—
 $—
 $—
 $10,000,000
 $333,500
 $—

(1)The Company and Great American Life Insurance Company (“GALIC”) are the members of MCC Senior Loan Strategy JV I LLC (“MCC JV”), a joint venture formed as a Delaware limited liability company that is not consolidated by either member for financial reporting purposes. The members of MCC JV make capital contributions as investments by MCC JV are completed, and all portfolio and other material decisions regarding MCC JV must be submitted to MCC JV’s board of managers, which is comprised of an equal number of members appointed by each of the Company and GALIC. Approval of MCC JV’s board of managers requires the unanimous approval of a quorum of the board of managers, with a quorum consisting of equal representation of members appointed by each of the Company and GALIC. Because management of MCC JV is shared equally between the Company and GALIC, the Company does not have operational control over the MCC JV for purposes of the 1940 Act or otherwise.
(2)The prior year table has been modified to conform to the current year.
(3)Amount represents distributions from MCC JV to the Company and is a component of dividend income, net of provisional taxes in the Consolidated Statements of Operations.
Purchases/(sales) of or advances/(distributions) to affiliates represent the proceeds from sales and settlements of investments, purchases, originations and participations, investment increases due to payment-in-kind interest as well as net amortization of premium/(discount) on investments and are included in the purchases and sales presented on the Consolidated Statements of Cash Flows for the threesix months ended DecemberMarch 31, 20162017 and 2015, respectively.2016. Transfers in/(out) of affiliates represents the fair value for the month an investment became or was removed as an affiliated investment. Income received from affiliates is included in total investment income on the Consolidated Statements of Operations for the three and six months ended DecemberMarch 31, 20162017 and 2015, respectively.2016.
 


Loan Participation Sales
 
The Company sells portions of its investments via participation agreements to a managed account, managed by an affiliate and non-affiliate of the Company. At DecemberMarch 31, 2016,2017, there were 109 participation agreements outstanding with an aggregate fair value of $151.6$137.7 million. At September 30, 2016 there were 14 participation agreements outstanding with an aggregate fair value of $254.5 million. The transfer of the participated portion of the


investments met the criteria set forth in ASC 860, Transfers and Servicing for treatment as a sale. In each case, the Company’s loan participation agreements satisfy the following conditions:

transferred investments have been isolated from the Company - put presumptively beyond the reach of the Company and its creditors, even in bankruptcy or other receivership,

each participant has the right to pledge or exchange the transferred investments it received, and no condition both constrains the participant from taking advantage of its right to pledge or exchange and provides more than a trivial benefit to the Company; and

the Company, its consolidated affiliates or its agents do not maintain effective control over the transferred investments through either: (i) an agreement that entitles and/or obligates the Company to repurchase or redeem the assets before maturity, or (ii) the ability to unilaterally cause the holder to return specific assets, other than through a cleanup call.

Such investments where the Company has retained proportionate interests are included in the consolidated schedule of investments. All of these investments are classified within Level 3 of the fair value hierarchy, as defined in Note 4.
 
During the three and six months ended DecemberMarch 31, 2016 and 2015,2017, the Company collected interest and principal payments on behalf of the participant in the aggregate amount of $6.0$1.6 million and $2.1$7.5 million, respectively. During the three and six months ended March 31, 2016, the Company collected interest and principal payments on behalf of the participant in the aggregate amount of $3.3 million and $5.5 million, respectively. Under the terms of the participation agreements, the Company will collect and remit periodic payments to the participant equal to the participant's proportionate share of any principal and interest payments received by the Company from the underlying investee companies.
 
MCC Senior Loan Strategy JV I LLC
 
On March 27, 2015, the Company and GALIC entered into a limited liability company operating agreement to co-manage MCC JV. All portfolio and other material decisions regarding MCC JV must be submitted to MCC JV’s board of managers, which is comprised of four members, two of whom are selected by the Company and the other two are selected by GALIC. The Company has concluded that it does not operationally control MCC JV. As the Company does not operationally control MCC JV, it does not consolidate the operations of MCC JV within the consolidated financial statements. As a practical expedient, the Company uses NAV to determine the value of its investment in MCC JV; therefore, this investment has been presented as a reconciling item within the fair value hierarchy (see Note 4). Investments held by MCC JV are measured at fair value using the same valuation methodologies as described in Note 2.
 
As of DecemberMarch 31, 2016,2017, MCC JV had total capital commitments of $100.0 million with the Company providing $87.5 million and GALIC providing $12.5 million. Approximately $45.0$49.4 million was funded as of DecemberMarch 31, 20162017 relating to these commitments, of which $39.4$43.2 million was from the Company.

On August 4, 2015, MCC JV entered into a senior secured revolving credit facility (the “JV Facility”) led by Credit Suisse, AG (“CS”)  with initial commitments of $100 million subject to leverage and borrowing base restrictions. On March 30, 2017, the Company amended the JV Facility previously administered by CS and facilitated the assignment of all rights and obligations of CS under the JV Facility to Deutsche Bank AG, New York Branch, (“DB”) and increased the total loan commitments to $200 million. The JV Facility will bearbears interest at a rate of LIBOR (with no minimum) + 2.50% per annum. The revolving loanJV Facility reinvestment period ends on August 4, 2018March 30, 2019 and the finalstated maturity date is August 4,March 30, 2022. As of DecemberMarch 31, 2017 and September 30, 2016, there was approximately $79.6$98.6 million and $68.1 million outstanding under the JV Facility.Facility, respectively.
 
At DecemberMarch 31, 20162017 and September 30, 2016, MCC JV had total investments at fair value of $116.6$138.3 million and $93.4 million, respectively. As of DecemberMarch 31, 20162017 and September 30, 2016, MCC JV’s portfolio was comprised of senior secured first lien term loans to 3640 and 30 borrowers, respectively. As of DecemberMarch 31, 20162017 and September 30, 2016, certain investments in one portfolio company held by MCC JV were on non-accrual status.

 
Below is a summary of MCC JV’s portfolio, followed by a listing of the individual loans in MCC JV’s portfolio as of DecemberMarch 31, 20162017 and September 30, 2016:

December 31, 2016 September 30, 2016March 31, 2017 September 30, 2016
Senior Secured Loans(1)
$118,684,965
 $95,872,612
$140,460,196
 $95,872,612
Weighted average current interest rate on Senior Secured Loans(2)
6.69% 6.70%6.67% 6.70%
Number of borrowers in MCC JV36
 30
40
 30
Largest loan to a single borrower(1)
$6,000,000
 $5,216,234
$11,462,500
 $5,216,234
Total of five largest loans to borrowers(1)
$26,667,772
 $22,637,363
$33,088,329
 $22,637,363
 
(1)At par value.
(2)Computed as the (a) annual stated interest rate on accruing senior secured loans, divided by (b) total senior secured loans at principal amount.


MCC JV Loan Portfolio as of DecemberMarch 31, 20162017
(unaudited)
CompanyIndustry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets
 Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets
                
4 Over International, LLCMedia: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 6/7/2022 2,475,000
 2,475,000
 2,475,000
 5.5% Media: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 6/7/2022 11,462,500
 11,462,500
 11,462,500
 23.1%
 2,475,000
 2,475,000
 2,475,000
   11,462,500
 11,462,500
 11,462,500
  
                
AccentCare, Inc.Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.75% Cash, 1.00% LIBOR Floor)(1)
 9/3/2021 2,730,000
 2,708,607
 2,730,000
 6.1% Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.75% Cash, 1.00% LIBOR Floor)(1)
 9/3/2021 2,765,158
 2,744,979
 2,758,245
 5.6%
 2,730,000
 2,708,607
 2,730,000
   2,765,158
 2,744,979
 2,758,245
  
                
Amplify Snack Brands, Inc.Beverage, Food & Tobacco 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 1.00% LIBOR Floor)(1)
 9/2/2023 3,990,000
 3,951,929
 3,873,612
 8.6% Beverage, Food & Tobacco 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 1.00% LIBOR Floor)(1)
 9/2/2023 3,980,000
 3,943,427
 3,877,236
 7.8%
 3,990,000
 3,951,929
 3,873,612
   3,980,000
 3,943,427
 3,877,236
  
                
APCO Holdings, Inc.Automotive 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 1/31/2022 3,626,098
 3,533,772
 3,641,001
 8.1% Automotive 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 1/31/2022 3,555,152
 3,469,019
 3,555,152
 7.2%
 3,626,098
 3,533,772
 3,641,001
   3,555,152
 3,469,019
 3,555,152
  
                
API Technologies Corp.Aerospace and Defense 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(1)
 4/22/2022 2,985,000
 2,931,879
 2,957,717
 6.6% Aerospace and Defense 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(1)
 4/22/2022 2,977,500
 2,926,973
 2,988,338
 6.0%
 2,985,000
 2,931,879
 2,957,717
   2,977,500
 2,926,973
 2,988,338
  
                
Avantor Performance Materials Holdings, Inc. Chemicals, Plastics and Rubber 
Senior Secured First Lien Term Loan (LIBOR + 4.00%, 1.00% LIBOR Floor)(1)
 3/11/2024 2,878,788
 2,871,332
 2,903,977
 5.8%
 2,878,788
 2,871,332
 2,903,977
  
        
Blount International, Inc.Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(1)
 4/12/2023 2,992,500
 2,942,257
 2,972,450
 6.6% Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(1)
 4/12/2023 2,985,000
 2,936,849
 3,008,432
 6.1%
 2,992,500
 2,942,257
 2,972,450
   2,985,000
 2,936,849
 3,008,432
  
                
Cardenas Markets LLCRetail 
Senior Secured First Lien Term Loan (LIBOR + 5.75%, 1.00% LIBOR Floor)(1)
 11/29/2023 5,500,000
 5,445,689
 5,445,000
 12.1% Retail 
Senior Secured First Lien Term Loan (LIBOR + 5.75%, 1.00% LIBOR Floor)(1)
 11/29/2023 5,486,250
 5,434,006
 5,431,388
 10.9%
 5,500,000
 5,445,689
 5,445,000
   5,486,250
 5,434,006
 5,431,388
  
                
CD&R TZ Purchaser, Inc.Services: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 7/21/2023 3,491,250
 3,441,893
 3,386,513
 7.5% Services: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 7/21/2023 3,482,500
 3,435,118
 3,433,710
 6.9%
 3,491,250
 3,441,893
 3,386,513
   3,482,500
 3,435,118
 3,433,710
  
        
CP OpCo, LLC Term Loan AServices: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 3/31/2019 504,597
 504,597
 504,597
 1.1%
 504,597
 504,597
 504,597
  
        
CP OpCo, LLC Term Loan BServices: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 3/31/2019 210,249
 210,249
 210,249
 0.5%
 210,249
 210,249
 210,249
  
        
CP OpCo, LLC Term Loan C(3)
Services: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 3/31/2019 1,487,033
 717,016
 743,516
 1.7%
 1,487,033
 717,016
 743,516
  
        
CP OpCo, LLC Term Loan D(3)
Services: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 6.00% PIK, 1.00% LIBOR Floor)(1)
 3/31/2019 934,849
 —
 —
 0.0%
 934,849
 —
 —
  


CompanyIndustry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets
              
CP OpCo, LLC Revolving Credit FacilityServices: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 3/31/2019 128,038
 128,038
 128,038
 0.3%
       128,038
 128,038
 128,038
  
              
CP OpCo, LLC Revolving Credit FacilityServices: Consumer 
Senior Secured First Lien Term Loan (ABR + 3.50% Cash, 3.50% ABR Floor)(1)
 3/31/2019 210,935
 210,935
 210,935
 0.5%
       210,935
 210,935
 210,935
  
              
CP Opco, LLCServices: Consumer Common Stock   41
 —
 —
 0.0%
       41
 —
 —
  
              
CRGT Inc.High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(1)
 12/19/2020 2,440,896
 2,436,291
 2,440,896
 5.4%
       2,440,896
 2,436,291
 2,440,896
  
              
Elite Comfort Solutions, Inc.Chemicals, Plastics & Rubber 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(1)
 1/15/2021 6,000,000
 6,000,000
 6,060,000
 13.5%
       6,000,000
 6,000,000
 6,060,000
  
              
Explorer Holdings, Inc.Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 5/2/2023 2,985,000
 2,974,896
 3,005,298
 6.7%
       2,985,000
 2,974,896
 3,005,298
  
              
GK Holdings, Inc.Services: Business 
Senior Secured First Lien Term Loan (LIBOR + 5.50%, 1.00% LIBOR Floor)(1)
 1/20/2021 2,992,366
 2,977,798
 3,052,214
 6.8%
       2,992,366
 2,977,798
 3,052,214
  
              
GTCR Valor Companies, Inc.Media: Diversified & Production 
Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(1)
 6/16/2023 3,980,000
 3,831,682
 3,930,250
 8.7%
       3,980,000
 3,831,682
 3,930,250
  
              
Harbortouch Payments, LLCBanking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 4.75% Cash, 1.00% LIBOR Floor)(1)
 5/31/2022 4,500,000
 4,456,602
 4,455,000
 9.9%
       4,500,000
 4,456,602
 4,455,000
  
              
High Ridge Brands Co.Consumer Goods - Non-Durable 
Senior Secured First Lien Term Loan (LIBOR + 5.25% Cash, 1.00% LIBOR Floor)(1)
 6/30/2022 1,865,625
 1,838,969
 1,837,641
 4.1%
       1,865,625
 1,838,969
 1,837,641
  
              
HNC Holdings, Inc.Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 10/5/2023 263,000
 261,724
 265,630
 0.6%
       263,000
 261,724
 265,630
  
              
Imagine! Print Solutions, LLCMedia: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 3/30/2022 4,964,677
 4,908,790
 5,014,323
 11.1%
       4,964,677
 4,908,790
 5,014,323
  
              
Keurig Green Mountain, Inc.Beverage, Food & Tobacco 
Senior Secured First Lien Term Loan (LIBOR + 4.50% Cash, 0.75% LIBOR Floor)(1)
 3/3/2023 2,291,883
 2,264,465
 2,291,883
 5.1%
       2,291,883
 2,264,465
 2,291,883
  
Company Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets
               
CP OPCO, LLC Services: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(1)
 4/28/2017 20,486
 20,486
 20,486
 0.0%
    
Senior Secured First Lien Term Loan A (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 3/31/2019 514,118
 514,118
 514,118
 1.0%
    
Senior Secured First Lien Term Loan B (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 3/31/2019 214,216
 214,216
 214,216
 0.4%
    
Senior Secured First Lien Term Loan C (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)(3)
 3/31/2019 1,526,410
 717,016
 763,205
 1.5%
    
Senior Secured First Lien Term Loan D (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(1)(3)
 3/31/2019 934,849
 —
 —
 0.0%
    
Senior Secured First Lien Revolving Term Loan (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 3/31/2019 338,973
 338,973
 338,973
 0.7%
    Common Stock   41
 —
 —
 0.0%
        3,549,093
 1,804,809
 1,850,998
  
               
CSP Technologies North America, LLC (f/k/a CV Holdings, L.L.C.) Containers, Packaging and Glass 
Senior Secured First Lien Term Loan (LIBOR + 5.25%, 1.00% LIBOR Floor)(1)
 1/29/2022 2,493,594
 2,493,594
 2,493,594
 5.0%
        2,493,594
 2,493,594
 2,493,594
  
               
Elite Comfort Solutions, Inc. Chemicals, Plastics & Rubber 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(1)
 1/15/2021 5,962,123
 5,962,123
 5,962,123
 12.0%
        5,962,123
 5,962,123
 5,962,123
  
               
Explorer Holdings, Inc. Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 5/2/2023 2,977,500
 2,967,813
 3,007,275
 6.1%
        2,977,500
 2,967,813
 3,007,275
  
               
Evo Payments International, LLC Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 12/22/2023 3,500,000
 3,466,117
 3,526,250
 7.1%
        3,500,000
 3,466,117
 3,526,250
  
               
GK Holdings, Inc. Services: Business 
Senior Secured First Lien Term Loan (LIBOR + 5.50%, 1.00% LIBOR Floor)(1)
 1/20/2021 2,984,733
 2,971,085
 2,969,809
 6.0%
        2,984,733
 2,971,085
 2,969,809
  
               
Global Eagle Entertainment Inc. Telecommunications 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 1/6/2023 4,200,000
 4,124,803
 4,122,006
 8.3%
        4,200,000
 4,124,803
 4,122,006
  
               
GTCR Valor Companies, Inc. Media: Diversified & Production 
Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(1)
 6/16/2023 3,305,009
 3,186,546
 3,305,009
 6.7%
        3,305,009
 3,186,546
 3,305,009
  
               
Harbortouch Payments, LLC Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 4.75% Cash, 1.00% LIBOR Floor)(1)
 5/31/2022 4,488,750
 4,447,432
 4,443,863
 8.9%
        4,488,750
 4,447,432
 4,443,863
  


CompanyIndustry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets
 Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets
        
Highline Aftermarket Acquisitions, LLC Automotive 
Senior Secured First Lien Term Loan (LIBOR + 4.25%, 1.00% LIBOR Floor)(1)
 3/17/2024 3,250,000
 3,233,769
 3,233,750
 6.5%
 3,250,000
 3,233,769
 3,233,750
  
        
High Ridge Brands Co. Consumer Goods - Non-Durable 
Senior Secured First Lien Term Loan (LIBOR + 5.25% Cash, 1.00% LIBOR Floor)(1)
 6/30/2022 1,860,938
 1,835,541
 1,860,938
 3.7%
 1,860,938
 1,835,541
 1,860,938
  
        
Imagine! Print Solutions, LLC Media: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 3/30/2022 4,952,171
 4,899,046
 4,952,171
 10.0%
 4,952,171
 4,899,046
 4,952,171
  
                
Keystone Peer Review Organization Holdings, Inc.Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (ABR + 4.00%, 3.75% ABR Floor)(1)
 12/28/2022 4,000,000
 4,000,000
 3,960,000
 8.8% Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (ABR + 4.00%, 3.75% ABR Floor)(1)
 12/28/2022 3,990,000
 3,990,000
 3,950,100
 8.0%
 4,000,000
 4,000,000
 3,960,000
   3,990,000
 3,990,000
 3,950,100
  
                
Kraton Polymers LLCChemicals, Plastics & Rubber 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 1/6/2022 3,000,000
 2,896,967
 3,030,000
 6.7% Chemicals, Plastics & Rubber 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 1/6/2022 1,299,883
 1,257,432
 1,299,883
 2.6%
 3,000,000
 2,896,967
 3,030,000
   1,299,883
 1,257,432
 1,299,883
  
                
MB Aerospace ACP Holdings II Corp.Aerospace and Defense 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 1.00% LIBOR Floor)(1)
 12/15/2022 5,203,095
 5,162,278
 5,203,095
 11.5% Aerospace and Defense 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 1.00% LIBOR Floor)(1)
 12/15/2022 5,189,956
 5,150,928
 5,189,956
 10.4%
 5,203,095
 5,162,278
 5,203,095
   5,189,956
 5,150,928
 5,189,956
  
                
MWI Holdings, Inc.Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 1.00% LIBOR Floor)(1)
 6/29/2020 1,990,000
 1,972,438
 1,985,025
 4.3% Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 1.00% LIBOR Floor)(1)
 6/29/2020 1,985,000
 1,968,718
 1,983,372
 3.9%
 1,990,000
 1,972,438
 1,985,025
   1,985,000
 1,968,718
 1,983,372
  
                
New Media Holdings II LLCMedia: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.25%, 1.00% LIBOR Floor)(1)
 6/4/2020 2,954,764
 2,954,764
 2,954,764
 6.6% Media: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.25%, 1.00% LIBOR Floor)(1)
 6/4/2020 2,947,227
 2,947,227
 2,947,227
 5.9%
 2,954,764
 2,954,764
 2,954,764
   2,947,227
 2,947,227
 2,947,227
  
                
O2 Partners, LLCConsumer Goods - Non-Durable 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 10/7/2022 4,488,750
 4,445,426
 4,443,863
 9.9% Consumer Goods - Non-Durable 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 10/7/2022 4,477,500
 4,436,131
 4,432,725
 8.9%
 4,488,750
 4,445,426
 4,443,863
   4,477,500
 4,436,131
 4,432,725
  
                
PetroChoice Holdings, Inc. Chemicals, Plastics and Rubber 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 9/3/2022 4,987,342
 4,987,342
 4,987,342
 10.0%
 4,987,342
 4,987,342
 4,987,342
  
        
Pomeroy Group LLCServices: Business 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 11/30/2021 2,784,175
 2,707,210
 2,700,650
 6.0% High Tech 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 11/30/2021 2,777,144
 2,704,223
 2,731,433
 5.5%
 2,784,175
 2,707,210
 2,700,650
   2,777,144
 2,704,223
 2,731,433
  
                
PT Network, LLCHealthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 6.50%, 1.00% LIBOR Floor)(1)
 11/30/2021 5,000,000
 4,950,876
 5,000,000
 11.1% Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 6.50%, 1.00% LIBOR Floor)(1)
 11/30/2021 4,987,500
 4,940,955
 4,987,500
 10.0%
 5,000,000
 4,950,876
 5,000,000
   4,987,500
 4,940,955
 4,987,500
  
        
Quorum Health CorporationHealthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.75%, 1.00% LIBOR Floor)(1)
 4/29/2022 2,467,100
 2,423,077
 2,411,590
 5.4%
 2,467,100
 2,423,077
 2,411,590
  
        
SCS Holdings I Inc.Wholesale 
Senior Secured First Lien Term Loan (LIBOR + 4.25%, 1.00% LIBOR Floor)(1)
 10/30/2022 2,958,792
 2,909,192
 2,951,395
 6.6%
 2,958,792
 2,909,192
 2,951,395
  
        
Sundial Group Holdings LLCConsumer Goods - Non-Durable 
Senior Secured First Lien Term Loan (LIBOR + 6.25%, 1.00% LIBOR Floor)(1)
 10/19/2021 2,887,500
 2,841,194
 2,887,500
 6.4%
 2,887,500
 2,841,194
 2,887,500
  
        
Survey Sampling International, LLCServices: Business 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 12/16/2020 2,977,265
 2,952,089
 2,996,349
 6.7%
 2,977,265
 2,952,089
 2,996,349
  


CompanyIndustry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets
 Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets
        
Quorum Health Corporation Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.75%, 1.00% LIBOR Floor)(1)
 4/29/2022 1,385,102
 1,361,530
 1,348,743
 2.7%
 1,385,102
 1,361,530
 1,348,743
  
        
Salient CRGT Inc. High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 5.75%, 1.00% LIBOR Floor)(1)
 2/28/2022 3,000,000
 2,940,530
 2,955,000
 5.9%
 3,000,000
 2,940,530
 2,955,000
  
        
SCS Holdings I Inc. Wholesale 
Senior Secured First Lien Term Loan (LIBOR + 4.25%, 1.00% LIBOR Floor)(1)
 10/30/2022 2,951,292
 2,903,909
 2,977,116
 6.0%
 2,951,292
 2,903,909
 2,977,116
  
        
Sundial Group Holdings LLC Consumer Goods - Non-Durable 
Senior Secured First Lien Term Loan (LIBOR + 6.25%, 1.00% LIBOR Floor)(1)
 10/19/2021 2,850,000
 2,806,643
 2,850,000
 5.7%
 2,850,000
 2,806,643
 2,850,000
  
        
Survey Sampling International, LLC Services: Business 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 12/16/2020 2,969,686
 2,946,137
 2,969,686
 6.0%
 2,969,686
 2,946,137
 2,969,686
  
                
TaxACT, Inc.Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(1)
 1/3/2023 3,731,481
 3,643,226
 3,731,481
 8.3% Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(1)
 1/3/2023 890,689
 870,487
 890,689
 1.8%
 3,731,481
 3,643,226
 3,731,481
   890,689
 870,487
 890,689
  
                
TrialCard IncorporatedServices: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 5.25%, 1.00% LIBOR Floor)(1)
 10/26/2021 3,500,000
 3,466,284
 3,500,000
 7.8% Services: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 5.25%, 1.00% LIBOR Floor)(1)
 10/26/2021 3,456,250
 3,424,658
 3,456,250
 7.0%
 3,500,000
 3,466,284
 3,500,000
   3,456,250
 3,424,658
 3,456,250
  
                
VCVH Holding Corp.Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 6/1/2023 2,985,000
 2,957,169
 2,955,150
 6.6% Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 6/1/2023 2,977,500
 2,950,806
 2,952,370
 5.9%
 2,985,000
 2,957,169
 2,955,150
   2,977,500
 2,950,806
 2,952,370
  
                
Victory Capital Operating, LLCBanking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 7.50%, 1.00% LIBOR Floor)(1)
 10/29/2021 1,621,005
 1,598,431
 1,637,215
 3.6% Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 7.50%, 1.00% LIBOR Floor)(1)
 10/29/2021 3,241,366
 3,220,247
 3,269,728
 6.6%
 1,621,005
 1,598,431
 1,637,215
   3,241,366
 3,220,247
 3,269,728
  
                
Western Digital CorporationHigh Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 3.75%, 0.75% LIBOR Floor)(1)
 4/29/2023 2,587,000
 2,536,945
 2,612,870
 5.8%
VIP Cinema Holdings, Inc. Consumer Goods: Durable 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 3/1/2023 1,000,000
 995,041
 995,000
 2.0%
 2,587,000
 2,536,945
 2,612,870
   1,000,000
 995,041
 995,000
  
                
Total Investments, December 31 2016 $118,684,965
 $115,570,641
 $116,592,711
 258.8%
Total Investments, March 31, 2017Total Investments, March 31, 2017 $140,460,196
 $137,419,825
 $138,320,884
 278.1%

(1)Represents the weighted average annual current interest rate as of DecemberMarch 31, 2016.2017. All interest rates are payable in cash, unless otherwise noted.
(2)Represents the fair value in accordance with ASC Topic 820.820 as reported by MCC JV. The determination of such fair value is not included in the Company’s board of directors’ valuation process described elsewhere herein.
(3)This investment was on non-accrual status as of DecemberMarch 31, 2016.2017.


MCC JV Loan Portfolio as of September 30, 2016

CompanyIndustry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets
 Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets
                          
4Over International, LLCMedia: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 6/7/2022 2,487,500
 2,487,500
 2,487,500
 7.0% Media: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 6/7/2022 2,487,500
 2,487,500
 2,487,500
 7.0%
      2,487,500
 2,487,500
 2,487,500
  
       2,487,500
 2,487,500
 2,487,500
  
                
AccentCare, Inc.Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.75% Cash, 1.00% LIBOR Floor)(1)
 9/3/2021 2,747,500
 2,724,808
 2,728,295
 7.6% Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.75% Cash, 1.00% LIBOR Floor)(1)
 9/3/2021 2,747,500
 2,724,808
 2,728,295
 7.6%
      2,747,500
 2,724,808
 2,728,295
  
       2,747,500
 2,724,808
 2,728,295
  
                
Amplify Snack Brands, Inc.Beverage & Food 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 1.00% LIBOR Floor)(1)
 9/2/2023 4,000,000
 3,960,392
 3,960,000
 11.1% Beverage & Food 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 1.00% LIBOR Floor)(1)
 9/2/2023 4,000,000
 3,960,392
 3,960,000
 11.1%
      4,000,000
 3,960,392
 3,960,000
  
       4,000,000
 3,960,392
 3,960,000
  
                
APCO Holdings, IncAutomotive 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 1/31/2022 3,703,125
 3,604,166
 3,660,168
 10.2% Automotive 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 1/31/2022 3,703,125
 3,604,166
 3,660,168
 10.2%
      3,703,125
 3,604,166
 3,660,168
  
       3,703,125
 3,604,166
 3,660,168
  
                
API Technologies Corp.Aerospace and Defense 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(1)
 4/22/2022 2,992,500
 2,936,717
 2,932,650
 8.2% Aerospace and Defense 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(1)
 4/22/2022 2,992,500
 2,936,717
 2,932,650
 8.2%
      2,992,500
 2,936,717
 2,932,650
  
       2,992,500
 2,936,717
 2,932,650
  
                
Blount International, Inc.Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(1)
 4/12/2023 3,000,000
 2,947,612
 2,910,000
 8.1% Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(1)
 4/12/2023 3,000,000
 2,947,612
 2,910,000
 8.1%
      3,000,000
 2,947,612
 2,910,000
  
       3,000,000
 2,947,612
 2,910,000
  
                
CD&R TZ Purchaser, Inc.Services: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 7/21/2023 3,500,000
 3,448,618
 3,395,002
 9.5% Services: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 7/21/2023 3,500,000
 3,448,618
 3,395,002
 9.5%
      3,500,000
 3,448,618
 3,395,002
  
       3,500,000
 3,448,618
 3,395,002
  
                
CP OpCo, LLC Term Loan AServices: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 3/31/2019 495,048
 495,048
 495,048
 1.4%
CP OPCO, LLC Services: Consumer 
Senior Secured First Lien Term Loan A (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 3/31/2019 495,048
 495,048
 495,048
 1.4%
      495,048
 495,048
 495,048
  
 
Senior Secured First Lien Term Loan B (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 3/31/2019 206,270
 206,270
 206,270
 0.6%
         
Senior Secured First Lien Term Loan C (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)(3)
 3/31/2019 1,447,834
 717,016
 717,016
 2.0%
CP OpCo, LLC Term Loan BServices: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 3/31/2019 206,270
 206,270
 206,270
 0.6%
      206,270
 206,270
 206,270
  
 
Senior Secured First Lien Term Loan D (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(1)(3)
 3/31/2019 901,391
 —
 —
 0.0%
         
Senior Secured First Lien Revolving Term Loan (LIBOR + 4.50%, 1.00% LIBOR
Floor)(1)
 3/31/2019 128,038
 128,038
 128,038
 0.4%
CP OpCo, LLC Term Loan C(3)
Services: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 3/31/2019 1,447,834
 717,016
 717,016
 2.0%
      1,447,834
 717,016
 717,016
  
 
Senior Secured First Lien Revolving Term Loan (ABR + 3.50% Cash, 3.50% ABR
Floor)(1)
 3/31/2019 112,674
 112,674
 112,674
 0.3%
         Common Stock   41
 —
 —
 0.0%
CP OpCo, LLC Term Loan D(3)
Services: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 3/31/2019 901,391
 —
 —
 0.0%
      901,391
 —
 —
  
       3,291,296
 1,659,046
 1,659,046
  
                
CP OpCo, LLC Revolving Credit FacilityServices: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 3/31/2019 128,038
 128,038
 128,038
 0.4%
CRGT Inc. High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(1)
 12/19/2020 2,646,703
 2,641,393
 2,646,703
 7.4%
      128,038
 128,038
 128,038
  
       2,646,703
 2,641,393
 2,646,703
  
        


CompanyIndustry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets
 Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets
             
CP OpCo, LLC Revolving Credit FacilityServices: Consumer 
Senior Secured First Lien Term Loan (ABR + 3.50% Cash, 3.50% ABR Floor)(1)
 3/31/2019 112,674
 112,674
 112,674
 0.3%
      112,674
 112,674
 112,674
  
        
CP Opco, LLC (Classic Party Rentals) Common UnitsServices: Consumer Common Stock   41
 —
 —
 0.0%
      41
 —
 —
  
        
CRGT Inc.High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(1)
 12/19/2020 2,646,703
 2,641,393
 2,646,703
 7.4%
      2,646,703
 2,641,393
 2,646,703
  
                     
Elite Comfort Solutions, IncChemicals, Plastics & Rubber 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(1)
 1/15/2021 4,196,875
 4,196,875
 4,238,844
 11.9% Chemicals, Plastics & Rubber 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(1)
 1/15/2021 4,196,875
 4,196,875
 4,238,844
 11.9%
      4,196,875
 4,196,875
 4,238,844
  
       4,196,875
 4,196,875
 4,238,844
  
                
Explorer Holdings, Inc.Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 5/2/2023 2,992,500
 2,981,967
 2,962,575
 8.3% Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 5/2/2023 2,992,500
 2,981,967
 2,962,575
 8.3%
      2,992,500
 2,981,967
 2,962,575
  
       2,992,500
 2,981,967
 2,962,575
  
                
GTCR Valor Companies, Inc.Media: Diversified & Production 
Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(1)
 6/16/2023 3,990,000
 3,835,508
 3,795,687
 10.6% Media: Diversified & Production 
Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(1)
 6/16/2023 3,990,000
 3,835,508
 3,795,687
 10.6%
      3,990,000
 3,835,508
 3,795,687
  
       3,990,000
 3,835,508
 3,795,687
  
                
HarborTouch Payments, LLCBanking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(1)
 5/31/2022 3,478,125
 3,445,054
 3,443,344
 9.6% Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(1)
 5/31/2022 3,478,125
 3,445,054
 3,443,344
 9.6%
      3,478,125
 3,445,054
 3,443,344
  
       3,478,125
 3,445,054
 3,443,344
  
                
High Ridge Brands Co.Consumer Goods - Non-Durable 
Senior Secured First Lien Term Loan (LIBOR + 5.25% Cash, 1.00% LIBOR Floor)(1)
 6/30/2022 1,870,313
 1,842,364
 1,842,257
 5.2% Consumer Goods - Non-Durable 
Senior Secured First Lien Term Loan (LIBOR + 5.25% Cash, 1.00% LIBOR Floor)(1)
 6/30/2022 1,870,313
 1,842,364
 1,842,257
 5.2%
      1,870,313
 1,842,364
 1,842,257
  
       1,870,313
 1,842,364
 1,842,257
  
                
Imagine! Print Solutions, LLCMedia: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 3/30/2022 4,977,182
 4,918,462
 5,020,982
 14.1% Media: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 3/30/2022 4,977,182
 4,918,462
 5,020,982
 14.1%
      4,977,182
 4,918,462
 5,020,982
  
       4,977,182
 4,918,462
 5,020,982
  
                
Keurig Green Mountain, Inc.Beverage & Food 
Senior Secured First Lien Term Loan (LIBOR + 4.50% Cash, 0.75% LIBOR Floor)(1)
 3/3/2023 4,013,275
 3,963,303
 4,013,275
 11.2% Beverage & Food 
Senior Secured First Lien Term Loan (LIBOR + 4.50% Cash, 0.75% LIBOR Floor)(1)
 3/3/2023 4,013,275
 3,963,303
 4,013,275
 11.2%
      4,013,275
 3,963,303
 4,013,275
  
       4,013,275
 3,963,303
 4,013,275
  
                
Kraton Polymers LLCChemicals, Plastics & Rubber 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 1/6/2022 3,000,000
 2,891,792
 3,030,000
 8.5% Chemicals, Plastics & Rubber 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 1/6/2022 3,000,000
 2,891,792
 3,030,000
 8.5%
      3,000,000
 2,891,792
 3,030,000
  
       3,000,000
 2,891,792
 3,030,000
  
                
MB Aerospace ACP Holdings II Corp.Aerospace and Defense 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 1.00% LIBOR Floor)(1)
 12/15/2022 5,216,234
 5,173,584
 5,160,681
 14.4% Aerospace and Defense 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 1.00% LIBOR Floor)(1)
 12/15/2022 5,216,234
 5,173,584
 5,160,681
 14.4%
      5,216,234
 5,173,584
 5,160,681
  
       5,216,234
 5,173,584
 5,160,681
  
                
MWI Holdings, Inc.Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 1.00% LIBOR Floor)(1)
 6/29/2020 1,995,000
 1,976,126
 1,990,012
 5.5% Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 5.50% Cash, 1.00% LIBOR Floor)(1)
 6/29/2020 1,995,000
 1,976,126
 1,990,012
 5.5%
      1,995,000
 1,976,126
 1,990,012
  
       1,995,000
 1,976,126
 1,990,012
  
        
NetSmart Inc. High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 4.75%, 1.00% LIBOR Floor)(1)
 4/19/2023 2,493,750
 2,469,871
 2,503,227
 7.0%
       2,493,750
 2,469,871
 2,503,227
  
        
New Media Holdings II LLC Media: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.25%, 1.00% LIBOR Floor)(1)
 6/4/2020 2,962,302
 2,962,302
 2,948,972
 8.3%
       2,962,302
 2,962,302
 2,948,972
  
        
Pomeroy Group LLC High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 11/30/2021 3,491,206
 3,389,703
 3,386,470
 9.5%
       3,491,206
 3,389,703
 3,386,470
  


CompanyIndustry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets
 Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets
             
NetSmart Inc.High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 4.75%, 1.00% LIBOR Floor)(1)
 4/19/2023 2,493,750
 2,469,871
 2,503,227
 7.0%
      2,493,750
 2,469,871
 2,503,227
  
        
New Media Holdings II LLCMedia: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.25%, 1.00% LIBOR Floor)(1)
 6/4/2020 2,962,302
 2,962,302
 2,948,972
 8.3%
      2,962,302
 2,962,302
 2,948,972
  
        
Pomeroy Group LLCHigh Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 11/30/2021 3,491,206
 3,389,703
 3,386,470
 9.5%
      3,491,206
 3,389,703
 3,386,470
  
                     
Quorum Health CorporationHealthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.75%, 1.00% LIBOR Floor)(1)
 4/29/2022 2,487,500
 2,441,013
 2,409,765
 6.7% Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.75%, 1.00% LIBOR Floor)(1)
 4/29/2022 2,487,500
 2,441,013
 2,409,765
 6.7%
      2,487,500
 2,441,013
 2,409,765
  
       2,487,500
 2,441,013
 2,409,765
  
                
SCS Holdings I Inc.Wholesale 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 10/30/2022 2,966,292
 2,914,417
 2,904,564
 8.1% Wholesale 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 10/30/2022 2,966,292
 2,914,417
 2,904,564
 8.1%
      2,966,292
 2,914,417
 2,904,564
  
       2,966,292
 2,914,417
 2,904,564
  
                
Sundial Group Holdings LLCConsumer Goods - Non-Durable 
Senior Secured First Lien Term Loan (LIBOR + 6.25%, 1.00% LIBOR Floor)(1)
 10/19/2021 2,925,000
 2,875,629
 2,879,721
 8.1% Consumer Goods - Non-Durable 
Senior Secured First Lien Term Loan (LIBOR + 6.25%, 1.00% LIBOR Floor)(1)
 10/19/2021 2,925,000
 2,875,629
 2,879,721
 8.1%
      2,925,000
 2,875,629
 2,879,721
  
       2,925,000
 2,875,629
 2,879,721
  
                
Survey Sampling International, LLCServices: Business 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 12/16/2020 2,984,843
 2,957,468
 2,954,994
 8.3% Services: Business 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 12/16/2020 2,984,843
 2,957,468
 2,954,994
 8.3%
      2,984,843
 2,957,468
 2,954,994
  
       2,984,843
 2,957,468
 2,954,994
  
                
TaxAct, Inc.Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(1)
 1/3/2023 4,233,796
 4,129,461
 4,302,807
 12.0% Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(1)
 1/3/2023 4,233,796
 4,129,461
 4,302,807
 12.0%
      4,233,796
 4,129,461
 4,302,807
  
       4,233,796
 4,129,461
 4,302,807
  
                
VCVH Holding Corp.High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 6/1/2023 2,992,500
 2,963,504
 2,971,852
 8.3% High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 6/1/2023 2,992,500
 2,963,504
 2,971,852
 8.3%
      2,992,500
 2,963,504
 2,971,852
  
       2,992,500
 2,963,504
 2,971,852
  
                
Victory Capital Operating, LLC.Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 7.50%, 1.00% LIBOR Floor)(1)
 10/29/2021 1,643,836
 1,619,749
 1,615,069
 4.5% Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 7.50%, 1.00% LIBOR Floor)(1)
 10/29/2021 1,643,836
 1,619,749
 1,615,069
 4.5%
      1,643,836
 1,619,749
 1,615,069
  
       1,643,836
 1,619,749
 1,615,069
  
                
Western Digital CorporationHigh Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 3.75%, 0.75% LIBOR Floor)(1)
 4/29/2023 2,593,500
 2,541,321
 2,617,879
 7.3% High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 3.75%, 0.75% LIBOR Floor)(1)
 4/29/2023 2,593,500
 2,541,321
 2,617,879
 7.3%
      2,593,500
 2,541,321
 2,617,879
  
       2,593,500
 2,541,321
 2,617,879
  
                
Total Investments, September 30, 2016Total Investments, September 30, 2016     $95,872,654
 $92,899,725
 $93,372,341
 261.4%Total Investments, September 30, 2016     $95,872,654
 $92,899,725
 $93,372,341
 261.4%

(1)Represents the weighted average annual current interest rate as of September 30, 2016. All interest rates are payable in cash, unless otherwise noted.
(2)Represents the fair value in accordance with ASC Topic 820.820 as reported by MCC JV. The determination of such fair value is not included in the Company’s board of directors’ valuation process described elsewhere herein.
(3)This investment was on non-accrual status as of September 30, 20162016.



Below is certain summarized financial Information for MCC JV as of DecemberMarch 31, 20162017 and September 30, 2016, and for the three and six months ended DecemberMarch 31, 20162017 and 2015:2016:

As of
December 31, 2016		 As of
September 30, 2016		March 31, 2017 September 30, 2016
Selected Consolidated Statement of Assets and Liabilities Information: 
  
 
  
Investments in loans at fair value (amortized cost of $115,570,641 and $92,899,725, respectively)$116,592,711
 $93,372,341
Investments in loans at fair value (amortized cost: of $137,419,825 and $92,899,725, respectively)$138,320,884
 $93,372,341
Cash7,131,730
 9,720,324
6,335,132
 9,720,324
Other assets428,215
 268,136
2,229,367
 268,136
Total assets$124,152,656
 $103,360,801
$146,885,383
 $103,360,801
      
Line of credit (net of debt issuance costs of $957,632 and $1,000,841, respectively)$78,622,368
 $67,079,159
Line of credit (net of debt issuance costs of $1,964,522 and $1,000,841, respectively)$96,615,478
 $67,079,159
Other liabilities239,801
 340,088
254,087
 340,088
Interest payable241,097
 224,507
277,610
 224,507
Total liabilities79,103,266
 67,643,754
97,147,175
 67,643,754
Members' capital45,049,390
 35,717,047
49,738,208
 35,717,047
Total liabilities and members' capital$124,152,656
 $103,360,801
$146,885,383
 $103,360,801

For the three months ended December 31For the three months ended
March 31		 For the six months ended
March 31
2016 20152017 2016 2017 2016
Selected Consolidated Statement of Operations Information: 
  
       
Total revenues$2,002,357
 355,113
$2,325,043
 773,430
 $4,327,399
 $1,128,543
Total expenses(975,360) (291,814)(1,013,655) (459,830) (1,990,369) (751,644)
Net unrealized depreciation549,454
 (36,806)(121,011) (49,419) 428,443
 (86,225)
Net realized gains105,892
 1,867
299,796
 18,402
 405,688
 20,269
Net income/(loss)$1,682,343
 $28,360
$1,490,173
 $282,583
 $3,171,161
 $310,943


Note 4. Fair Value Measurements
 
The Company follows ASC 820 for measuring the fair value of portfolio investments. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Financial investments recorded at fair value in the consolidated financial statements are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the investment as of the measurement date. The three levels are defined below. Investments which are valued using NAV as a practical expedient are excluded from this hierarchy:
 
Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2 - Valuations based on inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable at the measurement date. This category includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in non-active markets including actionable bids from third parties for privately held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward currency rates that are entered directly into valuation models to determine the value of derivatives or other assets or liabilities.
Level 3 - Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and are based upon management’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt and equity investments in private companies or assets valued using the market or income approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, beta and EBITDA multiples. The information may also include pricing information or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence.
In addition to using the above inputs in investment valuations, the Company continues to employ the valuation policy approved by the board of directors that is consistent with ASC 820 (see Note 2). Consistent with our valuation policy, we evaluate the source of inputs, including any markets in which our investments are trading, in determining fair value.
 


The following table presents the fair value measurements of our investments, by major class according to the fair value hierarchy, as of DecemberMarch 31, 20162017 (dollars in thousands):
 
Level 1 Level 2 Level 3 TotalLevel 1 Level 2 Level 3 Total
Senior Secured First Lien Term Loans$—
 $—
 $562,490
 $562,490
$—
 $—
 $568,947
 $568,947
Senior Secured Second Lien Term Loans—
 —
 214,871
 214,871
—
 —
 223,338
 223,338
Senior Secured First Lien Notes—
 6,664
 21,047
 27,711
—
 6,919
 21,102
 28,021
Unsecured Debt—
 —
 39,645
 39,645
—
 —
 28,240
 28,240
Equity/Warrants234
 200
 33,044
 33,478
120
 96
 32,808
 33,024
Total$234
 $6,864
 $871,097
 $878,195
$120
 $7,015
 $874,435
 $881,570
MCC Senior Loan Strategy JV I LLC(1)
 
  
  
 $39,418
 
  
  
 $44,571
Total Investments, at fair value 
  
  
 $917,613
 
  
  
 $926,141
  
The following table presents the fair value measurements of our investments, by major class according to the fair value hierarchy, as of September 30, 2016 (dollars in thousands):
 
 Level 1 Level 2 Level 3 Total
Senior Secured First Lien Term Loans$—
 $—
 $565,329
 $565,329
Senior Secured Second Lien Term Loans—
 —
 213,537
 213,537
Senior Secured First Lien Notes—
 6,375
 21,048
 27,423
Unsecured Debt—
 —
 52,809
 52,809
Equity/Warrants359
 363
 23,112
 23,834
Total$359

$6,738

$875,835

$882,932
MCC Senior Loan Strategy JV I LLC(1)
 
  
  
 $31,252
Total Investments, at fair value 
  
  
 $914,184
 
(1)Certain investments that are measured at fair value using NAV have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amount presented in the Consolidated Statements of Assets and Liabilities.
 
The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the threesix months ended DecemberMarch 31, 20162017 (dollars in thousands):
Senior
Secured
First Lien
Term
Loans
 
Senior
Secured
Second
Lien Term
Loans
 
Senior
Secured
First Lien
Notes
 
Unsecured
Debt
 Equities/Warrants Total
Senior
Secured
First Lien
Term
Loans
 
Senior
Secured
Second
Lien Term
Loans
 
Senior
Secured
First Lien
Notes
 
Unsecured
Debt
 Equities/Warrants Total
Balance as of September 30, 2016$565,329
 $213,537
 $21,048
 $52,809
 $23,112
 $875,835
$565,329
 $213,537
 $21,048
 $52,809
 $23,112
 $875,835
Purchases and other adjustments to cost4,119
 768
 —
 1,058
 12
 5,957
7,676
 4,295
 —
 2,134
 269
 14,374
Originations75,349
 —
 —
 1,973
 10,875
 88,197
120,012
 6,500
 —
 1,973
 10,935
 139,420
Sales—
 —
 —
 —
 —
 —
—
 (1,000) —
 —
 —
 (1,000)
Settlements(79,227) —
 —
 (15,000) —
 (94,227)(112,933) (300) —
 (15,000) —
 (128,233)
Net realized gains/(losses) from investments(6,089) —
 —
 (289) —
 (6,378)(6,089) 10
 —
 (289) —
 (6,368)
Net transfers in and/or out of Level 3—
 —
 —
 —
 —
 —
—
 —
 —
 —
 —
 —
Net unrealized gains/(losses)3,009
 566
 (1) (906) (955) 1,713
(5,048) 296
 54
 (13,387) (1,508) (19,593)
Balance as of December 31, 2016$562,490

$214,871

$21,047

$39,645

$33,044

$871,097
Balance as of March 31, 2017$568,947

$223,338

$21,102

$28,240

$32,808

$874,435
  


The following table provides a reconciliation of the beginning and ending balances for investments that use level 3 inputs for the threesix months ended DecemberMarch 31, 20152016 (dollars in thousands):
 
Senior
Secured
First Lien
Term
Loans
 
Senior
Secured
Second
Lien Term
Loans
 
Senior
Secured
First Lien
Notes
 
Unsecured
Debt
 Equities/Warrants Total
Senior
Secured
First Lien
Term
Loans
 
Senior
Secured
Second
Lien Term
Loans
 
Senior
Secured
First Lien
Notes
 
Unsecured
Debt
 Equities/Warrants Total
Balance as of September 30, 2015$695,970
 $372,176
 $30,669
 $45,661
 $50,584
 $1,195,060
$695,970
 $372,176
 $30,669
 $45,661
 $50,584
 $1,195,060
Purchases and other adjustments to cost3,232
 393
 9
 476
 460
 4,570
5,184
 1,262
 9
 1,228
 826
 8,509
Originations24,190
 10,000
 —
 —
 624
 34,814
42,678
 12,000
 —
 8,278
 896
 63,852
Sales(44,834) (32,900) —
 —
 —
 (77,734)—
 —
 —
 —
 —
 —
Settlements—
 —
 (11,000) —
 (5,840) (16,840)(91,922) (83,732) (11,000) —
 (5,840) (192,494)
Net realized gains/(losses) from investments151
 —
 39
 —
 5,303
 5,493
151
 —
 39
 —
 5,303
 5,493
Net transfers in and/or out of Level 3—
 —
 4,972
 —
 —
 4,972
—
 —
 —
 —
 —
 —
Net unrealized gains/(losses)(38,013) (5,087) 563
 (2,126) (14,389) (59,052)(42,080) (5,746) 728
 (2,127) (24,992) (74,217)
Balance as of December 31, 2015$640,696

$344,582

$25,252

$44,011

$36,742

$1,091,283
Balance as of March 31, 2016$609,981

$295,960

$20,445

$53,040

$26,777

$1,006,203
 
Net change in unrealized loss included in earnings related to investments still held as of DecemberMarch 31, 20162017 and 2015,2016, was approximately $23.0$24.7 million and $75.8$90.2 million, respectively.
 
Purchases and other adjustments to cost include purchases of new investments at cost, effects of refinancing/restructuring, accretion/amortization of income from discount/premium on debt securities, and PIK.
 
Sales represent net proceeds received from investments sold.
 
Settlements represent principal paydowns received.
 
A review of the fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification forof certain financial assets or liabilities. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3 category as of the beginning of the quarter in which the reclassifications occur. During the threesix months ended DecemberMarch 31, 20162017 none of our investments transferred in or out of Level 3. During the threesix months ended DecemberMarch 31, 2015,2016, one of our senior secured first lien notes with a fair value of $5.0 million transferred from Level 2 to Level 3 because of the decrease in availability of the transaction data or the inputs to the valuation.valuation, and one of our senior secured notes with a fair value of $5.9 million transferred from Level 3 to Level 2 because of the increase in availability of the transaction data or inputs to the valuation became observable.

The following table presents the quantitative information about Level 3 fair value measurements of our investments, as of DecemberMarch 31, 20162017 (dollars in thousands):
Fair Value Valuation Technique Unobservable Input Range (Weighted Average) Fair Value Valuation Technique Unobservable Input Range (Weighted Average)
     
Senior Secured First Lien Term Loans$367,923
 Income Approach (DCF) Market Yield 7.59% - 15.38% (11.21%) $335,034
 Income Approach (DCF) Market yield 7.37% - 15.01% (11.31%)
     
Senior Secured First Lien Term Loans34,490
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
NTM Revenue Multiple(1), NTM EBITDA Multiple(1), Discount Rate
 0.40x - 1.00x (0.82x)/5.00x - 7.00x (6.41x)/17.50% - 18.00% (17.65%) 10,602
 Enterprise Value Analysis Expected Proceeds $0.2M - $10.5M ($10.4M)
     
Senior Secured First Lien Term Loans21,662
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
Run-Rate Revenue Multiple(1), Run-Rate EBITDA Multiple(1), Discount Rate
 0.50x - 1.00x (0.75x)/5.50x - 6.50x (6.00x)/18.50% - 21.50% (20.00%) 51,401
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
2017 Revenue Multiple(1), 2017 EBITDA Multiple(1), Discount Rate
 1.13x - 3.00x (1.99x)/6.50x - 9.25x (7.98x)/15.50% - 17.50% (16.58%)
      
Senior Secured First Lien Term Loans41,383
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
NTM Revenue Multiple(1), Discount Rate
 0.63x - 3.00x (2.54x)/15.00% - 20.00% (15.96%) 22,402
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
Run-Rate Revenue Multiple(1), 2017 Revenue Multiple(1), 2017 EBITDA Multiple(1), Discount Rate
 0.50x - 1.00x (0.75x)/0.50x - 1.00x (0.75x)/5.50x - 6.50x (6.00x)/16.50% - 20.50% (18.50%)
     
Senior Secured First Lien Term Loans7,850
 Market Approach (Guideline Comparable) Revenue Generating Unit $393.75 - $525.00 ($459.38) 8,130
 Market Approach (Guideline Comparable)/Income Approach (DCF) LTM Revenue, 2017 Revenue, Discount Rate 1.20x - 1.40x (1.30x) / 1.20x - 1.40x (1.30x) / 15.50% - 17.50% (16.50%)
     
Senior Secured First Lien Term Loans6,228
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
LTM Revenue Multiple(1), Discount Rate
 1.00x - 1.50x (1.25x) /14.00%-18.00% (16.00%) 8,526
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
2017 Revenue Multiple(1), Discount Rate
 0.25x - 1.00x (0.75x)/19.00% - 21.00% (20.00%)
  


 Fair Value Valuation Technique Unobservable Input Range (Weighted Average)
        
Senior Secured First Lien Term Loans18,64820,009
 Market Approach (Guideline Comparable)/Market Approach (Comparable Transactions)/Income Approach (DCF) 
LTM Revenue Multiple(1), NTM2017 Revenue Multiple(1), LTM EBITDA Multiple(1), NTM2017 EBITDA Multiple(1), Discount Rate
 0.50x-0.75x(0.63x) /0.50x-0.75x(0.63x) / 6.50x-8.50x (7.50x)/ 6.50x-8.50x (7.50x)/19.00%-21.00% (20.00%)
        
Senior Secured First Lien Term Loans22,8897,132
Market Approach (Guideline Comparable)/Income Approach (DCF)
LTM Revenue Multiple(1), Run-Rate Revenue, Discount Rate
1.30x - 1.60x (1.45x) / 1.30x - 1.60x (1.45x) / 14.00%-18.00% (16.00%)
Senior Secured First Lien Term Loans22,502
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
2016 Revenue Multiple(1), NTM2017 Revenue Multiple(1), NTM EBITDA, Discount Rate
 0.75x-1.25x (1.00x)/0.75x-1.25x (1.00x)/6.50x-7.00x (6.75x)/ 17.50%-22.50% (20.00%)
        
Senior Secured First Lien Term Loans14,00914,493
 Market Approach (Guideline Comparable) 
2016LTM and NTM Revenue Multiple(1)
 0.50x - 0.75x (0.63x)/0.50x - 0.75x (0.63x)
        
Senior Secured First Lien Term Loans1136,670
 Enterprise Valuation AnalysisIncome Approach (DCF) Expected ProceedsDiscount Rate $0.2M9.00% - $0.2M ($0.2M)11.00% (10.00%)
        
Senior Secured First Lien Term Loans27,29762,046
 Recent Arms LengthArms-Length Transaction Recent Arms Length Transaction N/A
        
Senior Secured Notes21,04721,102
 Income Approach (DCF) Market Yieldyield 8.06%7.82% - 8.06% (8.06%7.82% (7.82%)
        
Senior Secured Second Lien Term Loans180,039181,606
 Income Approach (DCF) Market Yieldyield 8.98%8.72% - 17.44% (11.74%16.53% (11.40%)
        
Senior Secured Second Lien Term Loans2,8407,460
 Market Approach (Guideline Comparable)Recent Arms-Length Transaction 
2016 EBITDA Multiple(1)
Recent Arms Length Transaction		 5.00x - 6.00x (5.50x)N/A
        
Senior Secured Second Lien Term LoanLoans19,1961,949
 Market Approach (Guideline Comparable) 
LTM Revenue Multiple(1), NTM Revenue Multiple(1), LTMEBITDA, 2017 EBITDA Multiple(1)
 0.60x-0.80x(0.70x) /0.60x-0.80x(0.70x)4.50x - 5.50x (5.00x) / 6.25x4.50x - 6.75x (6.50x)5.50x (5.00x)
        
Senior Secured Second Lien Term LoanLoans12,79619,527
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
LTM Revenue Multiple(1), NTM Revenue Multiple(1), LTM EBITDA Multiple(1), NTMDiscount Rate
0.50x-0.75x(0.63x) /0.50x-0.75x(0.63x) / 6.25x - 6.75x (6.50x) / 16.50% - 18.50% (17.50%)
Senior Secured Second Lien Term Loans12,796
Market Approach (Guideline Comparable)/Income Approach (DCF)
LTM Revenue Multiple(1), 2017 Revenue Multiple(1), LTM EBITDA Multiple(1), 2017 EBITDA Multiple(1), Discount Rate
 0.40x-0.60x(0.50x) /0.40x-0.60x(0.50x)0.40x-0.60x (0.50x)/0.40x-0.60x (0.50x)/ 8.75x-9.75x (9.25x) / 8.25x-9.25x (8.75x)/ 7.50x-8.50x (8.00x)/17.50%-21.50% - 21.50% (19.50%)
        
Unsecured Debt12,47628,240
Income Approach (DCF)Market Yield18.01% - 18.01% (18.01%)
Unsecured Debt—
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
2016 Revenue Multiple(1), NTM Revenue Multiple(1), NTM EBITDA, Discount Rate
 0.75x-1.25x (1.00x)/0.75x-1.25x (1.00x)/6.50x-7.00x (6.75x)/ 17.50%-22.50% (20.00%)
        
Unsecured DebtEquity27,1696,007
 Income Approach (DCF) Market Yield 18.00% - 20.00% (18.00%8.76%-8.76% (8.76%)
        
Unsecured DebtEquity—3,330
Income Approach (DCF)Discount Rate9.00% - 11.00% (10.00%)
Equity1,200
 Recent Arms LengthArms-Length Transaction Recent Arms Length Transaction N/A
        
Equity5,750
Income Approach (DCF)Market Yield8.70%-8.70% (8.70%)
 
Equity—
Market Approach (Guideline Comparable)Revenue Generating Unit$393.75 - $525.00 ($459.38)
Equity—
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
LTM Revenue, Multiple(1),2017 Revenue, Discount Rate
 1.00x1.20x - 1.50x (1.25x) /14.00%-18.00% (16.00%1.40x (1.30x) / 1.20x - 1.40x (1.30x) / 15.50% - 17.50% (16.50%)


Fair Value Valuation Technique Unobservable Input Range (Weighted Average) Fair Value Valuation Technique Unobservable Input Range (Weighted Average)
   
Warrants —
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
2017 Revenue Multiple(1), Discount Rate
 0.25x - 1.00x (0.75x)/19.00% - 21.00% (20.00%)
     
Equity9,551
 Market Approach (Guideline Comparable)/Market Approach (Comparable Transactions)/Income Approach (DCF) 
LTM Revenue Multiple(1), NTM Revenue Multiple(1), LTM EBITDA Multiple(1), NTM EBITDA Multiple(1), Discount Rate
 0.50x-0.75x(0.63x) /0.50x-0.75x(0.63x) / 6.50x-8.50x (7.50x)/ 6.50x-8.50x (7.50x)/19.00%-21.00% (20.00%) —
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
LTM Revenue Multiple(1), Run-Rate Revenue, Discount Rate
 1.30x - 1.60x (1.45x) / 1.30x - 1.60x (1.45x) / 14.00%-18.00% (16.00%)
     
Equity1,186
 Market Approach (Guideline Comparable) 
LTM Revenue Multiple(1), NTM Revenue Multiple(1), LTM EBITDA Multiple(1)
 0.60x-0.80x(0.70x) /0.60x-0.80x(0.70x) / 6.25x - 6.75x (6.50x) 1,186
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
LTM Revenue Multiple(1), NTM Revenue Multiple(1), LTM EBITDA Multiple(1), Discount Rate
 0.50x-0.75x(0.63x) /0.50x-0.75x(0.63x) / 6.25x - 6.75x (6.50x) / 16.50% - 18.50% (17.50%)
     
Equity—
 Market Approach (Guideline Comparable) 
LTM Revenue Multiple(1), NTM Revenue Multiple(1)
 0.75x - 1.00x (0.75x) /0.75x - 1.00x (0.75x) 9,551
 Market Approach (Guideline Comparable)/Market Approach (Comparable Transactions)/Income Approach (DCF) 
LTM Revenue Multiple(1), 2017 Revenue Multiple(1), LTM EBITDA Multiple(1), 2017 EBITDA Multiple(1), Discount Rate
 0.50x-0.75x(0.63x) /0.50x-0.75x(0.63x) / 6.50x-8.50x (7.50x)/ 6.50x-8.50x (7.50x)/19.00%-21.00% (20.00%)
     
Equity1,612
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
LTM EBITDA, Run-Rate Multiple(1), Discount Rate
 7.00x - 8.00x (7.50x)/7.00x - 8.00x (7.50x) / 16.00%-18.00% (17.00%) —
 Market Approach (Guideline Comparable) 
LTM Revenue Multiple(1), NTM Revenue Multiple(1)
 0.75x - 1.00x (0.75x) /0.75x - 1.00x (0.75x)
     
Equity—
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
NTM Revenue Multiple(1), Discount Rate
 0.63x - 3.00x (2.54x)/15.00% - 20.00% (15.96%) 1,660
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
LTM EBITDA, Run-Rate Multiple(1), Discount rate
 7.00x - 8.00x (7.50x)/7.00x - 8.00x (7.50x) / 16.00%-18.00% (17.00%)
     
Equity5,400
 Market Approach (Guideline Comparable) 
LTM EBITDA and EV/PP&E Multiple(1)
 5.50x - 6.50x (6.00x) / 0.75x - 1.00x (0.88x) —
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
2017 Revenue Multiple(1), 2017 EBITDA Multiple(1), Discount Rate
 1.13x - 3.00x (1.99x)/6.50x - 9.25x (7.98x)/15.50% - 17.50% (16.58%)
     
Equity4,738
 Market Approach (Guideline Comparable) 
LTM and NTM EBITDA Multiple(1)
 5.50x - 7.00x (6.47x) / 5.75x - 6.75x (6.38x) 633
 Market Approach (Guideline Comparable) / Income Approach (DCF) 
LTM and NTM EBITDA Multiple(1), Discount Rate
 4.50x - 5.50x (5.00x) / 4.50x - 5.50x (5.00x) / 14.00% - 16.00% (15.00%)
     
Equity278
 Market Approach (Guideline Comparable)/Precendent Transaction 
LTM Revenue Multiple(1), NTM Revenue Multiple(1), LTM EBITDA Multiple(1), NTM EBITDA Multiple(1), Precedent Transaction
 0.75x-1.25x(1.00x) / 0.75x-1.25x(1.00x) / 7.00x-8.00x (7.50x)/ 5.50x-6.50x (6.00x)/$34.8M-$34.8M ($34.8M)
Warrants 5,400
 Market Approach (Guideline Comparable) 
LTM EBITDA Multiple(1), Asset Appraisal Multiple(1)
 6.50x - 7.50x (7.00x) / 1.50x - 3.00x (2.25x)
     
Equity—
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
NTM Revenue Multiple(1), NTM EBITDA Multiple(1), Discount Rate
 0.40x - 1.00x (0.82x)/5.00x - 7.00x (6.41x)/17.50% - 18.00% (17.65%) 3,567
 Market Approach (Guideline Comparable) 
LTM and 2017 EBITDA Multiple(1)
 5.00x - 7.00x (6.56x) / 5.00x - 6.75x (5.77x)
     
Equity—
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
Run-Rate Revenue Multiple(1), Run-Rate EBITDA Multiple(1), Discount Rate
 0.50x - 1.00x (0.75x)/5.50x - 6.50x (6.00x)/18.50% - 21.50% (20.00%) 274
 Market Approach (Guideline Comparable)/Precedent Transaction 
LTM Revenue Multiple(1), NTM Revenue Multiple(1), LTM EBITDA Multiple(1), NTM EBITDA Multiple(1), Precedent Transaction
 0.75x - 1.25x (1.00x) / 0.75x - 1.25x (1.00x) / 7.00x - 8.00x (7.50x)/ 5.50x - 6.50x (6.00x) / $34.5M - $34.5M ($34.5M)
     
Equity—
 Market Approach (Guideline Comparable) 
2016 EBITDA Multiple(1)
 5.00x - 6.00x (5.50x) —
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
Run-Rate Revenue Multiple(1), 2017 Revenue Multiple(1), 2017 EBITDA Multiple(1), Discount Rate
 0.50x - 1.00x (0.75x)/0.50x - 1.00x (0.75x)/5.50x - 6.50x (6.00x)/16.50% - 20.50% (18.50%)
     
Equity—
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
2016 Revenue Multiple(1), NTM Revenue Multiple(1), NTM EBITDA, Discount Rate
 0.75x-1.25x (1.00x)/0.75x-1.25x (1.00x)/6.50x-7.00x (6.75x)/ 17.50%-22.50% (20.00%) —
 Enterprise Value Analysis Expected Proceeds $0.0M - $0.0M ($0.0M)
     
Equity4,530
 Recent Arms Length Transaction Recent Arms Length Transaction N/A —
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
2016 Revenue Multiple(1), NTM Revenue Multiple(1), Discount Rate
 0.75x-1.25x (1.00x)/0.75x-1.25x (1.00x)/17.50%-22.50% (20.00%)
     
Total$871,097
  $874,435
 
   


The following table presents the quantitative information about Level 3 fair value measurements of our investments, as of September 30, 2016 (dollars in thousands):

 Fair Value Valuation Technique Unobservable Input Range (Weighted Average)
        
Senior Secured First Lien Term Loans$446,549
 Income Approach (DCF) Market Yield 7.55% - 16.00% (11.54%)
        
Senior Secured First Lien Term Loans54,254
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
NTM Revenue Multiple(1), NTM EBITDA Multiple(1), Discount Rate
 0.40x - 1.00x (0.80x)/5.00x - 7.00x (6.46x)/17.00% - 20.00% (18.33%)
        
Senior Secured First Lien Term Loans7,832
 Market Approach (Guideline Comparable) 
NTM Revenue Multiple(1), NTM EBITDA Multiple(1), RGU
 1.00x - 1.50x (1.50x)/5.00x - 6.00x (6.00x)/$393.75 - $525.00 ($525.00)
        
Senior Secured First Lien Term Loans7,207
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
NTM Revenue Multiple(1), Discount Rate
 0.25x - 1.00x (0.63x) 19.00% - 21.00% (20.00%)
        
Senior Secured First Lien Term Loans5,989
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
LTM Revenue Multiple(1), Discount Rate
 0.75x - 1.25x (1.00x) /14.00%-18.00% (16.00%)
        
Senior Secured First Lien Term Loans22,360
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
2016 Revenue Multiple(1), NTM Revenue Multiple(1), NTM EBITDA, Discount Rate
 0.75x-1.25x (1.25x)/0.75x-1.25x (1.25x)/6.50x-7.00x (7.00x)/ 17.50%-22.50% (20.00%)
        
Senior Secured First Lien Term Loans13,308
 Market Approach (Guideline Comparable) 
2016 Revenue Multiple(1)
 0.50x - 0.75x (0.63x)
        
Senior Secured First Lien Term Loans1,160
 Enterprise Valuation Analysis Recovery Proceeds $0.0M - $1.2M ($1.2M)
        
Senior Secured First Lien Term Loans6,670
 Recent Arms-Length Transaction Recent Arms Length Transaction N/A
        
Senior Secured First Lien Notes21,048
 Income Approach (DCF) Market Yield 8.02% - 8.02% (8.02%)
        
Senior Secured Second Lien Term Loans179,197
 Income Approach (DCF) Market Yield 8.97% -  17.86% (11.54%)
        
Senior Secured Second Lien Term Loans2,818
 Market Approach (Guideline Comparable) 
2016 EBITDA Multiple(1)
 5.00x - 6.00x (5.50x)
        
Senior Secured Second Lien Term Loan18,726
 Market Approach (Guideline Comparable) 
LTM Revenue Multiple(1), NTM Revenue Multiple(1), LTM EBITDA Multiple(1)
 0.50x-0.75x(0.63x) /0.50x-0.75x(0.63x) / 6.25x - 6.75x (6.50x)
        
Senior Secured Second Lien Term Loan12,796
 Market Approach (Guideline Comparable) 
LTM and NTM EBITDA Multiple(1)
 8.50x-9.50x (9.00x)/ 8.00x-9.00x (8.50x)
        
Unsecured Debt11,337
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
2016 Revenue Multiple(1), NTM Revenue Multiple(1), NTM EBITDA Multiple(1), Discount Rate
 0.75x-1.25x (1.25x)/0.75x-1.25x (1.25x)/6.50x-7.00x (7.00x)/ 17.50%-22.50% (20.00%)
        
Unsecured Debt26,322
 Income Approach (DCF) Market Yield 18.00%-18.50% (18.49%)
        
Unsecured Debt15,150
 Income Approach (DCF) Market Yield 10.58%-10.58% (10.58%)
        


 Fair Value Valuation Technique Unobservable Input Range (Weighted Average)
        
Equity5,749
 Income Approach (DCF) Market Yield 8.75%-8.75% (8.75%)
        
Equity3,330
 Recent Arms-Length Transaction Recent Arms Length Transaction N/A
        
Equity—
 Market Approach (Guideline Comparable) 
NTM Revenue Multiple(1), NTM EBITDA Multiple(1), RGU
 1.00x - 1.50x (1.50x)/5.00x - 6.00x (6.00x)/$393.75 - $525.00 ($525.00)
        
Warrants—
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
NTM Revenue Multiple(1), Discount Rate
 0.25x - 1.00x (0.63x) 19.00% - 21.00% (20.00%)
        
Equity—
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
LTM Revenue Multiple(1), Discount Rate
 0.75x - 1.25x (1.00x)/14.00% - 18.00% (16.00%)
        
Equity1,186
 Market Approach (Guideline Comparable) 
LTM Revenue Multiple(1), NTM Revenue Multiple(1), LTM EBITDA Multiple(1)
 0.50x-0.75x(0.63x) /0.50x-0.75x(0.63x) / 6.25x - 6.75x (6.50x)
        
Equity—
 Market Approach (Guideline Comparable) 
LTM Revenue Multiple(1), NTM Revenue Multiple(1)
 0.75x - 1.00x (0.75x) /0.75x - 1.00x (0.75x)
        
Equity3,263
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
LTM EBITDA, Run-Rate Multiple(1), Discount Rate
 7.00x - 8.00x (7.50x)/7.00x - 8.00x (7.50x) / 16.00%-18.00% (17.00%)
        
Equity71
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
NTM EBITDA Multiple(1), Discount Rate
 6.00x - 7.00x (7.00x)/ 14.00%-16.00% (15.00%)
        
Equity642
 Market Approach (Guideline Comparable)/Precedent Transaction 
NTM EBITDA Multiple(1), Precedent Transaction
 4.25x - 5.25x (4.75x) / $185.3M-$185.3M ($185.3M)
        
Warrants5,400
 Market Approach (Guideline Comparable) 
LTM EBITDA and EV/PP&E Multiple(1)
 5.50x - 6.50x (6.00x) / 0.75x - 1.00x (0.88x)
        
Equity1,759
 Market Approach (Guideline Comparable) 
LTM and 2016 EBITDA Multiple(1)
 6.50x - 7.00x (6.54x) / 6.00x - 6.50x (6.04x)
        
Equity1,712
 Market Approach (Guideline Comparable) 
LTM and NTM EBITDA Multiple(1)
 5.75x - 7.50x (7.03x) / 5.75x - 6.75x (6.49x)
        
Equity—
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
NTM Revenue Multiple(1), NTM EBITDA Multiple(1), Discount Rate
 0.40x - 1.00x (0.80x)/5.00x - 7.00x (6.46x)/17.00% - 20.00% (18.33%)
        
Warrants—
 Market Approach (Guideline Comparable) 
2016 EBITDA Multiple(1)
 5.00x - 6.00x (5.50x)
        
Equity—
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
2016 Revenue Multiple(1), NTM Revenue Multiple(1), NTM EBITDA Multiple(1), Discount Rate
 0.75x-1.25x (1.25x)/0.75x-1.25x (1.25x)/6.50x-7.00x (7.00x)/ 17.50%-22.50% (20.00%)
        
Total$875,835
      
  
  
(1)Represents amounts used when the Company has determined that market participants would use such multiples when measuring the fair value of these investments.


 
The significant unobservable inputs used in the fair value measurement of the Company’s debt investments are market yields. Increases in market yields would result in lower fair value measurements.
 
The significant unobservable inputs used in the fair value measurement of the Company’s equity/warrants investments are comparable company multiples of Revenue or EBITDA (earnings before interest, taxes, depreciation and amortization) for the last twelve months (“LTM”), next twelve months (“NTM”) or a reasonable period a market participant would consider. Increases in EBITDA multiples in isolation would result in higher fair value measurements.

Note 5. Borrowings 
 
As a BDC, we are only allowed to employ leverage to the extent that our asset coverage, as defined in the 1940 Act, equals at least 200% after giving effect to such leverage. The amount of leverage that we employ at any time depends on our assessment of the market and other factors at the time of any proposed borrowing.
 
On November 16, 2012, we obtained exemptive relief from the SEC to permit us to exclude the debt of the SBIC LP guaranteed by the SBA from our 200% asset coverage test under the 1940 Act. The exemptive relief provides us with increased flexibility under the 200% asset coverage test by permitting it to borrow up to $150 million more than it would otherwise be able to absent the receipt of this exemptive relief.
 
The Company’s outstanding debt excluding debt issuance costs as of DecemberMarch 31, 20162017 and September 30, 2016 was as follows (dollars in thousands):
 
As of
December 31, 2016 September 30, 2016March 31, 2017 September 30, 2016
Aggregate
Principal
Amount
Available
 
Principal
Amount
Outstanding
 
Carrying
Value
 
Fair
Value
 
Aggregate
Principal
Amount
Available
 
Principal
Amount
Outstanding
 
Carrying
Value
 
Fair
Value
Aggregate
Principal
Amount
Available
 
Principal
Amount
Outstanding
 
Carrying
Value
 
Fair
Value
 
Aggregate
Principal
Amount
Available
 
Principal
Amount
Outstanding
 
Carrying
Value
 
Fair
Value
Revolving Credit Facility$343,500
 $18,000
 $18,000
 $18,000
 $343,500
 $14,000
 $14,000
 $14,000
$200,000
 $34,000
 $34,000
 $34,000
 $343,500
 $14,000
 $14,000
 $14,000
Term Loan Facility174,000
 174,000
 174,000
 174,000
 174,000
 174,000
 174,000
 174,000
174,000
 174,000
 174,000
 174,000
 174,000
 174,000
 174,000
 174,000
2019 Notes40,000
 40,000
 40,000
 40,608
 40,000
 40,000
 40,000
 40,704
—
 —
 —
 —
 40,000
 40,000
 40,000
 40,704
2021 Notes74,013
 74,013
 74,013
 75,760
 74,013
 74,013
 74,013
 76,677
74,013
 74,013
 74,013
 77,565
 74,013
 74,013
 74,013
 76,677
2023 Notes63,880
 63,880
 63,880
 63,905
 63,500
 63,500
 63,500
 63,856
102,847
 102,847
 102,847
 104,287
 63,500
 63,500
 63,500
 63,856
SBA Debentures150,000
 150,000
 150,000
 150,000
 150,000
 150,000
 150,000
 150,000
150,000
 150,000
 150,000
 150,000
 150,000
 150,000
 150,000
 150,000
Total$845,393

$519,893

$519,893

$522,273

$845,013

$515,513

$515,513

$519,237
$700,860

$534,860

$534,860

$539,852

$845,013

$515,513

$515,513

$519,237
  
Credit Facility
 
On July 28, 2015, we entered into Amendment No. 7 to our existingThe Company has a Senior Secured Term Loan Credit Agreement, as amended (the ‘‘Term Loan Facility’’) and Senior Secured Revolving Credit Facility AmendmentAgreement, as amended (the ‘‘Revolving Credit Facility’’ and, Amendment No. 7 to our existingcollectively with the Term Loan Facility, Amendment, eachas amended, the ‘‘Facilities’’) with certain lenders party thereto and ING Capital LLC, as administrative agent. The Amendments modified certain provisions of the Facilities.Administrative agent, in order to borrow funds to make additional investments.

The pricing in the case of the term loan credit facility (the “TermTerm Loan Facility”) was reducedFacility for LIBOR loans fromis LIBOR (with no minimum) plus 3.25% to LIBOR plus 3.00%. The pricing on the revolving credit facility (the “RevolvingRevolving Credit Facility,” and together with the Term Loan Facility the “Facilities”) will remain the same at is LIBOR (with no minimum) plus 2.75%. Both the Term Loan Facility and Revolving Credit Facility will decrease by an additional 25 basis points upon receiving an investment grade rating from Standard & Poor’s.

Additionally, theThe Term Loan Facility’s bullet maturity was extended from June 2019 tois July 28, 2020 and the Revolving Credit Facility’s revolving period was extended from June 2017 toends July 28, 2019, followed by a one-year amortization period and a final maturity inon July 28, 2020.
On February 14, 2017, the Company elected to reduce the total commitment of the Revolving Credit Facility to $200.0 million from $343.5 million. The reduction was accounted for as a debt modification to a line-of credit or revolving-debt arrangement in accordance with ASC 470-50, Modifications and Extinguishments, which attributed to an acceleration of debt issuance costs in the amount of $1.3 million and recorded on the Consolidated Statements of Operations as a component of interest and financing expenses.
As of December 31, 2016, total commitmentsBorrowings under the Facilities are $517.5 million, comprisedsubject to, among other things, a minimum borrowing/collateral base and substantially all of $343.5 million committed to the Revolving Facility and $174.0 million fundedCompany’s assets are pledged as collateral under the Term Loan Facility.
Facilities. In addition, the Facilities require the Company to, among other things (i) make representations and warranties regarding the collateral as well the Company’s business and operations, (ii) agree to certain indemnification obligations and (iii) agree to comply with various affirmative and negative covenants. The documentation for each of the Facilities also includes default provisions such as the failure to make timely payments under the Facilities, the occurrence of a change in control and the failure by the Company to materially perform under the operative agreements governing the Facilities, which, if not complied with, could accelerate repayment under the Facilities, thereby materially and adversely affecting the Company’s liquidity, financial condition and results of operations.
At DecemberMarch 31, 2016,2017, the carrying amount of our borrowings under the Facilities approximated their fair value. The fair values of our debt obligations are determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of our borrowings under the Facilities are estimated based upon market interest rates for our own borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any. As of DecemberMarch 31, 20162017 and September 30, 2016, the Facilities would be deemed to be Level 3, as defined in Note 4.
 


In accordance with ASU 2015-03, the debt issuance costs related to the Facilities are reported on the Consolidated Statements of Assets and Liabilities as a direct deduction from the face amount of the Facilities. As of DecemberMarch 31, 20162017 and September 30, 2016, debt issuance costs related to the Facilities were as follows (dollars in thousands): 


December 31, 2016 September 30, 2016March 31, 2017 September 30, 2016
Revolving
Facility
 
Term
Facility
 
Revolving
Facility
 
Term
Facility
Revolving
Facility
 
Term
Facility
 
Revolving
Facility
 
Term
Facility
Total Debt Issuance Costs$8,199
 $4,290
 $8,199
 $4,290
$8,209
 $4,318
 $8,199
 $4,290
Amortized Debt Issuance Costs4,988
 2,273
 4,609
 2,093
6,501
 2,476
 4,609
 2,093
Unamortized Debt Issuance Costs$3,211

$2,017

$3,590

$2,197
$1,708

$1,842

$3,590

$2,197
 
The following table shows the components of interest expense, commitment fees related to the Revolving Facility, amortized debt issuance costs, weighted average stated interest rate and weighted average outstanding debt balance for the Facilities for the three and six months ended DecemberMarch 31, 20162017 and 20152016 (dollars in thousands):
For the three months ended
December 31		For the three months ended
March 31		 For the six months ended
March 31
2016 20152017 2016 2017 2016
Revolving Facility interest$21
 $1,202
$159
 $687
 $180
 $1,889
Revolving Facility commitment fee872
 287
633
 527
 1,505
 815
Term Facility interest1,600
 1,445
1,656
 1,518
 3,256
 2,963
Amortization of debt issuance costs559
 488
1,716
 480
 2,274
 968
Agency and other fees19
 21
19
 19
 38
 38
Total$3,071

$3,443
$4,183

$3,231
 $7,253
 $6,673
Weighted average stated interest rate3.7% 3.2%3.9% 3.4% 3.8% 3.3%
Weighted average outstanding balance$176,087
 $332,070
$190,978
 $258,195
 $183,376
 $295,334
 
As of December 31, 2016 and September 30, 2016, there was $18.0 million and $14.0 million, respectively, outstanding under the Revolving Facility. As of December 31, 2016 and September 30, 2016, there was $174.0 million outstanding under the Term Loan Facility.

Unsecured Notes
 
2019 Notes

On March 21, 2012, the Company issued $40.0 million in aggregate principal amount of 7.125% unsecured notes thatwhich were scheduled to mature on March 30, 2019 (the "2019 Notes"). The 2019 Notes may be redeemed in whole or in part at any time or from time to time at the Company's option on or after March 30, 2015. The 2019 Notes bearbore interest at a rate of 7.125% per year, and were payable quarterly on March 30, June 30, September 30 and December 30 of each year, beginning June 30, 2012. The 2019 Notes arewere listed on the NYSE and tradetraded thereon under the trading symbol “MCQ”. On February 22, 2017 the 2019 Notes were redeemed at par plus accrued and unpaid interest. The redemption was accounted for as a debt extinguishment in accordance with ASC 470-50, Modifications and Extinguishments, which attributed to a realized loss of $0.5 million.

2021 Notes
 
On December 17, 2015, the Company issued $70.8 million in aggregate principal amount of 6.50% unsecured notes that mature on January 30, 2021 (the “2021 Notes”). The 2021 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after January 30, 2019. The 2021 Notes bear interest at a rate of 6.50% per year, payable quarterly on January 30, April 30, July 30 and October 30 of each year, beginning January 30, 2016. The 2021 Notes are listed on the NYSE and trade thereon under the trading symbol “MCX”.

On January 14, 2016, the Company closed an additional $3.25 million in aggregate principal amount of the 2021 Notes, pursuant to the partial exercise of the underwriters’ option to purchase additional notes.

2023 Notes
  
On March 18, 2013, the Company issued $60.0 million in aggregate principal amount of 6.125% unsecured notes that mature on March 30, 2023 (the "2023 Notes," and together with the 2019 Notes and 2021 Notes, the “Unsecured Notes”). The 2023 Notes may be redeemed in whole or in part at any time or from time to time at the Company's option on or after March 30, 2016. The 2023 Notes bear interest at a rate of 6.125% per year, payable quarterly on March 30, June 30, September 30 and December 30 of each year, beginning June 30, 2013. The 2023 Notes are listed on the NYSE and trade thereon under the trading symbol “MCV”.
 
On March 26, 2013, the Company closed an additional $3.5 million in aggregate principal amount of the 2023 Notes, pursuant to the partial exercise of the underwriters’ option to purchase additional notes.

On December 12, 2016, the Company entered into an “At-The-Market” (“ATM”) debt distribution agreement with FBR Capital Markets & Co., through which the Company could offer for sale, from time to time, up to $40.0 million in aggregate principal amount of the 2023 Notes. During the period from December 12, 2016 to December 31, 2016, theThe Company sold 15,1591,573,872 of the 2023 Notes at an average price of $25.05$25.03 per note, and raised $0.4$38.6 million in net proceeds, undersince inception of the ATM debt distribution agreement.

The fair values of our debt obligations are determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the


Notes, which are publicly traded, is based upon closing market quotes as of the measurement date. At DecemberMarch 31, 20162017 and September 30, 2016, the Unsecured Notes would be deemed to be Level 1, as defined in Note 4. 


In accordance with ASU 2015-03, the debt issuance costs related to the Unsecured Notes are reported on the Consolidated Statements of Assets and Liabilities as a direct deduction from the face amount of the Unsecured Notes. As of DecemberMarch 31, 20162017 and September 30, 2016, debt issuance costs related to the Unsecured Notes were as follows (dollars in thousands):
 
December 31, 2016 December 31, 2015March 31, 2017 September 30, 2016
2019
Notes
 
2021
Notes
 
2023
Notes
 Total 
2019
Notes
 
2021
Notes
 
2023
Notes
 Total
2019
Notes
 
2021
Notes
 
2023
Notes
 Total 
2019
Notes
 
2021
Notes
 
2023
Notes
 Total
Total Debt Issuance Costs$1,475
 $3,226
 $2,414
 $7,115
 $1,475
 $3,226
 $2,129
 $6,830
$1,475
 $3,226
 $3,196
 $7,897
 $1,475
 $3,226
 $2,129
 $6,830
Amortized Debt Issuance Costs1,004
 657
 807
 2,468
 951
 498
 751
 2,200
1,475
 812
 898
 3,185
 951
 498
 751
 2,200
Unamortized Debt Issuance Costs$471
 $2,569
 $1,607
 $4,647
 $524
 $2,728
 $1,378
 $4,630
$—
 $2,414
 $2,298
 $4,712
 $524
 $2,728
 $1,378
 $4,630
   
For the three and six months ended DecemberMarch 31, 20162017 and 2015,2016, the components of interest expense, amortized debt issuance costs, weighted average stated interest rate and weighted average outstanding debt balance for the Unsecured Notes were as follows (dollars in thousands):
For the three months ended
December 31		For the three months ended
March 31		 For the six months ended
March 31
2016 20152017 2016 2017 2016
2019 Unsecured Notes interest$713
 $713
$404
 $713
 $1,116
 $1,425
2021 Unsecured Notes interest1,203
 166
1,201
 1,210
 2,405
 1,376
2023 Unsecured Notes interest973
 972
1,564
 972
 2,538
 1,945
2023 Unsecured Notes premium(1) —
 (1) —
Amortization of debt issuance costs267
 129
278
 264
 545
 393
Total$3,156

$1,980
$3,446

$3,159
 $6,603
 $5,139
Weighted average stated interest rate6.5% 6.4%6.5% 6.6% 6.5% 6.5%
Weighted average outstanding balance$177,534
 $114,268
$197,070
 $177,013
 $187,200
 $145,469

As of December 31, 2016, $40.0 million, $74.0 million and $63.9 million in aggregate principal amount of the 2019 Notes, the 2021 Notes, and the 2023 Notes were outstanding, respectively. As of September 30, 2016, $40.0 million, $74.0 million and $63.5 million in aggregate principal amount of the 2019 Notes, the 2021 Notes, and the 2023 Notes were outstanding, respectively.
SBA Debentures
 
On March 26, 2013, SBIC LP received an SBIC license from the SBA.
 
The SBIC license allows the SBIC LP to obtain leverage by issuing SBA-guaranteed debentures, subject to the issuance of a capital commitment by the SBA and other customary procedures. SBA-guaranteed debentures are non-recourse, interest only debentures with interest payable semi-annually and have a ten year maturity. The principal amount of SBA-guaranteed debentures is not required to be paid prior to maturity but may be prepaid at any time without penalty. The interest rate of SBA-guaranteed debentures is fixed on a semi-annual basis at a market-driven spread over U.S. Treasury Notes with 10-year maturities. The SBA, as a creditor, will have a superior claim to the SBIC LP’s assets over our stockholders in the event we liquidate the SBIC LP or the SBA exercises its remedies under the SBA-guaranteed debentures issued by the SBIC LP upon an event of default.
 
SBA regulations currently limit the amount that the SBIC LP may borrow to a maximum of $150 million when it has at least $75 million in regulatory capital, receives a capital commitment from the SBA and has been through an examination by the SBA subsequent to licensing.
 
As of DecemberMarch 31, 20162017 and September 30, 2016, SBIC LP had $75.0 million in regulatory capital and had $150.0 million SBA Debentures outstanding that mature between September 2023 and September 2025.
 
Our fixed-rate SBA Debentures excluding debt issuance costs as of DecemberMarch 31, 20162017 and September 30, 2016 were as follows (dollars in thousands):
 
December 31, 2016 September 30, 2016March 31, 2017 September 30, 2016
Rate Fix Date
Debenture
Amount
 
Fixed All-in
Interest Rate
 
Debenture
Amount
 
Fixed All-in
 Interest Rate
Debenture
Amount
 
Fixed All-in
Interest Rate
 
Debenture
Amount
 
Fixed All-in
 Interest Rate
September 2013$5,000
 4.404% $5,000
 4.404%$5,000
 4.404% $5,000
 4.404%
March 201439,000
 3.951
 39,000
 3.951
39,000
 3.951
 39,000
 3.951
September 201450,000
 3.370
 50,000
 3.370
50,000
 3.370
 50,000
 3.370
September 20146,000
 3.775
 6,000
 3.775
6,000
 3.775
 6,000
 3.775
September 201550,000
 3.571
 50,000
 3.571
50,000
 3.571
 50,000
 3.571
Weighted Average Rate/Total$150,000
 3.639% $150,000
 3.639%$150,000
 3.639% $150,000
 3.639%
 
As of DecemberMarch 31, 2016,2017, the carrying amount of the SBA Debentures approximated their fair value. The fair values of the SBA Debentures are determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the SBA Debentures are estimated based upon market interest rates for our own borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any. At DecemberMarch 31, 20162017 and September 30, 2016 the SBA Debentures would be deemed to be Level 3, as defined in Note 4.


 
In accordance with ASU 2015-03, the debt issuance costs related to the SBA Debentures are reported on the Consolidated Statements of Assets and Liabilities as a direct deduction from the face amount of the SBA Debentures. As of DecemberMarch 31, 20162017 and September 30, 2016, debt issuance costs related to the SBA Debentures were as follows (dollars in thousands): 
 
December 31, 2016 September 30, 2016March 31, 2017 September 30, 2016
Total Debt Issuance Costs$5,138
 $5,138
$5,138
 $5,138
Amortized Debt Issuance Costs1,784
 1,613
1,952
 1,613
Unamortized Debt Issuance Costs$3,354

$3,525
$3,186

$3,525
 
For the three and six months ended DecemberMarch 31, 20162017 and 2015,2016, the components of interest, amortized debt issuance costs, weighted average stated interest rate and weighted average outstanding debt balance for the SBA Debentures were as follows (dollars in thousands): 
 
For the three months ended
December 31		For the three months ended
March 31		 For the six months ended
March 31
2016 20152017 2016 2017 2016
SBA Debentures interest$1,376
 $1,376
$1,346
 $1,361
 $2,722
 $2,737
Amortization of debt issuance costs171
 171
168
 169
 339
 341
Total$1,547

$1,547
$1,514
 $1,530
 $3,061
 $3,078
Weighted average stated interest rate3.6% 3.6%3.6% 3.7% 3.6% 3.7%
Weighted average outstanding balance$150,000
 $150,000
$150,000
 $150,000
 $150,000
 $150,000

Note 6. Agreements
 
Investment Management Agreement
 
We entered into an investment management agreement with MCC Advisors. Mr. Brook Taube, our chairman and chief executive officer, is a managing partner and senior portfolio manager of MCC Advisors, and Mr. Seth Taube, one of our directors, is a managing partner of MCC Advisors.
 
Under the terms of our investment management agreement, MCC Advisors:
 
determines the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes;
identifies, evaluates and negotiates the structure of the investments we make (including performing due diligence on our prospective portfolio companies); and
executes, closes, monitors and administers the investments we make, including the exercise of any voting or consent rights.

MCC Advisors’ services under the investment management agreement are not exclusive, and it is free to furnish similar services to other entities so long as its services to us are not impaired.
 
Pursuant to our investment management agreement, we pay MCC Advisors a fee for investment advisory and management services consisting of a base management fee and a two-part incentive fee.
 
On December 3, 2015, MCC Advisors recommended and, in consultation with the Board, agreed to reduce fees under the investment management agreement. Beginning January 1, 2016, the base management fee was reduced to 1.50% on gross assets above $1 billion. In addition, MCC Advisors reduced its incentive fee from 20% on pre-incentive fee net investment income over an 8% hurdle, to 17.5% on pre-incentive fee net investment income over a 6% hurdle. Moreover, the revised incentive fee includes a netting mechanism and is subject to a rolling three-year look back from January 1, 2016 forward. Under no circumstances will the new fee structure result in higher fees to MCC Advisors than fees under the prior investment management agreement.
 
The following discussion of our base management fee and two-part incentive fee reflect the terms of the fee waiver agreement executed by MCC Advisors on February 8, 2016 (the “Fee Waiver Agreement”). The terms of the Fee Waiver Agreement are effective as of January 1, 2016, and are a permanent reduction in the base management fee and incentive fee on net investment income payable to MCC Advisors for the investment advisory and management services it provides under the investment management agreement. The Fee Waiver Agreement does not change the second component of the incentive fee, which is the incentive fee on capital gains.
 
Base Management Fee
 
For providing investment advisory and management services to us, MCC Advisors receives a base management fee. The base management fee is calculated at an annual rate of 1.75% (0.4375% per quarter) of up to $1.0 billion of the Company’s gross assets and 1.50% (0.375% per quarter) of any amounts over $1.0 billion of the Company’s gross assets, and is payable quarterly in arrears. The base management fee will be calculated based on the average value of the Company’s gross assets at the end of the two most recently completed calendar quarters and will be appropriately pro-rated for any partial quarter.


 
Incentive Fee
 
The incentive fee has two components, as follows:
 
Incentive Fee Based on Income
 
The first component of the incentive fee is payable quarterly in arrears and is based on our pre-incentive fee net investment income earned during the calendar quarter for which the incentive fee is being calculated. MCC Advisors is entitled to receive the incentive fee on net investment income from us if our Ordinary Income (as defined below) exceeds a quarterly “hurdle rate” of 1.5%. The hurdle amount is calculated after making appropriate adjustments to the Company’s net assets, as determined as of the beginning of each applicable calendar quarter, in order to account for any capital raising or other capital actions as a result of any issuances by the Company of its common stock (including issuances pursuant to our dividend reinvestment plan), any repurchase by the Company of its own common stock, and any dividends paid by the Company, each as may have occurred during the relevant quarter.
 
Beginning with the calendar quarter that commenced on January 1, 2016, the incentive fee on net investment income will be determined and paid quarterly in arrears at the end of each calendar quarter by reference to our aggregate net investment income, as adjusted as described below, from the calendar quarter then ending and the eleven preceding calendar quarters (or if shorter, the number of quarters that have occurred since January 1, 2016). We refer to such period as the “Trailing Twelve Quarters.”
 
The hurdle amount for the incentive fee on net investment income is determined on a quarterly basis, and is equal to 1.5% multiplied by the Company’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The hurdle amount is calculated after making appropriate adjustments to the Company’s net assets, as determined as of the beginning of each applicable calendar quarter, in order to account for any capital raising or other capital actions as a result of any issuances by the Company of its common stock (including issuances pursuant to our dividend reinvestment plan), any repurchase by the Company of its own common stock, and any dividends paid by the Company, each as may have occurred during the relevant quarter. The incentive fee for any partial period will be appropriately prorated. Any incentive fee on net investment income will be paid to MCC Advisors on a quarterly basis, and will be based on the amount by which (A) aggregate net investment income (“Ordinary Income”) in respect of the relevant Trailing Twelve Quarters exceeds (B) the hurdle amount for such Trailing Twelve Quarters. The amount of the excess of (A) over (B) described in this paragraph for such Trailing Twelve Quarters is referred to as the “Excess Income Amount.” For the avoidance of doubt, Ordinary Income is net of all fees and expenses, including the reduced base management fee but excluding any incentive fee on Pre-Incentive Fee net investment income or on the Company’s capital gains.
 
Determination of Quarterly Incentive Fee Based on Income
 
The incentive fee on net investment income for each quarter is determined as follows:
 
No incentive fee on net investment income is payable to MCC Advisors for any calendar quarter for which there is no Excess Income Amount.
100% of the Ordinary Income, if any, that exceeds the hurdle amount, but is less than or equal to an amount, which we refer to as the “Catch-up Amount,” determined as the sum of 1.8182% multiplied by the Company’s net assets at the beginning of each applicable calendar quarter, as adjusted as noted above, comprising the relevant Trailing Twelve Quarters is included in the calculation of the incentive fee on net investment income; and
17.5% of the Ordinary Income that exceeds the Catch-up Amount is included in the calculation of the incentive fee on net investment income.
The amount of the incentive fee on net investment income that will be paid to MCC Advisors for a particular quarter will equal the excess of the incentive fee so calculated minus the aggregate incentive fees on net investment income that were paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarters but not in excess of the Incentive Fee Cap (as described below).
 
The incentive fee on net investment income that is paid to MCC Advisors for a particular quarter is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap for any quarter is an amount equal to (a) 17.5% of the Cumulative Net Return (as defined below) during the relevant Trailing Twelve Quarters minus (b) the aggregate incentive fees on net investment income that were paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarters.
 
“Cumulative Net Return” means (x) the Ordinary Income in respect of the relevant Trailing Twelve Quarters minus (y) any Net Capital Loss (as described below), if any, in respect of the relevant Trailing Twelve Quarters. If, in any quarter, the Incentive Fee Cap is zero or a negative value, the Company will pay no incentive fee on net investment income to MCC Advisors for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is a positive value but is less than the incentive fee on net investment income that is payable to MCC Advisors for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company will pay an incentive fee on net investment income to MCC Advisors equal to the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is equal to or greater than the incentive fee on net investment income that is payable to MCC Advisors for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company will pay an incentive fee on net investment income to MCC Advisors, calculated as described above, for such quarter without regard to the Incentive Fee Cap.
 
“Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, and dilution to the Company’s net assets due to capital raising or capital actions, in such period and (ii) aggregate capital gains, whether realized or unrealized and accretion to the Company’s net assets due to capital raising or capital action, in such period.
 
Dilution to the Company’s net assets due to capital raising is calculated, in the case of issuances of common stock, as the amount by which the net asset value per share was adjusted over the transaction price per share, multiplied by the number of shares issued. Accretion to the Company’s net assets due to capital raising is calculated, in the case of issuances of common stock (including issuances pursuant to our dividend reinvestment plan), as the excess of the transaction price per share over the amount by which the net asset value per share was adjusted, multiplied by the number of shares issued. Accretion to the Company’s net assets due to other capital action is calculated, in the case of repurchases by the Company of its own common stock, as the excess


of the amount by which the net asset value per share was adjusted over the transaction price per share multiplied by the number of shares repurchased by the Company.
 
For the avoidance of doubt, the purpose of the new incentive fee calculation under theIncentive Fee Waiver Agreement is to permanently reduce aggregate fees payable to MCC Advisors by the Company, effective as of January 1, 2016. In order to ensure that the Company will pay MCC Advisors lesser aggregate feesBased on a cumulative basis, as calculated beginning January 1, 2016, we will, at the end of each quarter, also calculate the base management fee and incentive fee on net investment income owed by the Company to MCC Advisors based on the formula in place prior to January 1, 2016. If, at any time beginning January 1, 2016, the aggregate fees on a cumulative basis, as calculated based on the formula in place after January 1, 2016, would be greater than the aggregate fees on a cumulative basis, as calculated based on the formula in place prior to January 1, 2016, MCC Advisors shall only be entitled to the lesser of those two amounts.Capital Gains

The second component of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the investment management agreement as of the termination date) and equals 20.0% of our cumulative aggregate realized capital gains less cumulative realized capital losses, unrealized capital depreciation (unrealized depreciation on a gross investment-by-investment basis at the end of each calendar year) and all capital gains upon which prior performance-based capital gains incentive fee payments were previously made to the investment adviser.
 
Under GAAP, the Company calculates the second component of the incentive fee as if the Company had realized all assets at their fair values as of the reporting date. Accordingly, the Company accrues a provisional capital gains incentive fee taking into account any unrealized gains or losses. As the provisional capital gains incentive fee is subject to the performance of investments until there is a realization event, the amount of the provisional capital gains incentive fee accrued at a reporting date may vary from the capital gains incentive that is ultimately realized and the differences could be material.

Base Management Fee - Prior to Fee Waiver Agreement

The base management fee was calculated at an annual rate of 1.75% of our gross assets (which is defined as all the assets of Medley Capital, including those acquired using borrowings for investment purposes), and is payable quarterly in arrears. The base management fee is based on the average value of our gross assets at the end of the two most recently completed calendar quarters.

Incentive Fee - Prior to Fee Waiver Agreement

The incentive fee based on net investment income was calculated as 20.0% of the amount, if any, by which our pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets calculated as of the end of the calendar quarter immediately preceding the calendar quarter for which the incentive fee is being calculated, exceeds a 2.0% (which is 8.0% annualized) hurdle rate but also includes a “‘catch-up’ provision. Under this provision, in any calendar quarter, our investment adviser receives no incentive fee until our net investment income equals the hurdle rate of 2.0%, but then receives, as a “catch-up”, 100% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 2.5%. The effect of this provision is that, if pre-incentive fee net investment income exceeds 2.5% in any calendar quarter, our investment adviser will receive 20% of our pre-incentive fee net investment income as if the hurdle rate did not apply. For this purpose, 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 we receive from portfolio companies accrued during the calendar quarter, minus our operating expenses for the quarter including the base management fee, expenses payable under the administration agreement, and any interest expense and any dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee. Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash.

For the avoidance of doubt, the purpose of the new incentive fee calculation under the Fee Waiver Agreement is to permanently reduce aggregate fees payable to MCC Advisors by the Company, effective as of January 1, 2016. In order to ensure that the Company will pay MCC Advisors lesser aggregate fees on a cumulative basis, as calculated beginning January 1, 2016, we will, at the end of each quarter, also calculate the base management fee and incentive fee on net investment income owed by the Company to MCC Advisors based on the formula in place prior to January 1, 2016. If, at any time beginning January 1, 2016, the aggregate fees on a cumulative basis, as calculated based on the formula in place after January 1, 2016, would be greater than the aggregate fees on a cumulative basis, as calculated based on the formula in place prior to January 1, 2016, MCC Advisors shall only be entitled to the lesser of those two amounts.

For the three and six months ended DecemberMarch 31, 2016 and 20152017, the Company incurred base management fees to MCC Advisors of $4.5 million and $5.4$9.0 million, respectively. For the three and six months ended DecemberMarch 31, 2016, the Company incurred base management fees to MCC Advisors of $4.9 million and 2015,$10.2 million, respectively. For the three and six months ended March 31, 2017, base management fees, net of $17,327 and $37,272 waived under the Fee Waiver Agreement were $4.5 million and $9.0 million, respectively. For the three and six months ended March 31, 2016, base management fees, net of $71,604 and $71,604 waived under the Fee Waiver Agreement were $4.8 million and $10.2 million, respectively.

The incentive fees shown in the Consolidated Statements of Operations is calculated using the fee structure set forth in investment management agreement, and then adjusted to reflect the terms of the Fee Waiver Agreement. Pursuant to the investment management agreement, pre -incentive fee net investment income is compared to a hurdle rate of 2.0% of the net asset value at the beginning of the period and is calculated as follows:

1)No incentive fee is recorded during the quarter in which our pre-incentive fee net investment income does not exceed the hurdle rate.
2)100% of pre-incentive fee net investment income that exceeds the hurdle rate but is less than 2.5% in the quarter; and
3)20.0% of the amount of pre-incentive fee net investment income, if any, that exceeds 2.5% of the hurdle rate

For purposes of implementing the fee waiver under the Fee Waiver Agreement, we calculate the incentive fee based upon the formula that exists under the investment management agreement, and then apply the terms of wavier set forth in the Fee Waiver Agreement, if applicable.

For the three months ended March 31, 2017, the Company did not incur any incentive fees on net investment income because pre-incentive fee net investment income did not exceed the hurdle amount under the formula that exists under the investment management agreement. For the six months ended March 31, 2017, the Company incurred $0.9 million of incentive fees related to pre-incentive fee net investment income. For the three and $3.9six months ended March 31, 2016, the Company incurred $3.1 million and $7.1 million of incentive fees related to pre-incentive fee net investment income, respectively.



For the three and six months ended DecemberMarch 31, 2016, base management and2017, incentive fees, net of fees$0 and $43,663 waived under the Fee Waiver Agreement were $4.5$0.0 million and $0.9 million, respectively. For the three and six months ended March 31, 2016, incentive fees, net of $2.1 million and $2.1 million waived under the Fee Waiver Agreement were $1.1 million and $5.0 million, respectively.
 
As of DecemberMarch 31, 20162017 and September 30, 2016, $5.3$4.5 million and $4.6 million were included in “management and incentive fees payable,” in the accompanying Consolidated Statements of Assets and Liabilities.
 
Administration Agreement
 
On January 19, 2011, the Company entered into an administration agreement with MCC Advisors. Pursuant to this agreement, MCC Advisors furnishes us with office facilities and equipment, clerical, bookkeeping, recordkeeping and other administrative services related to the operations of the Company. We reimburse MCC Advisors for our allocable portion of overhead and other expenses incurred by it performing its obligations under the administration agreement, including rent and our allocable portion of the cost of certain of our officers and their respective staff. From time to time, our administrator may pay amounts owed by us to third-party service providers and we will subsequently reimburse our administrator for such amounts paid on our behalf. For the three and six months ended DecemberMarch 31, 2017, we incurred $1.0 million and $1.9 million in administrator expenses, respectively. For the three and six months ended March 31, 2016, and 2015, we incurred $0.9$1.0 million and $0.9$2.0 million in administrator expenses, respectively.

Note 7. Related Party Transactions
 
Investment in Loan Participations
 
As discussed in Note 1, the Loan Assets contributed to the Company by MOF LP and MOF LTD upon consummation of the Company’s IPO were in the form of loan participations with an affiliated entity managed by affiliates of MCC Advisors.
 
Due to Affiliate
 
Due to affiliate consists of certain general and administrative expenses paid by an affiliate on behalf of the Company.
 
Other Related Party Transactions
 
Certain affiliates of MCC Advisors, Medley Capital LLC, their respective affiliates and some of their employees purchased in the IPO an aggregate of 833,333 shares of common stock at the initial public offering price per share of $12.00. The Company received the full proceeds from the sale of these shares, and no underwriting discounts or commissions were paid in respect of these shares.
 
On February 23, 2012, MOF LTD and MOF LP sold 4,406,301 shares of common stock at a price of $11.13 per share. The Company did not receive any of the proceeds of the sale of these shares. In April and May 2012, MOF LTD and MOF LP distributed the remaining 946,293 shares of common stock to their investors and as of June 30, 2012, MOF LTD and MOF LP collectively no longer own shares of our common stock.
 
Opportunities for co-investments may arise when MCC Advisors or an affiliated adviser becomes aware of investment opportunities that may be appropriate for the Company and other clients, or affiliated funds. The Company obtained an exemptive order from the SEC on November 25, 2013 (the “Exemptive Order”), which permits the Company to participate in negotiated co-investment transactions with certain affiliates, each of whose investment adviser is Medley LLC, the parent company of Medley Capital LLC and MCC Advisors, or an investment adviser controlled by Medley LLC in a manner consistent with its investment objective, strategies and restrictions, as well as regulatory requirements and other pertinent factors. Co-investment under the Exemptive Order is subject to certain conditions therein, including the condition that, in the case of each co-investment transaction, the Company’s Board of Directors determines that it would be advantageous for the Company to co-invest in a manner described in the Exemptive Order. Before receiving the Exemptive


Order, the Company only participated in co-investments that were allowed under existing regulatory guidance, such as syndicated loan transactions where price was the only negotiated term, which limited the types of investments that the Company could make.

Note 8. Commitments
 
Unfunded commitments
 
As of DecemberMarch 31, 20162017 and September 30, 2016, we had commitments under loan and financing agreements to fund up to $12.3$10.3 million to 89 portfolio companies and $9.2 million to 8 portfolio companies, respectively. These commitments are primarily composed of senior secured term loans and a revolver and an analysis of their fair value is included in the Consolidated Schedule of Investments. The commitments are generally subject to the borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. The terms of the borrowings and financings subject to commitment are comparable to the terms of other loan and equity securities in our portfolio. A summary of the composition of the unfunded commitments as of DecemberMarch 31, 20162017 and September 30, 2016 is shown in the table below (dollars in thousands):
 


As of
December 31, 2016 September 30, 2016March 31, 2017 September 30, 2016
SMART Financial Operations, LLC - Delayed Draw Term Loan$4,725
 $—
$4,725
 $—
Trans-Fast Remittance LLC - Revolver1,875
 —
AAR Intermediate Holdings, LLC - Revolver1,366
 1,797
1,078
 1,797
Trans-Fast Remittance LLC - Delayed Draw Term Loan1,057
 —
1,057
 —
Black Angus Steakhouses, LLC - Delayed Draw Term Loan893
 893
893
 893
Brantley Transportation LLC - Delayed Draw Term Loan788
 —
Impact Sales, LLC - Delayed Draw Term Loan875
 —
755
 863
Brantley Transportation LLC - Delayed Draw Term Loan788
 863
Black Angus Steakhouses, LLC - Revolver625
 446
625
 446
Access Media Holdings, LLC - Series AA Preferred Equity60
 184
NVTN LLC - Delayed Draw Term Loan250
 —
CP OPCO LLC - Revolver53
 609
53
 609
Avantor Performance Materials Holdings, LLC - Delayed Draw Term Loan42
 —
Tenere Acquisition Corp. - Delayed Draw Term Loan—
 2,000
—
 2,000
DHISCO Electronic Distribution, Inc. - Revolver—
 1,905
—
 1,905
Lydell Jewelry Design Studio, LLC - Delayed Draw Term Loan—
 500
—
 500
Access Media Holdings, LLC - Series AA Preferred Equity—
 184
Total$12,317
 $9,197
$10,266
 $9,197
 
Legal Proceedings
 
We are a party to certain legal proceedings incidental to the normal course of our business, including where third parties may try to seek to impose liability on us in connection with the activities of our portfolio companies. While the outcome of these legal proceedings cannot at this time be predicted with certainty, we do not expect that these proceedings will have a material effect on our financial condition or results of operations.

Note 9. Fee Income
 
Fee income consists of origination/closing fee, amendment fee, prepayment penalty, administrative agent fee, and other miscellaneous fees. The following tables summarize the Company’s fee income for the three and six months ended DecemberMarch 31, 20162017 and 20152016 (dollars in thousands):
 
For the three months ended December 31For the three months ended
March 31		 For the six months ended
March 31
2016 20152017 2016 2017 2016
Origination fee$727
 $1,008
$973
 $223
 $1,700
 $1,230
Other fees218
 276
Administrative agent fee205
 190
Prepayment fee169
 482
219
 752
 388
 1,234
Amendment fee105
 1,103
189
 602
 294
 1,706
Administrative agent fee128
 181
 332
 371
Other fees29
 —
 248
 276
Fee income$1,424
 $3,059
$1,538
 $1,758
 $2,962
 $4,817

Note 10. Directors Fees
 
On December 7, 2016, the board of directors approved an amendment to the compensation model pursuant to which the independent directors earn fees for their service on the Board. Prior to the amendment, as compensation for serving on our board of directors, each independent director received an annual fee of $55,000. Independent directors also received $7,500 ($1,500 for telephonic attendance) plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each board meeting and received $2,500 ($1,500 for telephonic attendance) plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each committee meeting. In addition, the Chairman of the Audit Committee received an annual fee of $25,000 and each chairperson of any other committee received an annual fee of $10,000, and other members of the Audit Committee and any other standing committees received an annual fee of $12,500 and $6,000, respectively, for their additional services in these capacities.



The compensation model approved by the board of directors on December 7, 2016, which was retroactively effective as of October 1, 2016, amended the prior model by increasing the annual fee received by each independent director from $55,000 to $90,000, but decreasing the per board meeting fee from $7,500 to $3,000. In addition, there will no longer be a differentseparate fee for participating in board and/or committee meetings telephonically.

No compensation is paid to directors who are ‘‘interested persons’’ of the Company (as such term is defined in the 1940 Act). For the three and six months ended DecemberMarch 31, 2016 and 2015,2017, we accrued $0.2 million and $0.3 million for directors’ fees expense, respectively. For the three and six months ended March 31, 2016, we accrued $0.1 million and $0.3 million for directors’ fees expense, respectively.

Note 11. Earnings Per Share
 
In accordance with the provisions of ASC Topic 260 - Earnings per Share, basic earnings per share is computed by dividing earnings available to common shareholders by the weighted average number of shares outstanding during the period. Other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis.
 


The following information sets forth the computation of the weighted average basic and diluted net increase in net assets per share from operations for the three and six months ended DecemberMarch 31, 20162017 and 20152016 (dollars in thousands except share and per share amounts):
 
For the three months ended December 31For the three months ended
March 31		 For the six months ended
March 31
2016 20152017 2016 2017 2016
Basic and diluted: 
  
 
  
    
Net increase/(decrease) in net assets from operations$6,326
 $(39,204)$(12,248) $448
 $(5,922) $(38,756)
Weighted average common shares outstanding54,474,211
 56,300,067
54,474,211
 55,761,062
 54,474,211
 56,044,037
Earnings per common share-basic and diluted$0.12
 $(0.70)$(0.22) $0.01
 $(0.11) $(0.69)

Note 12. Financial Highlights
 
The following is a schedule of financial highlights for the threesix months ended DecemberMarch 31, 20162017 and 2015:2016:
 
For the three months ended December 31For the six months ended March 31
2016 20152017 2016
Per share data:      
Net asset value per share at beginning of period$9.49
 $11.00
$9.49
 $11.00
      
Net investment income(1)
0.19
 0.28
0.33
 0.54
Net realized gains/(losses) on investments(0.12) 0.10
(0.11) 0.10
Net unrealized appreciation/(depreciation) on investments0.05
 (1.07)(0.32) (1.32)
Change in provision for deferred taxes on unrealized appreciation/(depreciation) on investments—
 (0.01)—
 (0.01)
Loss on extinguishment of debt(0.01) —
Net increase/(decrease) in net assets0.12
 (0.70)(0.11) (0.69)
      
Distributions from net investment income(0.22) (0.30)(0.44) (0.60)
Distributions from net realized gains—
 —
—
 —
Distributions from tax return of capital—
 —
—
 —
Repurchase of common stock under stock repurchase program—
 0.01
—
 0.10
Other(2)
—
 —
—
 (0.01)
      
Net asset value at end of period$9.39
 $10.01
$8.94
 $9.80
Net assets at end of period$511,260,387
 $562,714,998
$487,015,228
 $536,771,831
Shares outstanding at end of period54,474,211
 56,193,803
54,474,211
 54,763,411
      
Per share market value at end of period$7.51
 $7.52
$7.69
 $6.60
Total return based on market value(3)
1.28% 4.87 %6.72 % (3.92)%
Total return based on net asset value(4)
1.81% (5.59)%(0.25)% (3.51)%
Portfolio turnover rate(5)
17.94% 15.26 %16.83 % 12.85 %
  



The following is a schedule of ratios and supplemental data for the threesix months ended DecemberMarch 31, 20162017 and 2015:2016:
 
For the three months ended December 31For the six months ended March 31
2016 20152017 2016
Ratios: 
  
 
  
Ratio of net investment income to average net assets after waivers(5)(6)(11)
8.29% 11.72%7.33% 10.62%
Ratio of total expenses to average net assets after waivers(5)(6)(11)
11.40% 9.98%12.40% 11.23%
Ratio of incentive fees to average net assets after waivers(6)(11)
0.16% 0.62%0.17% 1.18%
      
Supplemental Data: 
  
 
  
Ratio of net operating expenses and credit facility related expenses to average net assets(5)(6)(11)
11.24% 9.36%12.23% 10.05%
Percentage of non-recurring fee income(7)
4.68% 8.33%5.22% 6.82%
Average debt outstanding(8)
$503,620,657
 $596,337,821
$520,576,567
 $590,802,987
Average debt outstanding per common share$9.25
 $10.59
$9.56
 $10.54
Asset coverage ratio per unit(9)
2,382
 2,286
2,265
 2,467
      
Average market value per unit: 
  
 
  
Facilities(10)
N/A
 N/A
N/A
 N/A
SBA debentures(10)
N/A
 N/A
N/A
 N/A
Notes due 2019$25.40
 $25.18
$25.39
 $24.83
Notes due 2021$25.53
 24.56
$25.67
 $23.26
Notes due 2023$24.86
 $24.69
$25.04
 $23.85
    
(1)Net investment income excluding management and incentive fee waivers based on total weighted average common stock outstanding equals $0.18$0.33 and $0.50 per share for the threesix months ended DecemberMarch 31, 2017 and 2016, and net investment income based on total weighted average common stock outstanding equals $0.28 per share for the three months ended December 31, 2015.respectively.
(2)Represents the impact of the different share amounts used in calculating per share data as a result of calculating certain per share data based upon the weighted average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date.
(3)Total return is historical and assumes changes in share price, reinvestments of all dividends and distributions at prices obtained under the Company’s dividend reinvestment plan, and no sales charge for the period.
(4)Total return is historical and assumes changes in net assets value, reinvestments of all dividends and distributions at prices obtained under the Company’s dividend reinvestment plan, and no sales charge for the period.
(5)Ratios are annualized during interim periods.
(6)For the threesix months ended DecemberMarch 31, 2017, excluding management and incentive fee waivers, the ratio of net investment income, total expenses, incentive fees, and operating expenses and credit facility related expenses to average net assets is 7.31%, 12.42%, 0.17%, and 12.25%, respectively. For the six months ended March 31, 2016, excluding management and incentive fee waivers, the ratio of net investment income, total expenses, incentive fees, and operating expenses and credit facility related expenses incentive fees and total expenses to average net assets is 8.27%10.62%, 11.26%11.23%, 0.17%1.18%, and 11.43%10.05%, respectively. For the three months ended December 31, 2015, there was no management or incentive fee waiver.
(7)Represents the impact of the non-recurring fees over investment income.
(8)Based on daily weighted average balance of debt outstanding during the period.
(9)Asset coverage per unit is the ratio of the carrying value of our total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness. Asset coverage ratio per unit does not include unfunded commitments. The inclusion of unfunded commitments in the calculation of the asset coverage ratio per unit would not cause us to be below the required amount of regulatory coverage.
(10)The Facilities and SBA Debentures are not registered for public trading.
(11)
The ratios of net investment income, total expenses, incentive fees after waivers, and net operating expenses and credit facility related expenses, to average net assets for the threesix months ended DecemberMarch 31, 2015,2016, previously reported as 9.85%10.12%, 11.80%11.67%, 2.46%1.68%, and 9.33%10.00%, respectively, were revised to conform to the current period presentation. Incentive fees are based on the current performance of the fund during the period and are not annualized, as projections of future performance are uncertain.

Note 13. Dividends
 
Dividends and distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend is determined by our board of directors.
 
We have adopted an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a cash dividend or other distribution, each stockholder that has not “opted out” of our dividend reinvestment plan will have its dividends automatically reinvested in additional shares of our common stock rather than receiving cash dividends. Stockholders who receive distributions in the form of shares of common stock will be subject to the same federal, state and local tax consequences as if they received cash distributions.
 


The following table summarizes the Company’s dividend distributions during the threesix months ended DecemberMarch 31, 20162017 and 2015:2016:
 
Date DeclaredRecord DatePayment DateAmount Per ShareRecord DatePayment DateAmount Per Share
During the three months ended December 31, 2016  
During the six months ended March 31, 2017  
11/3/201611/23/201612/23/2016$0.22
11/23/201612/23/2016$0.22
1/31/20172/22/20173/24/2017$0.22
 $0.22
 $0.44
 
Date DeclaredRecord DatePayment DateAmount Per ShareRecord DatePayment DateAmount Per Share
During the three months ended December 31, 2015  
During the six months ended March 31, 2016  
11/5/201511/25/201512/18/2015$0.30
11/25/201512/18/2015$0.30
2/1/20162/24/20163/18/2016$0.30
 $0.30
 $0.60

Note 14. Stock Repurchase Program
 
The following table summarizes our share repurchases under our stock repurchase program for the three months ended December 31, 2016 and 2015 (dollars in thousands):
 For the three months ended December 31
 2016 2015
Dollar amount repurchased
N/A(1)
 $1,100
Shares Repurchased
N/A(1)
 143,349
Average price per share
N/A(1)
 $7.68
Weighted average discount to Net Asset Value
N/A(1)
 30.2%

(1)The Company did not repurchase any shares for the three months ended December 31, 2016.

On February 5, 2015, our board of directors approved a share repurchase program pursuant to which we can purchase up to an aggregate amount of $30.0 million of our common stock between the period of the approval date and February 5, 2016. On December 4, 2015, the board of directors extended the duration of the share repurchase program through December 31, 2016, and increased the aggregate amount to $50.0 million. On December 7, 2016, the board of directors extended the duration of the share repurchase program through December 31, 2017. Any stock repurchases will be made through the open market at times, and in such amounts, as management deems appropriate. As of DecemberMarch 31, 2016,2017, the Company has repurchased an aggregate of 4,259,073 shares of common stock at an average price of $8.16 per share with a total cost of approximately $34.1 million. The maximum dollar value of shares that may yet be purchased under the plan is $15.9 million. This program may be limited or terminated at any time without prior notice. Since the inception of the program, the Company's net asset value per share was increased by approximately $0.23 as a result of the share repurchases.

The following table summarizes our share repurchases under our stock repurchase program for the three and six months ended March 31, 2017 and 2016 (dollars in thousands):
 For the three months ended
March 31		 For the six months ended
March 31
 2017 2016 2017 2016
Dollar amount repurchased
N/A(1)
 $9,600
 
N/A(1)
 $10,700
Shares Repurchased
N/A(1)
 1,430,392
 
N/A(1)
 1,573,741
Average price per share
N/A(1)
 $6.71
 
N/A(1)
 $6.80
Weighted average discount to Net Asset Value
N/A(1)
 33.0% 
N/A(1)
 32.7%

(1)The Company did not repurchase any shares for the three and six months ended March 31, 2017.

Note 15. Subsequent Events
 
Management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that occurred during such period that would require disclosure in this Form 10-Q or would be required to be recognized in the Consolidated Financial Statements as of and for the yearsix months ended DecemberMarch 31, 2016,2017, except as disclosed below.

On January 23, 2017, the Company issued a redemption notice relating to its 2019 Notes. The Company will redeem all of the issued and outstanding 2019 Notes ($40,000,000 in aggregate principal amount) in full on February 22, 2017.
On January 31,May 5, 2017, the Company’s Board of Directors declared a quarterly dividend of $0.22$0.16 per share payable on March 24,June 23, 2017, to stockholders of record at the close of business on February 22,May 24, 2017.

On February 9, 2017, the Company issued a notice to reduce the Revolving Facility commitment to $200.0 million from $343.5 million. This reduction will be effective on February 14th.

As of February 9, 2017, the Company sold an additional 1,558,713 of the 2023 Notes at an average price of 25.01 per note, and raised $38.2 million in net proceeds, under the ATM debt distribution agreement.




Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
The following discussion and analysis should be read in conjunction with our financial statements and related notes and other financial information appearing elsewhere in this quarterly on Form 10-Q.
 
Except as otherwise specified, references to “we,” “us,” “our,” or the “Company,” refer to Medley Capital Corporation.
 
Forward-Looking Statements
 
Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements, which relate to future events or our performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, including statements as to:
 
the introduction, withdrawal, success and timing of business initiatives and strategies;
changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, which could result in changes in the value of our assets;
the relative and absolute investment performance and operations of MCC Advisors;
the impact of increased competition;
the impact of future acquisitions and divestitures;
our business prospects and the prospects of our portfolio companies;
the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to us or MCC Advisors;
our contractual arrangements and relationships with third parties;
any future financings by us;
the ability of MCC Advisors to attract and retain highly talented professionals;
fluctuations in foreign currency exchange rates;
the impact of changes to tax legislation and, generally, our tax position; and
the unfavorable resolution of legal proceedings.
Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “trend,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “potential,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may,” or similar expressions. The forward looking statements contained in this annual report 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 as “Risk Factors” in our annual report on Form 10-K filed with the SEC on December 8, 2016, and elsewhere in this quarterly report on Form 10-Q.

We have based the forward-looking statements included in this report on information available to us on the date of this report, and we assume no obligation to update any such forward-looking statements. Actual results could differ materially from those anticipated in our forward-looking statements, and future results could differ materially from historical performance. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the Securities and Exchange Commission (“SEC”), including annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K.
 
Overview
 
We are an externally-managed, non-diversified closed-end management investment company that filed an election to be regulated as a BDC under the 1940 Act. In addition, we have elected and qualified to be treated for U.S. federal income tax purposes as a RIC under subchapter M of the Code.
 
We commenced operations and completed our initial public offering on January 20, 2011. Our investment activities are managed by MCC Advisors and supervised by our board of directors, of which a majority of the members are independent of us.
 
Our investment objective is to generate current income and capital appreciation by lending to privately-held middle market companies, primarily through directly originated transactions, to help these companies fund acquisitions, growth or refinancing. Our portfolio generally consists of senior secured first lien term loans and senior secured second lien term loans. In many of our investments, we receive warrants or other equity participation features, which we believe will increase the total investment returns.
 
As a BDC, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities of private or thinly traded public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. In addition, we are only allowed to borrow money such that our asset coverage, as defined in the 1940 Act, equals at least 200% after such borrowing, with certain limited exceptions. To maintain our RIC status, we must meet specified source-of-income and asset diversification requirements. To maintain our RIC tax treatment under subchapter M for U.S. federal income tax purposes, we must


timely distribute at least 90% of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, for the taxable year.
 
Revenues
 
We generate revenue in the form of interest income on the debt that we hold and capital gains, if any, on warrants or other equity interests that we may acquire in portfolio companies. We invest our assets primarily in privately held companies with enterprise or asset values between $25 million and $250 million and focus on investment sizes of $10 million to $50 million. We believe that pursuing opportunities of this size offers several benefits including reduced competition, a larger investment opportunity set and the ability to minimize the impact of financial intermediaries. We expect our debt investments to bear interest at either a fixed or floating rate. Interest on debt will be payable generally either monthly or quarterly. In some cases our debt investments may provide for a portion of the interest to be PIK. To the extent interest is PIK, it will be payable through the increase of the principal amount of the obligation by the amount of interest due on the then-outstanding aggregate principal amount of such obligation. The principal amount of the debt and any accrued but unpaid interest will generally become due at the maturity date. In addition, we may generate revenue in the form of commitment, origination, structuring or diligence fees, fees for providing managerial assistance or investment management services and possibly consulting fees. Any such fees will be generated in connection with our investments and recognized as earned.
 
Expenses
 
Our primary operating expenses include the payment of management and incentive fees pursuant to the investment management agreement we have with MCC Advisors and overhead expenses, including our allocable portion of our administrator’s overhead under the administration agreement. Our management and incentive fees compensate MCC Advisors for its work in identifying, evaluating, negotiating, closing and monitoring our investments. We bear all other costs and expenses of our operations and transactions, including those relating to:
 
our organization and continued corporate existence;
calculating our NAV (including the cost and expenses of any independent valuation firms);
expenses incurred by MCC Advisors payable to third parties, including agents, consultants or other advisers, in monitoring our financial and legal affairs and in monitoring our investments and performing due diligence on our prospective portfolio companies;
interest payable on debt, if any, incurred to finance our investments;
the costs of all offerings of common stock and other securities, if any;
the base management fee and any incentive fee;
distributions on our shares;
administration fees payable under our administration agreement;
the allocated costs incurred by MCC Advisors in providing managerial assistance to those portfolio companies that request it;
amounts payable to third parties relating to, or associated with, making investments;
transfer agent and custodial fees;
registration fees and listing fees;
U.S. federal, state and local taxes;
independent director fees and expenses;
costs of preparing and filing reports or other documents with the SEC or other regulators;
the costs of any reports, proxy statements or other notices to our stockholders, including printing costs;
our fidelity bond;
directors and officers/errors and omissions liability insurance, and any other insurance premiums;
indemnification payments;
direct costs and expenses of administration, including audit and legal costs; and
all other expenses reasonably incurred by us or MCC Advisors in connection with administering our business, such as the allocable portion of overhead under our administration agreement, including rent and other allocable portions of the cost of certain of our officers and their respective staffs (including travel expenses).



Portfolio and Investment Activity
 
As of DecemberMarch 31, 20162017 and September 30, 2016, our portfolio had a fair market value of approximately $917.6$926.1 million and $914.2 million, respectively. The following table summarizes our portfolio and investment activity during the three and six months ended DecemberMarch 31, 20162017 and 20152016 (dollars in thousands):

For the three months ended December 31
For the three months ended
March 31
 
For the six months ended
March 31
2016 20152017 2016 2017 2016
Investments made in new portfolio companies$26,476
 $15,554
$49,398
 $10,000
 $77,870
 $25,554
Investments made in existing portfolio companies14,874
 28,011
8,572
 19,136
 21,450
 47,147
Aggregate amount in exits and repayments(40,118) (94,574)(35,005) (97,919) (75,123) (192,493)
Net investment activity$1,232
 $(51,009)$22,965
 $(68,783) $24,197
 $(119,792)
          
Portfolio Companies, at beginning of period58
 72
60
 68
 58
 72
Number of new portfolio companies4
 1
7
 1
 11
 2
Number of exited portfolio companies(2) (5)(3) (4) (5) (9)
Portfolio companies, at end of period60
 68
64
 65
 64
 65
          
Number of investments in existing portfolio companies10
 12
9
 8
 10
 20
 
The following table summarizes the amortized cost and the fair value of our average portfolio company investment and largest portfolio company investment as of DecemberMarch 31, 20162017 and September 30, 2016 (dollars in thousands):

As of
December 31, 2016
 
As of
September 30, 2016
March 31, 2017 September 30, 2016
Amortized Cost Fair Value Amortized Cost Fair ValueAmortized Cost Fair Value Amortized Cost Fair Value
Average portfolio company investment$16,897
 $15,294
 $17,464
 $15,762
$16,284
 $14,471
 $17,464
 $15,762
Largest portfolio company investment53,823
 52,784
 53,777
 51,930
52,593
 50,524
 53,777
 51,930
 
The composition of our investments as of DecemberMarch 31, 20162017 as a percentage of our total portfolio, at amortized cost and fair value were as follows (dollars in thousands):
Amortized Cost Percentage Fair Value PercentageAmortized Cost Percentage Fair Value Percentage
Senior Secured First Lien Term Loans$607,039
 59.9% $562,490
 61.3%$621,428
 59.6% $568,947
 61.4%
Senior Secured Second Lien Term Loans230,666
 22.8
 214,871
 23.4
239,403
 23.0
 223,338
 24.1
Senior Secured First Lien Notes26,758
 2.6
 27,711
 3.0
26,761
 2.6
 28,021
 3.0
Unsecured Debt49,892
 4.9
 39,645
 4.3
50,968
 4.9
 28,240
 3.1
MCC Senior Loan Strategy JV I LLC39,375
 3.9
 39,418
 4.3
43,225
 4.1
 44,571
 4.8
Equity/Warrants60,100
 5.9
 33,478
 3.7
60,418
 5.8
 33,024
 3.6
Total$1,013,830
 100.0% $917,613
 100.0%$1,042,203
 100.0% $926,141
 100.0%
 
The composition of our investments as of September 30, 2016 as a percentage of our total portfolio, at amortized cost and fair value were as follows (dollars in thousands):
 
 Amortized Cost Percentage Fair Value Percentage
Senior Secured First Lien Term Loans$612,762
 60.5% $565,329
 61.8%
Senior Secured Second Lien Term Loans229,898
 22.7
 213,537
 23.4
Senior Secured First Lien Notes26,755
 2.6
 27,423
 3.0
Unsecured Debt62,150
 6.1
 52,809
 5.8
MCC Senior Loan Strategy JV I LLC32,113
 3.2
 31,252
 3.4
Equity/Warrants49,213
 4.9
 23,834
 2.6
Total$1,012,891
 100.0% $914,184
 100.0%
 
As of DecemberMarch 31, 2016,2017, our income-bearing investment portfolio, which represented nearly 86.4%82.7% of our total portfolio, had a weighted average yield based upon cost of our portfolio investments of approximately 11.7%11.6%, and 84.3%83.4% of our income-bearing investment portfolio bore interest based on floating rates, such as LIBOR, and 15.7%16.6% bore interest at fixed rates.
 


MCC Advisors regularly assesses the risk profile of each of our investments and rates each of them based on the following categories, which we refer to as MCC Advisors’ investment credit rating:
Credit
Rating
 Definition
   
1 Investments that are performing above expectations.
   
2 Investments that are performing within expectations, with risks that are neutral or favorable compared to risks at the time of origination.
   
  All new loans are rated ‘2’.
   
3 Investments that are performing below expectations and that require closer monitoring, but where no loss of interest, dividend or principal is expected.
   
  Companies rated ‘3’ may be out of compliance with financial covenants, however, loan payments are generally not past due.
   
4 Investments that are performing below expectations and for which risk has increased materially since origination.
   
  Some loss of interest or dividend is expected but no loss of principal.
   
  In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 180 days past due).
   
5 Investments that are performing substantially below expectations and whose risks have increased substantially since origination.
   
  Most or all of the debt covenants are out of compliance and payments are substantially delinquent.
   
  Some loss of principal is expected.
 
The following table shows the distribution of our investments on the 1 to 5 investment performance rating scale at fair value as of DecemberMarch 31, 20162017 and September 30, 2016 (dollars in thousands):

 December 31, 2016 September 30, 2016 March 31, 2017 September 30, 2016
Investment Performance Rating Fair Value Percentage Fair Value Percentage Fair Value Percentage Fair Value Percentage
1 $112,787
 12.3% $112,770
 12.3% $111,495
 12.0% $112,770
 12.3%
2 553,408
 60.3
 554,384
 60.6
 541,000
 58.4
 554,384
 60.6
3 174,885
 19.1
 170,496
 18.7
 145,981
 15.8
 170,496
 18.7
4 64,002
 6.9
 65,349
 7.2
 58,773
 6.4
 65,349
 7.2
5 12,531
 1.4
 11,185
 1.2
 68,892
 7.4
 11,185
 1.2
Total $917,613
 100.0% $914,184
 100.0% $926,141
 100.0% $914,184
 100.0%

Results of Operations
 
Operating results for the threesix months ended DecemberMarch 31, 20162017 and 20152016 are as follows (dollars in thousands):
 
For the three months ended December 31For the three months ended
March 31		 For the six months ended
March 31
2016 20152017 2016 2017 2016
Total investment income$26,056
 $34,427
$24,357
 $30,714
 $50,413
 $65,141
Total expenses, net15,654
 18,761
16,315
 16,139
 31,969
 34,900
Net investment income before excise taxes10,402
 15,666
8,042
 14,575
 18,444
 30,241
Excise tax expense(267) —
—
 —
 (267) —
Net investment income10,135
 15,666
8,042
 14,575
 18,177
 30,241
Net realized gains/(losses)(6,298) 5,378
Net realized gains/(losses) investments10
 99
 (6,288) 5,477
Net unrealized gains/(losses) on investments2,489
 (60,024)(19,844) (14,093) (17,355) (74,116)
Change in provision for deferred taxes on unrealized appreciation/(depreciation) on investments—
 (224)—
 (133) —
 (358)
Loss on extinguishment of debt(456) —
 (456) —
Net increase in net assets resulting from operations$6,326
 $(39,204)$(12,248) $448
 $(5,922) $(38,756)



Investment Income
 
For the three and six months ended DecemberMarch 31, 2016,2017, investment income totaled $26.1$24.4 million and $50.4 million, respectively, of which $24.7$22.9 million and $47.4 million was attributable to portfolio interest and dividend income, and $1.4$1.5 million and $3.0 million to fee income.

For the three and six months ended DecemberMarch 31, 2015,2016, investment income totaled $34.4$30.7 million and $65.1 million, respectively, of which $31.4$28.9 million and $60.3 million was attributable to portfolio interest and dividend income, and $3.0$1.8 million and $4.8 million to fee income.
 
Operating Expenses
 
Operating expenses for the three and six months ended DecemberMarch 31, 20162017 and 20152016 are as follows (dollars in thousands):
 
For the three months ended December 31For the three months ended
March 31		 For the six months ended
March 31
2016 20152017 2016 2017 2016
Base management fees$4,515
 $5,347
$4,496
 $4,876
 $9,011
 $10,223
Incentive fees896
 3,916
—
 3,149
 896
 7,065
Interest and financing expenses7,774
 6,970
9,144
 7,920
 16,917
 14,890
Administrator expenses916
 916
997
 1,043
 1,913
 1,959
General and administrative697
 710
783
 453
 1,480
 1,163
Professional fees651
 633
663
 556
 1,314
 1,188
Directors fees170
 134
150
 130
 320
 264
Insurance99
 135
99
 135
 199
 271
Expenses before management and incentive fee waivers15,718
 18,761
16,332
 18,262
 32,050
 37,023
Management fee waiver(20) —
(17) (71) (37) (71)
Incentive fee waiver(44) —
—
 (2,052) (44) (2,052)
Expenses, net of management and incentive fee waivers$15,654
 $18,761
$16,315
 $16,139
 $31,969
 $34,900
 
For the three months ended DecemberMarch 31, 2016,2017, total operating expenses before manager expense waivermanagement and reimbursementincentive fee waivers and reimbursements decreased by $3.0$1.9 million, or 16.2%10.6%, compared to the yearthree months ended DecemberMarch 31, 2015.2016. For the six months ended March 31, 2017, total operating expenses before management and incentive fee waivers and reimbursements decreased by $5.0 million, or 13.4%, compared to the six months ended March 31, 2016.
 
Interest and financing expenses were higher in the three and six months ended DecemberMarch 31, 2017 compared to the three and six months ended March 31, 2016 thanprimarily due to (i) a $1.3 million acceleration of debt issuance costs, which was attributable to the three months ended December 31, 2015 duethe reduction of the revolving credit facility (the “Revolving Credit Facility”) commitment to $200.0 million from $343.5 million, (ii) an increase in LIBOR rates, which increased the interest paidexpenses on our five year senior secured term loan credit facility (the "Term Loan Facility" and together with the Revolving Facility, the “Facilities”), (iii) issuing  $74.0 million in aggregate principal amount of 6.50% unsecured notes that mature on January 30, 2021 (the “2021 Notes”) as well asand (iv) issuing an additional $0.4$39.4 million of 6.125% unsecured notes that mature on March 30, 2023 (the “2023 Notes”) through an “At-The-Market” (“ATM”) debt distribution agreement with FBR Capital Markets & Co. The increase in interest and finance expenses was partially offset from the repayment of the 7.125% unsecured notes which were scheduled to mature on March 30, 2019 (the “2019 Notes”).

Excluding interest and financing expenses, expenses decreased for the three and six months ended DecemberMarch 31, 20162017 compared to the three and six months ended DecemberMarch 31, 20152016 due to a decrease in base management fees, incentive fees, administrative service fees, and insurance fees, and general and administrative expenses, offset by an increase in general and administrative expenses, professional fees and director’s fees. Professional and administrative service fees have increased due to higher legal, audit, valuation services and administrator expenses. Base management fees, which are calculated based on average gross assets, decreased due to the decline in the portfolio throughout the period. The incentive fee decreased as a result of the decrease in pre-incentive fee net investment income. In addition, both the management and incentive fees decreased due to the fee waiver agreement described in the Investment Management Agreement section. Administrative service fees decreased due to lower administrator expenses. Professional fees have increased due to higher legal, audit, and valuation service expenses.

Net Realized Gains/Losses from Investments
 
We measure realized gains or losses by the difference between the net proceeds from the disposition and the amortized cost basis of an investment, without regard to unrealized gains or losses previously recognized.

During the three and six months ended DecemberMarch 31, 2016 and 2015,2017, we recognized $9,948 of realized gain and $6.3 million of realized loss on our portfolio investments, respectively. The realized loss of $6.3 million was primarily due to the non-cash restructuring transactions of certain investments.

During the three and $5.4six months ended March 31, 2016, we recognized $0.1 million and $5.5 million of realized gain on our portfolio investments, respectively. The realized gain during the six months ended March 31, 2016 was primarily due to the sale of an equity position held in a certain investment, which resulted in a realized gain of $5.3 million.



Realized loss on extinguishment of debt

In the event that we modify or extinguish our debt prior to maturity, we account for it in accordance with ASC 470-50, Modifications and Extinguishments, in which we measure the difference between the reacquisition price of the debt and the net carrying amount of the debt, which includes any unamortized debt issuance costs.

During the three and six months ended DecemberMarch 31, 2016,2017, we recognized $6.4a $0.5 million loss on extinguishment of realizeddebt from the redemption of the 2019 Notes. There was no loss related to certain non-cash restructuring transactions, which is recorded on the Consolidated Statementsextinguishment of Operations as a component of net realized gain/(loss) from investments. There were no realized gains or losses related to such non-cash restructuring transactions fordebt during the three and six months ended DecemberMarch 31, 2015.2016.
 
Net Unrealized Appreciation/Depreciation on Investments
 
Net change in unrealized appreciation or depreciation on investments reflects the net change in the fair value of our investment portfolio. For the three and six months ended DecemberMarch 31, 2016 and 2015,2017, we had $2.5$19.8 million and $17.4 million of unrealized appreciationdepreciation, respectively, on portfolio investments. For the three and $60.0six months ended March 31, 2016, we had $14.1 million and $74.1 million of unrealized depreciation, respectively, on portfolio investments.
 
Provision for Deferred Taxes on Unrealized Appreciation on Investments
 
Certain consolidated subsidiaries of ours are subject to U.S. federal and state income taxes. These taxable subsidiaries are not consolidated with the Company for income tax purposes, but are consolidated for GAAP purposes, and may generate income tax liabilities or assets from temporary differences


in the recognition of items for financial reporting and income tax purposes at the subsidiaries. For the three and six months ended DecemberMarch 31, 2016,2017, the Company did not recognize a provision for deferred taxes on the unrealized appreciation for consolidated subsidiaries. For the three and six months ended DecemberMarch 31, 2015,2016, the Company recognized a provision for deferred taxes on the unrealized appreciation on investments of $0.2$0.1 million and $0.4 million for consolidated subsidiaries, respectively.
 
Changes in Net Assets from Operations
 
For the three months ended DecemberMarch 31, 2016,2017, we recorded a net decrease in net assets resulting from operations of $12.2 million compared to a net increase in net assets resulting from operations of $6.3$0.4 million for the three months ended March 31, 2016 as a result of the factors discussed above. Based on 54,474,211 and 55,761,062 weighted average common shares outstanding for the three months ended March 31, 2017 and 2016, respectively, our per share net decrease in net assets resulting from operations was $0.22 for the three months months ended March 31, 2017 compared to a per share net increase in net assets from operations of $0.01 for the three months ended March 31, 2016.

For the six months ended March 31, 2017, we recorded a net decrease in net assets resulting from operations of $5.9 million compared to a net decrease in net assets resulting from operations of $39.2$38.8 million for the threesix months ended DecemberMarch 31, 20152016 as a result of the factors discussed above. Based on 54,474,211 and 56,300,06756,044,037 weighted average common shares outstanding for the threesix months ended DecemberMarch 31, 20162017 and 2015,2016, respectively, our per share net increasedecrease in net assets resulting from operations was $0.12$0.11 for the threesix months ended DecemberMarch 31, 20162017 compared to a per share net decrease in net assets from operations of $0.70$0.69 for the threesix months ended DecemberMarch 31, 2015.2016.
 
Financial Condition, Liquidity and Capital Resources
 
As a RIC, we distribute substantially all of our net income to our stockholders and have an ongoing need to raise additional capital for investment purposes. To fund growth, we have a number of alternatives available to increase capital; including raising equity, increasing debt, and funding from operational cash flow.

Our liquidity and capital resources have been generated primarily from the net proceeds of public offerings of common stock, advances from the revolving credit facility (the “Revolving Facility” and together with the Term Loan Facility the “Facilities”) and the Term Loan FacilityFacilities and net proceeds from the issuance of notes as well as cash flows from operations.

On January 20, 2011,As of March 31, 2017, $83.5 million was invested in an interest-bearing money market account. In the future, we completed our IPOmay generate cash from future offerings of securities, future borrowings and issued 11,111,112 common sharescash flows from operations, including interest earned from the temporary investment of cash in U.S. government securities and received net proceeds of $129.6 million.
On March 21, 2012, we issued $40.0 million in aggregate principal amount of 7.125% unsecured notesother high-quality debt investments that mature on March 30, 2019 (the “2019 Notes“). The 2019 Notes may be redeemed in wholeone year or less. Our primary use of funds is investments in part at any time or from timeour targeted asset classes, cash distributions to time at our option on or after March 30, 2015. The 2019 Notes bear interest at a rate of 7.125% per year, payable quarterly on March 30, June 30, September 30stockholders, and December 30 of each year, beginning June 30, 2012. The 2019 Notes are listed on the New York Stock Exchange (“NYSE”) and trade thereon under the trading symbol “MCQ”. As of September 30, 2016, $40.0 million in aggregate principal amount of the 2019 Notes were outstanding.other general corporate purposes.

On August 24, 2012,In order to satisfy the Code requirements applicable to a RIC, we completed a public offering of 5,750,000 shares, including the underwriters’ full exercise of the optionintend to purchase additional shares,distribute to our stockholders substantially all of our commontaxable income, but we may also elect to periodically spill over certain excess undistributed taxable income from one tax year into the next tax year. In addition, as a BDC, for each taxable year we generally are required to meet a coverage ratio of total assets to total senior securities, which include borrowings and any preferred stock we may issue in the future, of at a public offering price of $12.95 per share, raising approximately $71.9 million in net proceeds.
On December 3, 2012,least 200%. This requirement limits the amount that we completed a public offering of 5,000,000 shares of our common stock at a public offering price of $13.75 per share, raising approximately $66.0 million in net proceeds. On December 19, 2012, we sold an additional 495,263 shares of our common stock at a public offering price of $13.75 per share, raising approximately $6.5 million in net proceeds, pursuant to the underwriters’ partial exercise of the option to purchase additional shares.
On March 18, 2013, the Company issued $60.0 million in aggregate principal amount of the 2023 Notes. The 2023 Notes may be redeemed in whole or in part at any time or from time to time at the Company's option on or after March 30, 2016. The 2023 Notes bear interest at a rate of 6.125% per year, payable quarterly on March 30, June 30, September 30 and December 30 of each year, beginning June 30, 2013. The 2023 Notes are listed on the NYSE and trade thereon under the trading symbol “MCV”.
On March 26, 2013, the Company closed an additional $3.5 million in aggregate principal amount of the 2023 Notes, pursuant to the partial exercise of the underwriters’ option to purchase additional notes.
On April 12, 2013, we completed a public offering of 4,000,000 shares of our common stock and an additional 492,271 shares of our common stock pursuant to the underwriters’ partial exercise of the over-allotment option at a public offering price of $14.70 per share, raising approximately $63.4 million in net proceeds.
On September 9, 2013, we completed a public offering of 6,900,000 shares of our common stock, which included the full exercise of the underwriters’ option to purchase an additional 900,000 shares, at a public offering price of $13.00 per share, raising approximately $86.6 million in net proceeds.
On February 5, 2014 we completed a public offering of 6,000,000 shares of our common stock at a public offering price of $14.00 per share, raising approximately $81.1 million in net proceeds.
On April 28, 2014 we completed a public offering of 6,000,000 shares of our common stock at a public offering price of $13.25 per share, raising approximately $76.9 million in net proceeds.
On August 1, 2014, the Company entered into an ATM equity distribution agreement with Goldman, Sachs & Co., Barclays Capital Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Keefe, Bruyette & Woods, Inc., BB&T Capital Markets, a division of BB&T Securities, LLC, Janney Montgomery Scott LLC, Ladenburg Thalmann & Co. Inc., MLV & Co. LLC, Maxim Group LLC, National Securities Corporation and Gilford Securities Incorporated, through which the Company could sell shares of its common stock having an aggregate offering price of up to $100.0 million. During the period from August 5, 2014 to September 30, 2014, the Company sold 671,278 shares of its common stock at an average price of $12.87 per share, and raised $8.7 million in net proceeds, under the ATM Program.
borrow.

Credit Facility

On August 26, 2014, the Company completed a public offering of 5,000,000 shares of our common stock and an additional 750,000 shares of our common stock pursuant to the underwriters’ partial exercise of the over-allotment option at a public offering price of $13.02 per share, raising approximately $72.8 million in net proceeds.
On July 28, 2015, we entered into Amendment No. 7 to our existing Revolver Amendment and Amendment No. 7 to our existingThe Term Loan Amendment, eachFacility and Revolving Credit Facility with certain lenders party thereto and ING Capital LLC, as administrative agent. The Amendments amend certain provisions of the Facilities.Administrative agent, exist in order to borrow funds to make additional investments.

The pricing in the case of the Term Loan Facility was reduced for LIBOR loans fromis LIBOR (with no minimum) plus 3.25% to LIBOR plus 3.00%. The pricing on the Revolving Credit Facility, will remain the same atis LIBOR (with no minimum) plus 2.75%. Both the Term Loan Facility and Revolving Credit Facility will decrease by an additional 25 basis points upon receiving an investment grade rating from Standard & Poor’s.

Additionally, theThe Term Loan Facility’s bullet maturity was extended from June 2019 tois July 28, 2020 and the Revolving Credit Facility’s revolving period was extended from June 2017 toends July 28, 2019, followed by a one-year amortization period and a final maturity inon July 28, 2020.


On February 14, 2017, the Company elected to reduce the total commitment of the Revolving Credit Facility to $200.0 million from $343.5 million. The reduction was accounted for as a debt modification to a line-of credit or revolving-debt arrangement in accordance with ASC 470-50, Modifications and Extinguishments, which attributed to an acceleration of debt issuance costs in the amount of $1.3 million and recorded on the Consolidated Statements of Operations as a component of interest and financing expenses.
Borrowings under the Facilities are subject to, among other things, a minimum borrowing/collateral base and substantially all of the Company’s assets are pledged as collateral under the Facilities. In addition, the Facilities require the Company to, among other things (i) make representations and warranties regarding the collateral as well the Company’s business and operations, (ii) agree to certain indemnification obligations and (iii) agree to comply with various affirmative and negative covenants. The documentation for each of the Facilities also includes default provisions such as the failure to make timely payments under the Facilities, the occurrence of a change in control and the failure by the Company to materially perform under the operative agreements governing the Facilities, which, if not complied with, could accelerate repayment under the Facilities, thereby materially and adversely affecting the Company’s liquidity, financial condition and results of operations.
As of March 31, 2017, total commitments under the Facilities are $374.0 million, comprised of $200.0 million committed to the Revolving Credit Facility and $174.0 million funded under the Term Loan Facility.

Unsecured Notes

2019 Notes

On March 21, 2012, the Company issued $40.0 million in aggregate principal amount of 7.125% unsecured notes which were scheduled to mature on March 30, 2019 (the "2019 Notes"). The 2019 Notes bore interest at a rate of 7.125% per year, and were payable quarterly on March 30, June 30, September 30 and December 30 of each year, beginning June 30, 2012. The 2019 Notes were listed on the NYSE and traded thereon under the trading symbol “MCQ”. On February 22, 2017 the 2019 Notes were redeemed at par plus accrued and unpaid interest. The redemption was accounted for as a debt extinguishment in accordance with ASC 470-50, Modifications and Extinguishments, which attributed to a realized loss of $0.5 million.

2021 Notes

On December 17, 2015, the Company issued $70.8 million in aggregate principal amount of the 2021 Notes (together with the 2019 Notes and 2023 Notes, the “Notes”). The 2021 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after January 30, 2019. The 2021 Notes bear interest at a rate of 6.50% per year, payable quarterly on January 30, April 30, July 30 and October 30 of each year, beginning January 30, 2016. The 2021 Notes are listed on the NYSE and trade thereon under the trading symbol ‘‘MCX’’.

On January 14, 2016, the Company closed an additional $3.25 million in aggregate principal amount of the 2021 Notes, pursuant to the partial exercise of the underwriters’ option to purchase additional notes.

2023 Notes

On March 18, 2013, the Company issued $60.0 million in aggregate principal amount of 2023 Notes. The 2023 Notes may be redeemed in whole or in part at any time or from time to time at the Company's option on or after March 30, 2016. The 2023 Notes bear interest at a rate of 6.125% per year, payable quarterly on March 30, June 30, September 30 and December 30 of each year, beginning June 30, 2013. The 2023 Notes are listed on the NYSE and trade thereon under the trading symbol “MCV”.

On March 26, 2013, the Company closed an additional $3.5 million in aggregate principal amount of 2023 Notes, pursuant to the partial exercise of the underwriters’ option to purchase additional notes.

On December 12, 2016, the Company entered into an ATM debt distribution agreement with FBR Capital Markets & Co., through which the Company could offer for sale, from time to time, up to $40.0 million in aggregate principal amount of the 2023 Notes. During the period from December 12, 2016 to December 31, 2016, theThe Company sold 15,1591,573,872 of the 2023 Notes at an average price of $25.05$25.03 per note, and raised $0.4$38.6 million in net proceeds, undersince inception of the ATM debt distribution agreement.

As of December 31, 2016, total commitments under the Facilities are $517.5 million, comprised of $343.5 million committed to the Revolving Credit Facility and $174.0 million funded under the Term Loan Facility.SBA Debentures
As of December 31, 2016, we had $102.1 million in cash. In the future, we may generate cash from future offerings of securities, future borrowings and cash flows from operations, including interest earned from the temporary investment of cash in U.S. government securities and other high-quality debt investments that mature in one year or less. Our primary use of funds is investments in our targeted asset classes, cash distributions to our stockholders, and other general corporate purposes.
In order to satisfy the Code requirements applicable to a RIC, we intend to distribute to our stockholders substantially all of our taxable income, but we may also elect to periodically spill over certain excess undistributed taxable income from one tax year into the next tax year. In addition, as a BDC, for each taxable year we generally are required to meet a coverage ratio of total assets to total senior securities, which include borrowings and any preferred stock we may issue in the future, of at least 200%. This requirement limits the amount that we may borrow.

On March 26, 2013, our wholly-owned subsidiary, Medley SBIC LP (“SBIC LP”) received a Small Business Investment Company (“SBIC”) license from the Small Business Administration (“SBA”).

The SBIC license allows the SBIC LP to obtain leverage by issuing SBA-guaranteed debentures ("SBA Debentures"), subject to the issuance of a capital commitment by the SBA and other customary procedures. SBA Debentures are non-recourse, interest only debentures with interest payable semi-annually and have a ten year maturity. The principal amount of SBA Debentures is not required to be paid prior to maturity but may be prepaid at any time without penalty. The interest rate of SBA Debentures is fixed on a semi-annual basis at a market-driven spread over U.S. Treasury Notes with 10-year maturities. The SBA, as a creditor, will have a superior claim to the SBIC LP’s assets over our stockholders in the event we liquidate the SBIC LP or the SBA exercises its remedies under the SBA Debentures issued by the SBIC LP upon an event of default.

SBA regulations currently limit the amount that the SBIC LP may borrow to a maximum of $150.0 million when it has at least $75.0 million in regulatory capital, receives a capital commitment from the SBA and has been through an examination by the SBA subsequent to licensing.

On November 16, 2012, we obtained exemptive relief from the SEC to permit us to exclude the debt of the SBIC LP guaranteed by the SBA from our 200% asset coverage test under the 1940 Act. The exemptive relief provides us with increased flexibility under the 200% asset coverage test by permitting it to borrow up to $150.0 million more than it would otherwise be able to absent the receipt of this exemptive relief.



As of DecemberMarch 31, 2016,2017, SBIC LP had $75.0 million in regulatory capital and had $150.0 million SBA Debentures outstanding.

Contractual Obligations and Off-Balance Sheet Arrangements
 
As of DecemberMarch 31, 20162017 and September 30, 2016, we had commitments under loan and financing agreements to fund up to $12.3$10.3 million to 89 portfolio companies and $9.2 million to 8 portfolio companies, respectively. These commitments are primarily composed of senior secured term loans and a revolver and an analysis of their fair value is included in the Consolidated Schedule of Investments. The commitments are generally subject to the borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. The terms of the borrowings and financings subject to commitment are comparable to the terms of other loan and equity securities in our portfolio. A summary of the composition of the unfunded commitments as of DecemberMarch 31, 20162017 and September 30, 2016 is shown in the table below (dollars in thousands):
 


As of
December 31, 2016 September 30, 2016March 31, 2017 September 30, 2016
SMART Financial Operations, LLC - Delayed Draw Term Loan$4,725
 $—
$4,725
 $—
Trans-Fast Remittance LLC - Revolver1,875
 —
AAR Intermediate Holdings, LLC - Revolver1,366
 1,797
1,078
 1,797
Trans-Fast Remittance LLC - Delayed Draw Term Loan1,057
 —
1,057
 —
Black Angus Steakhouses, LLC - Delayed Draw Term Loan893
 893
893
 893
Brantley Transportation LLC - Delayed Draw Term Loan788
 —
Impact Sales, LLC - Delayed Draw Term Loan875
 —
755
 863
Brantley Transportation LLC - Delayed Draw Term Loan788
 863
Black Angus Steakhouses, LLC - Revolver625
 446
625
 446
Access Media Holdings, LLC - Series AA Preferred Equity60
 184
NVTN LLC - Delayed Draw Term Loan250
 —
CP OPCO LLC - Revolver53
 609
53
 609
Avantor Performance Materials Holdings, LLC - Delayed Draw Term Loan42
 —
Tenere Acquisition Corp. - Delayed Draw Term Loan—
 2,000
—
 2,000
DHISCO Electronic Distribution, Inc. - Revolver—
 1,905
—
 1,905
Lydell Jewelry Design Studio, LLC - Delayed Draw Term Loan—
 500
—
 500
Access Media Holdings, LLC - Series AA Preferred Equity—
 184
Total$12,317
 $9,197
$10,266
 $9,197

We have certain contracts under which we have material future commitments. We have entered into an investment management agreement with MCC Advisors in accordance with the 1940 Act. The investment management agreement became effective upon the pricing of our initial public offering. Under the investment management agreement, MCC Advisors has agreed to provide us with investment advisory and management services. For these services, we have agreed to pay a base management fee equal to a percentage of our gross assets and an incentive fee based on our performance.
 
We have also entered into an administration agreement with MCC Advisors as our administrator. The administration agreement became effective upon the pricing of our initial public offering. Under the administration agreement, MCC Advisors has agreed to furnish us with office facilities and equipment, provide us clerical, bookkeeping and record keeping services at such facilities and provide us with other administrative services necessary to conduct our day-to-day operations. MCC Advisors will also provide on our behalf significant managerial assistance to those portfolio companies to which we are required to provide such assistance.
 
The following table shows our payment obligations for repayment of debt and other contractual obligations at DecemberMarch 31, 20162017 (dollars in thousands):
 
Payment Due by PeriodPayment Due by Period
Total Less than 1 year 1 - 3 years 3 - 5 years 
More than 5
years
Total Less than 1 year 1 - 3 years 3 - 5 years 
More than 5
years
Revolving Facility$18,000
 $—
 $—
 $18,000
 $—
$34,000
 $—
 $—
 $34,000
 $—
Term Loan Facility174,000
 —
 —
 174,000
 —
174,000
 —
 —
 174,000
 —
7.125% Notes40,000
 —
 40,000
 —
 —
6.50% Notes74,013
 —
 —
 74,013
 —
74,013
 —
 —
 74,013
 —
6.125% Notes63,880
 —
 —
 —
 63,880
102,847
 —
 —
 —
 102,847
SBA Debenture150,000
 —
 —
 —
 150,000
150,000
 —
 —
 —
 150,000
Total contractual obligations$519,893
 $—
 $40,000
 $266,013
 $213,880
$534,860
 $—
 $—
 $282,013
 $252,847
 
If any of the contractual obligations discussed above are terminated, our costs under any new agreements that we enter into may increase. In addition, we would likely incur significant time and expense in locating alternative parties to provide the services we expect to receive under our investment management agreement and our administration agreement. Any new investment management agreement would also be subject to approval by our stockholders.
 
On March 27, 2015, Medley Capital Corporation and Great American Life Insurance Company (“GALIC”) entered into a limited liability company operating agreement to co-manage MCC Senior Loan Strategy JV I LLC (“MCC JV”). Medley Capital Corporation and GALIC have committed to provide $100 million of equity to MCC JV, with Medley Capital Corporation providing $87.5 million and GALIC providing $12.5 million. MCC JV commenced operations on July 15, 2015. On August 4, 2015, MCC JV entered into a senior secured revolving credit facility (the “JV Facility”) led by Credit Suisse, AG with initial commitments of $100 million. On March 30, 2017, the Company amended the JV Facility previously administered by CS and facilitated the assignment of all rights and obligations of CS under the JV Facility to Deutsche Bank AG, New York Branch, (“DB”) and increased the


total loan commitments to $200 million. As of DecemberMarch 31, 2016,2017, MCC JV has drawn approximately $79.6$98.6 million on the JV Facility. As of DecemberMarch 31, 2016,2017, MCC JV had total investments at fair value of $116.6$138.3 million. As of DecemberMarch 31, 2016,2017, MCC JV’s portfolio was comprised of senior secured first lien term loans to 3640 different borrowers. As of DecemberMarch 31, 2016,2017, certain investments in one portfolio company were on non-accrual status.
  
Medley Capital Corporation has determined that MCC JV is an investment company under ASC 946, however in accordance with such guidance, Medley Capital Corporation 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, Medley Capital Corporation does not consolidate its interest in MCC JV.
 


Distributions
 
We have elected and qualified to be treated for U.S. federal income tax purposes as a RIC under subchapter M of the Code. As a RIC, in any taxable year with respect to which we timely distribute at least 90 percent of the sum of our (i) investment company taxable income (which is generally our net ordinary income plus the excess of realized net short-term capital gains over realized net long-term capital losses) determined without regard to the deduction for dividends paid and (ii) net tax exempt interest income (which is the excess of our gross tax exempt interest income over certain disallowed deductions), we (but not our stockholders) generally will not be subject to U.S. federal income tax on investment company taxable income and net capital gains that we distribute to our stockholders. We intend to distribute annually all or substantially all of such income, but we may also elect to periodically spill over certain excess undistributed taxable income from one tax year to the next tax year. To the extent that we retain our net capital gains or any investment company taxable income, we will be subject to U.S. federal income tax. We may choose to retain our net capital gains or any investment company taxable income, and pay the associated federal corporate income tax, including the federal excise tax described below.
 
Amounts not distributed on a timely basis in accordance with a calendar year distribution requirement are subject to a nondeductible 4% U.S. federal excise tax payable by us. To avoid this tax, we must distribute (or be deemed to have distributed) during each calendar year an amount equal to the sum of:
 
(1)at least 98.0 percent of our ordinary income (not taking into account any capital gains or losses) for the calendar year;
(2)at least 98.2 percent of the amount by which our capital gains exceed our capital losses (adjusted for certain ordinary losses) for a one-year period ending  on October 31st of the calendar year; and
(3)income realized, but not distributed, in preceding years and on which we did not pay federal income tax.
While we intend to distribute any income and capital gains in the manner necessary to minimize imposition of the 4% U.S. federal excise tax, sufficient amounts of our taxable income and capital gains may not be distributed to avoid entirely the imposition of the tax. In that event, we will be liable for the tax only on the amount by which we do not meet the foregoing distribution requirement. For the calendar year ended December 31, 2016, the Company did not distribute at least 98% of its ordinary income and 98.2% of its capital gains. Accordingly, with respect to the calendar year ended December 31, 2016, a provision was recorded for federalan excise taxestax expense of $0.3 million. Theremillion was no provision for federal excise tax for 2015 accrued at December 31, 2015.recorded.
 
We intend to pay quarterly dividends to our stockholders out of assets legally available for distribution. We cannot assure you that we will achieve investment results that will allow us to pay a specified level of dividends or year-to-year increases in dividends. In addition, the inability to satisfy the asset coverage test applicable to us as a BDC could limit our ability to pay dividends. All dividends will be paid at the discretion of our board of directors and will depend on our earnings, our financial condition, maintenance of our RIC status, compliance with applicable BDC regulations and such other factors as our board of directors may deem relevant from time to time. We cannot assure you that we will pay dividends to our stockholders in the future.
 
To the extent our taxable earnings fall below the total amount of our distributions for a taxable year, a portion of those distributions may be deemed a return of capital to our stockholders for U.S. federal income tax purposes. Stockholders should read any written disclosure accompanying a distribution carefully and should not assume that the source of any distribution is our ordinary income or gains.
 
We have adopted an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a cash dividend or other distribution, each stockholder that has not “opted out” of our dividend reinvestment plan will have their dividends automatically reinvested in additional shares of our common stock rather than receiving cash dividends. Stockholders who receive distributions in the form of shares of common stock will be subject to the same federal, state and local tax consequences as if they received cash distributions.
 
The following table summarizes the dividend distributions during the threesix months ended DecemberMarch 31, 2016:2017: 
 
Date DeclaredRecord DatePayment DateAmount Per Share Record Date Payment Date Amount Per Share
11/3/201611/23/201612/23/2016$0.22
 11/23/2016 12/23/2016 $0.22
1/31/2017 2/22/2017 3/24/2017 0.22
 $0.44

Stock Repurchase Program
 
The following table summarizes our share repurchases under our stock repurchase program for the three months ended December 31, 2016 and 2015 (dollars in thousands):

 For the three months ended December 31
 2016 2015
Dollar amount repurchased
N/A(1)
 $1,100
Shares Repurchased
N/A(1)
 143,349
Average price per share
N/A(1)
 $7.68
Weighted average discount to Net Asset Value
N/A(1)
 30.2%
(1)The Company did not repurchase any shares for the three months ended December 31, 2016.

On February 5, 2015, our board of directors approved a share repurchase program pursuant to which we couldcan purchase up to an aggregate amount of $30.0 million of our common stock between the period of the approval date and February 5, 2016. On December 4, 2015, the board of directors extended


the duration of the share repurchase program through December 31, 2016, and increased the aggregate amount to $50.0 million. On December 7, 2016, the board of directors extended the duration of the share repurchase program through December 31, 2017. Any stock repurchases will be made through the open market at times, and in such amounts, as management deems appropriate. As of DecemberMarch 31, 2016,2017, the Company has repurchased an aggregate of


4,259,073 shares of common stock at an average price of $8.16 per share with a total cost of approximately $34.1 million. The maximum dollar value of shares that may yet be purchased under the plan is $15.9 million. This program may be limited or terminated at any time without prior notice. Since the inception of the program, the Company's net asset value per share was increased by approximately $0.23 as a result of the share repurchases.

The following table summarizes our share repurchases under our stock repurchase program for the three and six months ended March 31, 2017 and 2016 (dollars in thousands):
.
 For the three months ended
March 31		 For the six months ended
March 31
 2017 2016 2017 2016
Dollar amount repurchased
N/A(1)
 $9,600
 
N/A(1)
 $10,700
Shares Repurchased
N/A(1)
 1,430,392
 
N/A(1)
 1,573,741
Average price per share
N/A(1)
 $6.71
 
N/A(1)
 $6.80
Weighted average discount to Net Asset Value
N/A(1)
 33.0% 
N/A(1)
 32.7%
 
(1)The Company did not repurchase any shares for the three and six months ended March 31, 2017.

Related Party Transactions
 
Concurrent with the pricing of our initial public offering, we entered into a number of business relationships with affiliated or related parties, including the following:
 
We entered into an investment management agreement with MCC Advisors. Mr. Brook Taube, our chairman and chief executive officer, is a managing partner and senior portfolio manager of MCC Advisors, and Mr. Seth Taube, one of our directors, is a managing partner of MCC Advisors.
MCC Advisors provides us with the office facilities and administrative services necessary to conduct day-to-day operations pursuant to our administration agreement. We reimburse MCC Advisors for the allocable portion (subject to the review and approval of our board of directors) of overhead and other expenses incurred by it in performing its obligations under the administration agreement, including rent, the fees and expenses associated with performing compliance functions, and our allocable portion of the cost of our chief financial officer and chief compliance officer and their respective staffs.
We have entered into a license agreement with Medley Capital LLC, pursuant to which Medley Capital LLC has granted us a non-exclusive, royalty-free license to use the name “Medley.”
Certain affiliates of MCC Advisors, Medley Capital LLC, their respective affiliates and some of their employees purchased in the initial public offering an aggregate of 833,333 shares of common stock at the initial public offering price per share of $12.00. We received the full proceeds from the sale of these shares, and no underwriting discounts or commissions were paid in respect of these shares.
MCC Advisors and its affiliates may in the future manage other accounts that have investment mandates that are similar, in whole and in part, with ours. MCC Advisors and its affiliates may determine that an investment is appropriate for us and for one or more of those other accounts. In such event, depending on the availability of such investment and other appropriate factors, and pursuant to MCC Advisors’ allocation policy, MCC Advisors or its affiliates may determine that we should invest side-by-side with one or more other accounts. We will not make any investments if they are not permitted by applicable law and interpretive positions of the SEC and its staff, or if they are inconsistent with MCC Advisors’ allocation procedures.
 
In addition, we have adopted a formal code of ethics that governs the conduct of our and MCC Advisors’ officers, directors and employees. Our officers and directors also remain subject to the duties imposed by both the 1940 Act and the Delaware General Corporation Law.
 
Investment Management Agreement
 
Under the terms of our investment management agreement, MCC Advisors:
 
determines the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes;
identifies, evaluates and negotiates the structure of the investments we make (including performing due diligence on our prospective portfolio companies); and
executes, closes, monitors and administers the investments we make, including the exercise of any voting or consent rights.
MCC Advisors’ services under the investment management agreement are not exclusive, and it is free to furnish similar services to other entities so long as its services to us are not impaired.
 
Pursuant to our investment management agreement, we pay MCC Advisors a fee for investment advisory and management services consisting of a base management fee and a two-part incentive fee.
 
On December 3, 2015, MCC Advisors recommended and, in consultation with the Board, agreed to reduce fees under the investment management agreement. Beginning January 1, 2016, the base management fee was reduced to 1.50% on gross assets above $1 billion. In addition, MCC Advisors reduced its incentive fee from 20% on pre-incentive fee net investment income over an 8% hurdle, to 17.5% on pre-incentive fee net investment income over a 6% hurdle. Moreover, the revised incentive fee includes a netting mechanism and is subject to a rolling three-year look back from January 1, 2016


forward. Under no circumstances will the new fee structure result in higher fees to MCC Advisors than fees under the prior investment management agreement. 
 
The following discussion of our base management fee and two-part incentive fee reflects the terms of the fee waiver agreement executed by MCC Advisors on February 8, 2016 (the “Fee Waiver Agreement”). The terms of the Fee Waiver Agreement are effective as of January 1, 2016, and are a permanent reduction in the base management fee and incentive fee on net investment income payable to MCC Advisors for the investment advisory and management services it provides under the investment management agreement. The Fee Waiver Agreement does not change the second component of the incentive fee, which is the incentive fee on capital gains.


Base Management Fee
 
For providing investment advisory and management services to us, MCC Advisors receives a base management fee. The base management fee is calculated at an annual rate of 1.75% (0.4375% per quarter) of up to $1.0 billion of the Company’s gross assets and 1.50% (0.375% per quarter) of any amounts over $1.0 billion of the Company’s gross assets, and is payable quarterly in arrears. The base management fee will be calculated based on the average value of the Company’s gross assets at the end of the two most recently completed calendar quarters and will be appropriately pro-rated for any partial quarter.
 
Incentive Fee
 
The incentive fee has two components, as follows:
 
Incentive Fee Based on Income
 
The first component of the incentive fee is payable quarterly in arrears and is based on our pre-incentive fee net investment income earned during the calendar quarter for which the incentive fee is being calculated. MCC Advisors is entitled to receive the incentive fee on net investment income from us if our Ordinary Income (as defined below) exceeds a quarterly “hurdle rate” of 1.5%. The hurdle amount is calculated after making appropriate adjustments to the Company’s net assets, as determined as of the beginning of each applicable calendar quarter, in order to account for any capital raising or other capital actions as a result of any issuances by the Company of its common stock (including issuances pursuant to our dividend reinvestment plan), any repurchase by the Company of its own common stock, and any dividends paid by the Company, each as may have occurred during the relevant quarter.
 
Beginning with the calendar quarter that commenced on January 1, 2016, the incentive fee on net investment income will be determined and paid quarterly in arrears at the end of each calendar quarter by reference to our aggregate net investment income, as adjusted as described below, from the calendar quarter then ending and the eleven preceding calendar quarters (or if shorter, the number of quarters that have occurred since January 1, 2016). We refer to such period as the “Trailing Twelve Quarters.”
 
The hurdle amount for the incentive fee on net investment income is determined on a quarterly basis, and is equal to 1.5% multiplied by the Company’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The hurdle amount is calculated after making appropriate adjustments to the Company’s net assets, as determined as of the beginning of each applicable calendar quarter, in order to account for any capital raising or other capital actions as a result of any issuances by the Company of its common stock (including issuances pursuant to our dividend reinvestment plan), any repurchase by the Company of its own common stock, and any dividends paid by the Company, each as may have occurred during the relevant quarter. The incentive fee for any partial period will be appropriately prorated. Any incentive fee on net investment income will be paid to MCC Advisors on a quarterly basis, and will be based on the amount by which (A) aggregate net investment income (“Ordinary Income”) in respect of the relevant Trailing Twelve Quarters exceeds (B) the hurdle amount for such Trailing Twelve Quarters. The amount of the excess of (A) over (B) described in this paragraph for such Trailing Twelve Quarters is referred to as the “Excess Income Amount.” For the avoidance of doubt, Ordinary Income is net of all fees and expenses, including the reduced base management fee but excluding any incentive fee on Pre-Incentive Fee net investment income or on the Company’s capital gains.

Quarterly Incentive Fee Based on Income
 
The incentive fee on net investment income for each quarter is determined as follows:
 
No incentive fee on net investment income is payable to MCC Advisors for any calendar quarter for which there is no Excess Income Amount.
100% of the Ordinary Income, if any, that exceeds the hurdle amount, but is less than or equal to an amount, which we refer to as the “Catch-up Amount,” determined as the sum of 1.8182% multiplied by the Company’s net assets at the beginning of each applicable calendar quarter, as adjusted as noted above, comprising the relevant Trailing Twelve Quarters is included in the calculation of the incentive fee on net investment income; and
17.5% of the Ordinary Income that exceeds the Catch-up Amount is included in the calculation of the incentive fee on net investment income.
The amount of the incentive fee on net investment income that will be paid to MCC Advisors for a particular quarter will equal the excess of the incentive fee so calculated minus the aggregate incentive fees on net investment income that were paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarters but not in excess of the Incentive Fee Cap (as described below).
 
The incentive fee on net investment income that is paid to MCC Advisors for a particular quarter is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap for any quarter is an amount equal to (a) 17.5% of the Cumulative Net Return (as defined below) during the relevant Trailing Twelve Quarters minus (b) the aggregate incentive fees on net investment income that were paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarters.
 
“Cumulative Net Return” means (x) the Ordinary Income in respect of the relevant Trailing Twelve Quarters minus (y) any Net Capital Loss (as described below), if any, in respect of the relevant Trailing Twelve Quarters. If, in any quarter, the Incentive Fee Cap is zero or a negative value, the Company will


pay no incentive fee on net investment income to MCC Advisors for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is a positive value but is less than the incentive fee on net investment income that is payable to MCC Advisors for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company will pay an incentive fee on net investment income to MCC Advisors equal to the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is equal to or greater than the incentive fee on net investment income that is payable to MCC Advisors for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company will pay an incentive fee on net investment income to MCC Advisors, calculated as described above, for such quarter without regard to the Incentive Fee Cap.
 


“Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, and dilution to the Company’s net assets due to capital raising or capital actions, in such period and (ii) aggregate capital gains, whether realized or unrealized and accretion to the Company’s net assets due to capital raising or capital action, in such period.
 
Dilution to the Company’s net assets due to capital raising is calculated, in the case of issuances of common stock, as the amount by which the net asset value per share was adjusted over the transaction price per share, multiplied by the number of shares issued. Accretion to the Company’s net assets due to capital raising is calculated, in the case of issuances of common stock (including issuances pursuant to our dividend reinvestment plan), as the excess of the transaction price per share over the amount by which the net asset value per share was adjusted, multiplied by the number of shares issued. Accretion to the Company’s net assets due to other capital action is calculated, in the case of repurchases by the Company of its own common stock, as the excess of the amount by which the net asset value per share was adjusted over the transaction price per share multiplied by the number of shares repurchased by the Company.
 
For the avoidance of doubt, the purpose of the new incentive fee calculation under the Fee Waiver Agreement is to permanently reduce aggregate fees payable to MCC Advisors by the Company, effective as of January 1, 2016. In order to ensure that the Company will pay MCC Advisors lesser aggregate fees on a cumulative basis, as calculated beginning January 1, 2016, we will, at the end of each quarter, also calculate the base management fee and incentive fee on net investment income owed by the Company to MCC Advisors based on the formula in place prior to January 1, 2016. If, at any time beginning January 1, 2016, the aggregate fees on a cumulative basis, as calculated based on the formula in place after January 1, 2016, would be greater than the aggregate fees on a cumulative basis, as calculated based on the formula in place prior to January 1, 2016, MCC Advisors shall only be entitled to the lesser of those two amounts.

The second component of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the investment management agreement as of the termination date) and equals 20.0% of our cumulative aggregate realized capital gains less cumulative realized capital losses, unrealized capital depreciation (unrealized depreciation on a gross investment-by-investment basis at the end of each calendar year) and all capital gains upon which prior performance-based capital gains incentive fee payments were previously made to the investment adviser.
 
Under GAAP, the Company calculates the second component of the incentive fee as if the Company had realized all assets at their fair values as of the reporting date. Accordingly, the Company accrues a provisional capital gains incentive fee taking into account any unrealized gains or losses. As the provisional capital gains incentive fee is subject to the performance of investments until there is a realization event, the amount of the provisional capital gains incentive fee accrued at a reporting date may vary from the capital gains incentive that is ultimately realized and the differences could be material.
 
Critical Accounting Policies
 
The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following items as critical accounting policies.
 
Valuation of Portfolio Investments
 
We value investments for which market quotations are readily available at their market quotations, which are generally obtained from an independent pricing service or multiple broker-dealers or market makers. We weight the use of third-party broker quotes, if any, in determining fair value based on our understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer. However, a readily available market value is not expected to exist for many of the investments in our portfolio, and we value these portfolio investments at fair value as determined in good faith by our board of directors under our valuation policy and process. We may seek pricing information with respect to certain of our investments from pricing services or brokers or dealers in order to value such investments. We also employ independent third party valuation firms for all of our investments for which there is not a readily available market value.
 
Valuation methods may include comparisons of financial ratios of the portfolio companies that issued such private equity securities to peer companies that are public, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we will consider the pricing indicated by the external event to corroborate the private equity valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.
 
Our board of directors is ultimately and solely responsible for determining the fair value of the investments in our portfolio that are not publicly traded, whose market prices are not readily available on a quarterly basis or any other situation where portfolio investments require a fair value determination.
 
With respect to investments for which market quotations are not readily available, our board of directors will undertake a multi-step valuation process each quarter, as described below:
 


Our quarterly valuation process begins with each investment being initially valued by the investment professionals responsible for monitoring the portfolio investment.
Preliminary valuation conclusions are then documented and discussed with senior management.
At least twice annually, the valuation for each portfolio investment is reviewed by an independent valuation firm.
The audit committee of our board of directors reviews the preliminary valuations of the investment professionals, senior management and independent valuation firms.


Our board of directors discusses the valuations and determines the fair value of each investment in our portfolio in good faith based on the input of MCC Advisors, the respective independent valuation firms and the audit committee.
In following these approaches, the types of factors that are taken into account in fair value pricing investments include available current market data, including relevant and applicable market trading and transaction comparables; applicable market yields and multiples; security covenants; call protection provisions; information rights; the nature and realizable value of any collateral; the portfolio company’s ability to make payments; the portfolio company’s earnings and discounted cash flows; the markets in which the portfolio company does business; comparisons of financial ratios of peer companies that are public; comparable merger and acquisition transactions; and the principal market and enterprise values.

Determination of fair values involves subjective judgments and estimates not verifiable by auditing procedures. Under current auditing standards, the notes to our financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated financial statements.
 
Revenue Recognition
 
Our revenue recognition policies are as follows:
 
Investments and Related Investment IncomeIncome. We account for investment transactions on a trade-date basis and interest income, adjusted for amortization of premiums and accretion of discounts, is recorded on an accrual basis. For investments with contractual PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, we will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible. Origination, closing and/or commitment fees associated with investments in portfolio companies are recognized as income when the investment transaction closes. Other fees are capitalized as deferred revenue and recorded into income over the respective period. Prepayment penalties received by the Company for debt instruments paid back to the Company prior to the maturity date are recorded as income upon receipt. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis of investment, without regard to unrealized gains or losses previously recognized. We report changes in the fair value of investments that are measured at fair value as a component of the net change in unrealized appreciation/(depreciation) on investments in our Consolidated Statement of Operations.
 
Non-accrualNon-accrual. We place loans on non-accrual status when principal and interest payments are past due by 90 days or more, or when there is reasonable doubt that we will collect principal or interest. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in our management’s judgment, are likely to remain current. At December 31, 2016, certain investments in ten portfolio companies held by the Company were on non-accrual status with a combined fair value of approximately $60.2 million, or 6.6% of the fair value of our portfolio. At September 30, 2016, certain investments in nine portfolio companies held by the Company were on non-accrual status with a combined fair value of approximately $55.9 million, or 6.1% of the fair value of our portfolio.
 
Federal Income Taxes
 
The Company has elected and qualified to be treated for U.S. federal income tax purposes as a RIC under subchapter M of the Code, commencing with its first taxable year as a corporation, and it intends to operate in a manner so as to maintain its RIC tax treatment. As a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements. Once qualified as a RIC, the Company must timely distribute to its stockholders at least 90% of the sum of investment company taxable income (“ICTI”) including PIK, as defined by the Code, and net tax exempt interest income (which is the excess of our gross tax exempt interest income over certain disallowed deductions) for each taxable year in order to be eligible for tax treatment under subchapter M of the Code. The Company will be subject to a nondeductible U.S. federal excise tax of 4% on undistributed income if it does not distribute at least 98% of its net ordinary income for any calendar year and 98.2% of its capital gain net income for each one-year period ending on October 31 of such calendar year and any income realized, but not distributed, in preceding years and on which we did not pay federal income tax. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year dividend distributions into the next tax year and pay a 4% excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year dividend distributions for excise tax purposes, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.
 
Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the consolidated financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.
 
Recent Developments
On January 23, 2017, the Company issued a redemption notice relating to its 2019 Notes. The Company will redeem all of the issued and outstanding 2019 Notes ($40,000,000 in aggregate principal amount) in full on February 22, 2017.

On January 31,May 5, 2017, the Company’s Board of Directors declared a quarterly dividend of $0.22$0.16 per share payable on March 24,June 23, 2017, to stockholders of record at the close of business on February 22,May 24, 2017.

On February 9, 2017, the Company issued a notice to reduce the Revolving Facility commitment to $200.0 million from $343.5 million. This reduction will be effective on February 14th.



As of February 9, 2017, the Company sold an additional 1,558,713 of the 2023 Notes at an average price of 25.01 per note, and raised $38.2 million in net proceeds, under the ATM debt distribution agreement.



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 and cash and cash equivalents. Our investment income will be affected by changes in various interest rates, including LIBOR, to the extent our debt investments include floating interest rates. In the future, we expect other loans in our portfolio will have floating rates. We may hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act. For the threesix months ended DecemberMarch 31, 2016,2017, we did not engage in hedging activities.
 
As of DecemberMarch 31, 2016, 84.3%2017, 83.4% of our income-bearing investment portfolio bore interest based on floating rates. The composition of our floating rate debt investments by cash interest rate floor as of DecemberMarch 31, 20162017 was as follows (dollars in thousands):
  
December 31, 2016March 31, 2017
Fair Value 
% of Floating
Rate Portfolio
Fair Value 
% of Floating
Rate Portfolio
Under 1%$141,297
 22.0%$97,934
 15.3%
1% to under 2%475,968
 69.9
491,085
 76.9
2% to under 3%35,632
 5.5
35,632
 5.6
3%15,848
 2.6
14,096
 2.2
Total$668,745
 100.0%$638,747
 100.0%
 
Based on our Consolidated Statement of Assets and Liabilities as of DecemberMarch 31, 2016,2017, the following table (dollars in thousands) shows the approximate increase/(decrease) in components of net assets resulting from operations of hypothetical base rate changes in interest rates, assuming no changes in our investment and capital structure. 
  
Basis point increase(1)
Interest Income Interest Expense 
Net Increase/
(Decrease)
 Interest Income Interest Expense Net Increase/(Decrease)
100$4,600
 $1,900
 $2,700
 $4,700
 $2,100
 $2,600
20010,600
 3,800
 6,800
 11,100
 4,200
 6,900
30018,400
 5,800
 12,600
 17,600
 6,200
 11,400
40026,100
 7,700
 18,400
 24,000
 8,300
 15,700
50031,700
 9,600
 22,100
 30,400
 10,400
 20,000
 
As of September 30, 2016, 78.7% of our income-bearing investment portfolio bore interest based on floating rates. The composition of our floating rate debt investments by cash interest rate floor as of September 30, 2016 was as follows (dollars in thousands): 
 
 September 30, 2016
 Fair Value 
% of Floating
Rate Portfolio
Under 1%$141,508
 22.1%
1% to under 2%445,742
 69.6
2% to under 3%35,632
 5.6
3%17,033
 2.7
Total$639,915
 100.0%
 
Based on our Consolidated Statement of Assets and Liabilities as of September 30, 2016, the following table (dollars in thousands) shows the approximate increase/(decrease) in components of net assets resulting from operations of hypothetical base rate changes in interest rates, assuming no changes in our investment and capital structure.
 



Basis point increase(1)
 Interest Income Interest Expense 
Net Increase/
(Decrease)
100 $3,900
 $1,900
 $2,000
200 9,700
 3,800
 5,900
300 17,200
 5,600
 11,600
400 24,600
 7,500
 17,100
500 30,100
 9,400
 20,700
 
(1)A hypothetical decline in interest rates would not have a material impact on our financial statements.



Item 4. Controls and Procedures
 
Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of DecemberMarch 31, 2016.2017. The term “disclosure controls and procedures” is defined under Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on the evaluation of our disclosure controls and procedures as of DecemberMarch 31, 2016,2017, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective. It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Changes in Internal Control Over Financial Reporting

There has not been any change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



PART II - Other Information

Item 1. Legal Proceedings
 
From time to time, we are involved in various legal proceedings, lawsuits and claims incidental to the conduct of our business. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us. Except as described below, we are not currently party to any material legal proceedings.
 
MCC Advisors LLC was named as a defendant in a lawsuit on May 29, 2015, by Moshe Barkat and Modern VideoFilm Holdings, LLC (“MVF Holdings”) against MCC, MOF II, MCC Advisors LLC, Deloitte Transactions and Business Analytics LLP A/K/A Deloitte ERG (“Deloitte”), Scott Avila (“Avila”), Charles Sweet, and Modern VideoFilm, Inc. (“MVF”). The lawsuit is pending in the California Superior Court, Los Angeles County, Central District, as Case No. BC 583437. The lawsuit was filed after MCC, as agent for the lender group, exercised remedies following a series of defaults by MVF and MVF Holdings on a secured loan with an outstanding balance at the time in excess of $65 million. The lawsuit sought damages in excess of $100 million. Deloitte and Avila have settled the claims against them in exchange for payment of $1.5 million. Following a separate lawsuit by Mr. Barkat against MVF's D&O insurance carrier, the carrier, Charles Sweet and MVF have settled the claims against them. On June 6, 2016, the court granted the defendants' demurrers on several counts and dismissed Mr. Barkat's claims except with respect to his claim for intentional interference with contract. MCC and the other defendants continue to dispute the remaining allegations and are vigorously defending the lawsuit while pursuing affirmative counterclaims against Mr. Barkat and MVF Holdings. On August 29, 2016, MVF Holdings filed another lawsuit in the California Superior Court, Los Angeles County, Central District, as Case No. BC 631888 (the “Derivative Action”), naming Medley as a defendant, among others. In the Derivative Action, MVF Holdings reasserts substantially the same claims that were previously asserted in each of their three prior complaints. MVF Holdings claims for breach of fiduciary duty and related causes of action have already been dismissed by the California Superior Court on several occasions, most recently, on June 6, 2016, when the Court dismissed those claims with prejudice. Medley and the other defendants believe the outstanding claims for alleged interference with Mr. Barkat's employment contract, and the other causes of action asserted in the Derivative Action are without merit and all defendants intend to continue to assert a vigorous defense.

Item 1A. Risk Factors

In addition to other information set forth in this report, you should carefully consider the “Risk Factors” discussed in our annual report on Form 10-K for the fiscal year ended September 30, 2016, filed with the SEC on December 8, 2016, which could materially affect our business, financial condition and/or operating results. There have been no material changes during the threesix months ended DecemberMarch 31, 20162017 to the risk factors discussed in “Item 1A. Risk Factors” of our annual report on Form 10-K. Additional risks or uncertainties not currently known to us or that we currently deem to be immaterial also may materially affect our business, financial condition and/or operating results.

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

On February 5, 2015, the Company’sour board of directors approved a share repurchase planprogram pursuant to repurchase equity interestswhich we can purchase up to an aggregate amount of $30$30.0 million of our common stock between the period of the approval date and February 5, 2016. On December 4, 2015, the board of directors extended the duration of the share repurchase program through December 31, 2016, and increased the aggregate amount to $50.0 million. On December 7, 2016, the board of directors extended the duration of the share repurchase program through December 31, 2017. Any stock repurchases will be made through the open market at times, and in such amounts, as management deems appropriate. The Company did not repurchase any shares for the threesix months ended DecemberMarch 31, 2016.2017.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures
 
Not applicable. 

Item 5. Other Information

None.

Item 6. Exhibits

3.1Certificate of Incorporation (Incorporated by reference to Exhibit 99.A.3 to the Registrant’s Pre-effective Amendment No. 3 to the Registration Statement on Form N-2, filed on November 22, 2010).

3.2Form of Bylaws (Incorporated by reference to Exhibit 99.B.3 to the Registrant’s Pre-effective Amendment No. 3 to the Registration Statement on Form N-2, filed on November 22, 2010).

4.1Form of Stock Certificate (Incorporated by reference to Exhibit 99.D to the Registrant’s Pre-effective Amendment No. 3 to the Registration Statement on Form N-2, filed on November 22, 2010).

4.2Indenture, dated February 7, 2012, between Medley Capital Corporation and U.S. Bank National Association, as Trustee (Incorporated by reference to Exhibit 99.D.2 to the Registrant’s Pre-Effective Amendment No. 1 to the Registration Statement on Form N-2 (File No. 333-179237), filed on February 13, 2012).



4.3First Supplemental Indenture, dated March 21, 2012, between Medley Capital Corporation and U.S. Bank National Association, as Trustee (Incorporated by reference to Exhibit 99.D.4 to the Registrant’s Post-Effective Amendment No. 2 to the Registrant Statement on Form N-2 (File No. 333-179237), filed on March 21, 2012).

4.4Second Supplemental Indenture, dated March 18, 2013, between Medley Capital Corporation and U.S. Bank National Association, as Trustee (Incorporated by reference to Exhibit 99.D.4 to the Registrant’s Post-Effective Amendment No. 7 to the Registrant Statement on Form N-2 (File No. 333-179237), filed on March 15, 2013).

4.5Statement of Eligibility of Trustee on Form T-1 (Incorporated by reference to Exhibit d.5 to the Registrant’s Registration Statement on Form N-2, filed on March 15, 2013).

10.1Form of Amended and Restated Investment Management Agreement between Registrant and MCC Advisors LLC (Incorporated by reference to Exhibit 99.G to Registrant’s Post-Effective Amendment No. 3 to the Registration Statement on N-2, filed on December 10, 2013).

10.2Letter from MCC Advisors LLC re: Waiver of Base Management Fee and Incentive Fee on Net Investment Income, dated February 8, 2016 (Incorporated by reference to Exhibit 99.K.5 to Registrant’s Pre-Effective Amendment No. 1 to the Registration Statement on Form N-2 (File No. 333-208746), filed on March 25, 2016).

10.3Form of Custody Agreement (Incorporated by reference to Exhibit 99.J to the Registrant’s Pre-effective Amendment No. 3 to the Registration Statement on Form N-2, filed on November 22, 2010).

10.4Form of Administration Agreement (Incorporated by reference to Exhibit 99.K to the Registrant’s Pre-effective Amendment No. 1 to the Registration Statement on Form N-2, filed on June 9, 2010).

10.5Form of Sub-Administration Agreement (Incorporated by reference to Exhibit 99.K.4 to the Registrant’s Pre-effective Amendment No. 3 to the Registration Statement on Form N-2 (File No. 333-166491), filed on November 22, 2010).

10.6Form of Trademark License Agreement (Incorporated by reference to Exhibit 99.K.3 to the Registrant’s Pre-effective Amendment No. 1 to the Registration Statement on Form N-2, filed on June 9, 2010).

10.7Dividend Reinvestment Plan (Incorporated by reference to Exhibit 99.E to the Registrant’s Pre-effective Amendment No. 3 to the Registration Statement on Form N-2, filed on November 22, 2010).

10.8Senior Secured Revolving Credit Agreement among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, dated August 4, 2011 (Incorporated by reference to the Current Report on Form 8-K filed on August 9, 2011).

10.9Guarantee, Pledge and Security Agreement among the Company, the Subsidiary Guarantors party thereto, ING Capital LLC, as Administrative Agent, each Financial Agent and Designated Indebtedness Holder party thereto and ING Capital LLC, as Collateral Agent, dated August 4, 2011 (Incorporated by reference to the Current Report on Form 8-K filed on August 9, 2011).

10.10Amendment No. 1, dated as of August 31, 2012, to the Senior Secured Revolving Credit Agreement dated as of August 4, 2011, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on September 6, 2012).

10.11Amendment No. 2, dated as of December 7, 2012, to the Senior Secured Revolving Credit Agreement dated as of August 4, 2011, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment No. 1 to the Senior Secured Revolving Credit Agreement, dated as of August 31, 2012 (Incorporated by reference to the Current Report on Form 8-K filed on December 13, 2012).

10.12Amendment No. 3, dated as of March 28, 2013, to the Senior Secured Revolving Credit Agreement dated as of August 4, 2011, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1 and 2 to the Senior Secured Revolving Credit Agreement, dated as of August 31, 2012 and December 7, 2012, respectively (Incorporated by reference to the Current Report on Form 8-K filed on April 2, 2013).

10.13Senior Secured Term Loan Credit Agreement, dated as of August 31, 2012, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on September 6, 2012).

10.14Amendment No. 1, dated as of December 7, 2012, to the Senior Secured Term Loan Credit Agreement dated as of August 31, 2012, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on December 13, 2012).

10.15Amendment No. 2, dated as of January 23, 2013, to the Senior Secured Term Loan Credit Agreement dated as of August 31, 2012, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment No. 1 to the


Senior Secured Term Loan Credit Agreement, dated as of January 23, 2013 (Incorporated by reference to the Current Report on Form 8-K filed on January 29, 2013).

10.16Amendment No. 3, dated as of March 28, 2013, to the Senior Secured Term Loan Credit Agreement, dated as of August 31, 2012, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1 and 2 to the Senior Secured Term Loan Credit Agreement, dated as of December 7, 2012 and January 23, 2013, respectively (Incorporated by reference to the Current Report on Form 8-K filed on April 2, 2013).

10.17Amendment No. 4, dated as of May 1, 2013, to the Senior Secured Revolving Credit Agreement, dated as of August 4, 2011, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1, 2 and 3 to the Senior Secured Revolving Credit Agreement, dated as of August 31, 2012, December 7, 2012 and  March 28, 2013, respectively (Incorporated by reference to the Current Report on Form 8-K filed on May 7, 2013).

10.18Amendment No. 4, dated as of May 1, 2013, to the Senior Secured Term Loan Credit Agreement, dated as of August 31, 2012, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1, 2 and 3 to the Senior Secured Term Loan Credit Agreement, dated as of December 7, 2012, January 23, 2013 and March 28, 2013, respectively (Incorporated by reference to the Current Report on Form 8-K filed on May 7, 2013).

10.19Amendment No. 5, dated as of June 2, 2014, to the Senior Secured Revolving Credit Agreement, dated as of August 4, 2011, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1, 2, 3 and 4 to the Senior Secured Revolving Credit Agreement, dated as of August 31, 2012, December 7, 2012, March 28, 2013 and May 1, 2013, respectively (Incorporated by reference to the Current Report on Form 8-K filed on June 3, 2014).

10.20Amendment No. 5, dated as of June 2, 2014, to the Senior Secured Term Loan Credit Agreement, dated as of August 31, 2012, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1, 2, 3 and 4 to the Senior Secured Term Loan Credit Agreement, dated as of December 7, 2012, January 23, 2013, March 28, 2013 and May 1, 2013, respectively (Incorporated by reference to the Current Report on Form 8-K filed on June 3, 2014).

10.21Amendment No. 6, dated as of February 2, 2015, to the Senior Secured Revolving Credit Agreement, dated as of August 4, 2011, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1, 2, 3, 4 and 5 to the Senior Secured Revolving Credit Agreement, dated as of August 31, 2012, December 7, 2012, March 28, 2013, May 1, 2013 and June 2, 2014, respectively (Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on February 9, 2015).

10.22Amendment No. 6 to the Senior Secured Term Loan Credit Agreement, dated as of August 31, 2012, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1, 2, 3, 4 and 5 to the Senior Secured Term Loan Credit Agreement, dated as of December 7, 2012, January 23, 2013, March 28, 2013, May 1, 2013 and June 2, 2014, respectively (Incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed on February 9, 2015).

10.23Amendment No. 1 to Amended and Restated Senior Secured Revolving Credit Agreement, dated as of September 16, 2016, by and among the Company as borrower, MCC Investment Holdings LLC, MCC Investment Holdings Sendero LLC, MCC Investment Holdings RT1 LLC, MCC Investment Holdings Omnivore LLC, MCC Investment Holdings Amvestar, LLC, and MCC Investment Holdings AAR, LLC, as subsidiary guarantors, the Lenders party thereto and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on September 22, 2016).

10.24Amendment No. 1 to Amended and Restated Senior Secured Term Loan Credit Agreement dated as of September 16, 2016, by and among the Company as borrower, MCC Investment Holdings LLC, MCC Investment Holdings Sendero LLC, MCC Investment Holdings RT1 LLC, MCC Investment Holdings Omnivore LLC, MCC Investment Holdings Amvestar, LLC, and MCC Investment Holdings AAR, LLC, as subsidiary guarantors, the Lenders party thereto and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on September 22, 2016).

10.25Incremental Assumption Agreement, dated as of February 10, 2012, made by Credit Suisse AG, Cayman Islands Branch, as Assuming Lender, relating to the Senior Secured Revolving Credit Agreement dated as of August 4, 2011, among Medley Capital Corporation, as Borrower, the Several Lenders and Agents from Time to Time Parties Thereto, and ING Capital LLC, as Administrative Agent and Collateral Agent (Incorporated by reference to the Current Report on Form 8-K filed on February 10, 2012).

10.26Incremental Assumption Agreement dated as of March 30, 2012, made by Onewest Bank, FSB, as Assuming Lender, relating to the Senior Secured Revolving Credit Agreement dated as of August 4, 2011, among Medley Capital Corporation, as Borrower, the Several Lenders and Agents from Time to Time Parties Thereto, and ING Capital LLC, as Administrative Agent and Collateral Agent (Incorporated by reference to the Current Report on Form 8-K filed on April 4, 2012).

10.27Incremental Assumption Agreement dated as of May 3, 2012, made by Doral Bank, as Assuming Lender, relating to the Senior Secured Revolving Credit Agreement dated as of August 4, 2011, among Medley Capital Corporation, as Borrower, the Several Lenders and Agents from Time to Time Parties Thereto, and ING Capital LLC, as Administrative Agent and Collateral Agent (Incorporated by reference to the Current Report on Form 8-K filed on May 3, 2012).



10.28Incremental Assumption Agreement dated as of September 25, 2012, made by Stamford First Bank, a division of the Bank of New Canaan, as Assuming Lender, relating to the Senior Secured Revolving Credit Agreement dated as of August 4, 2011, as amended by Amendment No. 1, dated as of August 31, 2012, among Medley Capital Corporation, as Borrower, the Several Lenders and Agents from Time to Time Parties Thereto, and ING Capital LLC, as Administrative Agent and Collateral Agent (Incorporated by reference to the Current Report on Form 8-K filed on September 28, 2012).

10.29Limited Liability Company Operating Agreement of MCC Senior Loan Strategy JV I LLC, a Delaware Limited Liability Company, dated as of March 27, 2015 (Incorporated by reference to the Current Report on Form 8-K filed on March 30, 2015).

10.30Amended and Restated Senior Secured Revolving Credit Agreement, dated as of July 28, 2015, by and among the Company as borrower, each of the subsidiary guarantors party thereto, the Lenders party thereto and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on July 30, 2015).

10.31Amended and Restated Senior Secured Term Loan Credit Agreement dated as of July 28, 2015, by and among the Company as borrower, each of the subsidiary guarantors party thereto, the Lenders party thereto and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on July 30, 2015).

10.32Amendment No. 2 to Amended and Restated Senior Secured Revolving Credit Agreement, dated as of February 8, 2017, by and among the Company as borrower, MCC Investment Holdings LLC, MCC Investment Holdings Sendero LLC, MCC Investment Holdings RT1 LLC, MCC Investment Holdings Omnivere LLC, MCC Investment Holdings Amvestar, LLC, and MCC Investment Holdings AAR, LLC, as subsidiary guarantors, the Lenders party thereto and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on February 10, 2017).

10.33Amendment No. 2 to Amended and Restated Senior Secured Term Loan Credit Agreement dated as of February 8, 2017, by and among the Company as borrower, MCC Investment Holdings LLC, MCC Investment Holdings Sendero LLC, MCC Investment Holdings RT1 LLC, MCC Investment Holdings Omnivere LLC, MCC Investment Holdings Amvestar, LLC, and MCC Investment Holdings AAR, LLC, as subsidiary guarantors, the Lenders party thereto and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on February 10, 2017).

14.1Code of Business Conduct and Ethics of the Registrant (Incorporated by reference to Exhibit 14.1 to the Registrant’s 10-Q for the period ended June 30, 2011, filed on August 4, 2011).

14.2Code of Business Ethics of MCC Advisors (Incorporated by reference to Exhibit 99.R.2 to the Registrant’s Pre-effective Amendment No. 1 to the Registration Statement on Form N-2, filed on June 9, 2010).

21.1    List of Subsidiaries*

24    Power of attorney (included on the signature page hereto)

31.1Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*

31.2Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*

32.1Certification of Chief Executive Officer and Chief Financial Officer pursuant to section 906 of The Sarbanes-Oxley Act of 2002.*

*    Filed herewith.



SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Dated:Medley Capital Corporation
FebruaryMay 9, 2017 
  
 By/s/ Brook Taube
  Brook Taube
  Chief Executive Officer
  (Principal Executive Officer)
   
 By/s/ Richard T. Allorto, Jr.
  Richard T. Allorto, Jr.
  Chief Financial Officer
  (Principal Accounting and Financial Officer)


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