UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________
FORM 10-Q
_____________________________________________________
(Mark One)
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2024
OR
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to __________
Commission File Number 814-01431
________________________________________________________________________________________________
HPS Corporate Lending Fund
(Exact name of Registrant as specified in its Charter)
________________________________________________________________________________________________
Delaware | 87-6391045 | |||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
40 West 57th Street, 33rd Floor New York, NY | 10019 | |||||||
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (212) 287-6767
________________________________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
None | None | None |
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer | o | Accelerated filer | o | ||||||||
Non-accelerated filer | x | Smaller reporting company | o | ||||||||
Emerging growth company | o |
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 Act). Yes ☐ No ☒
The Registrant’s Common Shares, $0.01 par value per share, outstanding as of August 8, 2024 was 9,940,216, 84,327,899, 38,853,898 and 155,547,132 of Class S, Class I, Class D, and Class F common shares, respectively. Common shares outstanding exclude August 1, 2024 subscriptions since the issuance price is not yet finalized at the date of this filing.
Table of Contents
Page | ||||||||
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about HPS Corporate Lending Fund (together, with its consolidated subsidiaries, the “Company”, “we” or “our”), our current and prospective portfolio investments, our industry, our beliefs and opinions, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:
•our future operating results;
•our business prospects and the prospects of our portfolio companies, including our and their ability to achieve our respective objectives as a result of inflation, increases in borrowing costs and a potential global recession;
•the impact of geo-political conditions, including revolution, insurgency, terrorism or war, including those arising out of the ongoing conflict between Russia and Ukraine and the broader Middle East conflict;
•the impact of the investments that we expect to make;
•our ability to raise sufficient capital to execute our investment strategy;
•our current and expected financing arrangements and investments;
•the adequacy of our cash resources, financing sources and working capital;
•changes in the general interest rate environment, including a sustained elevated interest rate environment, and uncertainty about the Federal Reserve’s intentions regarding interest rates in the upcoming year;
•the timing and amount of cash flows, distributions and dividends, if any, from our portfolio companies;
•our contractual arrangements and relationships with third parties;
•actual and potential conflicts of interest with HPS Advisors, LLC (the “Adviser”) or any of its affiliates;
•the elevated levels of inflation, and its impact on our portfolio companies and on the industries in which we invest;
•the dependence of our future success on the general economy and its effect on the industries in which we may invest;
•the availability of credit and/or our ability to access the capital markets;
•our use of financial leverage;
•the ability of the Adviser to source suitable investments for us and to monitor and administer our investments;
•the ability of the Adviser or its affiliates to attract and retain highly talented professionals;
•our ability to qualify for and maintain our qualification as a regulated investment company and as a business development company (“BDC”);
•the impact on our business of new or amended legislation or regulations;
•currency fluctuations, particularly to the extent that we receive payments denominated in currency other than U.S. dollars;
•the effect of changes to tax legislation and our tax position; and
•the tax status of the enterprises in which we may invest.
Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of any projection or forward-looking statement in this report should not be regarded as a representation by us that our plans and objectives will be achieved. Moreover, we assume no duty and do not undertake to update the forward-looking statements, except as required by applicable law. Because we are an investment company, the forward-looking statements and projections contained in this report are excluded from the safe harbor protection provided by Section 21E of the U.S. Securities Exchange Act of 1934 Act, as amended (the “Exchange Act”).
1
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.
HPS Corporate Lending Fund
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share amounts)
June 30, 2024 | December 31, 2023 | ||||||||||
ASSETS | (Unaudited) | ||||||||||
Investments at fair value | |||||||||||
Non-controlled/non-affiliated investments (amortized cost of $10,737,830 and $9,058,649 at June 30, 2024 and December 31, 2023, respectively) | $ | 10,863,483 | $ | 9,145,583 | |||||||
Non-controlled/affiliated investments (amortized cost of $19,524 and $19,639 at June 30, 2024 and December 31, 2023, respectively) | 20,083 | 19,824 | |||||||||
Controlled/affiliated investments (amortized cost of $227,227 and $125,513 at June 30, 2024 and December 31, 2023, respectively) | 238,639 | 124,003 | |||||||||
Total investments at fair value (amortized cost of $10,984,581 and $9,203,801 at June 30, 2024 and December 31, 2023, respectively) | 11,122,205 | 9,289,410 | |||||||||
Cash and cash equivalents | 351,130 | 188,775 | |||||||||
Interest receivable from non-controlled/non-affiliated investments | 103,798 | 91,134 | |||||||||
Dividend receivable from non-controlled/non-affiliated investments | 27 | 83 | |||||||||
Deferred financing costs | 35,095 | 30,825 | |||||||||
Deferred offering costs | 1,589 | 891 | |||||||||
Derivative assets, at fair value (Note 6) | 8,144 | 8,353 | |||||||||
Receivable for investments | 14,016 | 105,138 | |||||||||
Other assets | 19,212 | 811 | |||||||||
Total assets | $ | 11,655,216 | $ | 9,715,420 | |||||||
LIABILITIES | |||||||||||
Debt (net of unamortized debt issuance costs of $57,128 and $11,833 at June 30, 2024 and December 31, 2023, respectively) | $ | 4,220,909 | $ | 4,206,900 | |||||||
Payable for investments purchased | 75,905 | 71,339 | |||||||||
Interest payable | 77,767 | 58,786 | |||||||||
Derivative liabilities, at fair value (Note 6) | 17,901 | 9,104 | |||||||||
Due to affiliates | 10,986 | 12,833 | |||||||||
Distribution payable (Note 9) | 58,234 | 74,907 | |||||||||
Payable for share repurchases (Note 9) | 56,104 | 63,474 | |||||||||
Management fees payable (Note 3) | 7,329 | 5,591 | |||||||||
Income based incentive fees payable (Note 3) | 27,025 | 20,347 | |||||||||
Capital gains incentive fees payable (Note 3) | 13,046 | 3,518 | |||||||||
Distribution and/or shareholder servicing fees payable | 1,955 | 1,524 | |||||||||
Accrued expenses and other liabilities | 795 | 1,733 | |||||||||
Total liabilities | 4,567,956 | 4,530,056 | |||||||||
Commitments and contingencies (Note 8) | |||||||||||
NET ASSETS | |||||||||||
Common Shares, $0.01 par value (277,761,711 and 206,889,570 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively) | 2,778 | 2,069 | |||||||||
Additional paid in capital | 6,903,828 | 5,113,205 | |||||||||
Distributable earnings (loss) | 180,654 | 70,090 | |||||||||
Total net assets | 7,087,260 | 5,185,364 | |||||||||
Total liabilities and net assets | $ | 11,655,216 | $ | 9,715,420 |
The accompanying notes are an integral part of these consolidated financial statements.
2
HPS Corporate Lending Fund
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share amounts)
June 30, 2024 | December 31, 2023 | ||||||||||
NET ASSET VALUE PER SHARE | (Unaudited) | ||||||||||
Class I Shares: | |||||||||||
Net assets | $ | 2,052,817 | $ | 1,314,775 | |||||||
Common Shares outstanding ($0.01 par value, unlimited shares authorized) | 80,453,015 | 52,457,511 | |||||||||
Net asset value per share | $ | 25.52 | $ | 25.06 | |||||||
Class D Shares: | |||||||||||
Net assets | $ | 926,987 | $ | 706,613 | |||||||
Common Shares outstanding ($0.01 par value, unlimited shares authorized) | 36,330,213 | 28,192,719 | |||||||||
Net asset value per share | $ | 25.52 | $ | 25.06 | |||||||
Class F Shares: | |||||||||||
Net assets | $ | 3,878,862 | $ | 3,142,475 | |||||||
Common Shares outstanding ($0.01 par value, unlimited shares authorized) | 152,019,594 | 125,381,461 | |||||||||
Net asset value per share | $ | 25.52 | $ | 25.06 | |||||||
Class S Shares: | |||||||||||
Net assets | $ | 228,594 | $ | 21,501 | |||||||
Common Shares outstanding ($0.01 par value, unlimited shares authorized) | 8,958,889 | 857,879 | |||||||||
Net asset value per share | $ | 25.52 | $ | 25.06 |
The accompanying notes are an integral part of these consolidated financial statements.
3
HPS Corporate Lending Fund
Consolidated Statements of Operations
(in thousands)
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Investment income: | |||||||||||||||||||||||
From non-controlled/non-affiliated investments: | |||||||||||||||||||||||
Interest income | $ | 303,580 | $ | 206,356 | $ | 595,344 | $ | 379,998 | |||||||||||||||
Payment-in-kind interest income | 16,910 | 8,161 | 34,940 | 12,891 | |||||||||||||||||||
Dividend income | 973 | 47 | 1,768 | 47 | |||||||||||||||||||
Other income | 3,170 | 1,241 | 4,264 | 1,645 | |||||||||||||||||||
From controlled/affiliated investments: | |||||||||||||||||||||||
Dividend income | 6,626 | — | 8,445 | — | |||||||||||||||||||
Total investment income | 331,259 | 215,805 | 644,761 | 394,581 | |||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Interest expense | 88,668 | 61,600 | 174,761 | 111,563 | |||||||||||||||||||
Management fees | 21,207 | 12,070 | 39,546 | 23,258 | |||||||||||||||||||
Income based incentive fee | 27,025 | 17,211 | 52,590 | 31,459 | |||||||||||||||||||
Capital gains incentive fee | 3,573 | — | 9,528 | — | |||||||||||||||||||
Distribution and/or shareholder servicing fees | |||||||||||||||||||||||
Class D | 560 | 313 | 1,057 | 588 | |||||||||||||||||||
Class F | 4,724 | 3,055 | 9,033 | 5,890 | |||||||||||||||||||
Class S | 412 | — | 596 | — | |||||||||||||||||||
Professional fees | 843 | 1,285 | 1,599 | 2,204 | |||||||||||||||||||
Board of Trustees’ fees | 151 | 145 | 300 | 286 | |||||||||||||||||||
Administrative service expenses (Note 3) | 847 | 581 | 1,669 | 1,154 | |||||||||||||||||||
Other general & administrative | 2,410 | 2,044 | 4,793 | 3,695 | |||||||||||||||||||
Amortization of continuous offering costs | 363 | 389 | 816 | 754 | |||||||||||||||||||
Total expenses | 150,783 | 98,693 | 296,288 | 180,851 | |||||||||||||||||||
Net investment income before excise tax | 180,476 | 117,112 | 348,473 | 213,730 | |||||||||||||||||||
Excise tax expense | 569 | — | 554 | (5) | |||||||||||||||||||
Net investment income after excise tax | 179,907 | 117,112 | 347,919 | 213,735 | |||||||||||||||||||
Net realized and change in unrealized gain (loss): | |||||||||||||||||||||||
Realized gain (loss): | |||||||||||||||||||||||
Non-controlled/non-affiliated investments | (1,525) | 365 | (11,474) | (10,366) | |||||||||||||||||||
Foreign currency forward contracts | (2,821) | (7,152) | (2,654) | (7,681) | |||||||||||||||||||
Foreign currency transactions | 5,612 | 27 | 9,121 | (142) | |||||||||||||||||||
Net realized gain (loss) | 1,266 | (6,760) | (5,007) | (18,189) | |||||||||||||||||||
Net change in unrealized appreciation (depreciation): | |||||||||||||||||||||||
Non-controlled/non-affiliated investments | 19,374 | 38,117 | 38,719 | 115,990 | |||||||||||||||||||
Non-controlled/affiliated investments | 420 | — | 374 | — | |||||||||||||||||||
Controlled/affiliated investments | 6,234 | — | 12,922 | — | |||||||||||||||||||
Foreign currency forward contracts | 4,754 | 3,409 | 17,248 | 904 | |||||||||||||||||||
Translation of assets and liabilities in foreign currencies | (3,458) | (5,960) | 11,972 | (7,493) | |||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 27,324 | 35,566 | 81,235 | 109,401 | |||||||||||||||||||
Net realized and change in unrealized gain (loss) | 28,590 | 28,806 | 76,228 | 91,212 | |||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 208,497 | $ | 145,918 | $ | 424,147 | $ | 304,947 |
The accompanying notes are an integral part of these consolidated financial statements.
4
HPS Corporate Lending Fund
Consolidated Statements of Changes in Net Assets
(in thousands)
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Increase (decrease) in net assets from operations: | |||||||||||||||||||||||
Net investment income after excise tax | $ | 179,907 | $ | 117,112 | $ | 347,919 | $ | 213,735 | |||||||||||||||
Net realized gain (loss) | 1,266 | (6,760) | (5,007) | (18,189) | |||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 27,324 | 35,566 | 81,235 | 109,401 | |||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 208,497 | 145,918 | 424,147 | 304,947 | |||||||||||||||||||
Distributions to common shareholders: | |||||||||||||||||||||||
Class I | (48,883) | (23,136) | (88,567) | (44,075) | |||||||||||||||||||
Class D | (22,251) | (12,317) | (42,269) | (22,593) | |||||||||||||||||||
Class F | (91,600) | (58,567) | (176,171) | (110,152) | |||||||||||||||||||
Class S | (4,521) | — | (6,575) | — | |||||||||||||||||||
Net decrease in net assets resulting from distributions | (167,255) | (94,020) | (313,582) | (176,820) | |||||||||||||||||||
Share transactions: | |||||||||||||||||||||||
Class I: | |||||||||||||||||||||||
Proceeds from shares sold | 374,949 | 38,749 | 735,047 | 60,642 | |||||||||||||||||||
Share transfers between classes | 1,115 | — | 2,448 | 16,465 | |||||||||||||||||||
Distributions reinvested | 13,283 | 8,064 | 26,809 | 16,590 | |||||||||||||||||||
Repurchased shares, net of early repurchase deduction | (22,768) | (4,144) | (55,979) | (13,336) | |||||||||||||||||||
Net increase (decrease) from share transactions | 366,579 | 42,669 | 708,325 | 80,361 | |||||||||||||||||||
Class D: | |||||||||||||||||||||||
Proceeds from shares sold | 81,825 | 49,495 | 178,322 | 79,895 | |||||||||||||||||||
Share transfers between classes | 13,549 | 5,462 | 16,476 | 5,462 | |||||||||||||||||||
Distributions reinvested | 10,301 | 5,024 | 21,265 | 9,430 | |||||||||||||||||||
Repurchased shares, net of early repurchase deduction | 20 | (25,085) | (10,538) | (25,077) | |||||||||||||||||||
Net increase (decrease) from share transactions | 105,695 | 34,896 | 205,525 | 69,710 | |||||||||||||||||||
Class F: | |||||||||||||||||||||||
Proceeds from shares sold | 229,852 | 158,441 | 657,909 | 258,850 | |||||||||||||||||||
Share transfers between classes | (14,664) | (5,462) | (20,355) | (21,927) | |||||||||||||||||||
Distributions reinvested | 40,181 | 24,055 | 84,121 | 48,579 | |||||||||||||||||||
Repurchased shares, net of early repurchase deduction | (33,361) | (69,371) | (49,118) | (85,956) | |||||||||||||||||||
Net increase (decrease) from share transactions | 222,008 | 107,663 | 672,557 | 199,546 | |||||||||||||||||||
Class S: | |||||||||||||||||||||||
Proceeds from shares sold | 102,658 | — | 201,047 | — | |||||||||||||||||||
Share transfers between classes | — | — | 1,431 | — | |||||||||||||||||||
Distributions reinvested | 1,863 | — | 2,441 | — | |||||||||||||||||||
Repurchased shares, net of early repurchase deduction | 5 | — | 5 | — | |||||||||||||||||||
Net increase (decrease) from share transactions | 104,526 | — | 204,924 | — | |||||||||||||||||||
Total increase (decrease) in net assets | 840,050 | 237,126 | 1,901,896 | 477,744 | |||||||||||||||||||
Net assets, beginning of period | 6,247,210 | 3,695,890 | 5,185,364 | 3,455,272 | |||||||||||||||||||
Net assets, end of period | $ | 7,087,260 | $ | 3,933,016 | $ | 7,087,260 | $ | 3,933,016 |
The accompanying notes are an integral part of these consolidated financial statements.
5
HPS Corporate Lending Fund
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Six Months Ended June 30, | |||||||||||
2024 | 2023 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 424,147 | $ | 304,947 | |||||||
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: | |||||||||||
Net change in unrealized (appreciation) depreciation on investments | (52,015) | (115,990) | |||||||||
Net realized (gain) loss on investments | 11,474 | 10,366 | |||||||||
Net change in unrealized (appreciation) depreciation on foreign currency forward contracts | (17,248) | (904) | |||||||||
Net change in unrealized (appreciation) depreciation on translation of assets and liabilities in foreign currencies | (13,913) | 7,696 | |||||||||
Net accretion of discount and amortization of premium, net | (47,986) | (17,778) | |||||||||
Amortization of deferred financing costs | 4,371 | 2,738 | |||||||||
Amortization of debt issuance costs and original issue discount on notes | 3,247 | 809 | |||||||||
Amortization of offering costs | 816 | 754 | |||||||||
Payment-in-kind interest capitalized | (34,077) | (12,458) | |||||||||
Payment-in-kind dividends capitalized | (954) | — | |||||||||
Purchases of investments | (3,018,927) | (1,539,183) | |||||||||
Proceeds from sale of investments and principal repayments | 1,309,690 | 366,205 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Interest receivable from non-controlled/non-affiliated investments | (12,664) | (5,083) | |||||||||
Dividend receivable from non-controlled/non-affiliated investments | 56 | — | |||||||||
Receivable for investments | 91,122 | (8,945) | |||||||||
Other assets | (18,401) | (556) | |||||||||
Payable for investments purchased | 4,566 | 35,370 | |||||||||
Interest payable | 18,981 | 22,176 | |||||||||
Due to affiliates | (1,847) | 6,491 | |||||||||
Management fees payable | 1,738 | 4,096 | |||||||||
Income based incentive fees payable | 6,678 | 17,211 | |||||||||
Capital gains incentive fees payable | 9,528 | — | |||||||||
Distribution and/or shareholder servicing fees payable | 431 | 1,257 | |||||||||
Accrued expenses and other liabilities | (938) | (783) | |||||||||
Net cash provided by (used in) operating activities | (1,332,125) | (921,564) | |||||||||
Cash flows from financing activities: | |||||||||||
Borrowings on debt | 3,062,601 | 2,253,726 | |||||||||
Repayments of debt | (2,963,128) | (1,456,808) | |||||||||
Deferred financing costs paid | (8,642) | (11,416) | |||||||||
Debt issuance costs paid | (48,543) | (3,646) | |||||||||
Deferred offering costs paid | (1,514) | (1,511) | |||||||||
Proceeds from issuance of Common Shares | 1,772,325 | 399,387 | |||||||||
Common Shares repurchased, net of early repurchase deduction | (123,000) | (35,589) | |||||||||
Distributions paid in cash | (195,619) | (108,992) | |||||||||
Net cash provided by (used in) financing activities | 1,494,480 | 1,035,151 | |||||||||
Net increase (decrease) in cash and cash equivalents | 162,355 | 113,587 | |||||||||
Cash and cash equivalents, beginning of period | 188,775 | 74,241 | |||||||||
Cash and cash equivalents, end of period | $ | 351,130 | $ | 187,828 | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
HPS Corporate Lending Fund
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Six Months Ended June 30, | |||||||||||
2024 | 2023 | ||||||||||
Supplemental information and non-cash activities: | |||||||||||
Interest paid during the period | $ | 148,162 | $ | 89,387 | |||||||
Taxes paid during the period | $ | 1,522 | $ | 819 | |||||||
Distribution payable | $ | 58,234 | $ | 32,319 | |||||||
Share repurchases accrued but not paid | $ | 56,104 | $ | 98,594 | |||||||
Reinvestment of distributions during the period | $ | 134,636 | $ | 74,599 | |||||||
Non-cash purchases of investments | $ | 3,045 | $ | 28,861 | |||||||
Non-cash sales of investments | $ | (3,045) | $ | (28,861) |
The accompanying notes are an integral part of these consolidated financial statements.
7
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Non-Controlled/Non-Affiliated Investments | |||||||||||||||||||||||||||||||||||||||||||||||
First Lien Debt | |||||||||||||||||||||||||||||||||||||||||||||||
Aerospace and Defense | |||||||||||||||||||||||||||||||||||||||||||||||
Arcfield Acquisition Corp (4)(6)(9) | 8/4/2028 | $ | 5,687 | $ | (79) | $ | (107) | ||||||||||||||||||||||||||||||||||||||||
Arcfield Acquisition Corp (4)(9) | SF + | 6.25% | 11.58 | % | 8/3/2029 | 48,637 | 47,884 | 47,627 | |||||||||||||||||||||||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(8) | B + | 5.75% | 10.10 | % | 8/22/2028 | A$ | 3,614 | 2,421 | 2,377 | ||||||||||||||||||||||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(6)(8) | 8/22/2028 | A$ | 5,421 | (83) | (50) | ||||||||||||||||||||||||||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(8) | B + | 5.75% | 10.10 | % | 8/22/2028 | A$ | 41,558 | 27,944 | 27,338 | ||||||||||||||||||||||||||||||||||||||
Cadence - Southwick, Inc. (4)(6)(10) | SF + | 5.00% | 10.42 | % | 5/3/2028 | 17,561 | 7,288 | 7,552 | |||||||||||||||||||||||||||||||||||||||
Cadence - Southwick, Inc. (4)(10) | SF + | 5.00% | 10.44 | % | 5/3/2029 | 41,321 | 40,311 | 41,321 | |||||||||||||||||||||||||||||||||||||||
Cadence - Southwick, Inc. (4)(10) | SF + | 5.00% | 10.44 | % | 5/3/2029 | 3,104 | 3,048 | 3,104 | |||||||||||||||||||||||||||||||||||||||
Fastener Distribution Holdings, LLC (4)(10) | SF + | 6.50% | 11.98 | % | 10/1/2025 | 41,298 | 40,965 | 41,122 | |||||||||||||||||||||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(6)(9) | 1/10/2028 | 6,864 | (133) | — | |||||||||||||||||||||||||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(9) | SF + | 5.00% | 10.33 | % | 1/9/2030 | 37,241 | 36,348 | 37,241 | |||||||||||||||||||||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(9) | SF + | 5.00% | 10.33 | % | 1/9/2030 | 7,840 | 7,705 | 7,840 | |||||||||||||||||||||||||||||||||||||||
WP CPP Holdings, LLC (4)(6)(10) | 11/30/2029 | 26,285 | (593) | (225) | |||||||||||||||||||||||||||||||||||||||||||
WP CPP Holdings, LLC (4)(10) | SF + | 7.50% (incl 4.13% PIK) | 12.85 | % | 11/30/2029 | 190,949 | 186,730 | 189,312 | |||||||||||||||||||||||||||||||||||||||
399,756 | 404,452 | 5.71 | % | ||||||||||||||||||||||||||||||||||||||||||||
Alternative Energy | |||||||||||||||||||||||||||||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(15) | SF + | 7.00% | 12.43 | % | 11/9/2026 | 14,325 | 14,100 | 14,098 | |||||||||||||||||||||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(15) | SF + | 7.00% | 12.43 | % | 11/9/2026 | 1,089 | 1,070 | 1,072 | |||||||||||||||||||||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(15) | SF + | 7.00% | 12.43 | % | 11/9/2026 | 11,816 | 11,595 | 11,628 | |||||||||||||||||||||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(15) | SF + | 7.00% | 12.43 | % | 11/9/2026 | 1,075 | 1,058 | 1,058 | |||||||||||||||||||||||||||||||||||||||
27,823 | 27,856 | 0.39 | % | ||||||||||||||||||||||||||||||||||||||||||||
Asset Based Lending and Fund Finance | |||||||||||||||||||||||||||||||||||||||||||||||
CRSS HPS LLC (4)(5)(10) | SF + | 6.75% | 12.18 | % | 12/21/2026 | 18,402 | 18,099 | 18,118 | |||||||||||||||||||||||||||||||||||||||
18,099 | 18,118 | 0.26 | % | ||||||||||||||||||||||||||||||||||||||||||||
Automobiles and Parts | |||||||||||||||||||||||||||||||||||||||||||||||
Clarios Global LP (7) | SF + | 3.00% | 8.34 | % | 5/6/2030 | 10,723 | 10,673 | 10,762 | |||||||||||||||||||||||||||||||||||||||
Foundation Automotive US Corp (4)(10) | SF + | 7.75% PIK | 13.33 | % | 12/24/2027 | 4,444 | 4,400 | 3,751 | |||||||||||||||||||||||||||||||||||||||
Foundation Automotive Corp (4)(5)(10) | SF + | 7.75% PIK | 13.35 | % | 12/24/2027 | 14,645 | 14,512 | 12,359 | |||||||||||||||||||||||||||||||||||||||
Foundation Automotive US Corp (4)(10) | SF + | 7.75% PIK | 13.35 | % | 12/24/2027 | 24,933 | 24,709 | 21,041 | |||||||||||||||||||||||||||||||||||||||
Oil Changer Holding Corporation (4)(10) | SF + | 6.75% | 12.24 | % | 2/8/2027 | 40,389 | 40,163 | 40,389 | |||||||||||||||||||||||||||||||||||||||
Oil Changer Holding Corporation (4)(10) | SF + | 6.75% | 12.24 | % | 2/8/2027 | 8,479 | 8,433 | 8,479 | |||||||||||||||||||||||||||||||||||||||
102,890 | 96,781 | 1.37 | % | ||||||||||||||||||||||||||||||||||||||||||||
Chemicals | |||||||||||||||||||||||||||||||||||||||||||||||
Lummus Technology Holdings V LLC (7) | SF + | 3.50% | 8.96 | % | 12/31/2029 | 15,073 | 14,878 | 15,149 | |||||||||||||||||||||||||||||||||||||||
14,878 | 15,149 | 0.21 | % | ||||||||||||||||||||||||||||||||||||||||||||
Construction and Materials | |||||||||||||||||||||||||||||||||||||||||||||||
Esdec Solar Group B.V. (4)(5)(6)(8) | 8/30/2028 | € | 17,183 | (342) | (96) | ||||||||||||||||||||||||||||||||||||||||||
Esdec Solar Group B.V. (4)(5)(8) | E + | 6.25% | 10.08 | % | 8/30/2028 | € | 51,162 | 55,048 | 54,510 | ||||||||||||||||||||||||||||||||||||||
Nexus Intermediate III, LLC (4)(9) | SF + | 5.50% | 11.18 | % | 12/6/2027 | 1,058 | 1,047 | 1,055 | |||||||||||||||||||||||||||||||||||||||
55,753 | 55,469 | 0.78 | % | ||||||||||||||||||||||||||||||||||||||||||||
Consumer Services | |||||||||||||||||||||||||||||||||||||||||||||||
Aesthetics Australia Group Pty Ltd (4)(5)(8) | B + | 6.25% | 10.65 | % | 3/21/2028 | A$ | 57,095 | 36,082 | 37,209 | ||||||||||||||||||||||||||||||||||||||
AI Learning (Singapore) PTE. LTD. (4)(5)(12) | SORA + | 8.25% (incl 4.00% PIK) | 11.69 | % | 5/25/2027 | 44,947 | S$ | 32,488 | 32,767 | ||||||||||||||||||||||||||||||||||||||
American Academy Holdings, LLC (4)(17) | SF + | 9.75% (incl 5.25% PIK) | 15.21 | % | 6/30/2027 | 55,337 | 55,337 | 55,330 | |||||||||||||||||||||||||||||||||||||||
Auctane Inc (4)(9) | SF + | 5.75% | 11.18 | % | 10/5/2028 | 24,438 | 24,438 | 24,438 | |||||||||||||||||||||||||||||||||||||||
Club Car Wash Operating, LLC (4)(6)(10) | SF + | 6.00% | 11.48 | % | 6/16/2027 | 39,238 | 24,673 | 25,261 | |||||||||||||||||||||||||||||||||||||||
Club Car Wash Operating, LLC (4)(10) | SF + | 6.00% | 11.48 | % | 6/16/2027 | 12,441 | 12,279 | 12,441 |
8
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Club Car Wash Operating, LLC (4)(10) | SF + | 6.00% | 11.48 | % | 6/16/2027 | 25,457 | 25,236 | 25,457 | |||||||||||||||||||||||||||||||||||||||
Express Wash Concepts, LLC (4)(10) | SF + | 6.00% | 11.44 | % | 4/30/2027 | 46,989 | 46,719 | 47,144 | |||||||||||||||||||||||||||||||||||||||
Express Wash Concepts, LLC (4)(10) | SF + | 6.00% | 11.44 | % | 4/30/2027 | 26,393 | 26,237 | 26,479 | |||||||||||||||||||||||||||||||||||||||
Grant Thornton LLP (7) | SF + | 3.25% | 8.60 | % | 6/2/2031 | 3,750 | 3,750 | 3,765 | |||||||||||||||||||||||||||||||||||||||
Houghton Mifflin Harcourt Company (8) | SF + | 5.25% | 10.70 | % | 4/9/2029 | 25,123 | 24,582 | 23,971 | |||||||||||||||||||||||||||||||||||||||
IXM Holdings, Inc. (4)(11) | SF + | 6.50% | 11.83 | % | 12/14/2029 | 18,519 | 18,266 | 18,704 | |||||||||||||||||||||||||||||||||||||||
IXM Holdings, Inc. (4)(6)(11) | 12/14/2029 | 1,638 | (23) | 16 | |||||||||||||||||||||||||||||||||||||||||||
IXM Holdings, Inc. (4)(6)(11) | SF + | 6.50% | 11.84 | % | 12/14/2029 | 2,184 | 1,303 | 1,332 | |||||||||||||||||||||||||||||||||||||||
KUEHG Corp. (8) | SF + | 4.50% | 9.83 | % | 6/12/2030 | 3,827 | 3,818 | 3,846 | |||||||||||||||||||||||||||||||||||||||
Learning Care Group, Inc. (8) | SF + | 4.00% | 9.34 | % | 8/11/2028 | 1,985 | 1,960 | 2,001 | |||||||||||||||||||||||||||||||||||||||
Mckissock Investment Holdings, LLC (9) | SF + | 5.00% | 10.48 | % | 3/12/2029 | 46,566 | 45,533 | 46,804 | |||||||||||||||||||||||||||||||||||||||
Mckissock Investment Holdings, LLC (9) | SF + | 5.00% | 10.48 | % | 3/12/2029 | 12,454 | 12,366 | 12,517 | |||||||||||||||||||||||||||||||||||||||
Polyconcept North America Holdings, Inc. (9) | SF + | 5.50% | 10.83 | % | 5/18/2029 | 22,892 | 22,557 | 22,452 | |||||||||||||||||||||||||||||||||||||||
Spotless Brands, LLC (4)(10) | SF + | 6.50% | 11.97 | % | 7/25/2028 | 21,484 | 21,189 | 21,610 | |||||||||||||||||||||||||||||||||||||||
Spotless Brands, LLC (4)(10) | SF + | 6.50% | 11.97 | % | 7/25/2028 | 15,942 | 15,724 | 16,036 | |||||||||||||||||||||||||||||||||||||||
Spotless Brands, LLC (4)(10) | SF + | 6.50% | 11.97 | % | 7/25/2028 | 105,065 | 103,595 | 105,682 | |||||||||||||||||||||||||||||||||||||||
Spotless Brands, LLC (4)(6)(10) | SF + | 6.50% | 11.93 | % | 7/25/2028 | 5,175 | 2,001 | 2,070 | |||||||||||||||||||||||||||||||||||||||
Thrasio LLC (4)(10) | SF + | 10.00% PIK | 15.45 | % | 6/18/2029 | 344 | 342 | 344 | |||||||||||||||||||||||||||||||||||||||
Thrasio LLC (4)(7)(18) | SF + | 10.00% PIK | 6/18/2029 | 1,055 | 1,029 | 833 | |||||||||||||||||||||||||||||||||||||||||
TruGreen Limited Partnership (9) | SF + | 4.00% | 9.44 | % | 11/2/2027 | 8,531 | 8,456 | 8,241 | |||||||||||||||||||||||||||||||||||||||
WMB Holdings Inc (8) | SF + | 2.75% | 8.09 | % | 11/2/2029 | 1,673 | 1,634 | 1,681 | |||||||||||||||||||||||||||||||||||||||
Zips Car Wash, LLC (4)(10) | SF + | 7.25% (incl 1.50% PIK) | 12.69 | % | 12/31/2024 | 26,098 | 26,098 | 25,632 | |||||||||||||||||||||||||||||||||||||||
Zips Car Wash, LLC (4)(10) | SF + | 7.25% (incl 1.50% PIK) | 12.69 | % | 12/31/2024 | 15,375 | 15,373 | 15,101 | |||||||||||||||||||||||||||||||||||||||
Zips Car Wash, LLC (4)(10) | SF + | 7.25% (incl 1.50% PIK) | 12.69 | % | 12/31/2024 | 987 | 987 | 969 | |||||||||||||||||||||||||||||||||||||||
614,029 | 620,133 | 8.75 | % | ||||||||||||||||||||||||||||||||||||||||||||
Electricity | |||||||||||||||||||||||||||||||||||||||||||||||
Hamilton Projects Acquiror, LLC (8) | SF + | 3.75% | 9.09 | % | 5/31/2031 | 17,149 | 17,106 | 17,280 | |||||||||||||||||||||||||||||||||||||||
IP Operating Portfolio I, LLC (4)(7) | 7.88 | % | 12/31/2029 | 27,428 | 26,954 | 27,428 | |||||||||||||||||||||||||||||||||||||||||
IP Operations II Investco, LLC (4)(6)(15) | SF + | 5.50% | 10.84 | % | 6/26/2029 | 26,547 | 8,320 | 8,322 | |||||||||||||||||||||||||||||||||||||||
IP Operations II Investco, LLC (4)(6)(15) | SF + | 5.50% | 10.84 | % | 12/31/2025 | 38,338 | 6,756 | 6,761 | |||||||||||||||||||||||||||||||||||||||
Sunzia UpperCo LLC (4)(16) | SF + | 5.00% | 10.33 | % | 6/27/2025 | 25,000 | 24,797 | 24,897 | |||||||||||||||||||||||||||||||||||||||
83,933 | 84,688 | 1.19 | % | ||||||||||||||||||||||||||||||||||||||||||||
Electronic and Electrical Equipment | |||||||||||||||||||||||||||||||||||||||||||||||
Brightstar Escrow Corp. (7) | 9.75 | % | 10/15/2025 | 183 | 182 | 185 | |||||||||||||||||||||||||||||||||||||||||
182 | 185 | — | % | ||||||||||||||||||||||||||||||||||||||||||||
Finance and Credit Services | |||||||||||||||||||||||||||||||||||||||||||||||
PCP CW Aggregator Holdings II, L.P. (4)(5)(10) | SF + | 9.25% PIK | 14.73 | % | 2/9/2027 | 20,864 | 20,670 | 20,781 | |||||||||||||||||||||||||||||||||||||||
Yes Energy LLC (4)(10) | SF + | 5.00% | 10.35 | % | 4/21/2028 | 9,975 | 9,830 | 10,038 | |||||||||||||||||||||||||||||||||||||||
Yes Energy LLC (4)(10) | SF + | 5.00% | 10.35 | % | 4/21/2028 | 4,861 | 4,727 | 4,892 | |||||||||||||||||||||||||||||||||||||||
Yes Energy LLC (4)(6)(10) | SF + | 5.00% | 10.34 | % | 4/21/2028 | 4,212 | 202 | 326 | |||||||||||||||||||||||||||||||||||||||
Yes Energy LLC (4)(10) | SF + | 5.00% | 10.35 | % | 4/21/2028 | 25,935 | 25,457 | 26,100 | |||||||||||||||||||||||||||||||||||||||
60,886 | 62,137 | 0.88 | % | ||||||||||||||||||||||||||||||||||||||||||||
Food Producers | |||||||||||||||||||||||||||||||||||||||||||||||
Specialty Ingredients, LLC (4)(6)(9) | SF + | 6.00% | 11.44 | % | 2/12/2029 | 11,279 | 6,607 | 6,767 | |||||||||||||||||||||||||||||||||||||||
Specialty Ingredients, LLC (4)(9) | SF + | 6.00% | 11.44 | % | 2/12/2029 | 89,347 | 88,048 | 89,347 | |||||||||||||||||||||||||||||||||||||||
Sugar PPC Buyer LLC (4)(10) | SF + | 6.00% | 11.33 | % | 10/2/2030 | 16,499 | 16,157 | 16,664 | |||||||||||||||||||||||||||||||||||||||
Sugar PPC Buyer LLC (4)(10) | SF + | 6.00% | 11.33 | % | 10/2/2030 | 59,397 | 58,202 | 59,991 | |||||||||||||||||||||||||||||||||||||||
169,014 | 172,769 | 2.44 | % | ||||||||||||||||||||||||||||||||||||||||||||
Gas, Water and Multi-utilities | |||||||||||||||||||||||||||||||||||||||||||||||
Floating Infrastructure Holdings Finance LLC (4)(5)(10) | SF + | 5.75% | 11.18 | % | 8/13/2027 | 42,274 | 41,758 | 42,274 |
9
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Eagle LNG Partners Jacksonville II LLC (4)(7) | 13.50% (incl 6.35% PIK) | 4/26/2029 | 766 | 744 | 744 | ||||||||||||||||||||||||||||||||||||||||||
42,502 | 43,018 | 0.61 | % | ||||||||||||||||||||||||||||||||||||||||||||
General Industrials | |||||||||||||||||||||||||||||||||||||||||||||||
BP Purchaser, LLC (4)(9) | SF + | 5.50% | 11.11 | % | 12/11/2028 | 27,373 | 27,010 | 25,840 | |||||||||||||||||||||||||||||||||||||||
Bright Light Buyer, Inc. (4)(10) | SF + | 6.00% | 11.33 | % | 11/8/2029 | 74,625 | 72,959 | 74,732 | |||||||||||||||||||||||||||||||||||||||
Capripack Debtco PLC (4)(5)(10) | E + | 6.75% (incl 2.50% PIK) | 10.64 | % | 1/3/2030 | € | 13,229 | 13,986 | 13,995 | ||||||||||||||||||||||||||||||||||||||
Capripack Debtco PLC (4)(5)(10) | E + | 6.75% (incl 2.50% PIK) | 10.64 | % | 1/3/2030 | € | 71,210 | 75,289 | 75,332 | ||||||||||||||||||||||||||||||||||||||
Capripack Debtco PLC (4)(5)(6)(10) | 1/3/2030 | € | 29,873 | (1,138) | (392) | ||||||||||||||||||||||||||||||||||||||||||
Capripack Debtco PLC (4)(5)(6)(10) | 1/3/2030 | € | 26,139 | (996) | (343) | ||||||||||||||||||||||||||||||||||||||||||
Cube Industrials Buyer, Inc. (4)(6)(10) | 10/18/2029 | 5,664 | (75) | — | |||||||||||||||||||||||||||||||||||||||||||
Cube Industrials Buyer, Inc. (4)(10) | SF + | 6.00% | 11.33 | % | 10/18/2030 | 48,963 | 48,302 | 49,453 | |||||||||||||||||||||||||||||||||||||||
Formerra, LLC (4)(10) | SF + | 7.25% | 12.74 | % | 11/1/2028 | 4,230 | 4,127 | 4,205 | |||||||||||||||||||||||||||||||||||||||
Formerra, LLC (4)(6)(10) | SF + | 7.25% | 12.69 | % | 11/1/2028 | 12,031 | 3,327 | 3,537 | |||||||||||||||||||||||||||||||||||||||
Formerra, LLC (4)(10) | SF + | 7.25% | 12.73 | % | 11/1/2028 | 105,153 | 102,627 | 104,518 | |||||||||||||||||||||||||||||||||||||||
Marcone Group Inc (4)(13) | SF + | 6.25% | 11.73 | % | 6/23/2028 | 11,892 | 11,811 | 11,504 | |||||||||||||||||||||||||||||||||||||||
Marcone Group Inc (4)(13) | SF + | 6.25% | 11.73 | % | 6/23/2028 | 49,609 | 49,095 | 47,992 | |||||||||||||||||||||||||||||||||||||||
Marcone Group Inc (4)(13) | SF + | 6.25% | 11.73 | % | 6/23/2028 | 4,373 | 4,343 | 4,230 | |||||||||||||||||||||||||||||||||||||||
Marcone Group Inc (4)(13) | SF + | 6.25% | 11.73 | % | 6/23/2028 | 13,160 | 13,071 | 12,731 | |||||||||||||||||||||||||||||||||||||||
TMC Buyer Inc (8) | SF + | 6.00% | 11.33 | % | 6/30/2028 | 69,797 | 63,296 | 69,797 | |||||||||||||||||||||||||||||||||||||||
487,034 | 497,131 | 7.01 | % | ||||||||||||||||||||||||||||||||||||||||||||
Health Care Providers | |||||||||||||||||||||||||||||||||||||||||||||||
123Dentist Inc (4)(5)(6)(9) | 8/10/2029 | C$ | 1,941 | (29) | — | ||||||||||||||||||||||||||||||||||||||||||
123Dentist Inc (4)(5)(9) | C + | 5.50% | 10.27 | % | 8/10/2029 | C$ | 55,115 | 42,129 | 40,280 | ||||||||||||||||||||||||||||||||||||||
Aspen Dental Management Inc. (ADMI Corp) (8) | SF + | 3.75% | 9.21 | % | 12/23/2027 | 3,319 | 3,253 | 3,259 | |||||||||||||||||||||||||||||||||||||||
Aspen Dental Management Inc. (ADMI Corp) (7) | SF + | 5.75% | 11.09 | % | 12/23/2027 | 858 | 866 | 865 | |||||||||||||||||||||||||||||||||||||||
Accelerated Health Systems LLC (8) | SF + | 4.25% | 9.73 | % | 2/15/2029 | 7,911 | 7,896 | 6,598 | |||||||||||||||||||||||||||||||||||||||
ATI Holdings Acquisition, Inc. (4)(5)(10) | SF + | 7.25% | 12.73 | % | 2/24/2028 | 41,092 | 40,585 | 40,365 | |||||||||||||||||||||||||||||||||||||||
Baart Programs, Inc. (4)(10) | SF + | 5.00% | 10.60 | % | 6/11/2027 | 10,071 | 10,013 | 9,695 | |||||||||||||||||||||||||||||||||||||||
Charlotte Buyer Inc (8) | SF + | 5.25% | 10.58 | % | 2/11/2028 | 23,814 | 22,766 | 23,906 | |||||||||||||||||||||||||||||||||||||||
ERC Topco Holdings, LLC (4)(6)(7)(18) | SF + | 6.25% (incl 3.25% PIK) | 11/10/2027 | 1,000 | 738 | 425 | |||||||||||||||||||||||||||||||||||||||||
ERC Topco Holdings, LLC (4)(7)(18) | SF + | 6.25% (incl 3.25% PIK) | 11/10/2028 | 25,291 | 24,420 | 16,252 | |||||||||||||||||||||||||||||||||||||||||
ERC Topco Holdings, LLC (4)(7)(18) | SF + | 6.25% PIK | 11/10/2028 | 417 | 417 | 268 | |||||||||||||||||||||||||||||||||||||||||
ERC Topco Holdings, LLC (4)(7)(18) | SF + | 6.25% PIK | 11/10/2028 | 11 | 11 | 7 | |||||||||||||||||||||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(6)(9) | 2/13/2031 | 54,046 | (1,052) | 360 | |||||||||||||||||||||||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(6)(9) | 2/13/2031 | 32,427 | (955) | 216 | |||||||||||||||||||||||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(6)(13) | P + | 5.00% | 13.50 | % | 2/13/2031 | 13,909 | 2,797 | 3,060 | |||||||||||||||||||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(9) | SF + | 6.00% | 11.33 | % | 2/13/2031 | 155,694 | 153,320 | 156,731 | |||||||||||||||||||||||||||||||||||||||
Medline Borrower LP (8) | SF + | 2.75% | 8.09 | % | 10/23/2028 | 15,135 | 15,021 | 15,183 | |||||||||||||||||||||||||||||||||||||||
MPH Acquisition Holdings LLC (8) | SF + | 4.25% | 9.86 | % | 9/1/2028 | 4,563 | 4,479 | 3,810 | |||||||||||||||||||||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(10) | SF + | 6.25% | 11.58 | % | 6/3/2030 | 30,015 | 29,253 | 30,315 | |||||||||||||||||||||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(10) | SF + | 6.25% | 11.58 | % | 6/3/2030 | 10,005 | 9,751 | 10,105 | |||||||||||||||||||||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(6)(10) | 6/1/2029 | 4,032 | (99) | — | |||||||||||||||||||||||||||||||||||||||||||
Phoenix Newco Inc (8) | SF + | 3.25% | 8.71 | % | 11/15/2028 | 17,478 | 17,390 | 17,535 | |||||||||||||||||||||||||||||||||||||||
Pinnacle Fertility, Inc. (4)(9) | SF + | 5.00% | 10.59 | % | 3/14/2028 | 9,211 | 9,104 | 9,211 | |||||||||||||||||||||||||||||||||||||||
Pinnacle Fertility, Inc. (4)(9) | SF + | 5.00% | 10.51 | % | 3/14/2028 | 26,881 | 26,537 | 26,881 | |||||||||||||||||||||||||||||||||||||||
PPV Intermediate Holdings, LLC (4)(9) | SF + | 5.75% | 11.10 | % | 8/31/2029 | 108,193 | 106,711 | 108,193 | |||||||||||||||||||||||||||||||||||||||
PPV Intermediate Holdings, LLC (4)(6)(9) | 8/31/2029 | 8,145 | (120) | — |
10
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
PTSH Intermediate Holdings, LLC (4)(9) | SF + | 5.50% | 10.98 | % | 12/17/2027 | 3,921 | 3,870 | 3,918 | |||||||||||||||||||||||||||||||||||||||
PTSH Intermediate Holdings, LLC (4)(9) | SF + | 5.50% | 10.98 | % | 12/17/2027 | 20,574 | 20,324 | 20,559 | |||||||||||||||||||||||||||||||||||||||
Tenet Healthcare Corp (5)(7) | 5.13 | % | 11/1/2027 | 2,695 | 2,720 | 2,640 | |||||||||||||||||||||||||||||||||||||||||
Tivity Health Inc (4)(9) | SF + | 6.00% | 11.34 | % | 6/28/2029 | 110,590 | 108,596 | 110,590 | |||||||||||||||||||||||||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(6)(9) | SF + | 5.75% | 11.08 | % | 7/17/2028 | 50,016 | 31,911 | 31,359 | |||||||||||||||||||||||||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(9) | SF + | 5.75% | 11.08 | % | 7/17/2028 | 26,414 | 26,061 | 25,736 | |||||||||||||||||||||||||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(9) | SF + | 5.75% | 11.07 | % | 7/17/2028 | 43,070 | 42,468 | 41,966 | |||||||||||||||||||||||||||||||||||||||
WCAS XIV Primary Care Investors, L.P. (4)(10) | SF + | 6.25% | 11.58 | % | 12/31/2032 | 56,433 | 55,339 | 56,142 | |||||||||||||||||||||||||||||||||||||||
WCAS XIV Primary Care Investors, L.P. (4)(10) | SF + | 6.25% | 11.59 | % | 12/31/2032 | 8,342 | 8,175 | 8,299 | |||||||||||||||||||||||||||||||||||||||
WCAS XIII Primary Care Investors, L.P. (4)(10) | SF + | 6.25% | 11.58 | % | 12/31/2029 | 135,630 | 133,483 | 134,896 | |||||||||||||||||||||||||||||||||||||||
958,149 | 959,625 | 13.54 | % | ||||||||||||||||||||||||||||||||||||||||||||
Household Goods and Home Construction | |||||||||||||||||||||||||||||||||||||||||||||||
LHS Borrower LLC (8) | SF + | 4.75% | 10.19 | % | 2/16/2029 | 6,912 | 6,865 | 6,559 | |||||||||||||||||||||||||||||||||||||||
Sunset Debt Merger Sub, Inc. (9) | SF + | 4.00% | 9.46 | % | 10/6/2028 | 704 | 616 | 604 | |||||||||||||||||||||||||||||||||||||||
7,481 | 7,163 | 0.10 | % | ||||||||||||||||||||||||||||||||||||||||||||
Industrial Engineering | |||||||||||||||||||||||||||||||||||||||||||||||
LSF12 Donnelly Bidco, LLC (4)(10) | SF + | 6.50% | 11.84 | % | 10/2/2029 | 19,778 | 19,345 | 19,976 | |||||||||||||||||||||||||||||||||||||||
Radwell Parent, LLC (4)(6)(9) | SF + | 5.50% | 10.83 | % | 4/3/2028 | 13,271 | 2,863 | 3,097 | |||||||||||||||||||||||||||||||||||||||
Radwell Parent, LLC (4)(9) | SF + | 5.50% | 10.83 | % | 4/2/2029 | 153,047 | 149,574 | 153,046 | |||||||||||||||||||||||||||||||||||||||
Roper Industrial Products Investment Co (8) | SF + | 3.25% | 8.58 | % | 11/22/2029 | 17,227 | 16,742 | 17,317 | |||||||||||||||||||||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) | E + | 6.50% | 10.29 | % | 12/1/2027 | € | 4,758 | 4,954 | 4,936 | ||||||||||||||||||||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(6)(9) | SF + | 6.50% | 12.00 | % | 12/1/2027 | 1,000 | 914 | 898 | |||||||||||||||||||||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) | SF + | 6.50% | 12.00 | % | 12/1/2027 | 12,081 | 11,925 | 11,727 | |||||||||||||||||||||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) | E + | 6.50% | 10.29 | % | 12/1/2027 | € | 8,380 | 9,351 | 8,693 | ||||||||||||||||||||||||||||||||||||||
TK Elevator US Newco Inc (5)(8) | SF + | 3.50% | 8.79 | % | 4/30/2030 | 12,510 | 12,362 | 12,590 | |||||||||||||||||||||||||||||||||||||||
Wec US Holdings Ltd (7) | SF + | 2.75% | 8.09 | % | 1/27/2031 | 10,000 | 9,926 | 10,021 | |||||||||||||||||||||||||||||||||||||||
237,956 | 242,301 | 3.42 | % | ||||||||||||||||||||||||||||||||||||||||||||
Industrial Metals and Mining | |||||||||||||||||||||||||||||||||||||||||||||||
BLY US Holdings Inc. (4)(5)(10) | SF + | 6.00% | 11.33 | % | 4/10/2029 | 61,908 | 60,413 | 60,429 | |||||||||||||||||||||||||||||||||||||||
60,413 | 60,429 | 0.85 | % | ||||||||||||||||||||||||||||||||||||||||||||
Industrial Support Services | |||||||||||||||||||||||||||||||||||||||||||||||
Acuris Finance US, Inc (8) | SF + | 4.00% | 9.48 | % | 2/16/2028 | 13,500 | 13,419 | 13,520 | |||||||||||||||||||||||||||||||||||||||
AI Circle Bidco Limited (4)(5)(6)(10) | 2/8/2031 | € | 6,374 | (267) | (124) | ||||||||||||||||||||||||||||||||||||||||||
AI Circle Bidco Limited (4)(5)(10) | E + | 6.75% | 10.66 | % | 2/8/2031 | € | 44,620 | 46,259 | 46,918 | ||||||||||||||||||||||||||||||||||||||
Allied Universal Holdco LLC (8) | SF + | 3.75% | 9.19 | % | 5/12/2028 | 2,986 | 2,979 | 2,978 | |||||||||||||||||||||||||||||||||||||||
Argos Health Holdings, Inc. (4)(9) | SF + | 5.75% | 11.07 | % | 12/6/2027 | 650 | 642 | 612 | |||||||||||||||||||||||||||||||||||||||
Atlas Intermediate III, L.L.C. (4)(10) | SF + | 8.25% (incl 4.00% PIK) | 13.58 | % | 10/31/2029 | 114,369 | 111,879 | 113,388 | |||||||||||||||||||||||||||||||||||||||
Atlas Intermediate III, L.L.C. (4)(6)(10) | 10/31/2029 | 13,445 | (299) | (115) | |||||||||||||||||||||||||||||||||||||||||||
Becklar, LLC (4)(10) | SF + | 6.85% | 12.29 | % | 12/21/2026 | 976 | 966 | 971 | |||||||||||||||||||||||||||||||||||||||
Becklar, LLC (4)(10) | SF + | 6.85% | 12.29 | % | 12/21/2026 | 5,667 | 5,600 | 5,634 | |||||||||||||||||||||||||||||||||||||||
Captive Resources Midco LLC (4)(6)(9) | 7/3/2028 | 7,558 | (101) | — | |||||||||||||||||||||||||||||||||||||||||||
Captive Resources Midco LLC (4)(9) | SF + | 5.25% | 10.59 | % | 7/2/2029 | 94,578 | 93,279 | 94,578 | |||||||||||||||||||||||||||||||||||||||
CD&R Madison UK Bidco LTD (4)(5)(6)(7) | SN + | 8.50% (incl 2.00% PIK) | 13.71 | % | 2/28/2030 | £ | 9,976 | 3,756 | 4,171 | ||||||||||||||||||||||||||||||||||||||
CD&R Madison UK Bidco LTD (4)(5)(7) | SN + | 8.50% (incl 2.00% PIK) | 13.72 | % | 2/28/2030 | £ | 45,850 | 53,647 | 58,094 | ||||||||||||||||||||||||||||||||||||||
CD&R Madison UK Bidco LTD (4)(5)(7) | E + | 8.00% (incl 2.00% PIK) | 11.79 | % | 2/28/2030 | € | 22,605 | 23,212 | 24,221 | ||||||||||||||||||||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(6)(9) | 10/1/2029 | 10,736 | (269) | (18) | |||||||||||||||||||||||||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(6)(9) | 10/1/2029 | 11,656 | (262) | (20) |
11
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(9) | SF + | 5.25% | 10.58 | % | 10/1/2029 | 80,685 | 78,935 | 80,546 | |||||||||||||||||||||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(6)(9) | 10/1/2029 | 4,423 | (43) | (8) | |||||||||||||||||||||||||||||||||||||||||||
Eagle 2021 Lower Merger Sub, LLC (4)(9) | SF + | 5.75% | 11.07 | % | 12/6/2027 | 813 | 803 | 765 | |||||||||||||||||||||||||||||||||||||||
Employbridge, LLC (9) | SF + | 4.75% | 10.31 | % | 7/19/2028 | 9,757 | 9,720 | 6,838 | |||||||||||||||||||||||||||||||||||||||
Empower Payments Investor, LLC (4)(6)(9) | 3/12/2031 | 14,426 | (282) | (56) | |||||||||||||||||||||||||||||||||||||||||||
Empower Payments Investor, LLC (4)(6)(9) | 3/12/2030 | 9,704 | (184) | (52) | |||||||||||||||||||||||||||||||||||||||||||
Empower Payments Investor, LLC (4)(9) | SF + | 5.25% | 10.48 | % | 3/12/2031 | 101,946 | 99,996 | 101,554 | |||||||||||||||||||||||||||||||||||||||
Galaxy US Opco Inc. (5)(8) | SF + | 4.75% | 10.08 | % | 4/29/2029 | 25,906 | 25,439 | 21,135 | |||||||||||||||||||||||||||||||||||||||
Guidehouse Inc. (4)(9) | SF + | 5.75% (incl 2.00% PIK) | 11.09 | % | 12/16/2030 | 187,862 | 185,521 | 185,982 | |||||||||||||||||||||||||||||||||||||||
IG Investments Holdings, LLC (4)(6)(9) | 9/22/2027 | 6,836 | (111) | (35) | |||||||||||||||||||||||||||||||||||||||||||
IG Investments Holdings, LLC (4)(9) | SF + | 6.00% | 11.43 | % | 9/22/2028 | 22,164 | 21,934 | 22,160 | |||||||||||||||||||||||||||||||||||||||
IG Investments Holdings, LLC (4)(9) | SF + | 6.00% | 11.43 | % | 9/22/2028 | 1,828 | 1,816 | 1,828 | |||||||||||||||||||||||||||||||||||||||
IG Investments Holdings, LLC (4)(9) | SF + | 6.00% | 11.33 | % | 9/22/2028 | 2,190 | 2,169 | 2,190 | |||||||||||||||||||||||||||||||||||||||
NBG Acquisition Corp. (4)(6)(9) | SF + | 5.25% | 10.73 | % | 11/6/2028 | 2,876 | 2,118 | 2,037 | |||||||||||||||||||||||||||||||||||||||
NBG Acquisition Corp. (4)(9) | SF + | 5.25% | 10.73 | % | 11/6/2028 | 21,227 | 21,125 | 20,491 | |||||||||||||||||||||||||||||||||||||||
PG Polaris BidCo Sarl (5)(7) | SF + | 3.50% | 8.83 | % | 3/26/2031 | 6,977 | 6,960 | 7,032 | |||||||||||||||||||||||||||||||||||||||
Planet US Buyer LLC (7) | SF + | 3.50% | 8.82 | % | 2/7/2031 | 7,500 | 7,482 | 7,557 | |||||||||||||||||||||||||||||||||||||||
Royal Buyer, LLC (4)(6)(9) | SF + | 5.50% | 10.85 | % | 8/31/2028 | 8,972 | 7,555 | 7,689 | |||||||||||||||||||||||||||||||||||||||
Royal Buyer, LLC (4)(6)(9) | 8/31/2028 | 7,000 | (97) | — | |||||||||||||||||||||||||||||||||||||||||||
Royal Buyer, LLC (4)(9) | SF + | 5.50% | 10.85 | % | 8/31/2028 | 44,325 | 43,693 | 44,325 | |||||||||||||||||||||||||||||||||||||||
Royal Buyer, LLC (4)(6)(9) | 8/31/2028 | 23,538 | (226) | — | |||||||||||||||||||||||||||||||||||||||||||
Royal Buyer, LLC (4)(9) | SF + | 5.50% | 10.85 | % | 8/31/2028 | 70,672 | 70,023 | 70,672 | |||||||||||||||||||||||||||||||||||||||
Sedgwick Claims Management Services, Inc. (7) | SF + | 3.75% | 9.09 | % | 6/27/2031 | 19,109 | 18,971 | 19,154 | |||||||||||||||||||||||||||||||||||||||
SimpliSafe Holding Corporation (4)(9) | SF + | 6.25% | 11.59 | % | 5/2/2028 | 15,066 | 14,852 | 15,066 | |||||||||||||||||||||||||||||||||||||||
SimpliSafe Holding Corporation (4)(9) | SF + | 6.25% | 11.59 | % | 5/2/2028 | 118,434 | 116,881 | 118,433 | |||||||||||||||||||||||||||||||||||||||
Soliant Lower Intermediate LLC (7) | SF + | 3.75% | 9.09 | % | 6/20/2031 | 8,249 | 8,167 | 8,249 | |||||||||||||||||||||||||||||||||||||||
Spirit RR Holdings, Inc. (4)(6)(9) | SF + | 5.00% | 10.45 | % | 9/13/2028 | 3,579 | 543 | 596 | |||||||||||||||||||||||||||||||||||||||
Spirit RR Holdings, Inc. (4)(9) | SF + | 5.00% | 10.43 | % | 9/13/2028 | 42,885 | 42,225 | 42,885 | |||||||||||||||||||||||||||||||||||||||
Spirit RR Holdings, Inc. (4)(6)(9) | SF + | 5.00% | 10.40 | % | 9/13/2028 | 5,971 | 2,896 | 2,978 | |||||||||||||||||||||||||||||||||||||||
TruckPro, LLC (4)(12) | SF + | 7.75% | 13.23 | % | 8/16/2028 | 70,179 | 68,441 | 66,995 | |||||||||||||||||||||||||||||||||||||||
Vaco Holdings LLC (9) | SF + | 5.00% | 10.48 | % | 1/21/2029 | 13,170 | 13,126 | 13,099 | |||||||||||||||||||||||||||||||||||||||
W3 TopCo LLC (4)(10) | SF + | 6.50% | 11.83 | % | 3/22/2029 | 89,698 | 86,307 | 87,312 | |||||||||||||||||||||||||||||||||||||||
1,311,195 | 1,322,225 | 18.66 | % | ||||||||||||||||||||||||||||||||||||||||||||
Industrial Transportation | |||||||||||||||||||||||||||||||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(6)(7) | 5/31/2029 | € | 11,245 | (288) | — | ||||||||||||||||||||||||||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(7) | E + | 6.50% | 10.27 | % | 5/31/2029 | € | 8,096 | 8,503 | 8,671 | ||||||||||||||||||||||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(7) | E + | 6.50% | 10.27 | % | 5/31/2029 | € | 22,264 | 23,383 | 23,845 | ||||||||||||||||||||||||||||||||||||||
Truck-Lite Co, LLC (4)(6)(9) | 2/13/2031 | 9,338 | (177) | 11 | |||||||||||||||||||||||||||||||||||||||||||
Truck-Lite Co, LLC (4)(6)(9) | SF + | 5.75% | 11.08 | % | 2/13/2030 | 11,973 | 175 | 389 | |||||||||||||||||||||||||||||||||||||||
Truck-Lite Co, LLC (4)(9) | SF + | 5.75% | 11.07 | % | 2/13/2031 | 86,157 | 84,527 | 86,257 | |||||||||||||||||||||||||||||||||||||||
116,123 | 119,173 | 1.68 | % | ||||||||||||||||||||||||||||||||||||||||||||
Investment Banking and Brokerage Services | |||||||||||||||||||||||||||||||||||||||||||||||
Apex Group Treasury LLC (5)(8) | SF + | 5.00% | 10.32 | % | 7/27/2028 | 6,947 | 6,857 | 6,991 | |||||||||||||||||||||||||||||||||||||||
Ascensus Holdings, Inc. (8) | SF + | 3.50% | 8.96 | % | 8/2/2028 | 7,603 | 7,548 | 7,619 | |||||||||||||||||||||||||||||||||||||||
Baker Tilly Advisory Group, LP (4)(9) | SF + | 5.00% | 10.34 | % | 6/3/2031 | 98,839 | 97,371 | 97,372 | |||||||||||||||||||||||||||||||||||||||
Baker Tilly Advisory Group, LP (4)(6)(9) | 6/3/2031 | 19,768 | (295) | (293) | |||||||||||||||||||||||||||||||||||||||||||
Baker Tilly Advisory Group, LP (4)(6)(9) | 6/3/2030 | 23,539 | (349) | (349) | |||||||||||||||||||||||||||||||||||||||||||
Eisner Advisory Group LLC (8) | SF + | 4.00% | 9.34 | % | 2/28/2031 | 6,032 | 5,975 | 6,099 | |||||||||||||||||||||||||||||||||||||||
More Cowbell II, LLC (4)(6)(9) | 9/3/2030 | 5,484 | (105) | — | |||||||||||||||||||||||||||||||||||||||||||
More Cowbell II, LLC (4)(6)(9) | SF + | 6.00% | 11.33 | % | 9/4/2029 | 7,590 | 3,139 | 3,270 | |||||||||||||||||||||||||||||||||||||||
More Cowbell II, LLC (4)(9) | SF + | 6.00% | 11.09 | % | 9/3/2030 | 50,216 | 49,330 | 50,216 | |||||||||||||||||||||||||||||||||||||||
Osaic Holdings Inc (7) | SF + | 4.00% | 9.34 | % | 8/17/2028 | 12,993 | 12,941 | 13,049 |
12
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Rockefeller Capital Management (4)(8) | SF + | 5.00% | 10.33 | % | 4/4/2031 | 70,000 | 69,318 | 70,422 | |||||||||||||||||||||||||||||||||||||||
Transnetwork LLC (8) | SF + | 5.50% | 10.83 | % | 12/29/2030 | 61,917 | 61,011 | 62,381 | |||||||||||||||||||||||||||||||||||||||
Travelex Issuerco 2 PLC (4)(5)(14) | SN + | 8.00% | 13.21 | % | 9/22/2028 | £ | 22,905 | 27,090 | 29,018 | ||||||||||||||||||||||||||||||||||||||
Violin Finco Guernsey Limited (4)(5)(7) | SN + | 5.50% | 10.70 | % | 6/24/2031 | £ | 93,262 | 117,151 | 116,725 | ||||||||||||||||||||||||||||||||||||||
Violin Finco Guernsey Limited (4)(5)(6)(7) | 6/24/2031 | £ | 6,211 | (79) | (78) | ||||||||||||||||||||||||||||||||||||||||||
456,903 | 462,442 | 6.52 | % | ||||||||||||||||||||||||||||||||||||||||||||
Leisure Goods | |||||||||||||||||||||||||||||||||||||||||||||||
Jam City, Inc. (4)(10) | SF + | 7.00% | 12.60 | % | 9/7/2027 | 1,981 | 1,970 | 2,001 | |||||||||||||||||||||||||||||||||||||||
1,970 | 2,001 | 0.03 | % | ||||||||||||||||||||||||||||||||||||||||||||
Life Insurance | |||||||||||||||||||||||||||||||||||||||||||||||
OneDigital Borrower LLC (7) | SF + | 3.50% | 8.84 | % | 7/2/2031 | 8,870 | 8,826 | 8,859 | |||||||||||||||||||||||||||||||||||||||
8,826 | 8,859 | 0.12 | % | ||||||||||||||||||||||||||||||||||||||||||||
Media | |||||||||||||||||||||||||||||||||||||||||||||||
2080 Media, Inc. (4)(9) | SF + | 5.25% | 10.58 | % | 3/14/2029 | 12,586 | 12,426 | 12,548 | |||||||||||||||||||||||||||||||||||||||
2080 Media, Inc. (4)(6)(9) | 3/14/2028 | 13,795 | (170) | — | |||||||||||||||||||||||||||||||||||||||||||
2080 Media, Inc. (4)(9) | SF + | 5.25% | 10.58 | % | 3/14/2029 | 54,215 | 53,453 | 54,054 | |||||||||||||||||||||||||||||||||||||||
2080 Media, Inc. (4)(6)(9) | 3/14/2029 | 18,859 | (189) | (56) | |||||||||||||||||||||||||||||||||||||||||||
Arc Media Holdings Limited (4)(5)(6)(10) | SF + | 7.25% | 12.74 | % | 10/29/2027 | 2,766 | 1,738 | 1,698 | |||||||||||||||||||||||||||||||||||||||
Arc Media Holdings Limited (4)(5)(10) | SF + | 7.25% | 12.73 | % | 10/29/2027 | 39,914 | 39,239 | 38,664 | |||||||||||||||||||||||||||||||||||||||
Aventine Intermediate LLC (4)(9) | SF + | 6.00% (incl 4.00% PIK) | 11.43 | % | 6/18/2027 | 1,096 | 1,085 | 1,064 | |||||||||||||||||||||||||||||||||||||||
Aventine Intermediate LLC (4)(9) | SF + | 6.00% (incl 4.00% PIK) | 11.43 | % | 6/18/2027 | 19,253 | 19,051 | 18,700 | |||||||||||||||||||||||||||||||||||||||
IEHL US Holdings, Inc. (4)(12) | SF + | 7.00% | 12.33 | % | 10/29/2029 | 6,604 | 6,440 | 6,670 | |||||||||||||||||||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(12) | SN + | 7.40% | 12.64 | % | 10/29/2029 | £ | 15,493 | 18,834 | 19,782 | ||||||||||||||||||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(10) | E + | 7.00% | 10.87 | % | 10/29/2029 | € | 2,540 | 2,731 | 2,747 | ||||||||||||||||||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(10) | E + | 7.00% | 10.87 | % | 10/29/2029 | € | 3,048 | 3,185 | 3,297 | ||||||||||||||||||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(6)(12) | 4/27/2029 | 5,080 | (135) | 51 | |||||||||||||||||||||||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(12) | SF + | 7.00% | 12.33 | % | 10/29/2029 | 30,478 | 29,734 | 30,783 | |||||||||||||||||||||||||||||||||||||||
LOCI Bidco Limited (4)(5)(8) | SF + | 5.25% | 10.54 | % | 5/19/2031 | 12,087 | 11,790 | 11,790 | |||||||||||||||||||||||||||||||||||||||
LOCI Bidco Limited (4)(5)(8) | SN + | 5.25% | 10.48 | % | 5/19/2031 | £ | 73,522 | 91,122 | 90,662 | ||||||||||||||||||||||||||||||||||||||
LOCI Bidco Limited (4)(5)(6)(8) | 5/19/2031 | 46,320 | (1,148) | (1,138) | |||||||||||||||||||||||||||||||||||||||||||
Mav Acquisition Corporation (8) | SF + | 4.75% | 10.20 | % | 7/28/2028 | 15,644 | 15,458 | 15,690 | |||||||||||||||||||||||||||||||||||||||
OneTeam Partners, LLC (4)(9) | SF + | 5.50% | 10.94 | % | 9/14/2029 | 73,875 | 72,749 | 73,875 | |||||||||||||||||||||||||||||||||||||||
Renaissance Financiere (4)(5)(7) | E + | 7.00% | 10.88 | % | 7/26/2028 | € | 34,871 | 35,575 | 37,584 | ||||||||||||||||||||||||||||||||||||||
Renaissance Holding Corp. (8) | SF + | 4.25% | 9.60 | % | 4/5/2030 | 7,940 | 7,790 | 7,944 | |||||||||||||||||||||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(10) | SF + | 6.50% | 11.93 | % | 8/7/2028 | 3,648 | 3,573 | 3,648 | |||||||||||||||||||||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(6)(14) | 8/7/2028 | 4,711 | (105) | — | |||||||||||||||||||||||||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(10) | SF + | 6.25% | 11.68 | % | 8/7/2028 | 4,253 | 4,175 | 4,253 | |||||||||||||||||||||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(10) | SF + | 6.50% | 11.93 | % | 8/7/2028 | 63,352 | 61,932 | 63,352 | |||||||||||||||||||||||||||||||||||||||
490,333 | 497,662 | 7.02 | % | ||||||||||||||||||||||||||||||||||||||||||||
Medical Equipment and Services | |||||||||||||||||||||||||||||||||||||||||||||||
ABB/CON-CISE Optical Group LLC (4)(9) | SF + | 7.50% | 12.99 | % | 2/23/2028 | 21,259 | 20,916 | 19,312 | |||||||||||||||||||||||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10) | SF + | 6.75% (incl 3.38% PIK) | 12.08 | % | 9/30/2030 | 15,472 | 2,507 | 2,956 | |||||||||||||||||||||||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10) | 10/1/2029 | 21,254 | (557) | (29) | |||||||||||||||||||||||||||||||||||||||||||
Bamboo US BidCo LLC (4)(10) | E + | 6.75% (incl 3.38% PIK) | 10.62 | % | 9/30/2030 | € | 62,335 | 64,178 | 66,901 | ||||||||||||||||||||||||||||||||||||||
Bamboo US BidCo LLC (4)(10) | SF + | 6.75% (incl 3.38% PIK) | 12.08 | % | 9/30/2030 | 82,357 | 80,192 | 82,426 | |||||||||||||||||||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(6)(9) | 5/11/2028 | 10,470 | (247) | (11) | |||||||||||||||||||||||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) | SF + | 5.50% | 10.84 | % | 5/11/2028 | 22,743 | 22,441 | 22,743 | |||||||||||||||||||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(6)(9) | SF + | 5.50% | 10.84 | % | 5/11/2028 | 10,875 | 3,663 | 3,806 | |||||||||||||||||||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) | SF + | 5.50% | 10.84 | % | 5/11/2028 | 74,916 | 73,905 | 74,916 |
13
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) | SF + | 5.75% | 11.09 | % | 5/11/2028 | 33,996 | 33,253 | 33,959 | |||||||||||||||||||||||||||||||||||||||
Femur Buyer, Inc. (4)(6)(10) | 9/18/2029 | 13,350 | (316) | (401) | |||||||||||||||||||||||||||||||||||||||||||
Femur Buyer, Inc. (4)(10) | SF + | 8.25% (incl 4.50% PIK) | 13.59 | % | 3/18/2030 | 139,158 | 135,883 | 134,925 | |||||||||||||||||||||||||||||||||||||||
Limpio Bidco GMBH (4)(5)(7) | E + | 5.20% | 9.06 | % | 10/31/2030 | € | 66,556 | 68,671 | 71,281 | ||||||||||||||||||||||||||||||||||||||
PerkinElmer U.S. LLC (4)(10) | SF + | 5.00% | 10.34 | % | 3/13/2029 | 111,503 | 108,335 | 111,242 | |||||||||||||||||||||||||||||||||||||||
PerkinElmer U.S. LLC (4)(10) | SF + | 5.00% | 10.34 | % | 3/13/2029 | 62,276 | 61,170 | 62,130 | |||||||||||||||||||||||||||||||||||||||
PerkinElmer U.S. LLC (4)(6)(10) | 3/13/2029 | 67,165 | (993) | (157) | |||||||||||||||||||||||||||||||||||||||||||
Plasma Buyer LLC (4)(6)(9) | SF + | 6.25% | 11.59 | % | 5/12/2029 | 3,151 | 1,211 | 1,156 | |||||||||||||||||||||||||||||||||||||||
Plasma Buyer LLC (4)(6)(9) | SF + | 5.75% | 11.08 | % | 5/12/2028 | 9,458 | 5,175 | 5,023 | |||||||||||||||||||||||||||||||||||||||
Plasma Buyer LLC (4)(9) | SF + | 5.75% | 11.08 | % | 5/12/2029 | 83,636 | 82,425 | 80,861 | |||||||||||||||||||||||||||||||||||||||
Resonetics, LLC (9) | SF + | 3.75% | 9.08 | % | 6/18/2031 | 48,913 | 48,791 | 49,066 | |||||||||||||||||||||||||||||||||||||||
SDC US Smilepay SPV (4)(7)(18) | P + | 9.75% | 10/27/2025 | 20,751 | 15,612 | 12,202 | |||||||||||||||||||||||||||||||||||||||||
TecoStar Holdings Inc (4)(10) | SF + | 8.50% (incl 4.50% PIK) | 13.80 | % | 7/6/2029 | 122,633 | 120,159 | 124,020 | |||||||||||||||||||||||||||||||||||||||
Zeus Company LLC (4)(6)(9) | 2/28/2031 | 23,088 | (338) | 143 | |||||||||||||||||||||||||||||||||||||||||||
Zeus Company LLC (4)(6)(9) | 2/28/2030 | 21,506 | (304) | — | |||||||||||||||||||||||||||||||||||||||||||
Zeus Company LLC (4)(9) | SF + | 5.50% | 10.83 | % | 2/28/2031 | 124,100 | 122,329 | 124,867 | |||||||||||||||||||||||||||||||||||||||
1,068,061 | 1,083,337 | 15.29 | % | ||||||||||||||||||||||||||||||||||||||||||||
Non-life Insurance | |||||||||||||||||||||||||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(6)(9) | SF + | 6.00% | 11.35 | % | 10/30/2029 | 7,970 | 6,733 | 6,825 | |||||||||||||||||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(9) | SF + | 5.50% | 11.00 | % | 11/1/2029 | 39,450 | 39,213 | 39,450 | |||||||||||||||||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(6)(9) | 11/1/2029 | 467 | — | — | |||||||||||||||||||||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(9) | SF + | 5.50% | 10.98 | % | 11/1/2029 | 14,199 | 14,199 | 14,199 | |||||||||||||||||||||||||||||||||||||||
Acrisure LLC (7) | SF + | 3.25% | 8.59 | % | 11/6/2030 | 17,903 | 17,903 | 17,903 | |||||||||||||||||||||||||||||||||||||||
Alera Group, Inc. (4)(9) | SF + | 5.25% | 10.59 | % | 10/2/2028 | 21,446 | 21,299 | 21,661 | |||||||||||||||||||||||||||||||||||||||
Alera Group, Inc. (4)(9) | SF + | 5.25% | 10.59 | % | 10/2/2028 | 12,334 | 12,327 | 12,458 | |||||||||||||||||||||||||||||||||||||||
Alera Group, Inc. (4)(9) | SF + | 5.25% | 10.59 | % | 10/2/2028 | 43,502 | 43,476 | 43,937 | |||||||||||||||||||||||||||||||||||||||
Alera Group, Inc. (4)(6)(9) | SF + | 5.75% | 11.09 | % | 10/2/2028 | 5,193 | 798 | 898 | |||||||||||||||||||||||||||||||||||||||
Alliant Holdings Intermediate, LLC (8) | SF + | 3.50% | 8.84 | % | 11/6/2030 | 18,744 | 18,630 | 18,812 | |||||||||||||||||||||||||||||||||||||||
AmWINS Group Inc (9) | SF + | 2.25% | 7.71 | % | 2/19/2028 | 7,536 | 7,510 | 7,539 | |||||||||||||||||||||||||||||||||||||||
Amynta Agency Borrower Inc (7) | SF + | 3.75% | 9.09 | % | 2/28/2028 | 20,065 | 19,613 | 20,139 | |||||||||||||||||||||||||||||||||||||||
BroadStreet Partners, Inc. (7) | SF + | 3.25% | 8.59 | % | 6/13/2031 | 9,169 | 9,088 | 9,155 | |||||||||||||||||||||||||||||||||||||||
Galway Borrower LLC (4)(6)(9) | SF + | 5.25% | 10.69 | % | 9/29/2028 | 2,216 | 278 | 304 | |||||||||||||||||||||||||||||||||||||||
Galway Borrower LLC (4)(9) | SF + | 5.25% | 10.68 | % | 9/29/2028 | 60,653 | 60,263 | 60,653 | |||||||||||||||||||||||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(10) | SF + | 5.50% | 10.94 | % | 11/24/2028 | 22,350 | 22,156 | 22,350 | |||||||||||||||||||||||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(10) | SF + | 5.50% | 10.94 | % | 11/24/2028 | 47 | 47 | 47 | |||||||||||||||||||||||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(10) | SF + | 5.50% | 10.94 | % | 11/24/2028 | 9,727 | 9,669 | 9,727 | |||||||||||||||||||||||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(6)(10) | SF + | 4.75% | 10.09 | % | 11/24/2028 | 14,334 | 1,457 | 1,596 | |||||||||||||||||||||||||||||||||||||||
HUB International Ltd (7) | 7.25 | % | 6/15/2030 | 10,517 | 10,517 | 10,787 | |||||||||||||||||||||||||||||||||||||||||
HUB International Ltd (9) | SF + | 3.25% | 8.57 | % | 6/20/2030 | 13,818 | 13,683 | 13,864 | |||||||||||||||||||||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(6)(9) | SF + | 6.00% | 11.35 | % | 8/27/2026 | 5,820 | 2,010 | 2,058 | |||||||||||||||||||||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(9) | SF + | 6.02% | 11.37 | % | 8/27/2026 | 20,592 | 20,398 | 20,592 | |||||||||||||||||||||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(9) | SF + | 6.02% | 11.47 | % | 8/27/2026 | 56,684 | 56,357 | 56,684 | |||||||||||||||||||||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(6)(10) | 8/27/2026 | 472 | (3) | — | |||||||||||||||||||||||||||||||||||||||||||
Jones Deslauriers Insurance Management Inc. (5)(7) | 8.50 | % | 3/15/2030 | 14,487 | 14,468 | 15,161 | |||||||||||||||||||||||||||||||||||||||||
Patriot Growth Insurance Services LLC (4)(9) | SF + | 5.00% | 10.48 | % | 10/16/2028 | 18,138 | 17,883 | 18,138 | |||||||||||||||||||||||||||||||||||||||
Patriot Growth Insurance Services LLC (4)(6)(9) | 10/16/2028 | 822 | (11) | — | |||||||||||||||||||||||||||||||||||||||||||
Patriot Growth Insurance Services LLC (4)(9) | SF + | 5.00% | 10.48 | % | 10/16/2028 | 7,150 | 7,058 | 7,150 | |||||||||||||||||||||||||||||||||||||||
Summit Acquisition Inc. (4)(6)(9) | 5/1/2029 | 6,685 | (162) | — | |||||||||||||||||||||||||||||||||||||||||||
Summit Acquisition Inc. (4)(6)(9) | 5/1/2030 | 10,961 | (299) | 219 | |||||||||||||||||||||||||||||||||||||||||||
Summit Acquisition Inc. (4)(9) | SF + | 6.75% | 12.08 | % | 5/1/2030 | 48,658 | 47,443 | 49,631 | |||||||||||||||||||||||||||||||||||||||
Truist Insurance Holdings LLC (7) | SF + | 3.25% | 8.58 | % | 5/6/2031 | 13,333 | 13,301 | 13,379 |
14
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Trupanion, Inc. (4)(5)(9) | SF + | 5.00% | 10.48 | % | 3/25/2027 | 25,887 | 25,676 | 25,864 | |||||||||||||||||||||||||||||||||||||||
Trupanion, Inc. (4)(5)(6)(9) | 3/25/2027 | 6,576 | (54) | (6) | |||||||||||||||||||||||||||||||||||||||||||
Trupanion, Inc. (4)(5)(9) | SF + | 5.00% | 10.48 | % | 3/25/2027 | 20,528 | 20,350 | 20,509 | |||||||||||||||||||||||||||||||||||||||
USI Inc/NY (7) | SF + | 2.75% | 8.08 | % | 9/27/2030 | 5,955 | 5,942 | 5,963 | |||||||||||||||||||||||||||||||||||||||
559,216 | 567,646 | 8.01 | % | ||||||||||||||||||||||||||||||||||||||||||||
Oil, Gas and Coal | |||||||||||||||||||||||||||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(6)(10) | 12/7/2029 | 6,923 | (148) | 15 | |||||||||||||||||||||||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(6)(10) | P + | 5.00% | 13.50 | % | 12/7/2029 | 6,923 | 1,982 | 2,123 | |||||||||||||||||||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(10) | SF + | 6.00% | 11.34 | % | 12/7/2029 | 45,923 | 44,986 | 46,023 | |||||||||||||||||||||||||||||||||||||||
46,820 | 48,161 | 0.68 | % | ||||||||||||||||||||||||||||||||||||||||||||
Personal Care, Drug and Grocery Stores | |||||||||||||||||||||||||||||||||||||||||||||||
Parfums Holding Company, Inc. (4)(10) | SF + | 5.25% | 10.59 | % | 6/27/2030 | 120,026 | 118,828 | 118,826 | |||||||||||||||||||||||||||||||||||||||
Parfums Holding Company, Inc. (4)(6)(10) | 6/27/2029 | 9,034 | (90) | (90) | |||||||||||||||||||||||||||||||||||||||||||
Puma Buyer LLC (4)(8) | SF + | 5.50% | 10.93 | % | 7/16/2029 | 61,070 | 57,843 | 61,070 | |||||||||||||||||||||||||||||||||||||||
Vermont Aus Pty Ltd (4)(5)(9) | SF + | 5.65% | 10.98 | % | 3/23/2028 | 15,786 | 15,527 | 15,786 | |||||||||||||||||||||||||||||||||||||||
Vermont Aus Pty Ltd (4)(5)(9) | B + | 5.75% | 10.25 | % | 3/23/2028 | A$ | 34,946 | 25,655 | 23,309 | ||||||||||||||||||||||||||||||||||||||
217,763 | 218,901 | 3.09 | % | ||||||||||||||||||||||||||||||||||||||||||||
Personal Goods | |||||||||||||||||||||||||||||||||||||||||||||||
Daphne S.P.A. (4)(5)(6)(7) | 5/23/2028 | € | 3,978 | (106) | (329) | ||||||||||||||||||||||||||||||||||||||||||
Daphne S.P.A. (4)(5)(7) | E + | 6.25% | 10.41 | % | 5/23/2028 | € | 45,354 | 47,765 | 44,819 | ||||||||||||||||||||||||||||||||||||||
Spanx, LLC (4)(6)(9) | 11/18/2027 | 5,000 | (58) | — | |||||||||||||||||||||||||||||||||||||||||||
Spanx, LLC (4)(9) | SF + | 5.25% | 10.69 | % | 11/20/2028 | 29,250 | 28,866 | 29,250 | |||||||||||||||||||||||||||||||||||||||
76,467 | 73,740 | 1.04 | % | ||||||||||||||||||||||||||||||||||||||||||||
Pharmaceuticals and Biotechnology | |||||||||||||||||||||||||||||||||||||||||||||||
Advarra Holdings, Inc. (4)(6)(9) | 8/24/2029 | 6,340 | (91) | — | |||||||||||||||||||||||||||||||||||||||||||
Advarra Holdings, Inc. (4)(9) | SF + | 5.25% | 10.59 | % | 8/24/2029 | 69,108 | 68,195 | 69,108 | |||||||||||||||||||||||||||||||||||||||
CPI Buyer, LLC (4)(9) | SF + | 5.50% | 11.11 | % | 11/1/2028 | 1,337 | 1,327 | 1,337 | |||||||||||||||||||||||||||||||||||||||
CPI Buyer, LLC (4)(6)(9) | 10/30/2026 | 2,115 | (21) | — | |||||||||||||||||||||||||||||||||||||||||||
CPI Buyer, LLC (4)(9) | SF + | 5.50% | 11.11 | % | 11/1/2028 | 24,830 | 24,574 | 24,830 | |||||||||||||||||||||||||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(6)(7) | 10/27/2028 | € | 8,400 | (171) | — | ||||||||||||||||||||||||||||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(7) | E + | 6.50% | 10.22 | % | 10/27/2028 | € | 82,300 | 80,535 | 88,143 | ||||||||||||||||||||||||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(5)(6)(9) | B + | 6.50% | 10.90 | % | 10/30/2028 | A$ | 11,982 | 1,917 | 2,118 | ||||||||||||||||||||||||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(5)(9) | B + | 6.50% | 10.90 | % | 10/30/2028 | A$ | 118,623 | 74,429 | 79,913 | ||||||||||||||||||||||||||||||||||||||
Syneos Health Inc (7) | SF + | 3.75% | 9.08 | % | 9/27/2030 | 9,975 | 9,982 | 9,979 | |||||||||||||||||||||||||||||||||||||||
260,676 | 275,428 | 3.89 | % | ||||||||||||||||||||||||||||||||||||||||||||
Real Estate Investment and Services | |||||||||||||||||||||||||||||||||||||||||||||||
Associations Finance, Inc. (4)(10) | SF + | 6.50% | 12.09 | % | 7/3/2028 | 55,835 | 55,781 | 55,781 | |||||||||||||||||||||||||||||||||||||||
Associations Finance, Inc. (4)(6)(7) | 7/3/2028 | 4,316 | (4) | (4) | |||||||||||||||||||||||||||||||||||||||||||
Associations Finance, Inc. (4)(6)(10) | 7/3/2028 | 3,459 | (3) | (3) | |||||||||||||||||||||||||||||||||||||||||||
55,774 | 55,774 | 0.79 | % | ||||||||||||||||||||||||||||||||||||||||||||
Retailers | |||||||||||||||||||||||||||||||||||||||||||||||
AI Grace Aus Bidco Pty Ltd (4)(5)(9) | E + | 6.50% | 10.28 | % | 12/5/2029 | € | 21,626 | 22,712 | 23,065 | ||||||||||||||||||||||||||||||||||||||
BradyIFS Holdings, LLC (4)(6)(10) | 10/31/2029 | 1,150 | (11) | — | |||||||||||||||||||||||||||||||||||||||||||
BradyIFS Holdings, LLC (4)(6)(10) | SF + | 6.00% | 11.33 | % | 10/31/2029 | 1,492 | 905 | 939 | |||||||||||||||||||||||||||||||||||||||
BradyIFS Holdings, LLC (4)(10) | SF + | 6.00% | 11.33 | % | 10/31/2029 | 13,504 | 13,381 | 13,639 | |||||||||||||||||||||||||||||||||||||||
Johnstone Supply LLC (7) | SF + | 3.00% | 8.33 | % | 6/9/2031 | 3,636 | 3,627 | 3,645 | |||||||||||||||||||||||||||||||||||||||
Knitwell Borrower LLC (4)(10) | SF + | 8.00% | 13.48 | % | 7/28/2027 | 49,460 | 48,318 | 47,825 | |||||||||||||||||||||||||||||||||||||||
Knitwell Borrower LLC (4)(10) | SF + | 8.00% | 13.48 | % | 7/28/2027 | 42,581 | 41,110 | 41,173 | |||||||||||||||||||||||||||||||||||||||
Petsmart LLC (9) | SF + | 3.75% | 9.19 | % | 2/11/2028 | 15,354 | 15,280 | 15,329 | |||||||||||||||||||||||||||||||||||||||
Staples, Inc. (7) | SF + | 5.75% | 11.08 | % | 9/4/2029 | 29,639 | 28,351 | 27,261 | |||||||||||||||||||||||||||||||||||||||
White Cap Buyer, LLC (7) | SF + | 3.25% | 8.59 | % | 10/19/2029 | 10,793 | 10,734 | 10,823 | |||||||||||||||||||||||||||||||||||||||
184,407 | 183,699 | 2.59 | % |
15
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Software and Computer Services | |||||||||||||||||||||||||||||||||||||||||||||||
Armstrong Bidco Limited (4)(5)(7) | SN + | 5.25% | 10.45 | % | 6/28/2029 | £ | 47,995 | 55,932 | 60,676 | ||||||||||||||||||||||||||||||||||||||
Armstrong Bidco Limited (4)(5)(7) | SN + | 5.25% | 10.45 | % | 6/28/2029 | £ | 91,991 | 110,058 | 116,294 | ||||||||||||||||||||||||||||||||||||||
Artisan Bidco, Inc. (4)(10) | SF + | 7.00% | 12.33 | % | 11/7/2029 | 39,800 | 38,912 | 39,834 | |||||||||||||||||||||||||||||||||||||||
Artisan Bidco, Inc. (4)(6)(10) | 11/7/2029 | 6,000 | (134) | — | |||||||||||||||||||||||||||||||||||||||||||
Artisan Bidco, Inc. (4)(10) | E + | 7.00% | 10.83 | % | 11/7/2029 | € | 18,521 | 19,368 | 19,871 | ||||||||||||||||||||||||||||||||||||||
Aurelia Netherlands Midco 2 B.V. (4)(5)(7) | E + | 5.75% | 9.55 | % | 5/22/2031 | € | 46,878 | 49,738 | 49,218 | ||||||||||||||||||||||||||||||||||||||
Avalara, Inc. (4)(6)(13) | 10/19/2028 | 6,324 | (113) | — | |||||||||||||||||||||||||||||||||||||||||||
Avalara, Inc. (4)(9) | SF + | 6.75% | 12.08 | % | 10/19/2028 | 56,918 | 55,875 | 57,345 | |||||||||||||||||||||||||||||||||||||||
Barracuda Networks Inc (8) | SF + | 4.50% | 9.81 | % | 8/15/2029 | 13,792 | 13,489 | 13,786 | |||||||||||||||||||||||||||||||||||||||
Bottomline Technologies, Inc. (4)(6)(9) | 5/15/2028 | 385 | (3) | — | |||||||||||||||||||||||||||||||||||||||||||
Bottomline Technologies, Inc. (4)(9) | SF + | 5.25% | 10.59 | % | 5/14/2029 | 4,535 | 4,502 | 4,535 | |||||||||||||||||||||||||||||||||||||||
Calabrio, Inc. (4)(6)(10) | 4/16/2027 | 2,687 | — | — | |||||||||||||||||||||||||||||||||||||||||||
Calabrio, Inc. (4)(10) | SF + | 7.13% | 12.47 | % | 4/16/2027 | 22,313 | 22,313 | 22,313 | |||||||||||||||||||||||||||||||||||||||
Calabrio, Inc. (4)(10) | SF + | 7.13% | 12.47 | % | 4/16/2027 | 3,273 | 3,217 | 3,273 | |||||||||||||||||||||||||||||||||||||||
Central Parent LLC (7) | SF + | 3.25% | 8.58 | % | 7/6/2029 | 15,000 | 14,967 | 14,827 | |||||||||||||||||||||||||||||||||||||||
Certinia Inc. (4)(6)(10) | 8/3/2029 | 5,449 | (139) | — | |||||||||||||||||||||||||||||||||||||||||||
Certinia Inc. (4)(10) | SF + | 7.25% | 12.58 | % | 8/3/2029 | 40,323 | 39,296 | 40,532 | |||||||||||||||||||||||||||||||||||||||
Cloud Software Group Inc (8) | SF + | 4.00% | 9.33 | % | 3/30/2029 | 13,658 | 12,813 | 13,664 | |||||||||||||||||||||||||||||||||||||||
Cloud Software Group Inc (7) | 6.50 | % | 3/31/2029 | 7,740 | 6,780 | 7,428 | |||||||||||||||||||||||||||||||||||||||||
Coupa Holdings, LLC (4)(6)(9) | 2/27/2030 | 7,123 | (157) | — | |||||||||||||||||||||||||||||||||||||||||||
Coupa Holdings, LLC (4)(6)(9) | 2/27/2029 | 6,211 | (121) | — | |||||||||||||||||||||||||||||||||||||||||||
Coupa Holdings, LLC (4)(9) | SF + | 5.50% | 10.83 | % | 2/27/2030 | 79,777 | 78,263 | 79,777 | |||||||||||||||||||||||||||||||||||||||
Denali Bidco Limited (4)(5)(7) | E + | 5.75% | 9.47 | % | 8/29/2030 | € | 9,441 | 9,816 | 10,128 | ||||||||||||||||||||||||||||||||||||||
Denali Bidco Limited (4)(5)(7) | E + | 5.75% | 9.47 | % | 8/29/2030 | € | 6,742 | 7,177 | 7,233 | ||||||||||||||||||||||||||||||||||||||
Denali Bidco Limited (4)(5)(7) | SN + | 5.75% | 10.95 | % | 8/29/2030 | £ | 23,265 | 28,781 | 29,486 | ||||||||||||||||||||||||||||||||||||||
Denali Bidco Limited (4)(5)(6)(7) | 8/29/2030 | £ | 14,557 | (355) | (357) | ||||||||||||||||||||||||||||||||||||||||||
Denali Bidco Limited (4)(5)(7) | E + | 5.50% | 9.22 | % | 8/29/2030 | € | 15,916 | 16,628 | 16,715 | ||||||||||||||||||||||||||||||||||||||
Elements Finco Limited (4)(5)(6)(7) | 4/29/2031 | £ | 14,938 | (185) | (184) | ||||||||||||||||||||||||||||||||||||||||||
Elements Finco Limited (4)(5)(7) | SF + | 4.75% | 10.09 | % | 4/29/2031 | 10,431 | 10,329 | 10,329 | |||||||||||||||||||||||||||||||||||||||
Elements Finco Limited (4)(5)(7) | SF + | 4.75% | 10.09 | % | 4/29/2031 | 8,681 | 8,597 | 8,597 | |||||||||||||||||||||||||||||||||||||||
Elements Finco Limited (4)(5)(7) | SN + | 5.00% | 10.20 | % | 4/29/2031 | £ | 33,323 | 41,452 | 41,716 | ||||||||||||||||||||||||||||||||||||||
Enverus Holdings Inc (4)(9) | SF + | 5.50% | 10.84 | % | 12/24/2029 | 64,416 | 63,534 | 65,028 | |||||||||||||||||||||||||||||||||||||||
Enverus Holdings Inc (4)(6)(9) | 12/24/2029 | 3,229 | (46) | 31 | |||||||||||||||||||||||||||||||||||||||||||
Enverus Holdings Inc (4)(6)(9) | 12/24/2029 | 4,913 | (67) | — | |||||||||||||||||||||||||||||||||||||||||||
FinThrive Software Intermediate Holdings Inc (8) | SF + | 4.00% | 9.46 | % | 12/18/2028 | 12,904 | 12,721 | 10,565 | |||||||||||||||||||||||||||||||||||||||
GoTo Group Inc (7) | SF + | 4.75% | 10.18 | % | 4/28/2028 | 1,006 | 1,006 | 519 | |||||||||||||||||||||||||||||||||||||||
GovCIO Buyer Company (4)(10) | SF + | 5.00% | 10.32 | % | 8/18/2027 | 8,975 | 8,872 | 8,975 | |||||||||||||||||||||||||||||||||||||||
Huskies Parent, Inc. (4)(6)(9) | SF + | 5.50% | 10.98 | % | 11/3/2027 | 1,000 | 812 | 805 | |||||||||||||||||||||||||||||||||||||||
Huskies Parent, Inc. (4)(9) | SF + | 5.50% | 10.98 | % | 11/3/2028 | 25,026 | 24,708 | 24,496 | |||||||||||||||||||||||||||||||||||||||
IRI Group Holdings, Inc. (4)(9) | SF + | 5.50% (incl 2.00% PIK) | 10.85 | % | 12/1/2028 | 153,010 | 150,967 | 153,010 | |||||||||||||||||||||||||||||||||||||||
IRI Group Holdings, Inc. (4)(6)(9) | SF + | 5.00% | 10.34 | % | 12/1/2027 | 9,023 | 5,761 | 5,883 | |||||||||||||||||||||||||||||||||||||||
LMI Inc/DE (8) | SF + | 3.50% | 8.94 | % | 10/2/2028 | 6,230 | 6,205 | 6,048 | |||||||||||||||||||||||||||||||||||||||
Medallia, Inc. (4)(9) | SF + | 6.50% (incl 4.00% PIK) | 11.93 | % | 10/30/2028 | 78,311 | 78,311 | 76,977 | |||||||||||||||||||||||||||||||||||||||
McAfee Corp (8) | SF + | 3.25% | 8.58 | % | 3/1/2029 | 7,860 | 7,836 | 7,862 | |||||||||||||||||||||||||||||||||||||||
Mitchell International, Inc. (8) | SF + | 3.25% | 8.59 | % | 6/17/2031 | 10,000 | 9,950 | 9,927 | |||||||||||||||||||||||||||||||||||||||
Newfold Digital Holdings Group Inc (9) | SF + | 3.50% | 8.94 | % | 2/10/2028 | 1,784 | 1,776 | 1,662 | |||||||||||||||||||||||||||||||||||||||
New Era Technology, Inc. (4)(10) | SF + | 6.25% | 11.73 | % | 10/31/2026 | 19,111 | 19,111 | 18,905 | |||||||||||||||||||||||||||||||||||||||
OEConnection LLC (9) | SF + | 5.25% | 10.59 | % | 4/22/2031 | 67,627 | 66,969 | 67,119 | |||||||||||||||||||||||||||||||||||||||
OEConnection LLC (6)(9) | 4/22/2031 | 11,741 | (116) | (88) | |||||||||||||||||||||||||||||||||||||||||||
OEConnection LLC (6)(9) | 4/22/2031 | 7,338 | (71) | (115) |
16
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Onesource Virtual, Inc. (4)(10) | SF + | 5.00% | 10.33 | % | 5/28/2030 | 222,850 | 219,559 | 219,558 | |||||||||||||||||||||||||||||||||||||||
Onesource Virtual, Inc. (4)(6)(10) | 5/28/2030 | 25,318 | (374) | (374) | |||||||||||||||||||||||||||||||||||||||||||
Oranje Holdco, Inc. (4)(6)(10) | 2/1/2029 | 4,657 | (89) | (53) | |||||||||||||||||||||||||||||||||||||||||||
Oranje Holdco, Inc. (4)(10) | SF + | 7.50% | 12.83 | % | 2/1/2029 | 33,837 | 33,191 | 33,449 | |||||||||||||||||||||||||||||||||||||||
Oranje Holdco, Inc. (4)(10) | SF + | 7.25% | 12.59 | % | 2/1/2029 | 15,917 | 15,600 | 15,600 | |||||||||||||||||||||||||||||||||||||||
Peraton Inc. (9) | SF + | 3.75% | 9.19 | % | 2/1/2028 | 10,017 | 9,934 | 10,030 | |||||||||||||||||||||||||||||||||||||||
Perforce Software Inc (4)(8) | SF + | 4.50% | 9.84 | % | 7/1/2026 | 19,600 | 19,351 | 19,600 | |||||||||||||||||||||||||||||||||||||||
Ping Identity Holding Corp. (4)(6)(9) | 10/17/2028 | 6,068 | (112) | — | |||||||||||||||||||||||||||||||||||||||||||
Ping Identity Holding Corp. (4)(9) | SF + | 7.00% | 12.34 | % | 10/17/2029 | 59,003 | 57,843 | 60,184 | |||||||||||||||||||||||||||||||||||||||
Prism Parent Co., Inc. (4)(6)(9) | 9/19/2028 | 10,833 | (180) | — | |||||||||||||||||||||||||||||||||||||||||||
Prism Parent Co., Inc. (4)(9) | SF + | 5.00% | 10.34 | % | 9/19/2028 | 42,575 | 41,963 | 42,575 | |||||||||||||||||||||||||||||||||||||||
Project Alpha Intermediate Holding, Inc. (8) | SF + | 3.75% | 9.07 | % | 10/28/2030 | 17,648 | 17,376 | 17,724 | |||||||||||||||||||||||||||||||||||||||
Project Ruby Ultimate Parent Corp (9) | SF + | 3.25% | 8.71 | % | 3/10/2028 | 12,195 | 12,085 | 12,228 | |||||||||||||||||||||||||||||||||||||||
Proofpoint, Inc. (8) | SF + | 3.00% | 8.34 | % | 8/31/2028 | 2,378 | 2,378 | 2,383 | |||||||||||||||||||||||||||||||||||||||
Quail Buyer, Inc. (4)(9) | SF + | 5.50% | 10.93 | % | 10/1/2027 | 7,274 | 7,191 | 7,218 | |||||||||||||||||||||||||||||||||||||||
Quail Buyer, Inc. (4)(9) | SF + | 5.50% | 10.93 | % | 10/1/2027 | 39,838 | 39,257 | 39,530 | |||||||||||||||||||||||||||||||||||||||
Rithum Holdings Inc (4)(9) | SF + | 6.25% | 11.58 | % | 12/29/2027 | 42,383 | 40,295 | 42,185 | |||||||||||||||||||||||||||||||||||||||
Riley MergeCo LLC (4)(6)(10) | 9/23/2027 | 304 | (4) | (3) | |||||||||||||||||||||||||||||||||||||||||||
Riley MergeCo LLC (4)(10) | SF + | 5.50% | 10.96 | % | 9/23/2027 | 1,807 | 1,784 | 1,792 | |||||||||||||||||||||||||||||||||||||||
Smarsh Inc. (4)(6)(9) | SF + | 5.75% | 11.08 | % | 2/16/2029 | 4,286 | 2,082 | 2,143 | |||||||||||||||||||||||||||||||||||||||
Smarsh Inc. (4)(6)(9) | SF + | 5.75% | 11.10 | % | 2/16/2029 | 1,071 | 500 | 514 | |||||||||||||||||||||||||||||||||||||||
Smarsh Inc. (4)(9) | SF + | 5.75% | 11.08 | % | 2/16/2029 | 17,143 | 16,910 | 17,143 | |||||||||||||||||||||||||||||||||||||||
TriMech Acquisition Corp. (4)(6)(14) | P + | 3.75% | 12.25 | % | 3/10/2028 | 3,289 | 1,935 | 1,974 | |||||||||||||||||||||||||||||||||||||||
TriMech Acquisition Corp. (4)(10) | SF + | 4.75% | 10.23 | % | 3/10/2028 | 21,222 | 21,015 | 21,222 | |||||||||||||||||||||||||||||||||||||||
TriMech Acquisition Corp. (4)(10) | SN + | 4.75% | 10.03 | % | 3/10/2028 | £ | 36,070 | 43,719 | 45,599 | ||||||||||||||||||||||||||||||||||||||
UKG Inc (7) | SF + | 3.25% | 8.58 | % | 2/10/2031 | 9,927 | 9,917 | 9,976 | |||||||||||||||||||||||||||||||||||||||
User Zoom Technologies, Inc. (4)(9) | SF + | 7.00% | 12.31 | % | 4/5/2029 | 18,948 | 18,676 | 18,948 | |||||||||||||||||||||||||||||||||||||||
Zelis Payments Buyer, Inc. (7) | SF + | 2.75% | 8.09 | % | 9/28/2029 | 10,966 | 10,915 | 10,976 | |||||||||||||||||||||||||||||||||||||||
Zendesk Inc (4)(6)(9) | 11/22/2028 | 39,321 | (649) | — | |||||||||||||||||||||||||||||||||||||||||||
Zendesk Inc (4)(6)(9) | 11/22/2028 | 17,940 | (263) | — | |||||||||||||||||||||||||||||||||||||||||||
Zendesk Inc (4)(9) | SF + | 6.25% | 11.60 | % | 11/22/2028 | 161,380 | 159,029 | 161,379 | |||||||||||||||||||||||||||||||||||||||
1,906,169 | 1,938,145 | 27.35 | % | ||||||||||||||||||||||||||||||||||||||||||||
Technology Hardware and Equipment | |||||||||||||||||||||||||||||||||||||||||||||||
Altar Bidco Inc (8) | SF + | 3.10% | 7.95 | % | 2/1/2029 | 8,825 | 8,773 | 8,822 | |||||||||||||||||||||||||||||||||||||||
CC WDW Borrower, Inc. (4)(6)(10) | 1/27/2028 | 22,837 | (506) | (1,575) | |||||||||||||||||||||||||||||||||||||||||||
CC WDW Borrower, Inc. (4)(6)(10) | SF + | 6.75% | 12.23 | % | 1/27/2028 | 5,122 | 4,826 | 4,564 | |||||||||||||||||||||||||||||||||||||||
CC WDW Borrower, Inc. (4)(10) | SF + | 6.75% | 12.23 | % | 1/27/2028 | 44,874 | 44,040 | 41,779 | |||||||||||||||||||||||||||||||||||||||
Excelitas Technologies Corp. (4)(9) | SF + | 5.25% | 10.58 | % | 8/13/2029 | 8,233 | 8,109 | 8,233 | |||||||||||||||||||||||||||||||||||||||
Excelitas Technologies Corp. (4)(7) | E + | 5.25% | 8.95 | % | 8/13/2029 | € | 5,503 | 5,563 | 5,894 | ||||||||||||||||||||||||||||||||||||||
Excelitas Technologies Corp. (4)(6)(9) | 8/14/2028 | 3,261 | (45) | — | |||||||||||||||||||||||||||||||||||||||||||
TechInsights Inc (4)(5)(10) | SF + | 7.89% | 13.37 | % | 11/9/2027 | 978 | 965 | 972 | |||||||||||||||||||||||||||||||||||||||
TechInsights Inc (4)(5)(10) | SF + | 7.89% | 13.38 | % | 11/9/2027 | 2,539 | 2,507 | 2,525 | |||||||||||||||||||||||||||||||||||||||
74,232 | 71,214 | 1.00 | % | ||||||||||||||||||||||||||||||||||||||||||||
Telecommunications Equipment | |||||||||||||||||||||||||||||||||||||||||||||||
Delta Topco, Inc. (7) | SF + | 3.50% | 8.85 | % | 11/30/2029 | 18,333 | 18,289 | 18,347 | |||||||||||||||||||||||||||||||||||||||
Guardian US Holdco LLC (8) | SF + | 3.50% | 8.83 | % | 1/31/2030 | 7,920 | 7,791 | 7,881 | |||||||||||||||||||||||||||||||||||||||
Ribbon Communications Operating Company, Inc (4)(5)(10) | SF + | 6.25% | 11.59 | % | 6/21/2029 | 56,260 | 55,141 | 55,140 | |||||||||||||||||||||||||||||||||||||||
Ribbon Communications Operating Company, Inc (4)(5)(6)(10) | 6/21/2029 | 6,365 | (127) | (127) | |||||||||||||||||||||||||||||||||||||||||||
81,094 | 81,241 | 1.15 | % | ||||||||||||||||||||||||||||||||||||||||||||
Telecommunications Service Providers | |||||||||||||||||||||||||||||||||||||||||||||||
Directv Financing, LLC (9) | SF + | 5.00% | 10.46 | % | 8/2/2027 | 7,360 | 7,258 | 7,384 |
17
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Meriplex Communications, LTD (4)(6)(9) | SF + | 5.00% | 10.44 | % | 7/17/2028 | 4,925 | 2,884 | 2,895 | |||||||||||||||||||||||||||||||||||||||
Meriplex Communications, LTD (4)(6)(9) | 7/17/2028 | 1,143 | (12) | (7) | |||||||||||||||||||||||||||||||||||||||||||
Meriplex Communications, LTD (4)(9) | SF + | 5.00% | 10.44 | % | 7/17/2028 | 13,756 | 13,611 | 13,668 | |||||||||||||||||||||||||||||||||||||||
23,741 | 23,940 | 0.34 | % | ||||||||||||||||||||||||||||||||||||||||||||
Travel and Leisure | |||||||||||||||||||||||||||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(6)(7) | SN + | 6.00% | 11.24 | % | 9/8/2028 | £ | 2,437 | 313 | (129) | ||||||||||||||||||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(7) | SN + | 6.00% | 11.25 | % | 9/8/2028 | £ | 7,749 | 10,105 | 8,311 | ||||||||||||||||||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(7) | SN + | 6.00% | 11.25 | % | 9/8/2028 | £ | 4,509 | 5,911 | 4,837 | ||||||||||||||||||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(7) | SN + | 6.00% | 11.29 | % | 9/8/2028 | £ | 4,676 | 6,124 | 5,016 | ||||||||||||||||||||||||||||||||||||||
Fertitta Entertainment LLC/NV (8) | SF + | 3.75% | 9.08 | % | 1/27/2029 | 9,903 | 9,633 | 9,926 | |||||||||||||||||||||||||||||||||||||||
Havila Kystruten Operations AS (4)(5)(17) | E + | 8.75% (incl 2.75% PIK) | 12.63 | % | 7/27/2026 | € | 19,121 | 21,197 | 21,197 | ||||||||||||||||||||||||||||||||||||||
The One Group, LLC (4)(10) | SF + | 6.50% | 11.83 | % | 5/1/2029 | 50,920 | 49,443 | 49,443 | |||||||||||||||||||||||||||||||||||||||
The One Group, LLC (4)(6)(7) | 10/31/2028 | 6,649 | (192) | (192) | |||||||||||||||||||||||||||||||||||||||||||
Travel Leaders Group, LLC (4)(14) | SF + | 8.50% (incl 3.00% PIK) | 13.98 | % | 3/27/2028 | 138,544 | 135,995 | 143,545 | |||||||||||||||||||||||||||||||||||||||
238,529 | 241,954 | 3.41 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total First Lien Debt | $ | 10,519,077 | $ | 10,642,946 | 150.17 | % | |||||||||||||||||||||||||||||||||||||||||
Second Lien Debt | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer Services | |||||||||||||||||||||||||||||||||||||||||||||||
Asurion Corporation (7) | SF + | 5.25% | 10.71 | % | 1/31/2028 | $ | 4,132 | $ | 4,097 | $ | 3,861 | ||||||||||||||||||||||||||||||||||||
4,097 | 3,861 | 0.05 | % | ||||||||||||||||||||||||||||||||||||||||||||
Health Care Providers | |||||||||||||||||||||||||||||||||||||||||||||||
Charlotte Buyer Inc (4)(8) | SF + | 8.25% | 13.58 | % | 8/11/2028 | 10,000 | 9,494 | 9,871 | |||||||||||||||||||||||||||||||||||||||
9,494 | 9,871 | 0.15 | % | ||||||||||||||||||||||||||||||||||||||||||||
Industrial Support Services | |||||||||||||||||||||||||||||||||||||||||||||||
Galaxy US Opco Inc. (4)(5)(8) | SF + | 8.25% | 13.58 | % | 4/29/2030 | 9,000 | 8,827 | 7,268 | |||||||||||||||||||||||||||||||||||||||
8,827 | 7,268 | 0.10 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total Second Lien Debt | $ | 22,418 | $ | 21,000 | 0.30 | % | |||||||||||||||||||||||||||||||||||||||||
Other Secured Debt | |||||||||||||||||||||||||||||||||||||||||||||||
Asset Based Lending and Fund Finance | |||||||||||||||||||||||||||||||||||||||||||||||
TPG VIII Merlin New Holdings I, L.P. (4)(5)(10) | SF + | 6.50% | 11.83 | % | 3/15/2027 | $ | 65,000 | $ | 63,828 | $ | 64,304 | ||||||||||||||||||||||||||||||||||||
Total Other Secured Debt | $ | 63,828 | $ | 64,304 | 0.91 | % | |||||||||||||||||||||||||||||||||||||||||
Unsecured Debt | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer Services | |||||||||||||||||||||||||||||||||||||||||||||||
Wildcat Car Wash Holdings, LLC (4)(7) | 15.00% PIK | 7/16/2029 | $ | 14,410 | $ | 14,410 | $ | 14,410 | |||||||||||||||||||||||||||||||||||||||
14,410 | 14,410 | 0.20 | % | ||||||||||||||||||||||||||||||||||||||||||||
Health Care Providers | |||||||||||||||||||||||||||||||||||||||||||||||
VetCor Group Holdings LLC (4)(7) | 13.75% PIK | 9/3/2030 | 302 | 297 | 285 | ||||||||||||||||||||||||||||||||||||||||||
VetCor Group Holdings LLC (4)(7) | 14.75% PIK | 9/3/2030 | 258 | 252 | 254 | ||||||||||||||||||||||||||||||||||||||||||
VetCor Group Holdings LLC (4)(7) | 13.75% PIK | 9/3/2030 | 957 | 942 | 904 | ||||||||||||||||||||||||||||||||||||||||||
1,491 | 1,443 | 0.02 | % | ||||||||||||||||||||||||||||||||||||||||||||
Medical Equipment and Services | |||||||||||||||||||||||||||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) | 13.13% PIK | 12/28/2032 | 105 | 104 | 98 | ||||||||||||||||||||||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) | 13.13% PIK | 12/28/2032 | 190 | 185 | 178 |
18
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) | 13.13% PIK | 12/28/2032 | 1,115 | 1,100 | 1,044 | ||||||||||||||||||||||||||||||||||||||||||
1,389 | 1,320 | 0.02 | % | ||||||||||||||||||||||||||||||||||||||||||||
Non-life Insurance | |||||||||||||||||||||||||||||||||||||||||||||||
Alliant Holdings Intermediate LLC / Alliant Holdings Co-Issuer (7) | 6.75 | % | 10/15/2027 | 6,255 | 5,818 | 6,175 | |||||||||||||||||||||||||||||||||||||||||
5,818 | 6,175 | 0.09 | % | ||||||||||||||||||||||||||||||||||||||||||||
Real Estate Investment and Services | |||||||||||||||||||||||||||||||||||||||||||||||
Associations Finance, Inc. (4)(7) | 14.25% PIK | 5/3/2030 | 8,322 | 8,282 | 8,281 | ||||||||||||||||||||||||||||||||||||||||||
Associations Finance, Inc. (4)(7) | 14.25% PIK | 5/3/2030 | 3,178 | 3,163 | 3,162 | ||||||||||||||||||||||||||||||||||||||||||
11,445 | 11,443 | 0.16 | % | ||||||||||||||||||||||||||||||||||||||||||||
Software and Computer Services | |||||||||||||||||||||||||||||||||||||||||||||||
Elements Midco 1 Limited (4)(5)(8) | SN + | 8.00% PIK | 13.24 | % | 4/29/2032 | £ | 1,583 | 1,939 | 1,952 | ||||||||||||||||||||||||||||||||||||||
1,939 | 1,952 | 0.03 | % | ||||||||||||||||||||||||||||||||||||||||||||
Telecommunications Service Providers | |||||||||||||||||||||||||||||||||||||||||||||||
CCO Holdings LLC / CCO Holdings Capital Corp (7) | 5.50 | % | 5/1/2026 | 7,000 | 7,057 | 6,937 | |||||||||||||||||||||||||||||||||||||||||
7,057 | 6,937 | 0.10 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total Unsecured Debt | $ | 43,549 | $ | 43,680 | 0.62 | % | |||||||||||||||||||||||||||||||||||||||||
Structured Finance | |||||||||||||||||||||||||||||||||||||||||||||||
Structured Finance Investments | |||||||||||||||||||||||||||||||||||||||||||||||
720 East CLO V Ltd (5)(7) | SF + | 6.30% | 11.63 | % | 7/20/2037 | $ | 4,000 | $ | 4,000 | $ | 4,018 | ||||||||||||||||||||||||||||||||||||
AMMC CLO 21 LTD (5)(7) | SF + | 6.76% | 12.09 | % | 11/2/2030 | 4,126 | 3,699 | 4,114 | |||||||||||||||||||||||||||||||||||||||
ARES CLO Ltd (5)(7) | SF + | 6.70% | 12.02 | % | 4/20/2037 | 5,000 | 5,000 | 5,024 | |||||||||||||||||||||||||||||||||||||||
Bain Capital Credit CLO 2024-3 Ltd (5)(7) | SF + | 6.25% | 11.59 | % | 7/16/2037 | 2,000 | 2,000 | 2,000 | |||||||||||||||||||||||||||||||||||||||
Carlyle Global Market Strategies (5)(7) | L + | 5.40% | 10.99 | % | 7/27/2031 | 1,200 | 957 | 1,179 | |||||||||||||||||||||||||||||||||||||||
Catskill Park CLO Ltd (5)(7) | SF + | 6.26% | 11.59 | % | 4/20/2029 | 1,350 | 1,241 | 1,358 | |||||||||||||||||||||||||||||||||||||||
CENT CLO 16, L.P. (5)(7) | SF + | 8.07% | 13.39 | % | 7/20/2034 | 3,000 | 2,832 | 2,890 | |||||||||||||||||||||||||||||||||||||||
Columbia Cent CLO 33 Ltd (5)(7) | SF + | 7.16% | 12.49 | % | 4/20/2037 | 2,000 | 1,960 | 1,990 | |||||||||||||||||||||||||||||||||||||||
Dryden 108 CLO Ltd (5)(7) | 7/18/2035 | 2,900 | 2,291 | 1,807 | |||||||||||||||||||||||||||||||||||||||||||
Marble Point CLO XI Ltd (5)(7) | SF + | 3.06% | 8.39 | % | 12/18/2030 | 1,850 | 1,588 | 1,840 | |||||||||||||||||||||||||||||||||||||||
Monroe Capital MML CLO XIV LLC (5)(7) | SF + | 10.02% | 15.34 | % | 10/24/2034 | 2,500 | 2,349 | 2,513 | |||||||||||||||||||||||||||||||||||||||
Oaktree CLO 2019-4 Ltd (5)(7) | SF + | 6.59% | 12.20 | % | 7/20/2037 | 3,000 | 2,970 | 3,000 | |||||||||||||||||||||||||||||||||||||||
OCP CLO 2017-14 Ltd (5)(7) | SF + | 6.80% | 12.13 | % | 1/15/2033 | 1,469 | 1,299 | 1,476 | |||||||||||||||||||||||||||||||||||||||
Octagon 52 Ltd (5)(7) | SF + | 7.33% | 12.92 | % | 7/23/2037 | 5,000 | 4,950 | 4,950 | |||||||||||||||||||||||||||||||||||||||
Octagon 63 Ltd (5)(7) | SF + | 6.50% | 11.82 | % | 7/20/2037 | 3,000 | 3,000 | 3,014 | |||||||||||||||||||||||||||||||||||||||
Octagon Investment Partners 29 Ltd (5)(7) | SF + | 7.17% | 12.77 | % | 7/18/2039 | 3,000 | 2,985 | 2,986 | |||||||||||||||||||||||||||||||||||||||
Onex Clo Subsidiary 2024-3 Ltd (5)(7) | SF + | 6.00% | 11.33 | % | 7/20/2037 | 5,000 | 5,000 | 4,999 | |||||||||||||||||||||||||||||||||||||||
Rad CLO Ltd (5)(7) | SF + | 6.51% | 11.84 | % | 4/15/2034 | 2,500 | 2,504 | 2,514 | |||||||||||||||||||||||||||||||||||||||
Shackleton 2019-XV CLO Ltd (5)(7) | SF + | 6.92% | 12.25 | % | 1/15/2032 | 3,000 | 2,669 | 3,025 | |||||||||||||||||||||||||||||||||||||||
Voya CLO Ltd (5)(7) | SF + | 3.81% | 9.13 | % | 4/17/2030 | 1,500 | 1,348 | 1,505 | |||||||||||||||||||||||||||||||||||||||
54,642 | 56,202 | 0.79 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total Structured Finance | $ | 54,642 | $ | 56,202 | 0.79 | % | |||||||||||||||||||||||||||||||||||||||||
Equity Investments | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer Services | |||||||||||||||||||||||||||||||||||||||||||||||
CG Parent Intermediate Holdings, Inc. - Preferred Shares (4) | 2,000 | $ | 1,940 | $ | 2,191 | ||||||||||||||||||||||||||||||||||||||||||
Club Car Wash Preferred, LLC (4) | 15.00% PIK | 8,817 | 8,817 | 8,817 | |||||||||||||||||||||||||||||||||||||||||||
Rapid Express Preferred, LLC (4) | 15.00% PIK | 2,784 | 2,784 | 2,784 |
19
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Club Car Wash Preferred, LLC (4) | 15.00% PIK | 11,548 | 11,548 | 11,548 | |||||||||||||||||||||||||||||||||||||||||||
Rapid Express Preferred, LLC (4) | 15.00% PIK | 5,249 | 5,249 | 5,249 | |||||||||||||||||||||||||||||||||||||||||||
Thrasio Holdings, Inc. (4) | 19,015 | — | — | ||||||||||||||||||||||||||||||||||||||||||||
30,338 | 30,589 | 0.43 | % | ||||||||||||||||||||||||||||||||||||||||||||
Electricity | |||||||||||||||||||||||||||||||||||||||||||||||
IP Operating Portfolio I, LLC (4) | 3 | 68 | 416 | ||||||||||||||||||||||||||||||||||||||||||||
68 | 416 | 0.01 | % | ||||||||||||||||||||||||||||||||||||||||||||
Gas, Water and Multi-utilities | |||||||||||||||||||||||||||||||||||||||||||||||
Eagle LNG Partners Jacksonville II LLC - Warrants (4) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
ELNG Equity LLC - Warrants (4) | 78,038 | — | — | ||||||||||||||||||||||||||||||||||||||||||||
— | — | — | % | ||||||||||||||||||||||||||||||||||||||||||||
Industrial Support Services | |||||||||||||||||||||||||||||||||||||||||||||||
BCPE Virginia HoldCo, Inc. (4) | 2,000 | 1,960 | 2,191 | ||||||||||||||||||||||||||||||||||||||||||||
1,960 | 2,191 | 0.03 | % | ||||||||||||||||||||||||||||||||||||||||||||
Media | |||||||||||||||||||||||||||||||||||||||||||||||
Oneteam Partners, LLC - Preferred Shares (4) | 8.00 | % | 1,000 | 1,000 | 1,183 | ||||||||||||||||||||||||||||||||||||||||||
1,000 | 1,183 | 0.02 | % | ||||||||||||||||||||||||||||||||||||||||||||
Travel and Leisure | |||||||||||||||||||||||||||||||||||||||||||||||
The ONE Group Hospitality, Inc. - Warrants (4) | 6,667 | — | — | ||||||||||||||||||||||||||||||||||||||||||||
The ONE Group Hospitality, Inc. - Warrants (4) | 11,911 | — | — | ||||||||||||||||||||||||||||||||||||||||||||
The ONE Group Hospitality, Inc. (4) | 1,000 | 950 | 972 | ||||||||||||||||||||||||||||||||||||||||||||
950 | 972 | 0.01 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total Equity Investments | $ | 34,316 | $ | 35,351 | 0.50 | % | |||||||||||||||||||||||||||||||||||||||||
Total Investments - Non-Controlled/Non-Affiliated | $ | 10,737,830 | $ | 10,863,483 | 153.28 | % | |||||||||||||||||||||||||||||||||||||||||
Non-Controlled/Affiliated Investments | |||||||||||||||||||||||||||||||||||||||||||||||
First Lien Debt | |||||||||||||||||||||||||||||||||||||||||||||||
Industrial Support Services | |||||||||||||||||||||||||||||||||||||||||||||||
Southern Graphics Inc. (4)(7)(18)(19) | SF + | 7.50% PIK | 5/1/2028 | $ | 5,568 | $ | 5,419 | $ | 5,567 | ||||||||||||||||||||||||||||||||||||||
5,419 | 5,567 | 0.08 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total First Lien Debt | $ | 5,419 | $ | 5,567 | 0.08 | % | |||||||||||||||||||||||||||||||||||||||||
Second Lien Debt | |||||||||||||||||||||||||||||||||||||||||||||||
Industrial Support Services | |||||||||||||||||||||||||||||||||||||||||||||||
Southern Graphics Inc. (4)(7)(18)(19) | SF + | 7.50% PIK | 10/30/2028 | $ | 1,932 | $ | 1,881 | $ | 1,932 | ||||||||||||||||||||||||||||||||||||||
1,881 | 1,932 | 0.03 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total Second Lien Debt | $ | 1,881 | $ | 1,932 | 0.03 | % | |||||||||||||||||||||||||||||||||||||||||
Equity Investments | |||||||||||||||||||||||||||||||||||||||||||||||
Industrial Support Services | |||||||||||||||||||||||||||||||||||||||||||||||
Southern Graphics Holdings LLC (4)(19) | 274 | $ | 2,333 | $ | 2,772 | ||||||||||||||||||||||||||||||||||||||||||
2,333 | 2,772 | 0.04 | % | ||||||||||||||||||||||||||||||||||||||||||||
Travel and Leisure | |||||||||||||||||||||||||||||||||||||||||||||||
SLF V AD1 Holdings, LLC (4)(19)(20) | 10,101 | 9,891 | 9,812 | ||||||||||||||||||||||||||||||||||||||||||||
9,891 | 9,812 | 0.14 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total Equity Investments | $ | 12,224 | $ | 12,584 | 0.18 | % | |||||||||||||||||||||||||||||||||||||||||
Total Investments - Non-Controlled/Affiliated | $ | 19,524 | $ | 20,083 | 0.28 | % | |||||||||||||||||||||||||||||||||||||||||
Controlled/Affiliated Investments | |||||||||||||||||||||||||||||||||||||||||||||||
Investments in Joint Ventures |
20
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
ULTRA III, LLC (5)(19) | $ | 227,227 | $ | 238,639 | |||||||||||||||||||||||||||||||||||||||||||
Total Investments in Joint Ventures | $ | 227,227 | $ | 238,639 | 3.37 | % | |||||||||||||||||||||||||||||||||||||||||
Total Investments - Controlled/Affiliated | $ | 227,227 | $ | 238,639 | 3.37 | % | |||||||||||||||||||||||||||||||||||||||||
Total Investment Portfolio | $ | 10,984,581 | $ | 11,122,205 | 156.93 | % | |||||||||||||||||||||||||||||||||||||||||
Cash Equivalents | |||||||||||||||||||||||||||||||||||||||||||||||
J.P. Morgan U.S. Government Fund, Institutional Shares (5) | $ | 269,155 | $ | 269,155 | $ | 269,155 | |||||||||||||||||||||||||||||||||||||||||
Total Cash Equivalents | $ | 269,155 | $ | 269,155 | 3.80 | % | |||||||||||||||||||||||||||||||||||||||||
Total Investment Portfolio, Cash Equivalents | $ | 11,253,736 | $ | 11,391,360 | 160.73 | % |
(1) Unless otherwise indicated, issuers of debt and equity investments held by the Company (which such term “Company” shall include the Company’s consolidated subsidiaries for purposes of this Consolidated Schedule of Investments) are denominated in dollars. All debt investments are income producing unless otherwise indicated. All equity investments are non-income producing unless otherwise noted. Certain portfolio company investments are subject to contractual restrictions on sales. The total par amount is presented for debt investments and the number of shares or units owned is presented for equity investments. Each of the Company’s investments is pledged as collateral under its credit facilities and debt securitization issuances unless otherwise indicated.
(2) The majority of the investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”), Prime Rate (“Prime” or “P”), Sterling Overnight Index Average ("SONIA" or "SN"), Euro Interbank Offer Rate (“Euribor” or “E”), Secured Overnight Financing Rate ("SOFR" or "SF"), Canadian Dollar Offered Rate ("CDOR" or "C"), Singapore Overnight Rate Average (“SORA”), Bloomberg Short Term Bank Yield Index (“BS”), or Bank Bill Swap Rate ("BBSW" or "B") which reset daily, monthly, quarterly, semiannually or annually. For each such investment, the Company has provided the spread over LIBOR, Prime, SONIA, E, SOFR, CDOR, SORA, BS or BBSW and the current contractual interest rate in effect at June 30, 2024. Certain investments are subject to a LIBOR, Prime, or SOFR interest rate floor, or rate cap. Certain investments contain a Payment-in-Kind (“PIK”) provision. SOFR based contracts may include a credit spread adjustment, which is included within the stated all-in interest rate, if applicable, that is charged in addition to the base rate and the stated spread.
(3) The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").
(4) These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by the Adviser as the Company’s valuation designee, subject to the oversight of the Board of Trustees (the “Board”) (see Note 2 and Note 5), pursuant to the Company’s valuation policy.
(5) The investment is not a qualifying asset, in whole or in part, under Section 55(a) of the 1940 Act. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of June 30, 2024, non-qualifying assets represented 22.1% of total assets as calculated in accordance with regulatory requirements.
(6) Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may be subject to unused commitment fees. Negative cost and fair value results from unamortized fees, which are capitalized to the investment cost. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the Company’s unfunded commitments:
Investments-non-controlled/non-affiliated | Commitment Type | Unfunded Commitment | Fair Value | |||||||||||||||||
PerkinElmer U.S. LLC | 1st Lien Senior Secured Delayed Draw Loan | $ | 67,165 | $ | (157) | |||||||||||||||
MB2 Dental Solutions, LLC | 1st Lien Senior Secured Delayed Draw Loan | 54,046 | 360 | |||||||||||||||||
LOCI Bidco Limited | 1st Lien Senior Secured Delayed Draw Loan | 46,320 | (1,138) | |||||||||||||||||
Zendesk Inc | 1st Lien Senior Secured Delayed Draw Loan | 39,321 | — | |||||||||||||||||
MB2 Dental Solutions, LLC | 1st Lien Senior Secured Delayed Draw Loan | 32,427 | 216 | |||||||||||||||||
Capripack Debtco PLC | 1st Lien Senior Secured Delayed Draw Loan | 31,994 | (392) | |||||||||||||||||
IP Operations II Investco, LLC | 1st Lien Senior Secured Delayed Draw Loan | 30,816 | (612) | |||||||||||||||||
Capripack Debtco PLC | 1st Lien Senior Secured Delayed Draw Loan | 27,995 | (343) | |||||||||||||||||
WP CPP Holdings, LLC | 1st Lien Senior Secured Revolving Loan | 26,285 | (225) | |||||||||||||||||
Onesource Virtual, Inc. | 1st Lien Senior Secured Revolving Loan | 25,318 | (374) | |||||||||||||||||
Baker Tilly Advisory Group, LP | 1st Lien Senior Secured Revolving Loan | 23,539 | (349) | |||||||||||||||||
Royal Buyer, LLC | 1st Lien Senior Secured Delayed Draw Loan | 23,538 | — | |||||||||||||||||
Zeus Company LLC | 1st Lien Senior Secured Delayed Draw Loan | 23,088 | 143 | |||||||||||||||||
CC WDW Borrower, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 22,837 | (1,575) | |||||||||||||||||
Zeus Company LLC | 1st Lien Senior Secured Revolving Loan | 21,506 | — | |||||||||||||||||
Bamboo US BidCo LLC | 1st Lien Senior Secured Revolving Loan | 21,254 | (29) | |||||||||||||||||
Baker Tilly Advisory Group, LP | 1st Lien Senior Secured Delayed Draw Loan | 19,768 | (293) |
21
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Investments-non-controlled/non-affiliated | Commitment Type | Unfunded Commitment | Fair Value | |||||||||||||||||
Elements Finco Limited | 1st Lien Senior Secured Delayed Draw Loan | 18,884 | (184) | |||||||||||||||||
2080 Media, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 18,859 | (56) | |||||||||||||||||
Denali Bidco Limited | 1st Lien Senior Secured Delayed Draw Loan | 18,403 | (357) | |||||||||||||||||
Esdec Solar Group B.V. | 1st Lien Senior Secured Delayed Draw Loan | 18,403 | (96) | |||||||||||||||||
Zendesk Inc | 1st Lien Senior Secured Revolving Loan | 17,940 | — | |||||||||||||||||
IP Operations II Investco, LLC | 1st Lien Senior Secured Delayed Draw Loan | 17,698 | (351) | |||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC | 1st Lien Senior Secured Delayed Draw Loan | 17,374 | (446) | |||||||||||||||||
Empower Payments Investor, LLC | 1st Lien Senior Secured Delayed Draw Loan | 14,426 | (56) | |||||||||||||||||
Club Car Wash Operating, LLC | 1st Lien Senior Secured Delayed Draw Loan | 13,977 | — | |||||||||||||||||
2080 Media, Inc. | 1st Lien Senior Secured Revolving Loan | 13,795 | — | |||||||||||||||||
Atlas Intermediate III, L.L.C. | 1st Lien Senior Secured Revolving Loan | 13,445 | (115) | |||||||||||||||||
Femur Buyer, Inc. | 1st Lien Senior Secured Revolving Loan | 13,350 | (401) | |||||||||||||||||
Higginbotham Insurance Agency, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 12,738 | — | |||||||||||||||||
Bamboo US BidCo LLC | 1st Lien Senior Secured Delayed Draw Loan | 12,528 | 10 | |||||||||||||||||
E.S.G. Movilidad, S.L.U. | 1st Lien Senior Secured Delayed Draw Loan | 12,044 | — | |||||||||||||||||
OEConnection LLC | 1st Lien Senior Secured Delayed Draw Loan | 11,741 | (88) | |||||||||||||||||
Coretrust Purchasing Group LLC | 1st Lien Senior Secured Revolving Loan | 11,656 | (20) | |||||||||||||||||
Truck-Lite Co, LLC | 1st Lien Senior Secured Revolving Loan | 11,574 | (10) | |||||||||||||||||
Summit Acquisition Inc. | 1st Lien Senior Secured Delayed Draw Loan | 10,961 | 219 | |||||||||||||||||
MB2 Dental Solutions, LLC | 1st Lien Senior Secured Revolving Loan | 10,849 | — | |||||||||||||||||
Prism Parent Co., Inc. | 1st Lien Senior Secured Delayed Draw Loan | 10,833 | — | |||||||||||||||||
Coretrust Purchasing Group LLC | 1st Lien Senior Secured Delayed Draw Loan | 10,736 | (18) | |||||||||||||||||
Coding Solutions Acquisition, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 10,470 | (11) | |||||||||||||||||
Radwell Parent, LLC | 1st Lien Senior Secured Revolving Loan | 10,175 | — | |||||||||||||||||
Cadence - Southwick, Inc. | 1st Lien Senior Secured Revolving Loan | 9,952 | (33) | |||||||||||||||||
Empower Payments Investor, LLC | 1st Lien Senior Secured Revolving Loan | 9,704 | (52) | |||||||||||||||||
Truck-Lite Co, LLC | 1st Lien Senior Secured Delayed Draw Loan | 9,338 | 11 | |||||||||||||||||
Parfums Holding Company, Inc. | 1st Lien Senior Secured Revolving Loan | 9,034 | (90) | |||||||||||||||||
Dolcetto HoldCo S.P.A. | 1st Lien Senior Secured Delayed Draw Loan | 8,996 | — | |||||||||||||||||
CD&R Madison UK Bidco Ltd | 1st Lien Senior Secured Delayed Draw Loan | 8,478 | 24 | |||||||||||||||||
Formerra, LLC | 1st Lien Senior Secured Revolving Loan | 8,422 | (51) | |||||||||||||||||
PPV Intermediate Holdings, LLC | 1st Lien Senior Secured Revolving Loan | 8,145 | — | |||||||||||||||||
Violin Finco Guernsey Limited | 1st Lien Senior Secured Delayed Draw Loan | 7,852 | (78) | |||||||||||||||||
Captive Resources Midco LLC | 1st Lien Senior Secured Revolving Loan | 7,558 | — | |||||||||||||||||
OEConnection LLC | 1st Lien Senior Secured Revolving Loan | 7,338 | (115) | |||||||||||||||||
Coupa Holdings, LLC | 1st Lien Senior Secured Delayed Draw Loan | 7,123 | — | |||||||||||||||||
Coding Solutions Acquisition, Inc. | 1st Lien Senior Secured Revolving Loan | 7,069 | — | |||||||||||||||||
Royal Buyer, LLC | 1st Lien Senior Secured Revolving Loan | 7,000 | — | |||||||||||||||||
Camin Cargo Control Holdings, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 6,923 | 15 | |||||||||||||||||
Frontgrade Technologies Holdings Inc. | 1st Lien Senior Secured Revolving Loan | 6,864 | — | |||||||||||||||||
IG Investments Holdings, LLC | 1st Lien Senior Secured Revolving Loan | 6,836 | (35) | |||||||||||||||||
AI Circle Bidco Limited | 1st Lien Senior Secured Delayed Draw Loan | 6,827 | (124) | |||||||||||||||||
Summit Acquisition Inc. | 1st Lien Senior Secured Revolving Loan | 6,685 | — | |||||||||||||||||
The One Group, LLC | 1st Lien Senior Secured Revolving Loan | 6,649 | (192) | |||||||||||||||||
Trupanion, Inc. | 1st Lien Senior Secured Revolving Loan | 6,576 | (6) | |||||||||||||||||
Ribbon Communications Operating Company, Inc | 1st Lien Senior Secured Revolving Loan | 6,365 | (127) | |||||||||||||||||
Advarra Holdings, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 6,340 | — | |||||||||||||||||
Avalara, Inc. | 1st Lien Senior Secured Revolving Loan | 6,324 | — | |||||||||||||||||
Coupa Holdings, LLC | 1st Lien Senior Secured Revolving Loan | 6,211 | — | |||||||||||||||||
Ping Identity Holding Corp. | 1st Lien Senior Secured Revolving Loan | 6,068 | — | |||||||||||||||||
Artisan Bidco, Inc. | 1st Lien Senior Secured Revolving Loan | 6,000 | — | |||||||||||||||||
Gusto Aus Bidco Pty Ltd | 1st Lien Senior Secured Delayed Draw Loan | 5,954 | 60 | |||||||||||||||||
Arcfield Acquisition Corp | 1st Lien Senior Secured Revolving Loan | 5,687 | (107) |
22
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Investments-non-controlled/non-affiliated | Commitment Type | Unfunded Commitment | Fair Value | |||||||||||||||||
Cube Industrials Buyer, Inc. | 1st Lien Senior Secured Revolving Loan | 5,664 | — | |||||||||||||||||
More Cowbell II, LLC | 1st Lien Senior Secured Delayed Draw Loan | 5,484 | — | |||||||||||||||||
Certinia Inc. | 1st Lien Senior Secured Revolving Loan | 5,449 | — | |||||||||||||||||
International Entertainment Investments Ltd | 1st Lien Senior Secured Delayed Draw Loan | 5,080 | 51 | |||||||||||||||||
Spanx, LLC | 1st Lien Senior Secured Revolving Loan | 5,000 | — | |||||||||||||||||
Enverus Holdings Inc | 1st Lien Senior Secured Revolving Loan | 4,913 | — | |||||||||||||||||
Camin Cargo Control Holdings, Inc. | 1st Lien Senior Secured Revolving Loan | 4,800 | — | |||||||||||||||||
Showtime Acquisition, L.L.C. | 1st Lien Senior Secured Revolving Loan | 4,711 | — | |||||||||||||||||
Oranje Holdco, Inc. | 1st Lien Senior Secured Revolving Loan | 4,657 | (53) | |||||||||||||||||
Specialty Ingredients, LLC | 1st Lien Senior Secured Revolving Loan | 4,511 | — | |||||||||||||||||
Coretrust Purchasing Group LLC | 1st Lien Senior Secured Delayed Draw Loan | 4,423 | (8) | |||||||||||||||||
Alera Group, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 4,347 | 43 | |||||||||||||||||
More Cowbell II, LLC | 1st Lien Senior Secured Revolving Loan | 4,320 | — | |||||||||||||||||
Associations Finance, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 4,316 | (4) | |||||||||||||||||
Daphne S.P.A. | 1st Lien Senior Secured Delayed Draw Loan | 4,261 | (329) | |||||||||||||||||
Plasma Buyer LLC | 1st Lien Senior Secured Revolving Loan | 4,162 | (120) | |||||||||||||||||
Pareto Health Intermediate Holdings, Inc. | 1st Lien Senior Secured Revolving Loan | 4,032 | — | |||||||||||||||||
Yes Energy LLC | 1st Lien Senior Secured Delayed Draw Loan | 3,914 | 25 | |||||||||||||||||
Integrity Marketing Acquisition LLC | 1st Lien Senior Secured Delayed Draw Loan | 3,761 | — | |||||||||||||||||
Asdam Operations Pty Ltd | 1st Lien Senior Secured Delayed Draw Loan | 3,616 | (50) | |||||||||||||||||
Associations Finance, Inc. | 1st Lien Senior Secured Revolving Loan | 3,459 | (3) | |||||||||||||||||
Excelitas Technologies Corp. | 1st Lien Senior Secured Revolving Loan | 3,261 | — | |||||||||||||||||
Enverus Holdings Inc | 1st Lien Senior Secured Delayed Draw Loan | 3,229 | 31 | |||||||||||||||||
IRI Group Holdings, Inc. | 1st Lien Senior Secured Revolving Loan | 3,140 | — | |||||||||||||||||
Spotless Brands, LLC | 1st Lien Senior Secured Revolving Loan | 3,105 | — | |||||||||||||||||
Spirit RR Holdings, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 2,993 | — | |||||||||||||||||
Spirit RR Holdings, Inc. | 1st Lien Senior Secured Revolving Loan | 2,982 | — | |||||||||||||||||
Artemis Bidco Limited | 1st Lien Senior Secured Delayed Draw Loan | 2,743 | (416) | |||||||||||||||||
Calabrio, Inc. | 1st Lien Senior Secured Revolving Loan | 2,687 | — | |||||||||||||||||
Smarsh Inc. | 1st Lien Senior Secured Delayed Draw Loan | 2,143 | — | |||||||||||||||||
CPI Buyer, LLC | 1st Lien Senior Secured Revolving Loan | 2,115 | — | |||||||||||||||||
Meriplex Communications, LTD | 1st Lien Senior Secured Delayed Draw Loan | 1,999 | (13) | |||||||||||||||||
Galway Borrower LLC | 1st Lien Senior Secured Revolving Loan | 1,912 | — | |||||||||||||||||
Plasma Buyer LLC | 1st Lien Senior Secured Delayed Draw Loan | 1,892 | (62) | |||||||||||||||||
IXM Holdings, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 1,638 | 16 | |||||||||||||||||
123Dentist Inc | 1st Lien Senior Secured Delayed Draw Loan | 1,419 | — | |||||||||||||||||
TriMech Acquisition Corp. | 1st Lien Senior Secured Revolving Loan | 1,316 | — | |||||||||||||||||
Royal Buyer, LLC | 1st Lien Senior Secured Delayed Draw Loan | 1,283 | — | |||||||||||||||||
BradyIFS Holdings, LLC | 1st Lien Senior Secured Revolving Loan | 1,150 | — | |||||||||||||||||
Accession Risk Management Group, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 1,146 | — | |||||||||||||||||
Meriplex Communications, LTD | 1st Lien Senior Secured Revolving Loan | 1,143 | (7) | |||||||||||||||||
Arc Media Holdings Limited | 1st Lien Senior Secured Revolving Loan | 982 | (31) | |||||||||||||||||
IXM Holdings, Inc. | 1st Lien Senior Secured Revolving Loan | 852 | — | |||||||||||||||||
Patriot Growth Insurance Services LLC | 1st Lien Senior Secured Revolving Loan | 822 | — | |||||||||||||||||
NBG Acquisition Corp. | 1st Lien Senior Secured Revolving Loan | 740 | (26) | |||||||||||||||||
BradyIFS Holdings, LLC | 1st Lien Senior Secured Delayed Draw Loan | 568 | 6 | |||||||||||||||||
Smarsh Inc. | 1st Lien Senior Secured Revolving Loan | 557 | — | |||||||||||||||||
Integrity Marketing Acquisition LLC | 1st Lien Senior Secured Revolving Loan | 472 | — | |||||||||||||||||
Accession Risk Management Group, Inc. | 1st Lien Senior Secured Revolving Loan | 467 | — | |||||||||||||||||
Bottomline Technologies, Inc. | 1st Lien Senior Secured Revolving Loan | 385 | — | |||||||||||||||||
Riley MergeCo LLC | 1st Lien Senior Secured Revolving Loan | 304 | (3) | |||||||||||||||||
ERC Topco Holdings, LLC | 1st Lien Senior Secured Revolving Loan | 245 | (81) | |||||||||||||||||
CC WDW Borrower, Inc. | 1st Lien Senior Secured Revolving Loan | 205 | (14) | |||||||||||||||||
Huskies Parent, Inc. | 1st Lien Senior Secured Revolving Loan | 176 | (3) |
23
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
Investments-non-controlled/non-affiliated | Commitment Type | Unfunded Commitment | Fair Value | |||||||||||||||||
Time Manufacturing Holdings, LLC | 1st Lien Senior Secured Revolving Loan | 73 | (2) | |||||||||||||||||
Total | $ | 1,227,418 | $ | (8,701) |
(7) There are no interest rate floors on these investments.
(8)The interest rate floor on these investments as of June 30, 2024 was 0.50%.
(9)The interest rate floor on these investments as of June 30, 2024 was 0.75%.
(10)The interest rate floor on these investments as of June 30, 2024 was 1.00%.
(11)The interest rate floor on these investments as of June 30, 2024 was 1.25%.
(12)The interest rate floor on these investments as of June 30, 2024 was 1.50%.
(13)The interest rate floor on these investments as of June 30, 2024 was 1.75%.
(14)The interest rate floor on these investments as of June 30, 2024 was 2.00%.
(15)The interest rate floor on these investments as of June 30, 2024 was 2.50%.
(16)The interest rate floor on these investments as of June 30, 2024 was 3.00%.
(17)The interest rate floor on these investments as of June 30, 2024 was 3.25%.
(18)Loan was on non-accrual status as of June 30, 2024.
(19)Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “1940 Act”), the Company is deemed to “control” a portfolio company if the Company owns more than 25% of its outstanding voting securities and/or holds the power to exercise control over the management or policies of the portfolio company. Under the 1940 Act, the Company is deemed an “affiliated person” of a portfolio company if the Company owns between 5% and 25% (inclusive) of the portfolio company’s outstanding voting securities. For purposes of determining the classification of its investment portfolio, the Company has excluded consideration of any voting securities or board appointment rights held by third-party investment funds advised by the Adviser and/or its affiliates. As of June 30, 2024, the Company’s controlled/affiliated and non-controlled/affiliated investments were as follows:
Fair Value as of December 31, 2023 | Gross Additions | Gross Reductions | Change in Unrealized Gains (Loss) | Net Realized Gain (Loss) | Fair Value as of June 30, 2024 | Dividend and Interest Income | ||||||||||||||||||||||||||||||||||||||
Non-Controlled/Affiliated Investments | ||||||||||||||||||||||||||||||||||||||||||||
Southern Graphics Inc. | $ | 9,947 | $ | — | $ | (115) | $ | 439 | $ | — | $ | 10,271 | $ | — | ||||||||||||||||||||||||||||||
SLF V AD1 Holdings, LLC | 9,877 | — | — | (65) | — | 9,812 | — | |||||||||||||||||||||||||||||||||||||
Total Non-Controlled/Affiliated Investments | $ | 19,824 | $ | — | $ | (115) | $ | 374 | $ | — | $ | 20,083 | $ | — | ||||||||||||||||||||||||||||||
Controlled/Affiliated Investments | ||||||||||||||||||||||||||||||||||||||||||||
ULTRA III, LLC | $ | 124,003 | $ | 105,859 | $ | (4,145) | $ | 12,922 | $ | — | $ | 238,639 | $ | 8,445 | ||||||||||||||||||||||||||||||
Total Controlled/Affiliated Investments | $ | 124,003 | $ | 105,859 | $ | (4,145) | $ | 12,922 | $ | — | $ | 238,639 | $ | 8,445 |
(20)These investments are not pledged as collateral under the Credit Facilities, 2023 CLO Secured Notes and/or 2024 CLO Secured Notes.
24
HPS Corporate Lending Fund
Consolidated Schedule of Investments
June 30, 2024
(in thousands)
(Unaudited)
ADDITIONAL INFORMATION
Foreign currency forward contracts:
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
U.S. Dollars 195 | Canadian Dollars 268 | Goldman Sachs Bank USA | 12/23/2024 | $ | (1) | |||||||||||||||||||||
U.S. Dollars 2,682 | Euro 2,473 | Goldman Sachs Bank USA | 9/23/2024 | 23 | ||||||||||||||||||||||
U.S. Dollars 248 | Euro 224 | Goldman Sachs Bank USA | 6/23/2025 | 4 | ||||||||||||||||||||||
U.S. Dollars 2,545 | Euro 2,215 | Goldman Sachs Bank USA | 3/23/2026 | 103 | ||||||||||||||||||||||
U.S. Dollars 187,731 | Euro 172,740 | Goldman Sachs Bank USA | 12/23/2024 | 1,126 | ||||||||||||||||||||||
U.S. Dollars 6,868 | British Pound 6,303 | Goldman Sachs Bank USA | 10/15/2024 | (1,107) | ||||||||||||||||||||||
U.S. Dollars 7,472 | British Pound 6,079 | Goldman Sachs Bank USA | 9/23/2024 | (218) | ||||||||||||||||||||||
U.S. Dollars 764 | British Pound 620 | Goldman Sachs Bank USA | 6/23/2025 | (21) | ||||||||||||||||||||||
U.S. Dollars 2,601 | British Pound 2,109 | Goldman Sachs Bank USA | 3/21/2025 | (69) | ||||||||||||||||||||||
U.S. Dollars 89 | British Pound 69 | Goldman Sachs Bank USA | 12/23/2024 | 1 | ||||||||||||||||||||||
U.S. Dollars 34,365 | Singaporean Dollars 45,548 | Goldman Sachs Bank USA | 12/23/2024 | 504 | ||||||||||||||||||||||
U.S. Dollars 101,171 | Euro 89,721 | SMBC Capital Markets, Inc. | 9/23/2025 | 2,994 | ||||||||||||||||||||||
U.S. Dollars 50,229 | Euro 45,512 | SMBC Capital Markets, Inc. | 3/21/2025 | 850 | ||||||||||||||||||||||
U.S. Dollars 10,401 | Euro 9,630 | SMBC Capital Markets, Inc. | 9/23/2024 | 46 | ||||||||||||||||||||||
U.S. Dollars 17,777 | Euro 16,234 | SMBC Capital Markets, Inc. | 6/23/2025 | 86 | ||||||||||||||||||||||
U.S. Dollars 258,460 | Euro 238,316 | SMBC Capital Markets, Inc. | 12/23/2024 | 1,015 | ||||||||||||||||||||||
U.S. Dollars 389,497 | British Pound 305,867 | SMBC Capital Markets, Inc. | 12/23/2024 | 2,327 | ||||||||||||||||||||||
U.S. Dollars 40,851 | Canadian Dollars 55,701 | SMBC Capital Markets, Inc. | 12/23/2024 | (27) | ||||||||||||||||||||||
U.S. Dollars 95,425 | Australian Dollars 141,767 | SMBC Capital Markets, Inc. | 12/23/2024 | 508 | ||||||||||||||||||||||
Total | $ | 8,144 |
Interest rate swaps:
Counterparty | Hedged Instrument | Company Receives | Company Pays | Maturity Date | Notional Amount | Fair Market Value | ||||||||||||||||||||||||||||||||
Goldman Sachs Bank USA | November 2025 Notes | 8.37% | SOFR + 4.08% | 11/14/2025 | $ | 85,000 | $ | (853) | ||||||||||||||||||||||||||||||
Goldman Sachs Bank USA | November 2027 Notes | 8.43% | SOFR + 4.42% | 11/14/2027 | 77,500 | (899) | ||||||||||||||||||||||||||||||||
Goldman Sachs Bank USA | March 2026 Notes | 8.12% | SOFR + 3.76% | 3/15/2026 | 276,000 | (2,859) | ||||||||||||||||||||||||||||||||
Goldman Sachs Bank USA | March 2028 Notes | 8.18% | SOFR + 4.24% | 3/15/2028 | 124,000 | (2,148) | ||||||||||||||||||||||||||||||||
Goldman Sachs Bank USA | September 2027 Notes | 8.67% | SOFR + 4.31% | 9/14/2027 | 75,000 | (336) | ||||||||||||||||||||||||||||||||
Goldman Sachs Bank USA | September 2028 Notes | 8.80% | SOFR + 4.54% | 9/14/2028 | 250,000 | (956) | ||||||||||||||||||||||||||||||||
SMBC Capital Markets, Inc. | January 2029 Notes | 6.75% | SOFR + 2.88% | 1/30/2029 | 550,000 | (10,782) | ||||||||||||||||||||||||||||||||
Goldman Sachs Bank USA | September 2029 Notes | 6.25% | SOFR + 2.06% | 9/30/2029 | 400,000 | 932 | ||||||||||||||||||||||||||||||||
Total Interest Rate Swaps | $ | (17,901) |
The accompanying notes are an integral part of these consolidated financial statements.
25
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
First Lien Debt | |||||||||||||||||||||||||||||||||||||||||||||||
First Lien Debt - Non-Controlled/Non-Affiliated | |||||||||||||||||||||||||||||||||||||||||||||||
Aerospace and Defense | |||||||||||||||||||||||||||||||||||||||||||||||
Arcfield Acquisition Corp (4)(6)(9) | 8/4/2028 | $ | 5,687 | $ | (89) | $ | (228) | ||||||||||||||||||||||||||||||||||||||||
Arcfield Acquisition Corp (4)(9) | SF + | 6.25% | 11.64 | % | 8/3/2029 | 48,883 | 48,042 | 46,696 | |||||||||||||||||||||||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(8) | B + | 5.75% | 10.11 | % | 8/22/2028 | A$ | 3,614 | 2,415 | 2,374 | ||||||||||||||||||||||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(6)(8) | 8/22/2028 | A$ | 5,421 | (93) | (132) | ||||||||||||||||||||||||||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(8) | B + | 5.75% | 10.11 | % | 8/22/2028 | A$ | 41,558 | 27,867 | 27,304 | ||||||||||||||||||||||||||||||||||||||
Cadence - Southwick, Inc. (4)(6)(10) | SF + | 6.75% | 12.22 | % | 5/3/2028 | 11,291 | 2,717 | 2,852 | |||||||||||||||||||||||||||||||||||||||
Cadence - Southwick, Inc. (4)(10) | SF + | 6.75% | 12.24 | % | 5/3/2029 | 41,529 | 40,408 | 40,998 | |||||||||||||||||||||||||||||||||||||||
Cadence - Southwick, Inc. (4)(10) | SF + | 6.00% | 11.47 | % | 5/3/2029 | 3,120 | 3,058 | 3,058 | |||||||||||||||||||||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(6)(9) | 1/10/2028 | 6,864 | (152) | (94) | |||||||||||||||||||||||||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(9) | SF + | 6.75% | 12.10 | % | 1/9/2030 | 37,429 | 36,451 | 36,988 | |||||||||||||||||||||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(9) | SF + | 6.75% | 12.10 | % | 1/9/2030 | 7,880 | 7,732 | 7,787 | |||||||||||||||||||||||||||||||||||||||
Sequa Corp (4)(6)(10) | 11/23/2027 | 13,676 | (542) | (135) | |||||||||||||||||||||||||||||||||||||||||||
Sequa Corp (4)(10) | SF + | 7.00% | 12.37 | % | 11/24/2028 | 127,027 | 121,623 | 125,770 | |||||||||||||||||||||||||||||||||||||||
WP CPP Holdings, LLC (4)(6)(10) | 11/30/2029 | 26,285 | (648) | (648) | |||||||||||||||||||||||||||||||||||||||||||
WP CPP Holdings, LLC (4)(10) | SF + | 7.50% (incl 4.13% PIK) | 12.88 | % | 11/30/2029 | 187,888 | 183,258 | 183,255 | |||||||||||||||||||||||||||||||||||||||
472,047 | 475,845 | 9.18 | % | ||||||||||||||||||||||||||||||||||||||||||||
Alternative Energy | |||||||||||||||||||||||||||||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(15) | SF + | 6.50% | 11.95 | % | 11/9/2026 | 17,091 | 16,765 | 16,765 | |||||||||||||||||||||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(6)(15) | 11/9/2026 | 1,139 | (22) | (22) | |||||||||||||||||||||||||||||||||||||||||||
16,743 | 16,743 | 0.32 | % | ||||||||||||||||||||||||||||||||||||||||||||
Asset Based Lending and Fund Finance | |||||||||||||||||||||||||||||||||||||||||||||||
CRSS HPS LLC (4)(5)(10) | SF + | 6.75% | 12.21 | % | 12/21/2026 | 21,772 | 21,341 | 21,341 | |||||||||||||||||||||||||||||||||||||||
21,341 | 21,341 | 0.41 | % | ||||||||||||||||||||||||||||||||||||||||||||
Automobiles and Parts | |||||||||||||||||||||||||||||||||||||||||||||||
Clarios Global LP (7) | SF + | 3.75% | 9.11 | % | 5/6/2030 | 14,963 | 14,886 | 15,015 | |||||||||||||||||||||||||||||||||||||||
Foundation Automotive Us Corp (4)(10) | SF + | 7.75% | 13.41 | % | 12/24/2027 | 4,300 | 4,249 | 3,865 | |||||||||||||||||||||||||||||||||||||||
Foundation Automotive Corp (4)(5)(10) | SF + | 7.75% | 13.36 | % | 12/24/2027 | 13,689 | 13,536 | 12,306 | |||||||||||||||||||||||||||||||||||||||
Foundation Automotive Us Corp (4)(10) | SF + | 7.75% | 13.36 | % | 12/24/2027 | 33,889 | 33,514 | 30,466 | |||||||||||||||||||||||||||||||||||||||
Oil Changer Holding Corporation (4)(10) | SF + | 6.75% | 12.27 | % | 2/8/2027 | 40,597 | 40,326 | 40,234 | |||||||||||||||||||||||||||||||||||||||
Oil Changer Holding Corporation (4)(10) | SF + | 6.75% | 12.27 | % | 2/8/2027 | 8,523 | 8,468 | 8,447 | |||||||||||||||||||||||||||||||||||||||
Tenneco Inc (8) | SF + | 4.75% | 10.22 | % | 11/17/2028 | 2,992 | 2,424 | 2,624 | |||||||||||||||||||||||||||||||||||||||
117,403 | 112,957 | 2.18 | % | ||||||||||||||||||||||||||||||||||||||||||||
Chemicals | |||||||||||||||||||||||||||||||||||||||||||||||
Illuminate Buyer, LLC (7) | SF + | 3.50% | 8.97 | % | 6/30/2027 | 15,111 | 14,972 | 15,157 | |||||||||||||||||||||||||||||||||||||||
14,972 | 15,157 | 0.29 | % | ||||||||||||||||||||||||||||||||||||||||||||
Construction and Materials | |||||||||||||||||||||||||||||||||||||||||||||||
Esdec Solar Group B.V. (4)(5)(6)(8) | 8/30/2028 | € | 17,183 | (361) | (164) | ||||||||||||||||||||||||||||||||||||||||||
Esdec Solar Group B.V. (4)(5)(8) | E + | 6.00% | 9.97 | % | 8/30/2028 | € | 51,420 | 55,215 | 56,271 | ||||||||||||||||||||||||||||||||||||||
Nexus Intermediate III, LLC (4)(6)(9) | 12/6/2027 | 300 | (3) | — | |||||||||||||||||||||||||||||||||||||||||||
Nexus Intermediate III, LLC (4)(9) | SF + | 5.50% | 11.36 | % | 12/6/2027 | 1,064 | 1,051 | 1,064 | |||||||||||||||||||||||||||||||||||||||
55,902 | 57,171 | 1.10 | % | ||||||||||||||||||||||||||||||||||||||||||||
Consumer Services | |||||||||||||||||||||||||||||||||||||||||||||||
AI Learning (Singapore) PTE. LTD. (4)(5)(12) | SORA + | 8.25% (incl 4.00% PIK) | 11.70 | % | 5/25/2027 | 44,063 | S$ | 31,713 | 32,862 | ||||||||||||||||||||||||||||||||||||||
American Academy Holdings, LLC (4)(10) | SF + | 11.00% (incl 5.25% PIK) | 16.47 | % | 1/2/2025 | 54,019 | 54,019 | 53,914 | |||||||||||||||||||||||||||||||||||||||
Auctane Inc (4)(9) | SF + | 5.75% | 11.23 | % | 10/5/2028 | 24,563 | 24,563 | 24,478 | |||||||||||||||||||||||||||||||||||||||
Club Car Wash Operating, LLC (4)(6)(10) | SF + | 6.50% | 12.00 | % | 6/16/2027 | 40,289 | 25,670 | 26,066 | |||||||||||||||||||||||||||||||||||||||
Club Car Wash Operating, LLC (4)(10) | SF + | 6.50% | 12.00 | % | 6/16/2027 | 12,958 | 12,762 | 12,879 |
26
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Club Car Wash Operating, LLC (4)(10) | SF + | 6.50% | 12.00 | % | 6/16/2027 | 26,517 | 26,248 | 26,355 | |||||||||||||||||||||||||||||||||||||||
Ensemble RCM LLC (7) | SF + | 3.75% | 9.23 | % | 8/3/2026 | 1,979 | 1,974 | 1,985 | |||||||||||||||||||||||||||||||||||||||
Express Wash Concepts (4)(10) | SF + | 6.00% | 11.46 | % | 4/30/2027 | 47,227 | 46,908 | 46,662 | |||||||||||||||||||||||||||||||||||||||
Express Wash Concepts (4)(10) | SF + | 6.00% | 11.46 | % | 4/30/2027 | 26,528 | 26,344 | 26,210 | |||||||||||||||||||||||||||||||||||||||
Houghton Mifflin Harcourt Company (8) | SF + | 5.25% | 10.71 | % | 4/9/2029 | 25,250 | 24,650 | 24,831 | |||||||||||||||||||||||||||||||||||||||
IXM Holdings, Inc. (4)(11) | SF + | 6.50% | 11.86 | % | 12/14/2029 | 18,566 | 18,289 | 18,289 | |||||||||||||||||||||||||||||||||||||||
IXM Holdings, Inc. (4)(6)(11) | 12/14/2029 | 1,638 | (25) | (24) | |||||||||||||||||||||||||||||||||||||||||||
IXM Holdings, Inc.(4)(6)(11) | SF + | 6.50% | 11.86 | % | 12/14/2029 | 2,184 | 568 | 568 | |||||||||||||||||||||||||||||||||||||||
Learning Care Group, Inc. (8) | SF + | 4.75% | 10.14 | % | 8/11/2028 | 1,995 | 1,967 | 2,010 | |||||||||||||||||||||||||||||||||||||||
Mckissock Investment Holdings, LLC (9) | SF + | 5.00% | 10.38 | % | 3/12/2029 | 46,800 | 45,651 | 46,859 | |||||||||||||||||||||||||||||||||||||||
Mckissock Investment Holdings, LLC (9) | SF + | 5.00% | 10.54 | % | 3/12/2029 | 12,517 | 12,420 | 12,533 | |||||||||||||||||||||||||||||||||||||||
PECF USS Intermediate Holding III Corporation (8) | SF + | 4.25% | 9.89 | % | 12/15/2028 | 14,712 | 14,645 | 11,558 | |||||||||||||||||||||||||||||||||||||||
Polyconcept North America Holdings, Inc. (9) | SF + | 5.50% | 10.85 | % | 5/18/2029 | 23,009 | 22,638 | 22,846 | |||||||||||||||||||||||||||||||||||||||
Spotless Brands, LLC (4)(10) | SF + | 6.50% | 12.02 | % | 7/25/2028 | 21,593 | 21,260 | 21,670 | |||||||||||||||||||||||||||||||||||||||
Spotless Brands, LLC (4)(10) | SF + | 6.50% | 12.03 | % | 7/25/2028 | 16,023 | 15,777 | 16,080 | |||||||||||||||||||||||||||||||||||||||
Spotless Brands, LLC (4)(10) | SF + | 6.50% | 12.03 | % | 7/25/2028 | 105,600 | 103,951 | 105,979 | |||||||||||||||||||||||||||||||||||||||
Spotless Brands, LLC (4)(6)(10) | SF + | 6.50% | 11.96 | % | 7/25/2028 | 5,175 | 1,040 | 1,118 | |||||||||||||||||||||||||||||||||||||||
Thrasio LLC (4)(7)(16) | SF + | 7.00% | 12/18/2026 | 2,912 | 2,903 | 1,715 | |||||||||||||||||||||||||||||||||||||||||
Trugreen Limited Partnership (9) | SF + | 4.00% | 9.46 | % | 11/2/2027 | 8,575 | 8,488 | 8,298 | |||||||||||||||||||||||||||||||||||||||
WMB Holdings Inc (8) | SF + | 3.25% | 8.71 | % | 11/2/2029 | 1,889 | 1,841 | 1,896 | |||||||||||||||||||||||||||||||||||||||
Zips Car Wash, LLC (4)(10) | SF + | 7.25% | 12.71 | % | 3/1/2024 | 26,027 | 26,025 | 25,942 | |||||||||||||||||||||||||||||||||||||||
Zips Car Wash, LLC (4)(10) | SF + | 7.25% | 12.71 | % | 3/1/2024 | 15,336 | 15,308 | 15,286 | |||||||||||||||||||||||||||||||||||||||
Zips Car Wash, LLC (4)(10) | SF + | 7.25% | 12.71 | % | 3/1/2024 | 984 | 984 | 981 | |||||||||||||||||||||||||||||||||||||||
588,581 | 589,846 | 11.38 | % | ||||||||||||||||||||||||||||||||||||||||||||
Electricity | |||||||||||||||||||||||||||||||||||||||||||||||
Hamilton Projects Acquiror, LLC (9) | SF + | 4.50% | 9.97 | % | 6/17/2027 | 55,588 | 51,772 | 55,914 | |||||||||||||||||||||||||||||||||||||||
IP Operating Portfolio I, LLC (4)(7) | 7.88 | % | 12/31/2029 | 27,428 | 26,919 | 27,154 | |||||||||||||||||||||||||||||||||||||||||
78,691 | 83,068 | 1.60 | % | ||||||||||||||||||||||||||||||||||||||||||||
Electronic and Electrical Equipment | |||||||||||||||||||||||||||||||||||||||||||||||
Brightstar Escrow Corp. (7) | 9.75 | % | 10/15/2025 | 1,000 | 989 | 1,015 | |||||||||||||||||||||||||||||||||||||||||
989 | 1,015 | 0.02 | % | ||||||||||||||||||||||||||||||||||||||||||||
Finance and Credit Services | |||||||||||||||||||||||||||||||||||||||||||||||
PCP CW Aggregator Holdings II, L.P. (4)(5)(10) | L + | 9.25% PIK | 14.69 | % | 2/9/2027 | 19,395 | 19,164 | 19,032 | |||||||||||||||||||||||||||||||||||||||
Verscend Holding Corp. (7) | SF + | 4.00% | 9.47 | % | 8/27/2025 | 3,939 | 3,928 | 3,957 | |||||||||||||||||||||||||||||||||||||||
Yes Energy LLC (4)(9) | BS + | 5.00% | 10.46 | % | 4/21/2028 | 10,000 | 9,836 | 10,004 | |||||||||||||||||||||||||||||||||||||||
Yes Energy LLC (4)(9) | BS + | 5.00% | 10.46 | % | 4/21/2028 | 26,000 | 25,458 | 26,010 | |||||||||||||||||||||||||||||||||||||||
58,386 | 59,003 | 1.14 | % | ||||||||||||||||||||||||||||||||||||||||||||
Food Producers | |||||||||||||||||||||||||||||||||||||||||||||||
Specialty Ingredients, LLC (4)(6)(9) | SF + | 6.00% | 11.46 | % | 2/12/2029 | 11,279 | 5,744 | 5,805 | |||||||||||||||||||||||||||||||||||||||
Specialty Ingredients, LLC (4)(9) | SF + | 6.00% | 11.46 | % | 2/12/2029 | 89,801 | 88,354 | 88,876 | |||||||||||||||||||||||||||||||||||||||
Sugar PPC Buyer LLC (4)(6)(10) | 10/2/2030 | 16,541 | (366) | (359) | |||||||||||||||||||||||||||||||||||||||||||
Sugar PPC Buyer LLC (4)(10) | SF + | 6.00% | 11.34 | % | 10/2/2030 | 59,546 | 58,254 | 58,254 | |||||||||||||||||||||||||||||||||||||||
151,986 | 152,576 | 2.94 | % | ||||||||||||||||||||||||||||||||||||||||||||
Gas, Water and Multi-utilities | |||||||||||||||||||||||||||||||||||||||||||||||
Floating Infrastructure Holdings Finance LLC (4)(5)(10) | SF + | 5.75% | 11.20 | % | 8/13/2027 | 43,439 | 42,809 | 42,991 | |||||||||||||||||||||||||||||||||||||||
Eagle LNG Partners Jacksonville II LLC (4)(14) | SF + | 9.88% | 15.22 | % | 6/8/2024 | 620 | 613 | 613 | |||||||||||||||||||||||||||||||||||||||
43,422 | 43,604 | 0.84 | % | ||||||||||||||||||||||||||||||||||||||||||||
General Industrials | |||||||||||||||||||||||||||||||||||||||||||||||
BP Purchaser, LLC (4)(9) | SF + | 5.50% | 11.14 | % | 12/11/2028 | 27,513 | 27,108 | 26,815 | |||||||||||||||||||||||||||||||||||||||
Bright Light Buyer, Inc. (4)(10) | SF + | 6.00% | 11.37 | % | 11/8/2029 | 75,000 | 73,171 | 73,170 | |||||||||||||||||||||||||||||||||||||||
Cube Industrials Buyer, Inc. (4)(6)(10) | 10/18/2029 | 5,664 | (82) | (82) | |||||||||||||||||||||||||||||||||||||||||||
Cube Industrials Buyer, Inc. (4)(10) | SF + | 6.00% | 11.40 | % | 10/18/2030 | 49,086 | 48,371 | 48,371 |
27
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Formerra, LLC (4)(10) | SF + | 7.25% | 12.81 | % | 11/1/2028 | 4,252 | 4,136 | 4,210 | |||||||||||||||||||||||||||||||||||||||
Formerra, LLC (4)(6)(10) | 11/1/2028 | 12,031 | (315) | (117) | |||||||||||||||||||||||||||||||||||||||||||
Formerra, LLC (4)(10) | SF + | 7.25% | 12.78 | % | 11/1/2028 | 105,686 | 102,857 | 104,660 | |||||||||||||||||||||||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) | SF + | 6.25% | 11.75 | % | 6/23/2028 | 11,952 | 11,861 | 11,871 | |||||||||||||||||||||||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) | SF + | 6.25% | 11.75 | % | 6/23/2028 | 49,864 | 49,282 | 49,526 | |||||||||||||||||||||||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) | SF + | 6.25% | 11.75 | % | 6/23/2028 | 4,395 | 4,362 | 4,365 | |||||||||||||||||||||||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) | SF + | 6.25% | 11.75 | % | 6/23/2028 | 13,228 | 13,127 | 13,138 | |||||||||||||||||||||||||||||||||||||||
TMC Buyer Inc (8) | SF + | 6.00% | 11.47 | % | 6/30/2028 | 70,148 | 62,802 | 69,403 | |||||||||||||||||||||||||||||||||||||||
396,680 | 405,330 | 7.82 | % | ||||||||||||||||||||||||||||||||||||||||||||
Health Care Providers | |||||||||||||||||||||||||||||||||||||||||||||||
123Dentist Inc (4)(5)(6)(9) | 8/10/2029 | $ | 7,211 | (101) | (55) | ||||||||||||||||||||||||||||||||||||||||||
123Dentist Inc (4)(5)(9) | C + | 5.50% | 10.94 | % | 8/10/2029 | $ | 50,116 | 38,465 | 37,435 | ||||||||||||||||||||||||||||||||||||||
Accelerated Health Systems, LLC (8) | SF + | 4.25% | 9.75 | % | 2/15/2029 | 7,951 | 7,935 | 6,722 | |||||||||||||||||||||||||||||||||||||||
ATI Holdings Acquisition, Inc. (4)(5)(10) | SF + | 7.25% | 12.73 | % | 2/24/2028 | 41,092 | 40,516 | 38,936 | |||||||||||||||||||||||||||||||||||||||
Baart Programs, Inc. (4)(10) | SF + | 5.00% | 10.61 | % | 6/11/2027 | 10,123 | 10,055 | 9,809 | |||||||||||||||||||||||||||||||||||||||
Charlotte Buyer Inc (8) | SF + | 5.25% | 10.61 | % | 2/11/2028 | 28,560 | 27,129 | 28,714 | |||||||||||||||||||||||||||||||||||||||
ERC Topco Holdings, LLC (4)(6)(9) | SF + | 6.25% (incl 3.25% PIK) | 11.91 | % | 11/10/2027 | 1,000 | 420 | 304 | |||||||||||||||||||||||||||||||||||||||
ERC Topco Holdings, LLC (4)(9) | SF + | 6.25% (incl 3.25% PIK) | 11.86 | % | 11/10/2028 | 25,291 | 24,931 | 21,444 | |||||||||||||||||||||||||||||||||||||||
ERC Topco Holdings, LLC (4)(9) | SF + | 6.25% PIK | 11.86 | % | 11/10/2028 | 203 | 203 | 172 | |||||||||||||||||||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(10) | SF + | 6.00% | 11.46 | % | 1/29/2027 | 9,108 | 8,979 | 9,052 | |||||||||||||||||||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(10) | SF + | 6.00% | 11.46 | % | 1/29/2027 | 86,591 | 85,394 | 86,054 | |||||||||||||||||||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(10) | SF + | 6.00% | 11.46 | % | 1/29/2027 | 34,429 | 33,987 | 34,216 | |||||||||||||||||||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(6)(10) | SF + | 6.50% | 11.96 | % | 1/29/2027 | 12,490 | 8,177 | 8,448 | |||||||||||||||||||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(10) | SF + | 6.00% | 11.46 | % | 1/29/2027 | 68,490 | 67,136 | 67,812 | |||||||||||||||||||||||||||||||||||||||
Medline Borrower, LP (8) | SF + | 3.00% | 8.47 | % | 10/23/2028 | 19,648 | 19,482 | 19,769 | |||||||||||||||||||||||||||||||||||||||
MPH Acquisition Holdings LLC (8) | SF + | 4.25% | 9.90 | % | 9/1/2028 | 4,586 | 4,491 | 4,434 | |||||||||||||||||||||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(10) | SF + | 6.50% | 11.97 | % | 6/3/2030 | 30,166 | 29,336 | 29,744 | |||||||||||||||||||||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(10) | SF + | 6.50% | 11.97 | % | 6/3/2030 | 10,055 | 9,779 | 9,915 | |||||||||||||||||||||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(6)(10) | 6/1/2029 | 4,032 | (109) | (61) | |||||||||||||||||||||||||||||||||||||||||||
Pediatric Associates Holding Company, LLC (8) | SF + | 3.25% | 8.72 | % | 12/29/2028 | 7,717 | 7,690 | 7,486 | |||||||||||||||||||||||||||||||||||||||
Phoenix Newco Inc (8) | SF + | 3.25% | 8.72 | % | 11/15/2028 | 17,567 | 17,469 | 17,692 | |||||||||||||||||||||||||||||||||||||||
Pinnacle Fertility, Inc. (4)(6)(9) | SF + | 5.00% | 10.43 | % | 3/14/2028 | 12,383 | 9,078 | 9,184 | |||||||||||||||||||||||||||||||||||||||
Pinnacle Fertility, Inc. (4)(9) | SF + | 5.00% | 10.43 | % | 3/14/2028 | 27,019 | 26,626 | 26,857 | |||||||||||||||||||||||||||||||||||||||
PPV Intermediate Holdings, LLC (4)(9) | SF + | 5.75% | 11.14 | % | 8/31/2029 | 108,193 | 106,567 | 107,507 | |||||||||||||||||||||||||||||||||||||||
PPV Intermediate Holdings, LLC (4)(6)(9) | 8/31/2029 | 8,145 | (132) | (52) | |||||||||||||||||||||||||||||||||||||||||||
PTSH Intermediate Holdings, LLC (4)(9) | SF + | 5.50% | 11.00 | % | 12/17/2027 | 3,941 | 3,882 | 3,941 | |||||||||||||||||||||||||||||||||||||||
PTSH Intermediate Holdings, LLC (4)(9) | SF + | 5.50% | 11.00 | % | 12/17/2027 | 20,679 | 20,392 | 20,679 | |||||||||||||||||||||||||||||||||||||||
Tenet Healthcare Corp (5)(7) | 5.13 | % | 11/1/2027 | 2,695 | 2,724 | 2,636 | |||||||||||||||||||||||||||||||||||||||||
Tivity Health Inc (4)(9) | SF + | 6.00% | 11.35 | % | 6/28/2029 | 111,153 | 108,949 | 108,628 | |||||||||||||||||||||||||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(6)(9) | SF + | 5.75% | 11.13 | % | 7/17/2028 | 50,181 | 32,006 | 31,265 | |||||||||||||||||||||||||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(9) | SF + | 5.75% | 11.16 | % | 7/17/2028 | 26,548 | 26,150 | 25,732 | |||||||||||||||||||||||||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(9) | SF + | 5.75% | 11.15 | % | 7/17/2028 | 43,290 | 42,610 | 41,959 | |||||||||||||||||||||||||||||||||||||||
WCAS XIII Primary Care Investors, L.P. (4)(10) | SF + | 6.25% | 11.61 | % | 12/31/2029 | 135,630 | 133,289 | 134,827 | |||||||||||||||||||||||||||||||||||||||
953,505 | 951,205 | 18.34 | % | ||||||||||||||||||||||||||||||||||||||||||||
Household Goods and Home Construction | |||||||||||||||||||||||||||||||||||||||||||||||
LHS Borrower, LLC (8) | SF + | 4.75% | 10.21 | % | 2/16/2029 | 6,948 | 6,896 | 6,301 | |||||||||||||||||||||||||||||||||||||||
Sunset Debt Merger Sub, Inc. (9) | SF + | 4.00% | 9.47 | % | 10/6/2028 | 707 | 609 | 636 | |||||||||||||||||||||||||||||||||||||||
7,505 | 6,937 | 0.13 | % | ||||||||||||||||||||||||||||||||||||||||||||
Industrial Engineering |
28
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Emerson Climate Technologies Inc (7) | SF + | 3.00% | 8.36 | % | 5/31/2030 | 13,957 | 13,851 | 14,023 | |||||||||||||||||||||||||||||||||||||||
LSF12 Donnelly Bidco, LLC (4)(10) | SF + | 6.50% | 11.86 | % | 10/2/2029 | 19,878 | 19,401 | 19,401 | |||||||||||||||||||||||||||||||||||||||
Radwell Parent, LLC (4)(6)(9) | SF + | 6.75% | 12.10 | % | 4/3/2028 | 13,271 | 2,390 | 2,654 | |||||||||||||||||||||||||||||||||||||||
Radwell Parent, LLC (4)(9) | SF + | 6.75% | 12.10 | % | 4/2/2029 | 153,824 | 149,966 | 156,200 | |||||||||||||||||||||||||||||||||||||||
Roper Industrial Products Investment Co (8) | SF + | 4.00% | 9.35 | % | 11/22/2029 | 18,044 | 17,488 | 18,106 | |||||||||||||||||||||||||||||||||||||||
Standard Industries, Inc. (8) | SF + | 2.25% | 7.72 | % | 9/22/2028 | 1,264 | 1,264 | 1,268 | |||||||||||||||||||||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) | E + | 6.50% | 10.46 | % | 12/1/2027 | € | 4,758 | 4,943 | 4,975 | ||||||||||||||||||||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(6)(9) | SF + | 6.50% | 12.04 | % | 12/1/2027 | 1,000 | 713 | 678 | |||||||||||||||||||||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) | SF + | 6.50% | 12.04 | % | 12/1/2027 | 12,081 | 11,902 | 11,481 | |||||||||||||||||||||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) | E + | 6.50% | 10.46 | % | 12/1/2027 | € | 8,380 | 9,333 | 8,762 | ||||||||||||||||||||||||||||||||||||||
TK Elevator U.S. Newco, Inc. (5)(8) | SF + | 3.50% | 9.38 | % | 7/30/2027 | 12,573 | 12,439 | 12,617 | |||||||||||||||||||||||||||||||||||||||
Wec US Holdings Ltd (8) | SF + | 3.75% | 9.11 | % | 8/1/2025 | 3,955 | 3,925 | 3,973 | |||||||||||||||||||||||||||||||||||||||
247,615 | 254,138 | 4.90 | % | ||||||||||||||||||||||||||||||||||||||||||||
Industrial Metals and Mining | |||||||||||||||||||||||||||||||||||||||||||||||
BLY US Holdings Inc. (4)(5)(10) | SF + | 7.50% | 13.12 | % | 9/8/2026 | 3,060 | 3,006 | 2,986 | |||||||||||||||||||||||||||||||||||||||
BLY US Holdings Inc. (4)(5)(10) | SF + | 7.50% | 13.12 | % | 9/8/2026 | 9,130 | 8,881 | 8,909 | |||||||||||||||||||||||||||||||||||||||
11,887 | 11,895 | 0.23 | % | ||||||||||||||||||||||||||||||||||||||||||||
Industrial Support Services | |||||||||||||||||||||||||||||||||||||||||||||||
Acuris Finance US, Inc (8) | SF + | 4.00% | 9.50 | % | 2/16/2028 | 13,500 | 13,408 | 13,515 | |||||||||||||||||||||||||||||||||||||||
Allied Universal Holdco LLC (8) | SF + | 3.75% | 9.21 | % | 5/12/2028 | 3,001 | 2,993 | 2,993 | |||||||||||||||||||||||||||||||||||||||
Argos Health Holdings, Inc. (4)(9) | SF + | 5.75% | 11.15 | % | 12/6/2027 | 653 | 644 | 629 | |||||||||||||||||||||||||||||||||||||||
Atlas Intermediate III, L.L.C. (4)(10) | SF + | 8.25% (incl 4.00% PIK) | 13.63 | % | 10/31/2029 | 112,091 | 109,368 | 109,368 | |||||||||||||||||||||||||||||||||||||||
Atlas Intermediate III, L.L.C. (4)(6)(10) | 10/31/2029 | 13,445 | (327) | (327) | |||||||||||||||||||||||||||||||||||||||||||
Becklar, LLC (4)(10) | SF + | 6.85% | 12.30 | % | 12/21/2026 | 986 | 974 | 978 | |||||||||||||||||||||||||||||||||||||||
Becklar, LLC (4)(10) | SF + | 6.85% | 12.30 | % | 12/21/2026 | 5,725 | 5,644 | 5,676 | |||||||||||||||||||||||||||||||||||||||
Captive Resources Midco LLC (4)(6)(9) | 7/3/2028 | 7,558 | (113) | — | |||||||||||||||||||||||||||||||||||||||||||
Captive Resources Midco LLC (4)(9) | SF + | 5.75% (incl 3.13% PIK) | 11.10 | % | 7/2/2029 | 93,197 | 91,762 | 94,129 | |||||||||||||||||||||||||||||||||||||||
CD&R Madison UK Bidco LTD (4)(5)(6)(7) | SN + | 8.25% | 13.47 | % | 2/28/2030 | £ | 9,965 | 2,252 | 2,394 | ||||||||||||||||||||||||||||||||||||||
CD&R Madison UK Bidco LTD (4)(5)(7) | SN + | 8.25% (incl 2.00% PIK) | 13.48 | % | 2/28/2030 | £ | 45,394 | 53,009 | 56,599 | ||||||||||||||||||||||||||||||||||||||
CD&R Madison UK Bidco LTD (4)(5)(7) | E + | 7.75% (incl 2.00% PIK) | 11.71 | % | 2/28/2030 | € | 22,377 | 22,902 | 24,093 | ||||||||||||||||||||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(6)(9) | 10/1/2029 | 10,736 | (279) | 58 | |||||||||||||||||||||||||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(6)(9) | 10/1/2029 | 11,656 | (287) | — | |||||||||||||||||||||||||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(9) | SF + | 6.75% | 12.11 | % | 10/1/2029 | 72,983 | 71,143 | 73,375 | |||||||||||||||||||||||||||||||||||||||
Eagle 2021 Lower Merger Sub, LLC (4)(9) | SF + | 5.75% | 11.15 | % | 12/6/2027 | 817 | 806 | 786 | |||||||||||||||||||||||||||||||||||||||
Employbridge, LLC (9) | SF + | 4.75% | 10.41 | % | 7/19/2028 | 9,807 | 9,765 | 8,099 | |||||||||||||||||||||||||||||||||||||||
Galaxy US Opco Inc. (5)(8) | SF + | 4.75% | 10.13 | % | 4/29/2029 | 26,037 | 25,520 | 21,611 | |||||||||||||||||||||||||||||||||||||||
Guidehouse Inc. (4)(9) | SF + | 5.75% (incl 2.00% PIK) | 11.11 | % | 12/16/2030 | 186,435 | 183,869 | 184,120 | |||||||||||||||||||||||||||||||||||||||
IG Investments Holdings, LLC (4)(6)(9) | 9/22/2027 | 1,726 | (18) | (12) | |||||||||||||||||||||||||||||||||||||||||||
IG Investments Holdings, LLC (4)(9) | SF + | 6.00% | 11.48 | % | 9/22/2028 | 22,278 | 22,019 | 22,129 | |||||||||||||||||||||||||||||||||||||||
IG Investments Holdings, LLC (4)(9) | SF + | 6.00% | 11.48 | % | 9/22/2028 | 1,837 | 1,824 | 1,825 | |||||||||||||||||||||||||||||||||||||||
NBG Acquisition Corp. (4)(6)(9) | SF + | 5.25% | 10.78 | % | 11/6/2028 | 2,876 | 1,837 | 1,792 | |||||||||||||||||||||||||||||||||||||||
NBG Acquisition Corp. (4)(9) | SF + | 5.25% | 10.78 | % | 11/6/2028 | 21,336 | 21,222 | 20,856 | |||||||||||||||||||||||||||||||||||||||
Planet US Buyer LLC (4)(6)(9) | 2/1/2028 | 8,024 | (197) | (148) | |||||||||||||||||||||||||||||||||||||||||||
Planet US Buyer LLC (4)(9) | SF + | 6.75% | 12.13 | % | 2/1/2030 | 83,233 | 81,061 | 81,744 | |||||||||||||||||||||||||||||||||||||||
Royal Buyer, LLC (4)(6)(9) | SF + | 5.50% | 10.89 | % | 8/31/2028 | 8,993 | 5,090 | 5,326 | |||||||||||||||||||||||||||||||||||||||
Royal Buyer, LLC (4)(6)(9) | SF + | 5.50% | 10.89 | % | 8/31/2028 | 7,000 | 1,525 | 1,633 | |||||||||||||||||||||||||||||||||||||||
Royal Buyer, LLC (4)(9) | SF + | 5.50% | 10.89 | % | 8/31/2028 | 44,550 | 43,839 | 44,996 | |||||||||||||||||||||||||||||||||||||||
Sedgwick Claims Management Services, Inc. (7) | SF + | 3.75% | 9.11 | % | 2/24/2028 | 19,205 | 19,048 | 19,288 | |||||||||||||||||||||||||||||||||||||||
Simplisafe Holding Corporation (4)(6)(9) | SF + | 6.25% | 11.61 | % | 5/2/2028 | 15,086 | 3,775 | 3,912 |
29
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Simplisafe Holding Corporation (4)(9) | SF + | 6.25% | 11.61 | % | 5/2/2028 | 119,039 | 117,275 | 118,277 | |||||||||||||||||||||||||||||||||||||||
Spirit RR Holdings, Inc. (4)(6)(9) | SF + | 5.25% | 10.71 | % | 9/13/2028 | 3,579 | 299 | 308 | |||||||||||||||||||||||||||||||||||||||
Spirit RR Holdings, Inc. (4)(9) | SF + | 5.25% | 10.70 | % | 9/13/2028 | 43,103 | 42,361 | 42,508 | |||||||||||||||||||||||||||||||||||||||
Spirit RR Holdings, Inc. (4)(6)(9) | 9/13/2028 | 5,986 | (89) | (83) | |||||||||||||||||||||||||||||||||||||||||||
TruckPro, LLC (4)(12) | SF + | 7.25% | 12.94 | % | 8/16/2028 | 70,533 | 68,576 | 69,207 | |||||||||||||||||||||||||||||||||||||||
Vaco Holdings, LLC (9) | SF + | 5.00% | 10.43 | % | 1/21/2029 | 12,495 | 12,452 | 12,362 | |||||||||||||||||||||||||||||||||||||||
1,034,952 | 1,044,016 | 20.13 | % | ||||||||||||||||||||||||||||||||||||||||||||
Industrial Transportation | |||||||||||||||||||||||||||||||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(6)(7) | 5/31/2029 | € | 11,245 | (299) | (86) | ||||||||||||||||||||||||||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(7) | E + | 6.50% | 10.53 | % | 5/31/2029 | € | 8,096 | 8,484 | 8,875 | ||||||||||||||||||||||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(7) | E + | 6.50% | 10.53 | % | 5/31/2029 | € | 22,264 | 23,330 | 24,407 | ||||||||||||||||||||||||||||||||||||||
31,515 | 33,196 | 0.64 | % | ||||||||||||||||||||||||||||||||||||||||||||
Investment Banking and Brokerage Services | |||||||||||||||||||||||||||||||||||||||||||||||
Apex Group Treasury LLC (4)(5)(8) | SF + | 5.00% | 10.40 | % | 7/27/2028 | 6,982 | 6,881 | 6,974 | |||||||||||||||||||||||||||||||||||||||
Ascensus Holdings, Inc. (8) | SF + | 3.50% | 8.97 | % | 8/2/2028 | 7,643 | 7,581 | 7,638 | |||||||||||||||||||||||||||||||||||||||
Eisner Advisory Group LLC (9) | SF + | 5.25% | 10.72 | % | 7/28/2028 | 4,451 | 4,433 | 4,466 | |||||||||||||||||||||||||||||||||||||||
Eisner Advisory Group LLC (9) | SF + | 5.25% | 10.72 | % | 7/28/2028 | 2,526 | 2,526 | 2,535 | |||||||||||||||||||||||||||||||||||||||
More Cowbell II, LLC (4)(6)(9) | 9/3/2030 | 5,484 | (108) | (111) | |||||||||||||||||||||||||||||||||||||||||||
More Cowbell II, LLC (4)(6)(9) | SF + | 6.00% | 11.39 | % | 9/4/2029 | 7,590 | 1,258 | 1,245 | |||||||||||||||||||||||||||||||||||||||
More Cowbell II, LLC (4)(9) | SF + | 6.00% | 11.48 | % | 9/3/2030 | 50,342 | 49,382 | 49,319 | |||||||||||||||||||||||||||||||||||||||
Osaic Holdings Inc (7) | SF + | 4.50% | 9.86 | % | 8/17/2028 | 10,841 | 10,794 | 10,889 | |||||||||||||||||||||||||||||||||||||||
Transnetwork LLC (8) | SF + | 5.50% | 10.85 | % | 12/29/2030 | 48,913 | 47,935 | 48,791 | |||||||||||||||||||||||||||||||||||||||
Travelex Issuerco 2 PLC (4)(5)(14) | SN + | 8.00% | 13.21 | % | 9/22/2028 | £ | 23,256 | 27,392 | 28,599 | ||||||||||||||||||||||||||||||||||||||
158,074 | 160,345 | 3.09 | % | ||||||||||||||||||||||||||||||||||||||||||||
Leisure Goods | |||||||||||||||||||||||||||||||||||||||||||||||
Jam City, Inc. (4)(10) | SF + | 7.00% | 12.61 | % | 9/7/2027 | 1,996 | 1,983 | 1,991 | |||||||||||||||||||||||||||||||||||||||
1,983 | 1,991 | 0.04 | % | ||||||||||||||||||||||||||||||||||||||||||||
Life Insurance | |||||||||||||||||||||||||||||||||||||||||||||||
Onedigital Borrower LLC (8) | SF + | 4.25% | 9.71 | % | 11/16/2027 | 5,880 | 5,872 | 5,884 | |||||||||||||||||||||||||||||||||||||||
5,872 | 5,884 | 0.11 | % | ||||||||||||||||||||||||||||||||||||||||||||
Media | |||||||||||||||||||||||||||||||||||||||||||||||
2080 Media, Inc. (4)(6)(9) | SF + | 6.00% | 11.47 | % | 3/14/2029 | 29,401 | 12,189 | 12,489 | |||||||||||||||||||||||||||||||||||||||
2080 Media, Inc. (4)(6)(9) | 3/14/2028 | 13,795 | (193) | (83) | |||||||||||||||||||||||||||||||||||||||||||
2080 Media, Inc. (4)(9) | SF + | 6.00% | 11.47 | % | 3/14/2029 | 54,491 | 53,644 | 54,192 | |||||||||||||||||||||||||||||||||||||||
Ancestry.com Inc. (8) | SF + | 3.25% | 8.71 | % | 12/6/2027 | 6,262 | 6,190 | 6,143 | |||||||||||||||||||||||||||||||||||||||
Arc Media Holdings Limited (4)(5)(6)(10) | SF + | 7.25% | 12.77 | % | 10/29/2027 | 2,766 | 2,437 | 2,347 | |||||||||||||||||||||||||||||||||||||||
Arc Media Holdings Limited (4)(5)(10) | SF + | 7.25% | 12.79 | % | 10/29/2027 | 40,972 | 40,176 | 38,860 | |||||||||||||||||||||||||||||||||||||||
Associations Inc. (4)(10) | SF + | 6.50% (incl 2.50% PIK) | 12.18 | % | 7/2/2027 | 494 | 491 | 499 | |||||||||||||||||||||||||||||||||||||||
Associations Inc. (4)(10) | SF + | 6.50% (incl 2.50% PIK) | 12.14 | % | 7/2/2027 | 1,029 | 1,022 | 1,039 | |||||||||||||||||||||||||||||||||||||||
Associations Inc. (4)(10) | SF + | 6.50% (incl 2.50% PIK) | 12.12 | % | 7/2/2027 | 1,029 | 1,022 | 1,039 | |||||||||||||||||||||||||||||||||||||||
Associations Inc. (4)(10) | SF + | 6.50% (incl 2.50% PIK) | 12.13 | % | 7/2/2027 | 621 | 617 | 627 | |||||||||||||||||||||||||||||||||||||||
Associations Inc. (4)(6)(10) | SF + | 6.50% | 12.14 | % | 7/2/2027 | 403 | 140 | 143 | |||||||||||||||||||||||||||||||||||||||
Associations Inc. (4)(10) | SF + | 6.50% (incl 2.50% PIK) | 12.18 | % | 7/2/2027 | 29,562 | 29,372 | 29,858 | |||||||||||||||||||||||||||||||||||||||
Aventine Intermediate LLC (4)(9) | SF + | 6.00% | 11.47 | % | 6/18/2027 | 1,073 | 1,061 | 993 | |||||||||||||||||||||||||||||||||||||||
Aventine Intermediate LLC (4)(9) | SF + | 6.00% | 11.47 | % | 6/18/2027 | 18,855 | 18,619 | 17,452 | |||||||||||||||||||||||||||||||||||||||
Circana Group, LP. (4)(6)(9) | P + | 4.75% | 13.25 | % | 12/1/2027 | 9,023 | 1,484 | 1,561 | |||||||||||||||||||||||||||||||||||||||
Circana Group, LP. (4)(9) | SF + | 6.25% (incl 2.75% PIK) | 11.61 | % | 12/1/2028 | 142,859 | 140,633 | 141,912 | |||||||||||||||||||||||||||||||||||||||
Circana Group, LP. (4)(9) | SF + | 5.75% | 11.21 | % | 12/1/2028 | 9,198 | 9,126 | 9,096 |
30
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
IEHL US Holdings, Inc. (4)(12) | SF + | 7.25% | 12.63 | % | 10/29/2029 | 6,604 | 6,425 | 6,522 | |||||||||||||||||||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(12) | SN + | 7.65% | 12.90 | % | 10/29/2029 | £ | 15,493 | 18,789 | 19,501 | ||||||||||||||||||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(10) | E + | 7.25% | 11.20 | % | 10/29/2029 | € | 2,540 | 2,724 | 2,770 | ||||||||||||||||||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(10) | E + | 7.25% | 11.20 | % | 10/29/2029 | € | 3,048 | 3,177 | 3,325 | ||||||||||||||||||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(6)(12) | 4/27/2029 | 5,080 | (141) | (66) | |||||||||||||||||||||||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(12) | SF + | 7.25% | 12.63 | % | 10/29/2029 | 30,478 | 29,657 | 30,100 | |||||||||||||||||||||||||||||||||||||||
Kobalt London Limited (4)(5)(9) | SF + | 8.00% | 13.55 | % | 2/25/2027 | 13,125 | 12,949 | 12,873 | |||||||||||||||||||||||||||||||||||||||
Kobalt London Limited (4)(5)(9) | SF + | 8.00% | 13.53 | % | 2/25/2027 | 13,125 | 12,952 | 12,874 | |||||||||||||||||||||||||||||||||||||||
Mav Acquisition Corporation (8) | SF + | 4.75% | 10.22 | % | 7/28/2028 | 15,724 | 15,518 | 15,729 | |||||||||||||||||||||||||||||||||||||||
Oneteam Partners, LLC (4)(9) | SF + | 5.50% | 10.98 | % | 9/14/2029 | 74,250 | 73,010 | 74,250 | |||||||||||||||||||||||||||||||||||||||
Renaissance Financiere (4)(5)(7) | E + | 7.00% | 10.94 | % | 7/26/2028 | € | 34,871 | 35,514 | 37,969 | ||||||||||||||||||||||||||||||||||||||
Renaissance Holding Corp. (8) | SF + | 4.75% | 10.11 | % | 4/5/2030 | 7,980 | 7,816 | 8,019 | |||||||||||||||||||||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(6)(10) | 8/7/2028 | 3,657 | (85) | (68) | |||||||||||||||||||||||||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(6)(10) | 8/7/2028 | 4,711 | (118) | (87) | |||||||||||||||||||||||||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(10) | SF + | 7.50% | 12.98 | % | 8/7/2028 | 63,672 | 62,071 | 62,493 | |||||||||||||||||||||||||||||||||||||||
598,288 | 604,371 | 11.66 | % | ||||||||||||||||||||||||||||||||||||||||||||
Medical Equipment and Services | |||||||||||||||||||||||||||||||||||||||||||||||
ABB/CON-CISE Optical Group LLC (4)(9) | SF + | 7.50% | 13.01 | % | 2/23/2028 | 21,259 | 20,869 | 19,119 | |||||||||||||||||||||||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10) | SF + | 6.00% | 11.36 | % | 9/30/2030 | 15,467 | 607 | 670 | |||||||||||||||||||||||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10) | 10/1/2029 | 21,254 | (610) | (543) | |||||||||||||||||||||||||||||||||||||||||||
Bamboo US BidCo LLC (4)(10) | E + | 6.75% (incl 3.38% PIK) | 10.70 | % | 9/30/2030 | € | 61,588 | 63,223 | 66,272 | ||||||||||||||||||||||||||||||||||||||
Bamboo US BidCo LLC (4)(10) | SF + | 6.75% (incl 3.38% PIK) | 12.13 | % | 9/30/2030 | 81,370 | 79,021 | 79,306 | |||||||||||||||||||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(6)(9) | 5/11/2028 | 34,900 | (848) | (734) | |||||||||||||||||||||||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) | SF + | 5.75% | 11.11 | % | 5/11/2028 | 22,857 | 22,514 | 22,452 | |||||||||||||||||||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(6)(9) | SF + | 5.75% | 11.11 | % | 5/11/2028 | 10,875 | 3,645 | 3,614 | |||||||||||||||||||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) | SF + | 5.75% | 11.11 | % | 5/11/2028 | 75,297 | 74,150 | 73,963 | |||||||||||||||||||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) | SF + | 6.00% | 11.36 | % | 5/11/2028 | 9,676 | 9,447 | 9,472 | |||||||||||||||||||||||||||||||||||||||
Limpio Bidco GMBH (4)(5)(7) | E + | 6.20% | 10.15 | % | 10/31/2030 | € | 66,556 | 68,533 | 71,499 | ||||||||||||||||||||||||||||||||||||||
PerkinElmer U.S. LLC (4)(10) | SF + | 6.75% | 12.11 | % | 3/13/2029 | 112,067 | 108,545 | 110,472 | |||||||||||||||||||||||||||||||||||||||
PerkinElmer U.S. LLC (4)(10) | SF + | 5.75% | 11.11 | % | 3/13/2029 | 62,432 | 61,205 | 61,203 | |||||||||||||||||||||||||||||||||||||||
Plasma Buyer LLC (4)(6)(9) | 5/12/2029 | 22,070 | (358) | (846) | |||||||||||||||||||||||||||||||||||||||||||
Plasma Buyer LLC (4)(6)(9) | SF + | 5.75% | 11.10 | % | 5/12/2028 | 9,458 | 3,015 | 2,828 | |||||||||||||||||||||||||||||||||||||||
Plasma Buyer LLC (4)(9) | SF + | 5.75% | 11.10 | % | 5/12/2029 | 84,061 | 82,720 | 80,839 | |||||||||||||||||||||||||||||||||||||||
Resonetics, LLC (4)(10) | SF + | 6.00% | 11.39 | % | 4/28/2028 | 63,513 | 61,712 | 61,710 | |||||||||||||||||||||||||||||||||||||||
SDC US Smilepay SPV (4)(7)(16) | P + | 9.75% | 10/27/2025 | 28,737 | 26,203 | 21,039 | |||||||||||||||||||||||||||||||||||||||||
TecoStar Holdings Inc (4)(10) | SF + | 8.50% (incl 4.50% PIK) | 13.91 | % | 7/6/2029 | 119,875 | 117,155 | 118,687 | |||||||||||||||||||||||||||||||||||||||
800,748 | 801,022 | 15.45 | % | ||||||||||||||||||||||||||||||||||||||||||||
Non-life Insurance | |||||||||||||||||||||||||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(6)(9) | SF + | 6.00% | 11.43 | % | 11/1/2029 | 8,000 | 1,340 | 1,446 | |||||||||||||||||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(9) | SF + | 5.50% | 11.04 | % | 11/1/2029 | 39,650 | 39,390 | 39,250 | |||||||||||||||||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(6)(9) | 11/1/2029 | 467 | — | (5) | |||||||||||||||||||||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(9) | SF + | 5.50% | 11.03 | % | 11/1/2029 | 14,273 | 14,273 | 14,129 | |||||||||||||||||||||||||||||||||||||||
Acrisure LLC (7) | SF + | 4.50% | 9.89 | % | 11/6/2030 | 4,000 | 3,961 | 4,015 | |||||||||||||||||||||||||||||||||||||||
Alera Group, Inc. (4)(9) | SF + | 6.00% | 11.46 | % | 10/2/2028 | 21,555 | 21,397 | 21,411 | |||||||||||||||||||||||||||||||||||||||
Alera Group, Inc. (4)(9) | SF + | 6.00% | 11.46 | % | 10/2/2028 | 12,398 | 12,390 | 12,315 | |||||||||||||||||||||||||||||||||||||||
Alera Group, Inc. (4)(9) | SF + | 6.00% | 11.46 | % | 10/2/2028 | 43,725 | 43,696 | 43,433 | |||||||||||||||||||||||||||||||||||||||
Alera Group (4)(6)(9) | 10/2/2028 | 5,196 | (51) | (51) | |||||||||||||||||||||||||||||||||||||||||||
Alliant Holdings Intermediate, LLC (8) | SF + | 3.50% | 8.86 | % | 11/6/2030 | 18,839 | 18,715 | 18,946 | |||||||||||||||||||||||||||||||||||||||
AmWINS Group, Inc. (9) | SF + | 2.25% | 7.72 | % | 2/19/2028 | 4,597 | 4,577 | 4,610 | |||||||||||||||||||||||||||||||||||||||
AmWINS Group, Inc. (9) | SF + | 2.75% | 8.22 | % | 2/19/2028 | 2,977 | 2,971 | 2,990 |
31
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Amynta Agency Borrower Inc. (7) | SF + | 4.25% | 9.61 | % | 2/28/2028 | 20,116 | 19,600 | 20,166 | |||||||||||||||||||||||||||||||||||||||
BroadStreet Partners, Inc. (7) | SF + | 3.75% | 9.11 | % | 1/27/2029 | 9,192 | 9,115 | 9,231 | |||||||||||||||||||||||||||||||||||||||
Galway Borrower LLC (4)(6)(9) | 9/30/2027 | 2,216 | (29) | (15) | |||||||||||||||||||||||||||||||||||||||||||
Galway Borrower LLC (4)(9) | SF + | 5.25% | 10.70 | % | 9/29/2028 | 60,965 | 60,526 | 60,560 | |||||||||||||||||||||||||||||||||||||||
Higginbotham Insurance Agency, Inc.(4)(6)(10) | SF + | 5.50% | 10.96 | % | 11/27/2028 | 22,463 | 14,732 | 14,698 | |||||||||||||||||||||||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(10) | SF + | 5.50% | 10.96 | % | 11/27/2028 | 48 | 47 | 47 | |||||||||||||||||||||||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(10) | SF + | 5.50% | 10.96 | % | 11/27/2028 | 9,777 | 9,710 | 9,669 | |||||||||||||||||||||||||||||||||||||||
HUB International Limited (7) | 7.25 | % | 6/15/2030 | 10,517 | 10,517 | 11,115 | |||||||||||||||||||||||||||||||||||||||||
HUB International Limited (9) | SF + | 4.25% | 9.66 | % | 6/20/2030 | 13,853 | 13,723 | 13,930 | |||||||||||||||||||||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(6)(9) | SF + | 6.00% | 11.39 | % | 8/27/2026 | 5,826 | 352 | 364 | |||||||||||||||||||||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(9) | SF + | 6.02% | 11.41 | % | 8/27/2026 | 20,696 | 20,456 | 20,543 | |||||||||||||||||||||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(9) | SF + | 6.02% | 11.51 | % | 8/27/2026 | 56,970 | 56,500 | 56,550 | |||||||||||||||||||||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(6)(10) | 8/27/2026 | 472 | (4) | (3) | |||||||||||||||||||||||||||||||||||||||||||
Jones Deslauriers Insurance Management Inc. (5)(7) | 8.50 | % | 3/15/2030 | 14,487 | 14,467 | 15,232 | |||||||||||||||||||||||||||||||||||||||||
Jones Deslauriers Insurance Management Inc. (5)(7) | SF + | 4.25% | 9.62 | % | 3/15/2030 | 5,128 | 5,091 | 5,156 | |||||||||||||||||||||||||||||||||||||||
Patriot Growth Insurance Services, LLC (4)(9) | SF + | 5.75% | 11.25 | % | 10/16/2028 | 18,214 | 17,928 | 18,150 | |||||||||||||||||||||||||||||||||||||||
Patriot Growth Insurance Services, LLC (4)(6)(9) | 10/16/2028 | 822 | (12) | (3) | |||||||||||||||||||||||||||||||||||||||||||
Patriot Growth Insurance Services, LLC (4)(9) | SF + | 5.50% | 11.00 | % | 10/16/2028 | 7,187 | 7,083 | 7,162 | |||||||||||||||||||||||||||||||||||||||
Summit Acquisition Inc. (4)(6)(9) | 5/1/2029 | 6,685 | (178) | (85) | |||||||||||||||||||||||||||||||||||||||||||
Summit Acquisition Inc. (4)(6)(9) | 5/1/2030 | 10,961 | (310) | (126) | |||||||||||||||||||||||||||||||||||||||||||
Summit Acquisition Inc. (4)(9) | SF + | 6.75% | 12.10 | % | 5/1/2030 | 48,780 | 47,459 | 48,221 | |||||||||||||||||||||||||||||||||||||||
Trupanion, Inc. (4)(5)(9) | SF + | 5.00% | 10.50 | % | 3/25/2027 | 26,018 | 25,768 | 25,588 | |||||||||||||||||||||||||||||||||||||||
Trupanion, Inc. (4)(5)(6)(9) | 3/25/2027 | 6,576 | (64) | (109) | |||||||||||||||||||||||||||||||||||||||||||
Trupanion, Inc. (4)(5)(9) | SF + | 5.00% | 10.50 | % | 3/25/2027 | 20,633 | 20,421 | 20,292 | |||||||||||||||||||||||||||||||||||||||
USI Inc/NY (7) | SF + | 3.25% | 8.60 | % | 9/27/2030 | 5,985 | 5,970 | 6,002 | |||||||||||||||||||||||||||||||||||||||
521,527 | 524,824 | 10.12 | % | ||||||||||||||||||||||||||||||||||||||||||||
Oil, Gas and Coal | |||||||||||||||||||||||||||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(6)(10) | 12/7/2029 | 6,923 | (155) | (154) | |||||||||||||||||||||||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(6)(10) | 12/7/2029 | 6,923 | (154) | (154) | |||||||||||||||||||||||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(10) | SF + | 6.00% | 11.36 | % | 12/7/2029 | 46,154 | 45,127 | 45,126 | |||||||||||||||||||||||||||||||||||||||
44,818 | 44,818 | 0.86 | % | ||||||||||||||||||||||||||||||||||||||||||||
Personal Care, Drug and Grocery Stores | |||||||||||||||||||||||||||||||||||||||||||||||
Parfums Holding Co Inc (12) | SF + | 6.00% | 11.61 | % | 6/30/2026 | 19,625 | 18,097 | 19,296 | |||||||||||||||||||||||||||||||||||||||
Puma Buyer LLC (4)(8) | SF + | 5.50% | 10.95 | % | 7/16/2029 | 61,380 | 57,816 | 61,380 | |||||||||||||||||||||||||||||||||||||||
Vermont Aus Pty Ltd (4)(5)(9) | SF + | 5.65% | 11.00 | % | 3/23/2028 | 15,866 | 15,572 | 15,714 | |||||||||||||||||||||||||||||||||||||||
Vermont Aus Pty Ltd (4)(5)(9) | B + | 5.75% | 10.16 | % | 3/23/2028 | A$ | 35,124 | 25,729 | 23,708 | ||||||||||||||||||||||||||||||||||||||
117,214 | 120,098 | 2.32 | % | ||||||||||||||||||||||||||||||||||||||||||||
Personal Goods | |||||||||||||||||||||||||||||||||||||||||||||||
Daphne S.P.A. (4)(5)(6)(7) | 5/23/2028 | € | 3,978 | (106) | (242) | ||||||||||||||||||||||||||||||||||||||||||
Daphne S.P.A. (4)(5)(7) | E + | 6.25% | 10.21 | % | 5/23/2028 | € | 45,354 | 47,660 | 47,313 | ||||||||||||||||||||||||||||||||||||||
Spanx, LLC (4)(6)(9) | 11/18/2027 | 5,000 | (67) | — | |||||||||||||||||||||||||||||||||||||||||||
Spanx, LLC (4)(9) | SF + | 5.25% | 10.71 | % | 11/20/2028 | 29,400 | 28,970 | 29,400 | |||||||||||||||||||||||||||||||||||||||
76,457 | 76,471 | 1.47 | % | ||||||||||||||||||||||||||||||||||||||||||||
Pharmaceuticals and Biotechnology | |||||||||||||||||||||||||||||||||||||||||||||||
Advarra Holdings, Inc. (4)(6)(9) | 8/24/2029 | 6,340 | (94) | 63 | |||||||||||||||||||||||||||||||||||||||||||
Advarra Holdings, Inc. (4)(9) | SF + | 5.25% | 10.61 | % | 8/24/2029 | 69,459 | 68,452 | 70,153 | |||||||||||||||||||||||||||||||||||||||
CPI Buyer, LLC (4)(9) | SF + | 5.50% | 11.15 | % | 11/1/2028 | 1,344 | 1,332 | 1,339 | |||||||||||||||||||||||||||||||||||||||
CPI Buyer, LLC (4)(6)(9) | 10/30/2026 | 2,115 | (26) | (5) | |||||||||||||||||||||||||||||||||||||||||||
CPI Buyer, LLC (4)(9) | SF + | 5.50% | 11.15 | % | 11/1/2028 | 24,957 | 24,670 | 24,869 | |||||||||||||||||||||||||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(6)(7) | 10/27/2028 | € | 8,400 | (178) | (60) | ||||||||||||||||||||||||||||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(7) | E + | 6.50% | 10.43 | % | 10/27/2028 | € | 82,300 | 80,361 | 90,259 | ||||||||||||||||||||||||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(5)(6)(9) | B + | 6.50% | 10.97 | % | 10/30/2028 | A$ | 11,982 | 1,897 | 1,994 |
32
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(5)(9) | B + | 6.50% | 10.92 | % | 10/30/2028 | A$ | 118,623 | 74,237 | 79,960 | ||||||||||||||||||||||||||||||||||||||
250,651 | 268,572 | 5.18 | % | ||||||||||||||||||||||||||||||||||||||||||||
Real Estate Investment and Services | |||||||||||||||||||||||||||||||||||||||||||||||
OEG Borrower LLC (4)(8) | SF + | 5.00% | 10.48 | % | 6/18/2029 | 39,500 | 38,219 | 39,500 | |||||||||||||||||||||||||||||||||||||||
38,219 | 39,500 | 0.76 | % | ||||||||||||||||||||||||||||||||||||||||||||
Retailers | |||||||||||||||||||||||||||||||||||||||||||||||
AI Grace Aus Bidco Pty Ltd (4)(5)(9) | E + | 6.50% | 10.50 | % | 12/5/2029 | € | 21,626 | 22,654 | 23,165 | ||||||||||||||||||||||||||||||||||||||
BradyIFS Holdings, LLC (4)(6)(10) | 10/31/2029 | 1,150 | (11) | (11) | |||||||||||||||||||||||||||||||||||||||||||
BradyIFS Holdings, LLC (4)(6)(10) | SF + | 6.00% | 11.32 | % | 10/31/2029 | 1,495 | 352 | 352 | |||||||||||||||||||||||||||||||||||||||
BradyIFS Holdings, LLC (4)(10) | SF + | 6.00% | 11.38 | % | 10/31/2029 | 13,572 | 13,436 | 13,439 | |||||||||||||||||||||||||||||||||||||||
Knitwell Borrower LLC (4)(10) | SF + | 8.00% | 13.54 | % | 7/28/2027 | 52,871 | 51,455 | 51,916 | |||||||||||||||||||||||||||||||||||||||
Petsmart LLC (9) | SF + | 3.75% | 9.21 | % | 2/11/2028 | 15,433 | 15,349 | 15,287 | |||||||||||||||||||||||||||||||||||||||
White Cap Buyer, LLC (8) | SF + | 3.75% | 9.11 | % | 10/19/2027 | 9,321 | 9,284 | 9,352 | |||||||||||||||||||||||||||||||||||||||
112,519 | 113,500 | 2.19 | % | ||||||||||||||||||||||||||||||||||||||||||||
Software and Computer Services | |||||||||||||||||||||||||||||||||||||||||||||||
Armstrong Bidco Limited (4)(5)(7) | SN + | 5.25% | 10.46 | % | 6/28/2029 | £ | 47,995 | 55,828 | 61,787 | ||||||||||||||||||||||||||||||||||||||
Armstrong Bidco Limited (4)(5)(7) | SN + | 5.25% | 10.46 | % | 6/28/2029 | £ | 91,991 | 109,854 | 118,424 | ||||||||||||||||||||||||||||||||||||||
Artisan Bidco, Inc. (4)(10) | SF + | 7.00% | 12.38 | % | 11/7/2029 | 40,000 | 39,025 | 39,025 | |||||||||||||||||||||||||||||||||||||||
Artisan Bidco, Inc. (4)(6)(10) | 11/7/2029 | 6,000 | (146) | (146) | |||||||||||||||||||||||||||||||||||||||||||
Artisan Bidco, Inc. (4)(10) | E + | 7.00% | 10.96 | % | 11/7/2029 | € | 18,614 | 19,424 | 20,047 | ||||||||||||||||||||||||||||||||||||||
Avalara, Inc. (4)(6)(9) | 10/19/2028 | 6,324 | (126) | (45) | |||||||||||||||||||||||||||||||||||||||||||
Avalara, Inc. (4)(9) | SF + | 7.25% | 12.60 | % | 10/19/2028 | 56,918 | 55,754 | 56,513 | |||||||||||||||||||||||||||||||||||||||
Barracuda Networks Inc (8) | SF + | 4.50% | 9.88 | % | 8/15/2029 | 13,862 | 13,528 | 13,571 | |||||||||||||||||||||||||||||||||||||||
Bottomline Technologies, Inc. (4)(6)(9) | 5/15/2028 | 385 | (3) | — | |||||||||||||||||||||||||||||||||||||||||||
Bottomline Technologies, Inc. (4)(9) | SF + | 5.25% | 10.61 | % | 5/14/2029 | 4,558 | 4,521 | 4,603 | |||||||||||||||||||||||||||||||||||||||
Calabrio, Inc. (4)(6)(10) | SF + | 7.13% | 12.48 | % | 4/16/2027 | 2,687 | 1,536 | 1,529 | |||||||||||||||||||||||||||||||||||||||
Calabrio, Inc. (4)(10) | SF + | 7.13% | 12.48 | % | 4/16/2027 | 22,313 | 22,313 | 22,257 | |||||||||||||||||||||||||||||||||||||||
Central Parent Inc (7) | SF + | 4.00% | 9.35 | % | 7/6/2029 | 15,000 | 14,964 | 15,102 | |||||||||||||||||||||||||||||||||||||||
Certinia Inc. (4)(6)(10) | 8/3/2029 | 5,449 | (152) | (96) | |||||||||||||||||||||||||||||||||||||||||||
Certinia Inc. (4)(10) | SF + | 7.25% | 12.68 | % | 8/3/2029 | 40,323 | 39,196 | 39,610 | |||||||||||||||||||||||||||||||||||||||
Cloud Software Group Inc. (8) | SF + | 4.50% | 9.95 | % | 3/30/2029 | 13,693 | 12,756 | 13,409 | |||||||||||||||||||||||||||||||||||||||
Cloud Software Group Inc. (7) | 6.50 | % | 3/31/2029 | 7,740 | 6,679 | 7,381 | |||||||||||||||||||||||||||||||||||||||||
CommerceHub, Inc. (4)(9) | SF + | 6.25% | 11.79 | % | 12/29/2027 | 64,255 | 60,635 | 60,694 | |||||||||||||||||||||||||||||||||||||||
Coupa Holdings, LLC (4)(6)(9) | 2/27/2030 | 7,123 | (163) | (99) | |||||||||||||||||||||||||||||||||||||||||||
Coupa Holdings, LLC (4)(6)(9) | 2/27/2029 | 6,211 | (133) | (89) | |||||||||||||||||||||||||||||||||||||||||||
Coupa Holdings, LLC (4)(9) | SF + | 7.50% | 12.86 | % | 2/27/2030 | 79,777 | 78,130 | 78,671 | |||||||||||||||||||||||||||||||||||||||
Denali Bidco Limited (4)(5)(6)(7) | 8/29/2030 | £ | 8,078 | (249) | (120) | ||||||||||||||||||||||||||||||||||||||||||
Denali Bidco Limited (4)(5)(7) | E + | 6.00% | 9.84 | % | 8/29/2030 | € | 6,742 | 7,164 | 7,359 | ||||||||||||||||||||||||||||||||||||||
Denali Bidco Limited (4)(5)(7) | SN + | 6.00% | 11.21 | % | 8/29/2030 | £ | 23,265 | 28,728 | 29,309 | ||||||||||||||||||||||||||||||||||||||
DS Admiral Bidco, LLC (4)(6)(10) | SF + | 6.50% | 11.85 | % | 3/16/2026 | 966 | 187 | 186 | |||||||||||||||||||||||||||||||||||||||
DS Admiral Bidco, LLC (4)(10) | SF + | 7.00% | 12.35 | % | 3/16/2028 | 39,345 | 38,336 | 39,093 | |||||||||||||||||||||||||||||||||||||||
DS Admiral Bidco, LLC (4)(10) | SF + | 6.50% | 11.85 | % | 3/16/2028 | 8,853 | 8,787 | 8,761 | |||||||||||||||||||||||||||||||||||||||
Enverus Holdings Inc (4)(9) | SF + | 5.50% | 10.86 | % | 12/24/2029 | 64,577 | 63,613 | 63,613 | |||||||||||||||||||||||||||||||||||||||
Enverus Holdings Inc (4)(6)(9) | 12/24/2029 | 3,229 | (48) | (48) | |||||||||||||||||||||||||||||||||||||||||||
Enverus Holdings Inc (4)(6)(9) | 12/24/2029 | 4,913 | (73) | (73) | |||||||||||||||||||||||||||||||||||||||||||
Finthrive Software Intermediate Holdings Inc (8) | SF + | 4.00% | 9.47 | % | 12/18/2028 | 12,970 | 12,765 | 10,370 | |||||||||||||||||||||||||||||||||||||||
GoTo Group Inc (7) | SF + | 4.75% | 10.28 | % | 8/31/2027 | 2,372 | 2,356 | 1,581 | |||||||||||||||||||||||||||||||||||||||
GovCIO Buyer Company (4)(10) | SF + | 5.00% | 10.36 | % | 8/18/2027 | 9,812 | 9,681 | 9,812 | |||||||||||||||||||||||||||||||||||||||
Helios Software Holdings, Inc. (10) | SF + | 3.75% | 9.25 | % | 3/11/2028 | 11,761 | 11,674 | 11,757 | |||||||||||||||||||||||||||||||||||||||
Huskies Parent, Inc. (4)(9) | SF + | 5.50% | 11.00 | % | 11/3/2027 | 1,000 | 987 | 948 | |||||||||||||||||||||||||||||||||||||||
Huskies Parent, Inc. (4)(9) | SF + | 5.50% | 11.00 | % | 11/3/2028 | 25,154 | 24,797 | 23,620 | |||||||||||||||||||||||||||||||||||||||
LMI Inc/DE (8) | SF + | 3.75% | 9.21 | % | 10/2/2028 | 6,262 | 6,234 | 6,032 |
33
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Medallia, Inc. (4)(9) | SF + | 6.50% (incl 4.00% PIK) | 11.95 | % | 10/30/2028 | 76,751 | 76,751 | 75,097 | |||||||||||||||||||||||||||||||||||||||
Mcafee Corp. (8) | SF + | 3.75% | 9.19 | % | 3/1/2029 | 7,880 | 7,854 | 7,869 | |||||||||||||||||||||||||||||||||||||||
Mitchell Topo Holdings Inc (8) | SF + | 3.75% | 9.40 | % | 10/15/2028 | 16,604 | 16,380 | 16,621 | |||||||||||||||||||||||||||||||||||||||
Newfold Digital Holdings Group Inc (9) | SF + | 3.50% | 9.42 | % | 2/10/2028 | 1,793 | 1,784 | 1,762 | |||||||||||||||||||||||||||||||||||||||
New Era Technology, Inc. (4)(10) | SF + | 6.25% | 11.78 | % | 10/31/2026 | 19,210 | 19,210 | 18,705 | |||||||||||||||||||||||||||||||||||||||
NWN Corporation (4)(6)(10) | 11/29/2028 | 7,686 | (208) | (208) | |||||||||||||||||||||||||||||||||||||||||||
NWN Corporation (4)(10) | SF + | 7.75% | 13.14 | % | 11/29/2028 | 52,087 | 50,680 | 50,679 | |||||||||||||||||||||||||||||||||||||||
Oranje Holdco, Inc. (4)(6)(10) | 2/1/2029 | 4,657 | (99) | (65) | |||||||||||||||||||||||||||||||||||||||||||
Oranje Holdco, Inc. (4)(10) | SF + | 7.50% | 12.88 | % | 2/1/2029 | 33,837 | 33,121 | 33,361 | |||||||||||||||||||||||||||||||||||||||
Peraton Inc. (9) | SF + | 3.75% | 9.21 | % | 2/1/2028 | 15,083 | 14,946 | 15,139 | |||||||||||||||||||||||||||||||||||||||
Perforce Software, Inc. (4)(8) | SF + | 4.50% | 9.86 | % | 7/1/2026 | 19,700 | 19,389 | 19,361 | |||||||||||||||||||||||||||||||||||||||
Ping Identity Holding Corp. (4)(6)(9) | 10/17/2028 | 6,068 | (125) | (43) | |||||||||||||||||||||||||||||||||||||||||||
Ping Identity Holding Corp. (4)(9) | SF + | 7.00% | 12.36 | % | 10/17/2029 | 59,003 | 57,735 | 58,658 | |||||||||||||||||||||||||||||||||||||||
Prism Parent Co., Inc. (4)(6)(9) | 9/19/2028 | 10,833 | (189) | 108 | |||||||||||||||||||||||||||||||||||||||||||
Prism Parent Co., Inc. (4)(9) | SF + | 5.75% | 11.11 | % | 9/19/2028 | 42,792 | 42,104 | 43,220 | |||||||||||||||||||||||||||||||||||||||
Project Alpha Intermediate Holding, Inc. (8) | SF + | 4.75% | 10.11 | % | 10/28/2030 | 15,061 | 14,767 | 15,172 | |||||||||||||||||||||||||||||||||||||||
Project Ruby Ultimate Parent Corp (9) | SF + | 3.25% | 8.72 | % | 3/10/2028 | 12,258 | 12,133 | 12,271 | |||||||||||||||||||||||||||||||||||||||
Quail Buyer, Inc. (4)(9) | SF + | 5.25% | 10.72 | % | 10/1/2027 | 7,311 | 7,216 | 7,311 | |||||||||||||||||||||||||||||||||||||||
Riley Mergeco LLC (4)(6)(10) | 9/23/2027 | 304 | (5) | (8) | |||||||||||||||||||||||||||||||||||||||||||
Riley Mergeco LLC (4)(10) | SF + | 5.50% | 10.97 | % | 9/23/2027 | 1,816 | 1,789 | 1,769 | |||||||||||||||||||||||||||||||||||||||
Smarsh Inc. (4)(6)(9) | SF + | 5.75% | 11.10 | % | 2/16/2029 | 4,286 | 2,078 | 2,118 | |||||||||||||||||||||||||||||||||||||||
Smarsh Inc. (4)(6)(9) | 2/16/2029 | 1,071 | (16) | (6) | |||||||||||||||||||||||||||||||||||||||||||
Smarsh Inc. (4)(9) | SF + | 5.75% | 11.10 | % | 2/16/2029 | 17,143 | 16,885 | 17,045 | |||||||||||||||||||||||||||||||||||||||
Trimech Acquisition Corp. (4)(6)(14) | P + | 3.75% | 12.25 | % | 3/10/2028 | 3,289 | 1,601 | 1,583 | |||||||||||||||||||||||||||||||||||||||
Trimech Acquisition Corp. (4)(10) | SF + | 4.75% | 10.25 | % | 3/10/2028 | 21,331 | 21,095 | 20,926 | |||||||||||||||||||||||||||||||||||||||
Trimech Acquisition Corp. (4)(10) | SN + | 4.75% | 10.11 | % | 3/10/2028 | £ | 36,254 | 43,882 | 45,565 | ||||||||||||||||||||||||||||||||||||||
UKG Inc (8) | SF + | 3.25% | 8.76 | % | 5/4/2026 | 9,071 | 9,030 | 9,107 | |||||||||||||||||||||||||||||||||||||||
User Zoom Technologies, Inc. (4)(9) | SF + | 7.00% | 12.49 | % | 4/5/2029 | 18,948 | 18,647 | 18,847 | |||||||||||||||||||||||||||||||||||||||
Zelis Payments Buyer, Inc. (7) | SF + | 3.50% | 8.97 | % | 9/30/2026 | 10,994 | 10,962 | 11,029 | |||||||||||||||||||||||||||||||||||||||
Zendesk Inc (4)(6)(9) | 11/22/2028 | 39,321 | (678) | 31 | |||||||||||||||||||||||||||||||||||||||||||
Zendesk Inc (4)(6)(9) | 11/22/2028 | 17,940 | (293) | — | |||||||||||||||||||||||||||||||||||||||||||
Zendesk Inc (4)(9) | SF + | 6.25% | 11.61 | % | 11/22/2028 | 161,380 | 158,763 | 161,505 | |||||||||||||||||||||||||||||||||||||||
1,405,548 | 1,428,877 | 27.57 | % | ||||||||||||||||||||||||||||||||||||||||||||
Technology Hardware and Equipment | |||||||||||||||||||||||||||||||||||||||||||||||
Altar Bidco, Inc. (8) | SF + | 3.10% | 8.26 | % | 2/1/2029 | 8,870 | 8,813 | 8,871 | |||||||||||||||||||||||||||||||||||||||
CC WDW Borrower, Inc. (4)(6)(10) | 1/27/2028 | 22,837 | (533) | (2,435) | |||||||||||||||||||||||||||||||||||||||||||
CC WDW Borrower, Inc. (4)(6)(10) | SF + | 6.75% | 12.25 | % | 1/27/2028 | 5,122 | 2,943 | 2,501 | |||||||||||||||||||||||||||||||||||||||
CC WDW Borrower, Inc. (4)(10) | SF + | 6.75% | 12.28 | % | 1/27/2028 | 45,103 | 44,147 | 40,293 | |||||||||||||||||||||||||||||||||||||||
Excelitas Technologies Corp. (4)(9) | SF + | 5.75% | 11.23 | % | 8/13/2029 | 10,030 | 9,868 | 9,931 | |||||||||||||||||||||||||||||||||||||||
Excelitas Technologies Corp. (4)(7) | E + | 5.75% | 9.75 | % | 8/13/2029 | € | 5,531 | 5,583 | 6,045 | ||||||||||||||||||||||||||||||||||||||
Excelitas Technologies Corp. (4)(6)(9) | SF + | 5.75% | 11.23 | % | 8/14/2028 | 3,261 | 1,950 | 1,966 | |||||||||||||||||||||||||||||||||||||||
TechInsights Inc (4)(5)(10) | SF + | 6.63% | 12.13 | % | 11/9/2027 | 983 | 968 | 959 | |||||||||||||||||||||||||||||||||||||||
TechInsights Inc (4)(5)(10) | SF + | 6.63% | 12.13 | % | 11/9/2027 | 2,552 | 2,515 | 2,492 | |||||||||||||||||||||||||||||||||||||||
76,254 | 70,623 | 1.37 | % | ||||||||||||||||||||||||||||||||||||||||||||
Telecommunications Equipment | |||||||||||||||||||||||||||||||||||||||||||||||
Delta Topco, Inc. (9) | SF + | 3.75% | 9.12 | % | 12/1/2027 | 6,882 | 6,743 | 6,887 | |||||||||||||||||||||||||||||||||||||||
Guardian US Holdco LLC (8) | SF + | 4.00% | 9.35 | % | 1/31/2030 | 7,960 | 7,819 | 7,993 | |||||||||||||||||||||||||||||||||||||||
14,562 | 14,880 | 0.29 | % | ||||||||||||||||||||||||||||||||||||||||||||
Telecommunications Service Providers | |||||||||||||||||||||||||||||||||||||||||||||||
Directv Financing, LLC (9) | SF + | 5.00% | 10.65 | % | 8/2/2027 | 16,365 | 16,101 | 16,395 | |||||||||||||||||||||||||||||||||||||||
Meriplex Communications, Ltd (4)(6)(9) | SF + | 5.00% | 10.46 | % | 7/17/2028 | 4,938 | 2,890 | 2,804 | |||||||||||||||||||||||||||||||||||||||
Meriplex Communications, Ltd (4)(6)(9) | 7/17/2028 | 1,143 | (13) | (31) |
34
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Meriplex Communications, Ltd (4)(9) | SF + | 5.00% | 10.46 | % | 7/17/2028 | 13,806 | 13,642 | 13,430 | |||||||||||||||||||||||||||||||||||||||
Openmarket Inc. (5)(9) | SF + | 6.25% | 11.86 | % | 9/17/2026 | 4,888 | 4,816 | 4,839 | |||||||||||||||||||||||||||||||||||||||
Radiate Holdco LLC (9) | SF + | 3.25% | 8.72 | % | 9/25/2026 | 14,729 | 14,684 | 11,864 | |||||||||||||||||||||||||||||||||||||||
TA TT Buyer, LLC (8) | SF + | 5.00% | 10.35 | % | 4/2/2029 | 14,812 | 14,695 | 14,738 | |||||||||||||||||||||||||||||||||||||||
66,815 | 64,039 | 1.23 | % | ||||||||||||||||||||||||||||||||||||||||||||
Travel and Leisure | |||||||||||||||||||||||||||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(6)(7) | SN + | 6.00% | 11.25 | % | 9/8/2028 | £ | 2,437 | 308 | (39) | ||||||||||||||||||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(7) | SN + | 6.00% | 11.26 | % | 9/8/2028 | £ | 7,749 | 10,090 | 8,669 | ||||||||||||||||||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(7) | SN + | 6.00% | 11.26 | % | 9/8/2028 | £ | 4,509 | 5,906 | 5,045 | ||||||||||||||||||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(7) | SN + | 6.00% | 11.30 | % | 9/8/2028 | £ | 4,676 | 6,117 | 5,232 | ||||||||||||||||||||||||||||||||||||||
Canoe Bidco Pty Limited (4)(5)(8) | B + | 5.50% | 9.92 | % | 5/20/2026 | A$ | 31,969 | 21,202 | 21,784 | ||||||||||||||||||||||||||||||||||||||
Canoe Bidco Pty Limited (4)(5)(8) | B + | 5.50% | 9.92 | % | 5/20/2026 | A$ | 137,468 | 95,483 | 93,671 | ||||||||||||||||||||||||||||||||||||||
Fertitta Entertainment LLC (8) | SF + | 4.00% | 9.36 | % | 1/27/2029 | 13,182 | 12,741 | 13,205 | |||||||||||||||||||||||||||||||||||||||
Havila Kystruten Operations AS (4)(5)(15) | E + | 9.50% (incl 3.50% PIK) | 13.44 | % | 7/27/2026 | € | 18,785 | 20,835 | 20,881 | ||||||||||||||||||||||||||||||||||||||
Havila Kystruten Operations AS (4)(5)(15) | E + | 9.50% (incl 3.50% PIK) | 13.44 | % | 10/26/2024 | € | 3,683 | 4,085 | 4,076 | ||||||||||||||||||||||||||||||||||||||
IRB Holding Corp. (9) | SF + | 3.00% | 8.46 | % | 12/15/2027 | 9,899 | 9,667 | 9,927 | |||||||||||||||||||||||||||||||||||||||
Travel Leaders Group, LLC (4)(14) | SF + | 8.50% (incl 3.00% PIK) | 13.96 | % | 3/27/2028 | 137,128 | 134,227 | 139,704 | |||||||||||||||||||||||||||||||||||||||
320,661 | 322,155 | 6.21 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total First Lien Debt - Non-Controlled/Non-Affiliated | 8,914,332 | 8,997,013 | 173.51 | % | |||||||||||||||||||||||||||||||||||||||||||
First Lien Debt - Non-Controlled/Affiliated | |||||||||||||||||||||||||||||||||||||||||||||||
Industrial Support Services | |||||||||||||||||||||||||||||||||||||||||||||||
Southern Graphics Inc. (4)(7)(16)(17) | SF + | 7.50% PIK | 5/1/2028 | $ | 5,682 | $ | 5,533 | $ | 5,682 | ||||||||||||||||||||||||||||||||||||||
5,533 | 5,682 | 0.11 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total First Lien Debt - Non-Controlled/Affiliated | 5,533 | 5,682 | 0.11 | % | |||||||||||||||||||||||||||||||||||||||||||
Total First Lien Debt | $ | 8,919,865 | $ | 9,002,695 | 173.62 | % | |||||||||||||||||||||||||||||||||||||||||
Second Lien Debt | |||||||||||||||||||||||||||||||||||||||||||||||
Second Lien Debt - Non-Controlled/Non-Affiliated | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer Services | |||||||||||||||||||||||||||||||||||||||||||||||
Asurion Corporation (7) | SF + | 5.25% | 10.72 | % | 1/31/2028 | $ | 4,132 | $ | 4,092 | $ | 3,949 | ||||||||||||||||||||||||||||||||||||
4,092 | 3,949 | 0.08 | % | ||||||||||||||||||||||||||||||||||||||||||||
Health Care Providers | |||||||||||||||||||||||||||||||||||||||||||||||
Charlotte Buyer Inc (4)(8) | SF + | 8.25% | 13.61 | % | 8/11/2028 | 10,000 | 9,433 | 9,744 | |||||||||||||||||||||||||||||||||||||||
9,433 | 9,744 | 0.19 | % | ||||||||||||||||||||||||||||||||||||||||||||
Industrial Support Services | |||||||||||||||||||||||||||||||||||||||||||||||
Galaxy US Opco Inc. (4)(5)(8) | SF + | 8.25% | 13.63 | % | 4/29/2030 | 9,000 | 8,812 | 7,765 | |||||||||||||||||||||||||||||||||||||||
8,812 | 7,765 | 0.15 | % | ||||||||||||||||||||||||||||||||||||||||||||
Software and Computer Services | |||||||||||||||||||||||||||||||||||||||||||||||
Cloud Software Group Inc (7) | 9.00 | % | 9/30/2029 | 19,666 | 15,951 | 18,750 | |||||||||||||||||||||||||||||||||||||||||
UKG Inc (8) | SF + | 5.25% | 10.76 | % | 5/3/2027 | 24,852 | 24,613 | 24,947 | |||||||||||||||||||||||||||||||||||||||
40,564 | 43,697 | 0.84 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total Second Lien Debt - Non-Controlled/Non-Affiliated | 62,901 | 65,155 | 1.26 | % | |||||||||||||||||||||||||||||||||||||||||||
Second Lien Debt - Non-Controlled/Affiliated | |||||||||||||||||||||||||||||||||||||||||||||||
Industrial Support Services | |||||||||||||||||||||||||||||||||||||||||||||||
Southern Graphics Inc. (4)(7)(16)(17) | SF + | 7.50% PIK | 10/30/2028 | $ | 1,932 | $ | 1,881 | $ | 1,932 | ||||||||||||||||||||||||||||||||||||||
Total Second Lien Debt - Non-Controlled/Affiliated | 1,881 | 1,932 | 0.03 | % | |||||||||||||||||||||||||||||||||||||||||||
Total Second Lien Debt | $ | 64,782 | $ | 67,087 | 1.29 | % | |||||||||||||||||||||||||||||||||||||||||
Unsecured Debt - Non-Controlled/Non-Affiliated | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer Services |
35
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Wildcat Car Wash Holdings, LLC (4)(7) | 15.00% PIK | 7/16/2029 | $ | 13,390 | $ | 13,390 | $ | 13,390 | |||||||||||||||||||||||||||||||||||||||
13,390 | 13,390 | 0.27 | % | ||||||||||||||||||||||||||||||||||||||||||||
Health Care Providers | |||||||||||||||||||||||||||||||||||||||||||||||
Vetcor Group Holdings LLC (4)(7) | 13.75% PIK | 9/3/2030 | 282 | 277 | 256 | ||||||||||||||||||||||||||||||||||||||||||
Vetcor Group Holdings LLC (4)(7) | 14.75% PIK | 9/3/2030 | 239 | 233 | 227 | ||||||||||||||||||||||||||||||||||||||||||
Vetcor Group Holdings LLC (4)(7) | 13.75% PIK | 9/3/2030 | 894 | 878 | 812 | ||||||||||||||||||||||||||||||||||||||||||
1,388 | 1,295 | 0.02 | % | ||||||||||||||||||||||||||||||||||||||||||||
Medical Equipment and Services | |||||||||||||||||||||||||||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) | 13.13% PIK | 12/28/2032 | 99 | 97 | 93 | ||||||||||||||||||||||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) | 13.13% PIK | 12/28/2032 | 178 | 173 | 168 | ||||||||||||||||||||||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) | 13.13% PIK | 12/28/2032 | 1,046 | 1,029 | 990 | ||||||||||||||||||||||||||||||||||||||||||
1,299 | 1,251 | 0.02 | % | ||||||||||||||||||||||||||||||||||||||||||||
Non-life Insurance | |||||||||||||||||||||||||||||||||||||||||||||||
Alliant Holdings Intermediate LLC / Alliant Holdings Co-Issuer (7) | 6.75 | % | 10/15/2027 | 6,255 | 5,752 | 6,207 | |||||||||||||||||||||||||||||||||||||||||
5,752 | 6,207 | 0.12 | % | ||||||||||||||||||||||||||||||||||||||||||||
Telecommunications Service Providers | |||||||||||||||||||||||||||||||||||||||||||||||
CCO Holdings LLC / CCO Holdings Capital Corp (7) | 5.50 | % | 5/1/2026 | 7,000 | 7,072 | 6,958 | |||||||||||||||||||||||||||||||||||||||||
7,072 | 6,958 | 0.13 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total Unsecured Debt - Non-Controlled/Non-Affiliated | $ | 28,901 | $ | 29,101 | 0.56 | % | |||||||||||||||||||||||||||||||||||||||||
Structured Finance - Non-Controlled/Non-Affiliated | |||||||||||||||||||||||||||||||||||||||||||||||
Structured Finance Investments | |||||||||||||||||||||||||||||||||||||||||||||||
ALM 2020 Ltd (5)(7) | SF + | 6.26% | 11.66 | % | 10/15/2029 | $ | 3,330 | $ | 3,037 | $ | 3,297 | ||||||||||||||||||||||||||||||||||||
AMMC CLO 21 Ltd (5)(7) | SF + | 3.10% | 8.74 | % | 11/2/2030 | 2,150 | 1,927 | 2,112 | |||||||||||||||||||||||||||||||||||||||
AMMC CLO 21 Ltd (5)(7) | SF + | 6.76% | 12.14 | % | 11/2/2030 | 4,126 | 3,665 | 3,840 | |||||||||||||||||||||||||||||||||||||||
Carlyle Global Market Strategies (5)(7) | SF + | 5.40% | 11.08 | % | 10/20/2027 | 1,750 | 1,531 | 1,676 | |||||||||||||||||||||||||||||||||||||||
Carlyle Global Market Strategies (5)(7) | L + | 5.40% | 11.05 | % | 7/27/2031 | 1,200 | 940 | 1,044 | |||||||||||||||||||||||||||||||||||||||
Catskill Park CLO Ltd (5)(7) | SF + | 6.26% | 11.68 | % | 4/20/2029 | 1,350 | 1,230 | 1,287 | |||||||||||||||||||||||||||||||||||||||
CENT CLO 16, L.P. (5)(7) | SF + | 8.07% | 13.47 | % | 7/24/2034 | 3,000 | 2,823 | 2,773 | |||||||||||||||||||||||||||||||||||||||
Dryden 108 CLO Ltd (5)(7) | 7/18/2035 | 2,900 | 2,291 | 1,891 | |||||||||||||||||||||||||||||||||||||||||||
Marble Point CLO XI Ltd (5)(7) | SF + | 3.06% | 8.46 | % | 12/18/2030 | 1,850 | 1,568 | 1,696 | |||||||||||||||||||||||||||||||||||||||
Monroe Capital MML CLO XIV LLC (5)(7) | SF + | 10.02% | 15.42 | % | 10/24/2034 | 2,500 | 2,341 | 2,446 | |||||||||||||||||||||||||||||||||||||||
OCP CLO 2017-14 Ltd (5)(7) | SF + | 6.80% | 12.19 | % | 1/15/2033 | 1,469 | 1,289 | 1,458 | |||||||||||||||||||||||||||||||||||||||
Shackleton 2019-XV CLO Ltd (5)(7) | SF + | 6.66% | 12.32 | % | 1/15/2032 | 3,000 | 2,648 | 2,905 | |||||||||||||||||||||||||||||||||||||||
Silver Creek CLO Ltd (5)(7) | SF + | 5.62% | 11.30 | % | 7/20/2030 | 2,000 | 1,802 | 1,988 | |||||||||||||||||||||||||||||||||||||||
Voya CLO Ltd (5)(7) | SF + | 3.81% | 9.21 | % | 4/17/2030 | 1,500 | 1,335 | 1,455 | |||||||||||||||||||||||||||||||||||||||
28,427 | 29,868 | 0.58 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total Structured Finance - Non-Controlled/Non-Affiliated | $ | 28,427 | $ | 29,868 | 0.58 | % | |||||||||||||||||||||||||||||||||||||||||
Equity Investments | |||||||||||||||||||||||||||||||||||||||||||||||
Equity Investments - Non-Controlled/Non-Affiliated | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer Services | |||||||||||||||||||||||||||||||||||||||||||||||
CG Parent Intermediate Holdings, Inc. - Preferred Shares (4) | 2,000 | $ | 1,940 | $ | 1,970 | ||||||||||||||||||||||||||||||||||||||||||
Club Car Wash Preferred, LLC (4)(6) | 8,817 | 2,784 | 2,784 | ||||||||||||||||||||||||||||||||||||||||||||
Rapid Express Preferred, LLC (4)(6) | 2,784 | 928 | 928 |
36
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1) | Reference Rate and Spread (2) | Interest Rate (2) | Maturity Date | Par Amount/Units | Amortized Cost (3) | Fair Value | Percentage of Net Assets | ||||||||||||||||||||||||||||||||||||||||
Club Car Wash Preferred, LLC (4) | 15.00% PIK | 10,313 | 10,313 | 10,313 | |||||||||||||||||||||||||||||||||||||||||||
Rapid Express Preferred, LLC (4) | 15.00% PIK | 4,770 | 4,770 | 4,770 | |||||||||||||||||||||||||||||||||||||||||||
20,735 | 20,765 | 0.40 | % | ||||||||||||||||||||||||||||||||||||||||||||
Electricity | |||||||||||||||||||||||||||||||||||||||||||||||
IP Operating Portfolio I, LLC (4) | 3 | $ | 68 | $ | 199 | ||||||||||||||||||||||||||||||||||||||||||
68 | 199 | — | % | ||||||||||||||||||||||||||||||||||||||||||||
Gas, Water and Multi-utilities | |||||||||||||||||||||||||||||||||||||||||||||||
Eagle LNG Partners Jacksonville II LLC (4) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
— | — | — | % | ||||||||||||||||||||||||||||||||||||||||||||
Industrial Support Services | |||||||||||||||||||||||||||||||||||||||||||||||
BCPE Virginia HoldCo, Inc. (4) | 2,000 | 1,960 | 1,973 | ||||||||||||||||||||||||||||||||||||||||||||
1,960 | 1,973 | 0.04 | % | ||||||||||||||||||||||||||||||||||||||||||||
Media | |||||||||||||||||||||||||||||||||||||||||||||||
Oneteam Partners, LLC - Preferred Shares (4) | 8.00 | % | 1,000 | 1,000 | 1,132 | ||||||||||||||||||||||||||||||||||||||||||
1,000 | 1,132 | 0.02 | % | ||||||||||||||||||||||||||||||||||||||||||||
Software and Computer Services | |||||||||||||||||||||||||||||||||||||||||||||||
Picard Holdco, Inc. - Preferred Shares (4) | 304 | 295 | 343 | ||||||||||||||||||||||||||||||||||||||||||||
Picard Holdco, Inc. - Preferred Shares (4) | 30 | 30 | 34 | ||||||||||||||||||||||||||||||||||||||||||||
325 | 377 | 0.01 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total Equity Investments - Non-Controlled/Non-Affiliated | 24,088 | 24,446 | 0.46 | % | |||||||||||||||||||||||||||||||||||||||||||
Equity Investments - Non-Controlled/Affiliated | |||||||||||||||||||||||||||||||||||||||||||||||
Industrial Support Services | |||||||||||||||||||||||||||||||||||||||||||||||
Southern Graphics Holdings LLC (4)(17) | 274 | $ | 2,333 | $ | 2,333 | ||||||||||||||||||||||||||||||||||||||||||
2,333 | 2,333 | 0.05 | % | ||||||||||||||||||||||||||||||||||||||||||||
Travel and Leisure | |||||||||||||||||||||||||||||||||||||||||||||||
SLF V AD1 Holdings, LLC (4)(17)(18) | 10,101 | 9,892 | 9,877 | ||||||||||||||||||||||||||||||||||||||||||||
9,892 | 9,877 | 0.19 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total Equity Investments - Non-Controlled/Affiliated | 12,225 | 12,210 | 0.24 | % | |||||||||||||||||||||||||||||||||||||||||||
Total Equity Investments | $ | 36,313 | $ | 36,656 | 0.71 | % | |||||||||||||||||||||||||||||||||||||||||
Investments in Joint Ventures | |||||||||||||||||||||||||||||||||||||||||||||||
Investments in Joint Ventures - Controlled/Affiliated | |||||||||||||||||||||||||||||||||||||||||||||||
ULTRA III, LLC (5)(17) | $ | 125,513 | $ | 124,003 | |||||||||||||||||||||||||||||||||||||||||||
Total Investments in Joint Ventures - Controlled/Affiliated | $ | 125,513 | $ | 124,003 | 2.39 | % | |||||||||||||||||||||||||||||||||||||||||
Total Investments - Non-Controlled/Non-Affiliated | $ | 9,058,649 | $ | 9,145,583 | 176.37 | % | |||||||||||||||||||||||||||||||||||||||||
Total Investments - Non-Controlled/Affiliated | $ | 19,639 | $ | 19,824 | 0.38 | % | |||||||||||||||||||||||||||||||||||||||||
Total Investments - Controlled/Affiliated | $ | 125,513 | $ | 124,003 | 2.40 | % | |||||||||||||||||||||||||||||||||||||||||
Total Investment Portfolio | $ | 9,203,801 | $ | 9,289,410 | 179.15 | % | |||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||||||||||||||||||||||||||||||||
J.P. Morgan U.S. Government Fund, Institutional Shares | 131,546 | $ | 131,546 | $ | 131,546 | ||||||||||||||||||||||||||||||||||||||||||
Cash | 57,229 | 57,229 | |||||||||||||||||||||||||||||||||||||||||||||
Total Cash and Cash Equivalents | $ | 188,775 | $ | 188,775 | 3.64 | % | |||||||||||||||||||||||||||||||||||||||||
Total Investment Portfolio, Cash and Cash Equivalents | $ | 9,392,576 | $ | 9,478,185 | 182.79 | % |
(1) Unless otherwise indicated, issuers of debt and equity investments held by the Company (which such term “Company” shall include the Company’s consolidated subsidiaries for purposes of this Consolidated Schedule of Investments) are denominated in dollars. All debt investments are income producing unless otherwise indicated. All equity
37
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
investments are non-income producing unless otherwise noted. Certain portfolio company investments are subject to contractual restrictions on sales. The total par amount is presented for debt investments and the number of shares or units owned is presented for equity investments. Each of the Company’s investments is pledged as collateral under its credit facilities and debt securitization issuances unless otherwise indicated.
(2) The majority of the investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”), Prime Rate (“Prime” or “P”), Sterling Overnight Index Average ("SONIA" or "SN"), Euro Interbank Offer Rate (“Euribor” or “E”), Secured Overnight Financing Rate ("SOFR" or "SF"), Canadian Dollar Offered Rate ("CDOR" or "C"), Singapore Overnight Rate Average (“SORA”), Bloomberg Short Term Bank Yield Index (“BS”), or Bank Bill Swap Rate ("BBSW" or "B") which reset daily, monthly, quarterly, semiannually or annually. For each such investment, the Company has provided the spread over LIBOR, Prime, SONIA, E, SOFR, CDOR, SORA, BS or BBSW and the current contractual interest rate in effect at December 31, 2023. Certain investments are subject to a LIBOR, Prime, or SOFR interest rate floor, or rate cap. Certain investments contain a Payment-in-Kind (“PIK”) provision. SOFR based contracts may include a credit spread adjustment, which is included within the stated all-in interest rate, if applicable, that is charged in addition to the base rate and the stated spread.
(3) The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").
(4) These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by the Adviser as the Company’s valuation designee, subject to the oversight of the Board of Trustees (the “Board”) (see Note 2 and Note 5), pursuant to the Company’s valuation policy.
(5) The investment is not a qualifying asset, in whole or in part, under Section 55(a) of the 1940 Act. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2023, non-qualifying assets represented 17.9% of total assets as calculated in accordance with regulatory requirements.
(6) Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may be subject to unused commitment fees. Negative cost and fair value results from unamortized fees, which are capitalized to the investment cost. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the Company’s unfunded commitments:
Investments-non-controlled/non-affiliated | Commitment Type | Unfunded Commitment | Fair Value | |||||||||||||||||
Zendesk Inc | 1st Lien Senior Secured Delayed Draw Loan | $ | 39,321 | $ | 31 | |||||||||||||||
Coding Solutions Acquisition, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 34,900 | (734) | |||||||||||||||||
WP CPP Holdings, LLC | 1st Lien Senior Secured Revolving Loan | 26,285 | (648) | |||||||||||||||||
CC WDW Borrower, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 22,837 | (2,435) | |||||||||||||||||
Plasma Buyer LLC | 1st Lien Senior Secured Delayed Draw Loan | 22,070 | (846) | |||||||||||||||||
Bamboo US BidCo LLC | 1st Lien Senior Secured Revolving Loan | 21,254 | (543) | |||||||||||||||||
Esdec Solar Group B.V. | 1st Lien Senior Secured Delayed Draw Loan | 18,968 | (164) | |||||||||||||||||
Zendesk Inc | 1st Lien Senior Secured Revolving Loan | 17,940 | — | |||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC | 1st Lien Senior Secured Delayed Draw Loan | 17,374 | (534) | |||||||||||||||||
2080 Media, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 16,751 | (92) | |||||||||||||||||
Sugar PPC Buyer LLC | 1st Lien Senior Secured Delayed Draw Loan | 16,541 | (359) | |||||||||||||||||
Bamboo US BidCo LLC | 1st Lien Senior Secured Delayed Draw Loan | 14,405 | (366) | |||||||||||||||||
Club Car Wash Operating, LLC | 1st Lien Senior Secured Delayed Draw Loan | 13,977 | (85) | |||||||||||||||||
2080 Media, Inc. | 1st Lien Senior Secured Revolving Loan | 13,795 | (83) | |||||||||||||||||
Sequa Corp | 1st Lien Senior Secured Revolving Loan | 13,676 | (135) | |||||||||||||||||
Atlas Intermediate III, L.L.C. | 1st Lien Senior Secured Revolving Loan | 13,445 | (327) | |||||||||||||||||
E.S.G. Movilidad, S.L.U. | 1st Lien Senior Secured Delayed Draw Loan | 12,414 | (86) | |||||||||||||||||
Formerra, LLC | 1st Lien Senior Secured Revolving Loan | 12,031 | (117) | |||||||||||||||||
Coretrust Purchasing Group LLC | 1st Lien Senior Secured Revolving Loan | 11,656 | — | |||||||||||||||||
SimpliSafe Holding Corporation | 1st Lien Senior Secured Delayed Draw Loan | 11,078 | (71) | |||||||||||||||||
Summit Acquisition Inc. | 1st Lien Senior Secured Delayed Draw Loan | 10,961 | (126) | |||||||||||||||||
Prism Parent Co., Inc. | 1st Lien Senior Secured Delayed Draw Loan | 10,833 | 108 | |||||||||||||||||
Coretrust Purchasing Group LLC | 1st Lien Senior Secured Delayed Draw Loan | 10,736 | 58 | |||||||||||||||||
Radwell Parent, LLC | 1st Lien Senior Secured Revolving Loan | 10,617 | — | |||||||||||||||||
Denali Bidco Limited | 1st Lien Senior Secured Delayed Draw Loan | 10,296 | (120) | |||||||||||||||||
CD&R Madison UK Bidco LTD | 1st Lien Senior Secured Delayed Draw Loan | 10,039 | (212) | |||||||||||||||||
Dolcetto HoldCo S.P.A. | 1st Lien Senior Secured Delayed Draw Loan | 9,273 | (60) | |||||||||||||||||
Cadence - Southwick, Inc. | 1st Lien Senior Secured Revolving Loan | 8,280 | (117) | |||||||||||||||||
PPV Intermediate Holdings, LLC | 1st Lien Senior Secured Revolving Loan | 8,145 | (52) | |||||||||||||||||
Planet US Buyer LLC | 1st Lien Senior Secured Revolving Loan | 8,024 | (148) | |||||||||||||||||
NWN Corporation | 1st Lien Senior Secured Revolving Loan | 7,686 | (208) |
38
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Investments-non-controlled/non-affiliated | Commitment Type | Unfunded Commitment | Fair Value | |||||||||||||||||
Captive Resources Midco LLC | 1st Lien Senior Secured Revolving Loan | 7,558 | — | |||||||||||||||||
Higginbotham Insurance Agency, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 7,515 | (83) | |||||||||||||||||
Circana Group, LP. | 1st Lien Senior Secured Revolving Loan | 7,399 | (52) | |||||||||||||||||
Coupa Holdings, LLC | 1st Lien Senior Secured Delayed Draw Loan | 7,123 | (99) | |||||||||||||||||
Coding Solutions Acquisition, Inc. | 1st Lien Senior Secured Revolving Loan | 7,069 | (125) | |||||||||||||||||
Camin Cargo Control Holdings, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 6,923 | (154) | |||||||||||||||||
Camin Cargo Control Holdings, Inc. | 1st Lien Senior Secured Revolving Loan | 6,923 | (154) | |||||||||||||||||
Frontgrade Technologies Holdings Inc. | 1st Lien Senior Secured Revolving Loan | 6,864 | (94) | |||||||||||||||||
Summit Acquisition Inc. | 1st Lien Senior Secured Revolving Loan | 6,685 | (85) | |||||||||||||||||
Trupanion, Inc. | 1st Lien Senior Secured Revolving Loan | 6,576 | (109) | |||||||||||||||||
Accession Risk Management Group, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 6,554 | — | |||||||||||||||||
Advarra Holdings, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 6,340 | 63 | |||||||||||||||||
Avalara, Inc. | 1st Lien Senior Secured Revolving Loan | 6,324 | (45) | |||||||||||||||||
Plasma Buyer LLC | 1st Lien Senior Secured Revolving Loan | 6,306 | (216) | |||||||||||||||||
Coupa Holdings, LLC | 1st Lien Senior Secured Revolving Loan | 6,211 | (89) | |||||||||||||||||
More Cowbell II, LLC | 1st Lien Senior Secured Revolving Loan | 6,189 | (127) | |||||||||||||||||
Gusto Aus Bidco Pty Ltd | 1st Lien Senior Secured Delayed Draw Loan | 6,083 | (65) | |||||||||||||||||
Ping Identity Holding Corp. | 1st Lien Senior Secured Revolving Loan | 6,068 | (43) | |||||||||||||||||
Club Car Wash Preferred, LLC | Preferred Equity | 6,033 | — | |||||||||||||||||
Artisan Bidco, Inc. | 1st Lien Senior Secured Revolving Loan | 6,000 | (146) | |||||||||||||||||
Spirit RR Holdings, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 5,986 | (83) | |||||||||||||||||
Arcfield Acquisition Corp | 1st Lien Senior Secured Revolving Loan | 5,687 | (228) | |||||||||||||||||
Cube Industrials Buyer, Inc. | 1st Lien Senior Secured Revolving Loan | 5,664 | (82) | |||||||||||||||||
More Cowbell II, LLC | 1st Lien Senior Secured Delayed Draw Loan | 5,484 | (111) | |||||||||||||||||
Certinia Inc. | 1st Lien Senior Secured Revolving Loan | 5,449 | (96) | |||||||||||||||||
123Dentist Inc | 1st Lien Senior Secured Delayed Draw Loan | 5,441 | (55) | |||||||||||||||||
Integrity Marketing Acquisition LLC | 1st Lien Senior Secured Delayed Draw Loan | 5,419 | (40) | |||||||||||||||||
Royal Buyer, LLC | 1st Lien Senior Secured Revolving Loan | 5,367 | — | |||||||||||||||||
Specialty Ingredients, LLC | 1st Lien Senior Secured Revolving Loan | 5,357 | (55) | |||||||||||||||||
Alera Group, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 5,196 | (51) | |||||||||||||||||
International Entertainment Investments Ltd | 1st Lien Senior Secured Delayed Draw Loan | 5,080 | (66) | |||||||||||||||||
Spanx, LLC | 1st Lien Senior Secured Revolving Loan | 5,000 | — | |||||||||||||||||
Enverus Holdings Inc | 1st Lien Senior Secured Revolving Loan | 4,913 | (73) | |||||||||||||||||
Showtime Acquisition, L.L.C. | 1st Lien Senior Secured Revolving Loan | 4,711 | (87) | |||||||||||||||||
Oranje Holdco, Inc. | 1st Lien Senior Secured Revolving Loan | 4,657 | (65) | |||||||||||||||||
Daphne S.P.A. | 1st Lien Senior Secured Delayed Draw Loan | 4,392 | (242) | |||||||||||||||||
Spotless Brands, LLC | 1st Lien Senior Secured Revolving Loan | 4,057 | — | |||||||||||||||||
Pareto Health Intermediate Holdings, Inc. | 1st Lien Senior Secured Revolving Loan | 4,032 | (61) | |||||||||||||||||
MB2 Dental Solutions, LLC | 1st Lien Senior Secured Delayed Draw Loan | 4,007 | (11) | |||||||||||||||||
Royal Buyer, LLC | 1st Lien Senior Secured Delayed Draw Loan | 3,758 | 38 | |||||||||||||||||
ASDAM Operations Pty Ltd | 1st Lien Senior Secured Delayed Draw Loan | 3,694 | (132) | |||||||||||||||||
Showtime Acquisition, L.L.C. | 1st Lien Senior Secured Delayed Draw Loan | 3,657 | (68) | |||||||||||||||||
Enverus Holdings Inc | 1st Lien Senior Secured Delayed Draw Loan | 3,229 | (48) | |||||||||||||||||
Spirit RR Holdings, Inc. | 1st Lien Senior Secured Revolving Loan | 3,221 | (44) | |||||||||||||||||
Pinnacle Fertility, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 3,125 | (19) | |||||||||||||||||
Artemis Bidco Limited | 1st Lien Senior Secured Delayed Draw Loan | 2,765 | (338) | |||||||||||||||||
Galway Borrower LLC | 1st Lien Senior Secured Revolving Loan | 2,216 | (15) | |||||||||||||||||
Smarsh Inc. | 1st Lien Senior Secured Delayed Draw Loan | 2,143 | (12) | |||||||||||||||||
CPI Buyer, LLC | 1st Lien Senior Secured Revolving Loan | 2,115 | (5) | |||||||||||||||||
CC WDW Borrower, Inc. | 1st Lien Senior Secured Revolving Loan | 2,074 | (221) | |||||||||||||||||
Meriplex Communications, LTD | 1st Lien Senior Secured Delayed Draw Loan | 1,999 | (54) | |||||||||||||||||
Rapid Express Preferred, LLC | Preferred Equity | 1,856 | — | |||||||||||||||||
IG Investments Holdings, LLC | 1st Lien Senior Secured Revolving Loan | 1,726 | (12) | |||||||||||||||||
TriMech Acquisition Corp. | 1st Lien Senior Secured Revolving Loan | 1,645 | (31) |
39
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Investments-non-controlled/non-affiliated | Commitment Type | Unfunded Commitment | Fair Value | |||||||||||||||||
IXM Holdings, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 1,638 | (24) | |||||||||||||||||
IXM Holdings, Inc. | 1st Lien Senior Secured Revolving Loan | 1,584 | (24) | |||||||||||||||||
Excelitas Technologies Corp. | 1st Lien Senior Secured Revolving Loan | 1,261 | (13) | |||||||||||||||||
Calabrio, Inc. | 1st Lien Senior Secured Revolving Loan | 1,152 | (3) | |||||||||||||||||
BradyIFS Holdings, LLC | 1st Lien Senior Secured Revolving Loan | 1,150 | (11) | |||||||||||||||||
Meriplex Communications, LTD | 1st Lien Senior Secured Revolving Loan | 1,143 | (31) | |||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP | 1st Lien Senior Secured Delayed Draw Loan | 1,139 | (22) | |||||||||||||||||
BradyIFS Holdings, LLC | 1st Lien Senior Secured Delayed Draw Loan | 1,128 | (11) | |||||||||||||||||
Smarsh Inc. | 1st Lien Senior Secured Revolving Loan | 1,071 | (6) | |||||||||||||||||
NBG Acquisition Corp. | 1st Lien Senior Secured Revolving Loan | 1,019 | (23) | |||||||||||||||||
Patriot Growth Insurance Services LLC | 1st Lien Senior Secured Revolving Loan | 822 | (3) | |||||||||||||||||
DS Admiral Bidco, LLC | 1st Lien Senior Secured Revolving Loan | 773 | (6) | |||||||||||||||||
ERC Topco Holdings, LLC | 1st Lien Senior Secured Revolving Loan | 567 | (73) | |||||||||||||||||
Integrity Marketing Acquisition LLC | 1st Lien Senior Secured Revolving Loan | 472 | (3) | |||||||||||||||||
Accession Risk Management Group, Inc. | 1st Lien Senior Secured Revolving Loan | 467 | (5) | |||||||||||||||||
Bottomline Technologies, Inc. | 1st Lien Senior Secured Revolving Loan | 385 | — | |||||||||||||||||
Riley MergeCo LLC | 1st Lien Senior Secured Revolving Loan | 304 | (8) | |||||||||||||||||
Nexus Intermediate III, LLC | 1st Lien Senior Secured Delayed Draw Loan | 300 | — | |||||||||||||||||
Arc Media Holdings Limited | 1st Lien Senior Secured Revolving Loan | 277 | (14) | |||||||||||||||||
Time Manufacturing Holdings, LLC | 1st Lien Senior Secured Revolving Loan | 273 | (14) | |||||||||||||||||
Associations Inc. | 1st Lien Senior Secured Revolving Loan | 261 | — | |||||||||||||||||
Total | $ | 760,659 | $ | (12,755) |
(7) There are no interest rate floors on these investments.
(8)The interest rate floor on these investments as of December 31, 2023 was 0.50%.
(9)The interest rate floor on these investments as of December 31, 2023 was 0.75%.
(10)The interest rate floor on these investments as of December 31, 2023 was 1.00%.
(11)The interest rate floor on these investments as of December 31, 2023 was 1.25%
(12)The interest rate floor on these investments as of December 31, 2023 was 1.50%
(13)The interest rate floor on these investments as of December 31, 2023 was 1.75%.
(14)The interest rate floor on these investments as of December 31, 2023 was 2.00%.
(15)The interest rate floor on these investments as of December 31, 2023 was 2.50%.
(16)Loan was on non-accrual status as of December 31, 2023.
(17)Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “1940 Act”), the Company is deemed to “control” a portfolio company if the Company owns more than 25% of its outstanding voting securities and/or holds the power to exercise control over the management or policies of the portfolio company. Under the 1940 Act, the Company is deemed an “affiliated person” of a portfolio company if the Company owns between 5% and 25% (inclusive) of the portfolio company’s outstanding voting securities. For purposes of determining the classification of its investment portfolio, the Company has excluded consideration of any voting securities or board appointment rights held by third-party investment funds advised by the Adviser and/or its affiliates. As of December 31, 2023, the Company’s controlled/affiliated and non-controlled/affiliated investments were as follows:
Fair Value as of December 31, 2022 | Gross Additions | Gross Reductions | Change in Unrealized Gains (Loss) | Net Realized Gain (Loss) | Fair Value as of December 31, 2023 | Dividend and Interest Income | ||||||||||||||||||||||||||||||||||||||
Non-Controlled/Affiliated Investments | ||||||||||||||||||||||||||||||||||||||||||||
Southern Graphics Inc. | $ | — | $ | 9,747 | $ | — | $ | 200 | $ | — | $ | 9,947 | $ | — | ||||||||||||||||||||||||||||||
AD1 LBV1, LLC | — | 6,013 | (5,149) | — | (864) | — | — | |||||||||||||||||||||||||||||||||||||
SLF V AD1 Holdings, LLC | — | 9,892 | — | (15) | — | 9,877 | — | |||||||||||||||||||||||||||||||||||||
Total Non-Controlled/Affiliated Investments | $ | — | $ | 25,652 | $ | (5,149) | $ | 185 | $ | (864) | $ | 19,824 | $ | — | ||||||||||||||||||||||||||||||
Controlled/Affiliated Investments | ||||||||||||||||||||||||||||||||||||||||||||
ULTRA III, LLC | $ | — | $ | 129,675 | $ | (4,162) | $ | (1,510) | $ | — | $ | 124,003 | $ | — | ||||||||||||||||||||||||||||||
Total Controlled/Affiliated Investments | $ | — | $ | 129,675 | $ | (4,162) | $ | (1,510) | $ | — | $ | 124,003 | $ | — |
(18) These investments are not pledged as collateral under the Credit Facilities and 2023 CLO Secured Notes.
40
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
ADDITIONAL INFORMATION
Foreign currency forward contracts
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||
U.S. Dollars 10,232 | Australian Dollars 15,121 | SMBC Capital Markets, Inc. | 3/21/2024 | $ | (96) | |||||||||||||||||||||
U.S. Dollars 2,719 | Canadian Dollars 3,623 | SMBC Capital Markets, Inc. | 3/21/2024 | (18) | ||||||||||||||||||||||
U.S. Dollars 3,343 | Euro 3,083 | Goldman Sachs Bank USA | 9/23/2024 | (98) | ||||||||||||||||||||||
U.S. Dollars 13,028 | Euro 12,097 | Goldman Sachs Bank USA | 3/21/2024 | (367) | ||||||||||||||||||||||
U.S. Dollars 177,612 | Euro 163,379 | Goldman Sachs Bank USA | 12/23/2024 | (5,544) | ||||||||||||||||||||||
U.S. Dollars 2,320 | Euro 2,080 | Goldman Sachs Bank USA | 1/29/2024 | 22 | ||||||||||||||||||||||
U.S. Dollars 106,649 | Euro 96,729 | SMBC Capital Markets, Inc. | 3/21/2024 | (465) | ||||||||||||||||||||||
U.S. Dollars 248 | Euro 224 | Goldman Sachs Bank USA | 6/23/2025 | (5) | ||||||||||||||||||||||
U.S. Dollars 101,171 | Euro 89,721 | SMBC Capital Markets, Inc. | 9/23/2025 | (656) | ||||||||||||||||||||||
U.S. Dollars 2,545 | British Pound 2,215 | Goldman Sachs Bank USA | 3/23/2026 | 13 | ||||||||||||||||||||||
Euro 80,972 | U.S. Dollars 89,270 | SMBC Capital Markets, Inc. | 3/21/2024 | 394 | ||||||||||||||||||||||
U.S. Dollars 6,868 | British Pound 6,303 | Goldman Sachs Bank USA | 10/15/2024 | (1,171) | ||||||||||||||||||||||
U.S. Dollars 7,472 | British Pound 6,079 | Goldman Sachs Bank USA | 9/23/2024 | (281) | ||||||||||||||||||||||
U.S. Dollars 764 | British Pound 620 | Goldman Sachs Bank USA | 6/23/2025 | (27) | ||||||||||||||||||||||
U.S. Dollars 2,601 | British Pound 2,109 | Goldman Sachs Bank USA | 3/21/2025 | (91) | ||||||||||||||||||||||
U.S. Dollars 125 | British Pound 99 | Goldman Sachs Bank USA | 3/21/2024 | (1) | ||||||||||||||||||||||
U.S. Dollars 134,754 | British Pound 105,740 | SMBC Capital Markets, Inc. | 3/21/2024 | (73) | ||||||||||||||||||||||
U.S. Dollars 3,086 | Singaporean Dollars 4,117 | Goldman Sachs Bank USA | 3/21/2024 | (44) | ||||||||||||||||||||||
U.S. Dollars 32,604 | Singaporean Dollars 43,183 | Goldman Sachs Bank USA | 12/23/2024 | (596) | ||||||||||||||||||||||
Total | $ | (9,104) |
Interest rate swaps
Counterparty | Hedged Instrument | Company Receives | Company Pays | Maturity Date | Notional Amount | Fair Market Value | ||||||||||||||||||||||||||||||||
Goldman Sachs Bank USA | November 2025 Notes | 8.37% | SOFR + 4.08% | 11/14/2025 | $ | 85,000 | $ | (43) | ||||||||||||||||||||||||||||||
Goldman Sachs Bank USA | November 2027 Notes | 8.43% | SOFR + 4.42% | 11/14/2027 | 77,500 | 733 | ||||||||||||||||||||||||||||||||
Goldman Sachs Bank USA | March 2026 Notes | 8.12% | SOFR + 3.76% | 3/15/2026 | 276,000 | 562 | ||||||||||||||||||||||||||||||||
Goldman Sachs Bank USA | March 2028 Notes | 8.18% | SOFR + 4.24% | 3/15/2028 | 124,000 | 538 | ||||||||||||||||||||||||||||||||
Goldman Sachs Bank USA | September 2027 Notes | 8.67% | SOFR + 4.31% | 9/14/2027 | 75,000 | 1,275 | ||||||||||||||||||||||||||||||||
Goldman Sachs Bank USA | September 2028 Notes | 8.80% | SOFR + 4.54% | 9/14/2028 | 250,000 | 5,288 | ||||||||||||||||||||||||||||||||
Total Interest Rate Swaps | $ | 8,353 |
The accompanying notes are an integral part of these consolidated financial statements.
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HPS Corporate Lending Fund
Notes to Consolidated Financial Statements
(Unaudited)
(in thousands, except per share data, percentages and as otherwise noted)
Note 1. Organization
HPS Corporate Lending Fund (the “Company” or “HLEND”) is a Delaware statutory trust that was formed on December 23, 2020 and commenced operations on February 3, 2022. The Company seeks to invest primarily in newly originated senior secured debt and other securities of private U.S. companies within the upper middle market. The Company is a non-diversified, closed-end management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company is externally managed by HPS Advisors, LLC (the “Adviser”), a wholly-owned subsidiary of HPS Investment Partners, LLC (the “Administrator” or “HPS”). Prior to June 30, 2023, the Company was externally managed by HPS. The Company has elected to be treated for federal income tax purposes, and intends to qualify annually thereafter, as a regulated investment company (“RIC”) as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).
The Company’s investment objective is to generate attractive risk-adjusted returns, predominately in the form of current income, with select investments exhibiting the ability to capture long-term capital appreciation. The Company seeks to achieve its investment objective by investing primarily in newly originated, privately negotiated senior credit investments in high quality, established upper middle market companies, and in select situations, companies in special situations. Upper middle market companies generally mean companies with earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $75 million to $1 billion annually or $250 million to $5 billion in revenue annually at the time of investment.
The Company has and may continue to invest in smaller or larger companies if the opportunity presents attractive investment and risk-adjusted returns. In addition to corporate level obligations, the Company’s investments in such companies may also opportunistically include private asset-based financings such as equipment financings, financings against mission-critical corporate assets and mortgage loans, and/or investments that represent equity in portfolios of loans, receivables or other debt instruments. The Company may also participate in programmatic investments through partnerships or joint ventures with one or more unaffiliated banks or other financial institutions, including structures where a partner assumes senior exposure to each investment, and the Company participates in the junior exposure.
The Company’s investment strategy also includes a smaller allocation to more liquid credit investments such as broadly syndicated loans and corporate bonds. This allocation may also include senior secured loans, senior secured bonds, high yield bonds and structured credit instruments.
The strategy of the Company primarily focuses on companies in the United States, but also intends to leverage the Adviser’s presence to invest in companies in Europe, Australia and other locations outside the U.S. In addition, the Company may also invest in publicly traded securities of larger corporate issuers on an opportunistic basis when market conditions create compelling potential return opportunities, subject to compliance with BDC requirements to invest at least 70% of assets in “eligible portfolio companies.”
The Company offers on a continuous basis up to $15.0 billion of Common Shares of beneficial interest pursuant to an offering registered with the Securities and Exchange Commission (the “Offering”). The Company offers to sell any combination of four classes of Common Shares: Class I shares, Class D shares, Class F shares, and Class S shares, with a dollar value up to the maximum offering amount. The share classes have different ongoing shareholder servicing and/or distribution fees. The initial purchase price for the Common Shares of beneficial interest was $25.00 per share for Class I shares, Class D shares and Class F shares, which commenced operations on February 3, 2022, and the initial purchase price was $25.11 for Class S shares, which commenced operations on October 1, 2023. Thereafter, the purchase price per share for each class of Common Shares equals the net asset value (“NAV”) per share, as of the effective date of the monthly share purchase date. HPS Securities, LLC (the “Managing Dealer” or “HPS Securities”) will use its best efforts to sell shares, but is not obligated to purchase or sell any specific amount of shares in the offering. The Company may also engage in private offerings of its Common Shares. Prior to April 11, 2024, Emerson Equity LLC was the managing dealer of the Company.
Note 2. Significant Accounting Policies
Basis of Presentation
The interim consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 6 of Regulation S-X. Accordingly, certain disclosures accompanying the annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments considered necessary for the fair statement of the consolidated financial statements for the interim
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periods presented have been included. All intercompany balances and transactions have been eliminated. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the fiscal year ending December 31, 2024.
As an investment company, the Company applies the accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies (“ASC 946”) issued by the Financial Accounting Standards Board (“FASB”).
Basis of Consolidation
As provided under ASC 946, the Company will not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company.
The Company consolidated the results of its wholly-owned subsidiaries HLEND Holdings A, L.P. (“HLEND A”), HLEND Holdings B, L.P. (“HLEND B”), HLEND Holdings C, L.P. (“HLEND C”), HLEND Holdings D, L.P. (“HLEND D”), HLEND Holdings E, L.P. (“HLEND E”), HLEND CLO 2023-1 Investments, LLC, HLEND CLO 2024-2 Investments, LLC, HLEND Proxima, LLC, HLEND FEP, LLC, HLEND OTM, LLC and HLEND Lux Sarl. All intercompany transactions have been eliminated in consolidation.
The Company does not consolidate its investment in the ULTRA III, LLC (“ULTRA III”) joint venture. For further description of the Company’s joint venture, see “Note 11. Joint Venture.”
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual amounts could differ from those estimates and such differences could be material.
Cash and Cash Equivalents
Cash and cash equivalents consist of demand deposits and highly liquid investments, such as money market funds, with original maturities of three months or less. Cash and cash equivalents are carried at cost, which approximates fair value. The Company deposits its cash and cash equivalents with financial institutions and, at times, may exceed the Federal Deposit Insurance Corporation insured limit.
Investments
Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds received (excluding prepayment fees, if any) and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. The net change in unrealized gains or losses primarily reflects the change in investment values, including the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period.
The Company is required to report its investments for which current market values are not readily available at fair value. The Company values its investments in accordance with ASC 820, Fair Value Measurement (“ASC 820”), which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date. ASC 820 prioritizes the use of observable market prices derived from such prices over entity-specific inputs. Due to the inherent uncertainties of valuation, certain estimated fair values may differ significantly from the values that would have been realized had a ready market for these investments existed, and these differences could be material.
Investments that are listed or traded on an exchange and are freely transferable are valued at either the closing price (in the case of securities and futures) or the mean of the closing bid and offer (in the case of options) on the principal exchange on which the investment is listed or traded. Investments for which other market quotations are readily available will typically be valued at those market quotations. To validate market quotations, the Company utilizes a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations. Where it is possible to obtain reliable, independent market quotations from a third-party vendor, the Company uses these quotations to determine the value of its investments. The Company utilizes mid-market pricing (i.e., mid-point of average bid and ask prices) to value these investments. The Adviser obtains these market quotations from independent pricing services, if available; otherwise from one or more broker quotes. To assess the continuing appropriateness of pricing sources and methodologies, the Adviser regularly performs price verification procedures and issues challenges as necessary to independent pricing services or brokers, and any differences are reviewed in accordance with the valuation procedures. The Adviser does not adjust the prices unless it has a reason to believe market quotations are not reflective of the fair value of an investment.
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Where prices or inputs are not available or, in the judgment of the Adviser, not reliable, valuation approaches based on the facts and circumstances of the particular investment will be utilized. Securities that are not publicly traded or for which market prices are not readily available, as will be the case for a substantial portion of the Company’s investments, are valued at fair value as determined in good faith by the Adviser as the Company’s valuation designee under Rule 2a-5 under the 1940 Act, pursuant to the Company’s valuation policy, and under the oversight of the Board of Trustees (the “Board”), based on, among other things, the input of one or more independent valuation firms retained by the Company to review the Company’s investments. These valuation approaches involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments’ complexity.
With respect to the quarterly valuation of investments, the Company undertakes a multi-step valuation process each quarter in connection with determining the fair value of our investments for which reliable market quotations are not readily available as of the last calendar day of each quarter, which includes, among other procedures, the following:
•The valuation process begins with each investment being preliminarily valued by the Adviser’s valuation team in consultation with the Adviser’s investment professionals responsible for each portfolio investment;
•In addition, independent valuation firms retained by the Company prepare quarter-end valuations of each such investment that was (i) originated or purchased prior to the first calendar day of the quarter and (ii) is not a de minimis investment, as determined by the Adviser. The independent valuation firms provide a final range of values on such investments to the Adviser. The independent valuation firms also provide analyses to support their valuation methodology and calculations;
•The Adviser’s valuation committee with respect to the Company (the “Valuation Committee”) reviews the valuation recommendations prepared by the Adviser’s valuation team and, as appropriate, the independent valuation firms’ valuation ranges;
•The Adviser’s Valuation Committee then determines fair value marks for each of the Company’s portfolio investments; and
•The Board and Audit Committee periodically review the valuation process and provide oversight in accordance with the requirements of Rule 2a-5 under the 1940 Act.
As part of the valuation process, the Company takes into account relevant factors in determining the fair value of the Company’s investments for which reliable market quotations are not readily available, many of which are loans, including and in combination, as relevant: (i) the estimated enterprise value of a portfolio company, generally based on an analysis of discounted cash flows, publicly traded comparable companies and comparable transactions, (ii) the nature and realizable value of any collateral, (iii) the portfolio company’s ability to make payments based on its earnings and cash flow, (iv) the markets in which the portfolio company does business, and (v) overall changes in the interest rate environment and the credit markets that may affect the price at which similar investments may be made in the future. When an external event such as a purchase transaction, public offering or subsequent equity or debt sale occurs, the Adviser considers whether the pricing indicated by the external event corroborates its valuation.
The Company has and will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of the Company’s portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter, and the Adviser and the Company may reasonably rely on that assistance. However, the Adviser is responsible for the ultimate valuation of the portfolio investments at fair value as determined in good faith pursuant to the Company’s valuation policy, the Board’s oversight and a consistently applied valuation process.
Derivative Instruments
The Company may enter into foreign currency forward contracts to reduce the Company’s exposure to foreign currency exchange rate fluctuations in the value of foreign currencies. In a foreign currency forward contract, the Company agrees to receive or deliver a fixed quantity of one currency for another, at a pre-determined price at a future date. Foreign currency forward contracts are marked-to-market at the applicable forward rate. Unrealized appreciation (depreciation) on foreign currency forward contracts are recorded on the Consolidated Statements of Assets and Liabilities by counterparty on a net basis, not taking into account collateral posted which is recorded separately, if applicable. Notional amounts of foreign currency forward contract assets and liabilities are presented separately on the Consolidated Schedules of Investments. Purchases and settlements of foreign currency forward contracts having the same settlement date and counterparty are generally settled net and any realized gains or losses are recognized on the settlement date. As it relates to foreign currency forward contracts, the Company does not utilize hedge accounting and as such, the Company recognizes its derivatives at fair value with changes in the net unrealized appreciation (depreciation) on foreign currency forward contracts recorded on the Consolidated Statements of Operations.
Additionally, the Company uses interest rate swaps to mitigate interest rate risk associated with the Company's fixed rate liabilities. The fair value of the interest rate swaps is included as derivative assets at fair value or derivative liabilities at fair value, as
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applicable, on the Company's Consolidated Statements of Assets and Liabilities. The Company designated the interest rate swaps as the hedging instruments in a qualifying fair value hedge accounting relationship, and therefore the change in fair value of the hedging instrument and hedged item are recorded as components of interest expense in the Consolidated Statements of Operations. The change in fair value of the interest rate swap is offset by a change in the carrying value of the fixed rate debt.
The fair value of the Company’s derivatives is recorded on the Consolidated Statements of Assets and Liabilities by security type and counterparty on a net basis, if subject to an enforceable master netting agreement, not taking into account collateral posted which is recorded separately. As of June 30, 2024 and December 31, 2023, there was $18.8 million and $0.0 million, respectively, of collateral pledged which is included in other assets on the Consolidated Statements of Assets and Liabilities. As of June 30, 2024, all of the collateral pledged was invested in a money market fund.
Loan Participations
The Company follows the guidance in ASC 860 Transfers and Servicing when accounting for loan participations and other partial loan sales. Such guidance requires a participation or other partial loan sale to meet the definition of a “participating interest,” as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales that do not meet the definition of a participating interest remain on the Consolidated Statements of Assets and Liabilities and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value. There were no participations that were accounted for as secured borrowings during the period.
Foreign Currency Transactions
Amounts denominated in foreign currencies are translated into U.S. dollars on the following basis: (i) investments and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates effective on the last business day of the period; and (ii) purchases and sales of investments, borrowings and repayments of such borrowings, income, and expenses denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates prevailing on the transaction dates.
The Company does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are included within the net realized and unrealized gains or losses on investments. Fluctuations arising from the translation of non-investment assets and liabilities are included with the net change in unrealized gains (losses) on foreign currency translations on the Consolidated Statements of Operations.
Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities.
Revenue Recognition
Interest Income
Interest income is recorded on an accrual basis and includes the accretion of discounts and amortizations of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including loan origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income in the current period. For the three and six months ended June 30, 2024, the Company recorded non-recurring interest income of $13.9 million and $36.3 million, respectively (e.g. prepayment premiums, accelerated accretion of upfront loan origination fees and unamortized discounts). For the three and six months ended June 30, 2023, the Company recorded non-recurring interest income of $9.5 million and $11.1 million, respectively (e.g. prepayment premiums, accelerated accretion of upfront loan origination fees and unamortized discounts).
Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full. Accrued interest is generally reversed when a loan is placed on non-accrual status. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid current and, in management’s judgment, are likely to remain current. Management may make exceptions to this treatment and determine to not place a loan on non-accrual status if the
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loan has sufficient collateral value and is in the process of collection. As of June 30, 2024 and December 31, 2023, the Company had certain investments in four and three portfolio companies on non-accrual status, respectively.
PIK Income
The Company has loans in its portfolio that contain payment-in-kind (“PIK”) provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. Such income is included in interest income in the Consolidated Statements of Operations. If at any point the Company believes PIK is not expected to be realized, the investment generating PIK will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest is generally reversed through interest income. To maintain the Company’s status as a RIC, this non-cash source of income must be paid out to shareholders in the form of dividends, even though the Company has not yet collected cash.
Dividend Income
Dividend income on preferred equity securities and on the Company’s membership interests in its joint ventures are recorded on the accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies. To the extent a preferred equity security contains PIK provisions, PIK dividends, computed at the contractual rate specified in each applicable agreement, are accrued and recorded as dividend income and added to the principal balance of the preferred equity security. PIK dividends added to the principal balance are generally collected upon redemption of the equity. For the three and six months ended June 30, 2024, the Company recorded $7.6 million and $10.2 million, respectively, of dividend income, of which, $1.0 million and $1.7 million, respectively, relate to PIK dividends. For the three and six months ended June 30, 2023, the Company recorded $0.0 million of dividend income, of which none related to PIK dividends.
Other Income
The Company may receive various fees in the ordinary course of business such as structuring, consent, waiver, amendment, syndication and other miscellaneous fees as well as fees for managerial assistance rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered.
Organization Costs
Organization expenses include, among other things, the cost of incorporating the Company and the cost of legal services and other fees pertaining to the Company's organization.
Offering Expenses
The Company's offering expenses include, among other things, legal fees, registration fees and other costs pertaining to the preparation of the Company's registration statement (and any amendments or supplements thereto) relating to the offering and associated marketing materials. Offering costs are capitalized as a deferred charge and amortized to expense on a straight-line basis over a twelve-month period from incurrence.
Deferred Financing Costs and Debt Issuance Costs
Deferred financing and debt issuance costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. These expenses are deferred and amortized into interest expense over the life of the related debt instrument using the straight-line method. Deferred financing costs related to revolving credit facilities are presented separately as an asset on the Company’s Statements of Assets and Liabilities. Debt issuance costs related to any issuance of installment debt or notes are presented net against the outstanding debt balance of the related security.
Income Taxes
The Company has elected to be treated as a RIC under the Code. So long as the Company maintains its status as a RIC, it generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually to its shareholders as dividends. Rather, any tax liability related to income earned and distributed by the Company would represent obligations of the Company’s shareholders and would not be reflected in the consolidated financial statements of the Company.
The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed
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to meet the “more-likely-than-not” threshold are reserved and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof. The Company intends to make the requisite distributions to its shareholders, which will generally relieve the Company from corporate-level income taxes.
To qualify for and maintain qualification as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements. In addition, to qualify for RIC tax treatment, the Company must distribute to its shareholders, for each taxable year, at least 90% of its “investment company taxable income” for that year, which is generally its ordinary income plus the excess, if any, of its realized net short-term capital gains over its realized net long-term capital losses.
In addition, based on the excise tax distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner in each taxable year an amount at least equal to the sum of (i) 98% of its ordinary income for the calendar year, (ii) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (iii) any income realized, but not distributed, in prior years. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed. To the extent that it determines that estimated current year annual taxable income will be in excess of estimated current year distributions from such taxable income, the Company will accrue excise taxes, if any, on estimated undistributed taxable income.
For the three and six months ended June 30, 2024, the Company accrued $0.6 million and $0.6 million of U.S. federal excise tax, respectively. For the three and six months ended June 30, 2023, the Company accrued $0.0 million and $(0.0) million of U.S. federal excise tax, respectively.
Allocation of Income, Expenses, Gains and Losses
Income, expenses (other than those attributable to a specific class), gains and losses are allocated to each class of shares based upon the aggregate net asset value of that class in relation to the aggregate net asset value of the Company. Expenses that are specific to a class of shares are allocated to such class directly.
Distributions
To the extent that the Company has taxable income available, the Company intends to make monthly distributions to its shareholders. Distributions to shareholders are recorded on the record date. All distributions will be paid at the discretion of the Board and will depend on the Company’s earnings, financial condition, maintenance of our tax treatment as a RIC, compliance with applicable BDC regulations and such other factors as the Board may deem relevant from time to time. Although the gross distribution per share is generally equivalent for each share class, the net distribution for each share class is reduced for any class specific expenses, including distribution and/or shareholder servicing fees, if any.
The Company has adopted a distribution reinvestment plan pursuant to which shareholders will have their cash distributions automatically reinvested in additional shares of the Company's same class of Common Shares to which the distribution relates unless they elect to receive their distributions in cash.
Recent Accounting Pronouncements
The Company considers the applicability and impact of all accounting standard updates (“ASUs”) issued by the Financial Accounting Standards Board. The Company has assessed currently issued ASUs and has determined that ASUs not listed are not applicable or are expected to have minimal impact on its consolidated financial statements.
In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”),” which clarifies guidance for fair value measurement of an equity security subject to a contractual sale restriction and establishes new disclosure requirements for such equity securities. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023 and for interim periods within those fiscal years, with early adoption permitted. The Company has concluded that this guidance did not have a material impact on its consolidated financial statements.
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Note 3. Fees, Expenses, Agreements and Related Party Transactions
Investment Advisory Agreement
On January 20, 2022, the Company entered into an investment advisory agreement with HPS, pursuant to which HPS managed the Company on a day-to-day basis until June 30, 2023. On June 30, 2023, the Company entered into the Investment Advisory Agreement (the “Investment Advisory Agreement”) with the Adviser and HPS in connection with a corporate reorganization of the investment advisory operations with respect to the Company. The Adviser is responsible for determining the portfolio composition, making investment decisions, monitoring investments, performing due diligence on prospective portfolio companies and providing the Company with such other investment advisory and related services as may reasonably be required for the investment of capital.
The Investment Advisory Agreement was effective for an initial one-year term ending on June 30, 2024 and will remain in effect from year-to-year thereafter if approved annually by a majority of the Board or by the holders of a majority of the Company’s outstanding voting securities and, in each case, a majority of the Independent Trustees. The Company may terminate the Investment Advisory Agreement, without payment of any penalty, upon 60 days’ written notice. The Investment Advisory Agreement will automatically terminate in the event of its assignment within the meaning of the 1940 Act and related Securities and Exchange Commission (the “SEC”) guidance and interpretations. The Investment Advisory Agreement was most recently renewed and approved by the Board, on May 13, 2024, for a one-year period ending on June 30, 2025.
Under the Investment Advisory Agreement, the Company pays the Adviser a fee for its services. The fee consists of two components: a management fee and an incentive fee. The cost of both the management fee and the incentive fee are ultimately borne by the shareholders.
Base Management Fee
The management fee is payable monthly in arrears at an annual rate of 1.25% of the value of the Company’s net assets as of the beginning of the first calendar day of the applicable month. For purposes of the Investment Advisory Agreement, net assets means the Company’s total assets less the carrying value of liabilities, determined in accordance with U.S. GAAP. For the first calendar month in which the Company had operations, net assets were measured as the beginning net assets as of the date on which the Company broke escrow for the Offering.
The Adviser agreed to waive the base management fee from the date on which the Company broke escrow for the Offering through December 31, 2022.
For the three and six months ended June 30, 2024, base management fees were $21.2 million and $39.5 million, respectively. For the three and six months ended June 30, 2023, base management fees were $12.1 million and $23.3 million, respectively. As of June 30, 2024 and December 31, 2023, $7.3 million and $5.6 million, respectively, were payable to the Adviser related to management fees.
Incentive Fees
The incentive fee consists of two components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the incentive fee is based on a percentage of the Company’s income and a portion is based on a percentage of the Company’s capital gains, each as described below.
(i) Income based incentive fee
The income based incentive fee is based on the Company’s Pre-Incentive Fee Net Investment Income Returns, as defined below. “Pre-Incentive Fee Net Investment Income Returns” means interest income, dividends, cash interest or other distributions or other cash income and any third-party fees received from portfolio companies (such as upfront fees, commitment fees, origination fee, amendment fees, ticking fees and break-up fees, as well as prepayments premiums, but excluding fees for providing managerial assistance) accrued during the quarter, minus operating expenses for the quarter (including the management fee, taxes, any expenses payable under the Investment Advisory Agreement and an administration agreement with the administrator, any expense of securitizations, and interest expense or other financing fees and any dividends paid on preferred stock, but excluding incentive fees and shareholder servicing and/or distribution fees). Pre-Incentive Fee Net Investment Income Returns 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. Pre-Incentive Fee Net Investment Income Returns do not include any realized capital gains, realized capital losses or
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unrealized capital appreciation or depreciation. The impact of expense support payments and recoupments are also excluded from Pre-Incentive Fee Net Investment Income Returns.
Pre-Incentive Fee Net Investment Income Returns, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding quarter, is compared to a “Hurdle Rate” defined as a return of 1.25% per quarter (5.0% annualized).
The Company pays the Adviser an incentive fee quarterly in arrears with respect to the Pre-Incentive Fee Net Investment Income Returns in each calendar quarter as follows:
i.No incentive fee will be paid on Pre-Incentive Fee Net Investment Income Returns in any calendar quarter in which the Pre-Incentive Fee Net Investment Income Returns do not exceed the Hurdle Rate;
ii.100% of the dollar amount of the Pre-Incentive Fee Net Investment Income Returns with respect to that portion of such Pre- Incentive Fee Net Investment Income Returns, if any, that exceeds the Hurdle Rate but is less than a rate of return of 1.43% (5.72% annualized). This portion of the Pre-Incentive Fee Net Investment Income Returns (which exceeds the Hurdle Rate but is less than 1.43%) is referred to as the “Catch-Up.” The Catch-Up is meant to provide the Adviser with 12.5% of the Company’s Pre-Incentive Fee Net Investment Income Returns as if a Hurdle Rate did not apply if this net investment income exceeds 1.43% in any calendar quarter; and
iii.12.5% of the dollar amount of the Pre-Incentive Fee Net Investment Income Returns, if any, that exceed a rate of return of 1.43% (5.72% annualized).
These calculations are prorated for any period of less than three months, including the first quarter the Company commenced operations, and are adjusted for any share issuances or repurchases during the relevant quarter.
The Adviser agreed to waive the income based incentive fee from the date on which the Company broke escrow for the Offering through December 31, 2022. For the three and six months ended June 30, 2024, income based incentive fees were $27.0 million and $52.6 million, respectively. For the three and six months ended June 30, 2023, income based incentive fees were $17.2 million and $31.5 million, respectively. As of June 30, 2024 and December 31, 2023, $27.0 million and $20.3 million, respectively, were payable to the Adviser relating to income based incentive fees.
(ii) Capital gains incentive fee
The second component of the incentive fee, the capital gains incentive fee, is payable at the end of each calendar year in arrears. The amount payable equals 12.5% of cumulative realized capital gains from inception through the end of such calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fee on capital gains as calculated in accordance with U.S. GAAP. U.S. GAAP requires that the capital gains incentive fee accrual consider the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement. This U.S. GAAP accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital depreciation included in the calculation of the capital gains incentive fee plus the aggregate cumulative unrealized capital appreciation, net of any expense associated with cumulative unrealized capital depreciation or appreciation. If such amount is positive at the end of a period, then U.S. GAAP requires the Company to record a capital gains incentive fee equal to 12.5% of such cumulative amount, less the aggregate amount of actual capital gains incentive fees paid or capital gains incentive fees accrued under GAAP in all prior periods.
For the three and six months ended June 30, 2024, capital gains incentive fees were $3.6 million and $9.5 million, respectively. For the three and six months ended June 30, 2023 there were no accrued capital gains incentive fees. As of June 30, 2024 and December 31, 2023, the Company accrued $13.0 million and $3.5 million, respectively, of capital gains incentive fees, none of which were payable under the Investment Advisory Agreement.
Administration Agreement
On January 20, 2022, the Company entered into an agreement (the “Administration Agreement”), subsequently amended on June 30, 2023, with the Administrator under which the Administrator provides, or oversees the performance of, administrative and compliance services, including, but not limited to, maintaining financial records, overseeing the calculation of the Company’s NAV, compliance monitoring (including diligence and oversight of other service providers), preparing reports to shareholders and reports filed with the SEC and other regulators, preparing materials and coordinating meetings of the Company’s Board, managing the payment of expenses, the payment and receipt of funds for investments and the performance of administrative and professional services rendered by others and
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providing office space, equipment and office services. The Company reimburses the Administrator for the costs and expenses incurred by the Administrator in performing its obligations under the Administration Agreement. Such reimbursement includes the Company’s allocable portion of compensation (including salaries, bonuses and benefits), overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement, including but not limited to: (i) the Company’s chief compliance officer, chief financial officer and their respective staffs; (ii) investor relations, legal, operations and other non-investment professionals at the Administrator that perform duties for the Company; and (iii) any internal audit group personnel of the Administrator or any of its affiliates, subject to the limitations described in Investment Advisory and Administration Agreements. In addition, pursuant to the terms of the Administration Agreement, the Administrator may delegate its obligations under the Administration Agreement to an affiliate or to a third party and the Company will reimburse the Administrator for any services performed for the Company by such affiliate or third party.
The amount of the reimbursement payable to the Administrator for administrative services will be the lesser of (1) Administrators’ actual costs incurred in providing such services and (2) the amount that the Company estimates it would be required to pay alternative service providers for comparable services in the same geographic location. The Administrator is required to allocate the cost of such services to the Company based on factors such as assets, revenues, time allocations and/or other reasonable metrics. The Company does not reimburse the Administrator for any services for which it receives a separate fee, or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of HPS.
Unless earlier terminated as described below, the Administration Agreement was effective for a one-year term ending on June 30, 2024 and will remain in effect from year-to-year thereafter if approved annually by a majority of the Board or by the holders of a majority of the Company’s outstanding voting securities and, in each case, a majority of the Independent Trustees. The Company may terminate the Administration Agreement, without payment of any penalty, upon 120 days’ written notice. The Administration Agreement will automatically terminate in the event of its assignment within the meaning of the 1940 Act and related SEC guidance and interpretations. The Administration Agreement was most recently renewed and approved by the Board, on May 13, 2024, for a one-year period ending on June 30, 2025.
For the three and six months ended June 30, 2024, the Company incurred $0.8 million and $1.7 million, respectively, in expenses under the Administration Agreement, which are recorded in “administrative service expenses” in the Company’s Consolidated Statements of Operations. For the three and six months ended June 30, 2023, the Company incurred $0.6 million and $1.2 million, respectively, in expenses under the Administration Agreement. As of June 30, 2024 and December 31, 2023, there was $1.9 million and $2.5 million, respectively, of administrative service expenses payable by the Company which are included in “due to affiliates” in the Consolidated Statements of Assets and Liabilities.
Sub-Administration and Fund Accounting Servicing Agreements
HPS previously engaged U.S. Bancorp Fund Services, LLC (“U.S. Bancorp”) to assist in the provision of sub-administrative and fund accounting services. U.S. Bancorp received compensation for these services under sub-administration and fund accounting servicing agreements. On August 30, 2023, the Company provided notice for the termination of the sub-administration agreement dated as of November 30, 2021 by and among the Company, HPS and U.S. Bancorp.
On August 28, 2023, the Company entered into a Sub-Administration Agreement (the “Sub-Administration Agreement”) with HPS and Harmonic Fund Services (“Harmonic”) as the Company’s sub-administrator. Pursuant to the Sub-Administration Agreement, Harmonic provides certain administrative services necessary for the operations of the Company. The Company will bear all fees to be paid to Harmonic under the Sub-Administration Agreement and Harmonic will be entitled to receive reimbursement from the Company for all out-of-pocket expenses properly incurred by Harmonic in respect of the services provided pursuant to the Sub-Administration Agreement.
Managing Dealer Agreement
On August 3, 2021, the Company entered into a managing dealer agreement with Emerson Equity LLC. On April 11, 2024, the Company entered into a managing dealer agreement (the “Managing Dealer Agreement”) with HPS Securities. In connection with the transition to HPS Securities as the Company’s Managing Dealer, the Company provided notice for the termination of the managing dealer agreement dated as of August 3, 2021 by and between the Company and Emerson Equity LLC, which termination was effective as of April 11, 2024.
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Under the terms of the Managing Dealer Agreement, the Managing Dealer will serve as the Managing Dealer for the Offering. The Managing Dealer will be entitled to receive distribution and/or shareholder servicing fees monthly in arrears at an annual rate of 0.25%, 0.50% and 0.85% of the value of the Company’s net assets attributable to Class D shares, Class F shares and Class S shares, respectively, as of the beginning of the first calendar day of the month. No distribution and/or shareholding servicing fees will be paid with respect to Class I. The distribution and/or shareholder servicing fees will be payable to the Managing Dealer, but the Managing Dealer anticipates that all or a portion of the shareholder servicing and/or distribution fees will be retained by, or reallowed (paid) to, participating broker-dealers. The Company will not pay any other fees to the Managing Dealer. As set forth in and pursuant to the managing dealer agreement with Emerson Equity LLC, the Company paid Emerson Equity LLC, the Company’s managing dealer prior to April 11, 2024, certain fees, including a $35,000 engagement fee that was previously paid, a $250,000 fixed managing dealer fee payable quarterly (which commenced in the first quarter of 2022) in arrears in five equal quarterly installments that was paid, and a two basis point (0.02%) variable managing dealer fee that was payable on any new capital raised in the offering following the expiration of the initial 15-month period of the Offering. In addition, in connection with services provided by Emerson Equity LLC with respect to the sale of shares registered pursuant to the registration statement filed on Form N-2 on June 30, 2023 related to a follow-on offering of shares of the Company, HPS agreed to pay and paid a one-time fee of $60,000 to Emerson Equity LLC. For the avoidance of doubt, such fee was borne and paid in its entirety solely by HPS, and such fee (or any portion thereof) was not borne or paid directly or indirectly by the Company or the shareholders.
The Company or the Adviser may also pay directly, or reimburse the Managing Dealer if the Managing Dealer pays on the Company’s behalf, any organization and offering expenses (other than any upfront selling commissions and shareholder servicing and/or distribution fees).
The Company will cease paying the distribution and/or shareholder servicing fees on the Class D shares, Class F shares and Class S shares on the earlier to occur of the following: (i) a listing of Class I shares, (ii) a merger or consolidation with or into another entity, or the sale or other disposition of all or substantially all of the Company’s assets or (iii) the date following the completion of the primary portion of the Offering on which, in the aggregate, underwriting compensation from all sources in connection with the Offering, including the distribution and/or shareholder servicing fees and other underwriting compensation, is equal to 10% of the gross proceeds from the Offering.
In addition, at the end of the month in which the Managing Dealer in conjunction with the transfer agent determines that total transaction or other fees, including upfront placement fees or brokerage commissions, and shareholder servicing and/or distribution fees paid with respect to any single share held in a shareholder’s account would exceed, in the aggregate, 10% of the gross proceeds from the sale of such share (or a lower limit as determined by the Managing Dealer or the applicable selling agent), the Company will cease paying the shareholder servicing and/or distribution fee on either (i) each such share that would exceed such limit or (ii) all Class D shares, Class F shares and Class S shares in such shareholder’s account. At the end of such month, the applicable Class D shares, Class F shares or Class S shares in such shareholder’s account will convert into a number of Class I shares (including any fractional shares), with an equivalent aggregate NAV as such Class D, Class F or Class S shares.
The Managing Dealer is a broker-dealer registered with the SEC and is a member of the Financial Industry Regulatory Authority, or FINRA.
The Managing Dealer Agreement may be terminated at any time, without the payment of any penalty, by vote of a majority of the Company’s trustees who are not “interested persons”, as defined in the 1940 Act, of the Company and who have no direct or indirect financial interest in the operation of the Company’s distribution plan or the Managing Dealer Agreement or by vote of a majority of the outstanding voting securities of the Company, on not more than 60 days’ written notice to the Managing Dealer or the Adviser. The Managing Dealer Agreement will automatically terminate in the event of its assignment, as defined in the 1940 Act.
Either party may terminate the Managing Dealer Agreement upon 60 days’ written notice to the other party or immediately upon notice to the other party in the event such other party failed to comply with a material provision of the Managing Dealer Agreement. The Company’s obligations under the Managing Dealer Agreement to pay the shareholder servicing and/or distribution fees with respect to the Class S, Class D shares and Class F shares distributed shall survive termination of the agreement until such shares are no longer outstanding (including such shares that have been converted into Class I shares, as described above).
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Distribution and Servicing Plan
On August 9, 2021, the Board approved a distribution and servicing plan (the “Distribution and Servicing Plan”). The following table shows the shareholder servicing and/or distribution fees the Company pays the Managing Dealer with respect to the Class I, Class D, Class F, and Class S on an annualized basis as a percentage of the Company’s NAV for such class.
Shareholder Servicing and/or Distribution Fee as a % of NAV | |||||
Class I shares | — | % | |||
Class D shares | 0.25 | % | |||
Class F shares | 0.50 | % | |||
Class S shares | 0.85 | % |
The shareholder servicing and/or distribution fees are paid monthly in arrears, calculated using the net asset value of the applicable class as of the beginning of the first calendar day of the month and subject to FINRA and other limitations on underwriting compensation. The Managing Dealer agreed to waive shareholder servicing and/or distribution fees for Class D shares and Class F shares for the first nine months following the date on which the Company broke escrow for the Offering.
The Managing Dealer will reallow (pay) all or a portion of the shareholder servicing and/or distribution fees to participating brokers and servicing brokers for ongoing shareholder services performed by such brokers, and will waive shareholder servicing and/or distribution fees to the extent a broker is not eligible to receive it for failure to provide such services. Because the shareholder servicing and/or distribution fees with respect to Class D, Class F or Class S shares are calculated based on the aggregate net asset value for all of the outstanding shares of each such class, it reduces the net asset value with respect to all shares of each such class, including shares issued under the Company’s distribution reinvestment plan.
Eligibility to receive the shareholder servicing and/or distribution fee is conditioned on a broker providing the following ongoing services with respect to the Class D, Class F or Class S shares: assistance with recordkeeping, answering investor inquiries regarding the Company, including regarding distribution payments and reinvestments, helping investors understand their investments upon their request, and assistance with share repurchase requests. If the applicable broker is not eligible to receive the shareholder servicing and/or distribution fee due to failure to provide these services, the Managing Dealer will waive the shareholder servicing fee and/or distribution that broker would have otherwise been eligible to receive. The shareholder servicing and/or distribution fees are ongoing fees that are not paid at the time of purchase.
For the three and six months ended June 30, 2024, the Company incurred distribution and/or shareholder servicing fees of $0.6 million and $1.1 million attributable to Class D shares, respectively, $4.7 million and $9.0 million attributable to Class F shares, respectively, and $0.4 million and $0.6 million attributable to Class S shares, respectively. For the three and six months ended June 30, 2023, the Company incurred distribution and/or shareholder servicing fees of $0.3 million and $0.6 million attributable to Class D shares, respectively, and $3.1 million and $5.9 million attributable to Class F shares, respectively. As of June 30, 2024 and December 31, 2023, there was $2.0 million and $1.5 million, respectively, of distribution and/or shareholder servicing fees payable to the Managing Dealer.
Expense Support and Conditional Reimbursement Agreement
On January 20, 2022, the Company entered into an expense support and conditional reimbursement agreement with the Adviser. On June 30, 2023, the Company and the Adviser entered into an Amended and Restated Expense Support and Conditional Reimbursement Agreement (the “Expense Support Agreement”) in connection with the corporate reorganization of the investment advisory operations with respect to the Company. Pursuant to the Expense Support Agreement, on a monthly basis, the Adviser is obligated to advance all of the Company’s Other Operating Expenses (as defined hereafter) (each, a “Required Expense Payment”) to the extent that such expenses exceed 1.00% (on an annualized basis) of the Company’s NAV. The Adviser may elect to pay an additional portion of the Company’s expenses from time to time, which the Company will be obligated to reimburse to the Adviser at a later date if certain conditions are met.
“Other Operating Expenses” means the Company’s total organization and offering expenses, professional fees, trustee fees, administration fees, and other general and administrative expenses (including the Company’s allocable portion of compensation (including salaries, bonuses and benefits), overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement).
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Any Required Expense Payment must be paid by the Adviser to the Company in any combination of cash or other immediately available funds and/or offset against amounts due from the Company to the Adviser or its affiliates.
The Adviser may elect to pay certain additional expenses on behalf of the Company (each, a “Voluntary Expense Payment” and together with a Required Expense Payment, the “Expense Payments”), provided that no portion of the payment will be used to pay any interest expense or distribution and/or shareholder servicing fees of the Company. Any Voluntary Expense Payment that the Adviser has committed to pay must be paid by the Adviser to the Company in any combination of cash or other immediately available funds no later than 45 days after such commitment was made in writing, and/or offset against amounts due from the Company to the Adviser or its affiliates.
Following any calendar month in which Available Operating Funds (as defined below) exceed the cumulative distributions accrued to the Company’s shareholders based on distributions declared with respect to record dates occurring in such calendar month (the amount of such excess being hereinafter referred to as “Excess Operating Funds”), the Company shall pay such Excess Operating Funds, or a portion thereof, to the Adviser until such time as all Expense Payments made by the Adviser to the Company within three years prior to the last business day of such calendar month have been reimbursed. Any payments required to be made by the Company shall be referred to herein as a “Reimbursement Payment.”
“Available Operating Funds” means the sum of (i) the Company’s net investment company taxable income (including net short-term capital gains reduced by net long-term capital losses), (ii) the Company’s net capital gains (including the excess of net long-term capital gains over net short-term capital losses) and (iii) dividends and other distributions paid to the Company on account of investments in portfolio companies (to the extent such amounts listed in clause (iii) are not included under clauses (i) and (ii) above).
The Company’s obligation to make a Reimbursement Payment shall automatically become a liability of the Company on the last business day of the applicable calendar month, except to the extent the Adviser has waived its right to receive such payment for the applicable month.
For the three and six months ended June 30, 2024 and 2023, the Adviser made no Expense Payments on behalf of the Company and there were no Reimbursement Payments made to the Adviser.
Controlled/Affiliated Portfolio Companies
Under the 1940 Act, the Company is required to separately identify non-controlled investments where it owns 5% or more of a portfolio company’s outstanding voting securities and/or has the power to exercise control over the management or policies of such portfolio company as investments in “affiliated” companies. In addition, under the 1940 Act, the Company is required to separately identify investments where it owns more than 25% of a portfolio company’s outstanding voting securities and/or has the power to exercise control over the management or policies of such portfolio company as investments in “controlled” companies. Under the 1940 Act, “non-affiliated investments” are defined as investments that are neither controlled investments nor affiliated investments. Detailed information with respect to the Company’s non-controlled, non-affiliated; non-controlled, affiliated; and controlled affiliated investments is contained in the accompanying consolidated financial statements, including the Consolidated Schedules of Investments.
The Company has made an investment in a joint venture, ULTRA III, which is considered a controlled/affiliated company. For a further description of ULTRA III, see “Note 11. Joint Venture.”
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Note 4. Investments
The composition of the Company’s investment portfolio at cost and fair value was as follows:
June 30, 2024 | December 31, 2023 | ||||||||||||||||||||||||||||||||||
Amortized Cost | Fair Value | % of Total Investments at Fair Value | Amortized Cost | Fair Value | % of Total Investments at Fair Value | ||||||||||||||||||||||||||||||
First lien debt | $ | 10,524,496 | $ | 10,648,513 | 95.74 | % | $ | 8,919,865 | $ | 9,002,695 | 96.93 | % | |||||||||||||||||||||||
Second lien debt | 24,299 | 22,932 | 0.21 | 64,782 | 67,087 | 0.72 | |||||||||||||||||||||||||||||
Other secured debt | 63,828 | 64,304 | 0.58 | — | — | — | |||||||||||||||||||||||||||||
Unsecured debt | 43,549 | 43,680 | 0.39 | 28,901 | 29,101 | 0.31 | |||||||||||||||||||||||||||||
Structured finance investments | 54,642 | 56,202 | 0.51 | 28,427 | 29,868 | 0.32 | |||||||||||||||||||||||||||||
Investments in joint ventures | 227,227 | 238,639 | 2.15 | 125,513 | 124,003 | 1.33 | |||||||||||||||||||||||||||||
Equity investments | 46,540 | 47,935 | 0.42 | 36,313 | 36,656 | 0.39 | |||||||||||||||||||||||||||||
Total | $ | 10,984,581 | $ | 11,122,205 | 100.00 | % | $ | 9,203,801 | $ | 9,289,410 | 100.00 | % |
The industry composition of investments at fair value was as follows:
June 30, 2024 | December 31, 2023 | ||||||||||||||||||||||
Fair Value | % of Total Investments at Fair Value | Fair Value | % of Total Investments at Fair Value | ||||||||||||||||||||
Software and Computer Services | $ | 1,940,097 | 17.43 | % | $ | 1,472,951 | 15.86 | % | |||||||||||||||
Industrial Support Services | 1,341,955 | 12.07 | 1,063,701 | 11.45 | |||||||||||||||||||
Medical Equipment and Services | 1,084,657 | 9.75 | 802,273 | 8.64 | |||||||||||||||||||
Health Care Providers | 970,939 | 8.73 | 962,244 | 10.36 | |||||||||||||||||||
Consumer Services | 668,993 | 6.01 | 627,950 | 6.76 | |||||||||||||||||||
Non-life Insurance | 573,821 | 5.16 | 531,031 | 5.72 | |||||||||||||||||||
Media | 498,845 | 4.49 | 605,503 | 6.52 | |||||||||||||||||||
General Industrials | 497,131 | 4.47 | 405,330 | 4.36 | |||||||||||||||||||
Investment Banking and Brokerage Services | 462,442 | 4.16 | 160,345 | 1.73 | |||||||||||||||||||
Aerospace and Defense | 404,452 | 3.64 | 475,845 | 5.12 | |||||||||||||||||||
Pharmaceuticals and Biotechnology | 275,428 | 2.48 | 268,572 | 2.89 | |||||||||||||||||||
Travel and Leisure | 252,738 | 2.27 | 332,032 | 3.57 | |||||||||||||||||||
Industrial Engineering | 242,301 | 2.18 | 254,138 | 2.74 | |||||||||||||||||||
Investments in Joint Ventures | 238,639 | 2.15 | 124,003 | 1.33 | |||||||||||||||||||
Personal Care, Drug and Grocery Stores | 218,901 | 1.97 | 120,098 | 1.29 | |||||||||||||||||||
Retailers | 183,699 | 1.65 | 113,500 | 1.22 | |||||||||||||||||||
Food Producers | 172,769 | 1.55 | 152,576 | 1.64 | |||||||||||||||||||
Industrial Transportation | 119,173 | 1.07 | 33,196 | 0.36 | |||||||||||||||||||
Automobiles and Parts | 96,781 | 0.87 | 112,957 | 1.22 | |||||||||||||||||||
Electricity | 85,104 | 0.77 | 83,267 | 0.90 | |||||||||||||||||||
Asset Based Lending and Fund Finance | 82,422 | 0.74 | 21,341 | 0.23 | |||||||||||||||||||
Telecommunications Equipment | 81,241 | 0.73 | 14,880 | 0.16 | |||||||||||||||||||
Personal Goods | 73,740 | 0.66 | 76,471 | 0.82 | |||||||||||||||||||
Technology Hardware and Equipment | 71,214 | 0.64 | 70,623 | 0.76 | |||||||||||||||||||
Real Estate Investment and Services | 67,217 | 0.60 | 39,500 | 0.43 | |||||||||||||||||||
Finance and Credit Services | 62,137 | 0.56 | 59,003 | 0.64 | |||||||||||||||||||
Industrial Metals and Mining | 60,429 | 0.54 | 11,895 | 0.13 | |||||||||||||||||||
Structured Finance | 56,202 | 0.51 | 29,868 | 0.32 | |||||||||||||||||||
Construction and Materials | 55,469 | 0.50 | 57,171 | 0.62 |
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Oil, Gas and Coal | 48,161 | 0.43 | 44,818 | 0.48 | |||||||||||||||||||
Gas, Water and Multi-utilities | 43,018 | 0.39 | 43,604 | 0.47 | |||||||||||||||||||
Telecommunications Service Providers | 30,877 | 0.28 | 70,997 | 0.76 | |||||||||||||||||||
Alternative Energy | 27,856 | 0.25 | 16,743 | 0.18 | |||||||||||||||||||
Chemicals | 15,149 | 0.14 | 15,157 | 0.16 | |||||||||||||||||||
Life Insurance | 8,859 | 0.08 | 5,884 | 0.06 | |||||||||||||||||||
Household Goods and Home Construction | 7,163 | 0.06 | 6,937 | 0.07 | |||||||||||||||||||
Leisure Goods | 2,001 | 0.02 | 1,991 | 0.02 | |||||||||||||||||||
Electronic and Electrical Equipment(1) | 185 | — | 1,015 | 0.01 | |||||||||||||||||||
Total | $ | 11,122,205 | 100.00 | % | $ | 9,289,410 | 100.00 | % |
(1)Amount rounds to less than 0.01% as of June 30, 2024.
The geographic composition of investments at cost and fair value was as follows:
June 30, 2024 | |||||||||||||||||||||||
Amortized Cost | Fair Value | % of Total Investments at Fair Value | Fair Value as % of Net Assets | ||||||||||||||||||||
Australia | $ | 183,892 | $ | 188,000 | 1.69 | % | 2.65 | % | |||||||||||||||
Austria | 87,141 | 88,592 | 0.80 | 1.25 | |||||||||||||||||||
Canada | 87,863 | 86,794 | 0.78 | 1.22 | |||||||||||||||||||
France | 81,567 | 84,378 | 0.76 | 1.19 | |||||||||||||||||||
Germany | 118,409 | 120,499 | 1.08 | 1.70 | |||||||||||||||||||
Italy | 128,023 | 132,633 | 1.19 | 1.87 | |||||||||||||||||||
Luxembourg | 6,960 | 7,032 | 0.06 | 0.10 | |||||||||||||||||||
Norway | 21,197 | 21,197 | 0.19 | 0.30 | |||||||||||||||||||
Singapore | 32,488 | 32,767 | 0.29 | 0.46 | |||||||||||||||||||
Spain | 31,598 | 32,516 | 0.29 | 0.46 | |||||||||||||||||||
Taiwan | 48,360 | 44,768 | 0.40 | 0.63 | |||||||||||||||||||
United Kingdom | 738,239 | 754,872 | 6.79 | 10.65 | |||||||||||||||||||
United States | 9,418,844 | 9,528,157 | 85.68 | 134.45 | |||||||||||||||||||
Total | $ | 10,984,581 | $ | 11,122,205 | 100.00 | % | 156.93 | % |
December 31, 2023 | |||||||||||||||||||||||
Amortized Cost | Fair Value | % of Total Investments at Fair Value | Fair Value as % of Net Assets | ||||||||||||||||||||
Australia | $ | 264,309 | $ | 266,377 | 2.87 | % | 5.14 | % | |||||||||||||||
Canada | 78,148 | 77,962 | 0.84 | 1.50 | |||||||||||||||||||
France | 35,514 | 37,969 | 0.41 | 0.73 | |||||||||||||||||||
Germany | 68,533 | 71,499 | 0.77 | 1.38 | |||||||||||||||||||
Italy | 127,737 | 137,270 | 1.48 | 2.65 | |||||||||||||||||||
Norway | 24,920 | 24,957 | 0.27 | 0.48 | |||||||||||||||||||
Singapore | 31,713 | 32,862 | 0.35 | 0.63 | |||||||||||||||||||
Spain | 31,515 | 33,196 | 0.36 | 0.64 | |||||||||||||||||||
Taiwan | 46,557 | 40,359 | 0.43 | 0.78 | |||||||||||||||||||
United Kingdom | 426,120 | 444,188 | 4.78 | 8.57 | |||||||||||||||||||
United States | 8,068,735 | 8,122,771 | 87.44 | 156.65 | |||||||||||||||||||
Total | $ | 9,203,801 | $ | 9,289,410 | 100.00 | % | 179.15 | % |
As of June 30, 2024 and December 31, 2023, the Company had certain investments in four and three portfolio companies on non-accrual status, respectively, which represented 0.35% and 0.33% of total debt investments, at fair value, respectively.
55
As of June 30, 2024 and December 31, 2023, on a fair value basis, 99.0% and 98.6%, respectively, of performing debt investments bore interest at a floating rate and 1.0% and 1.4%, respectively, of performing debt investments bore interest at a fixed rate.
Note 5. Fair Value Measurements
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date.
The fair value hierarchy under ASC 820 prioritizes the inputs to valuation methodology used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The levels used for classifying investments are not necessarily an indication of the risk associated with investing in these securities. The three levels of the fair value hierarchy are as follows:
•Level 1: Inputs to the valuation methodology that reflect unadjusted quoted prices available in active markets for identical assets or liabilities as of the reporting date.
•Level 2: Inputs to the valuation methodology other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date.
•Level 3: Inputs to the valuation methodology are unobservable and significant to overall fair value measurement.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Adviser’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.
In addition to using the above inputs in investment valuations, the Company applies the valuation policy approved by its Board that is consistent with ASC 820. Consistent with the valuation policy, the Company evaluates the source of the inputs, including any markets in which its investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value.
Investments whose values are based on the listed closing price quoted on the securities’ principal exchange are classified within Level 1 and include active listed equities. The Adviser does not adjust the quoted price for such instruments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.
Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. These include investment-grade corporate bonds, structured products, and certain bank loans, less liquid listed equities, and high yield bonds. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.
Investments classified within Level 3 have unobservable inputs, as they trade infrequently, or not at all. When observable prices are not available for these investments, the Adviser uses one or more valuation techniques (e.g., the market approach and the income approach) of which sufficient and reliable data is available. Within Level 3, the use of the market approach generally consists of using comparable market data, while the use of the income approach generally consists of the net present value of estimated future cash flows, which may be adjusted as appropriate for liquidity, credit, market and/or other risk factors.
Investments in senior loans primarily include first and second lien term loans, delayed draws and revolving credit. The Adviser analyzes enterprise value based on the weighted average of discounted cash flows, public comparables and merger and acquisition comparables. This analysis is done to ensure, among other things, that the investments have adequate collateral and asset coverage. Once the investment is determined to have adequate asset coverage, the Adviser monitors yields for senior loan investments made from the time of purchase to the month end average yields for similar investments and risk profiles. The Company uses market data, including newly funded transactions, and secondary market data with respect to high-yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield. The change in yield is utilized by the Adviser to discount the anticipated cash flows of the debt investment in order to arrive at a fair value. Further, the Adviser adjusts for material changes in the underlying fundamentals of the issuer, including changes in leverage, as necessary. If the investment does not have adequate coverage, a tranched valuation approach is considered.
56
Derivative Instruments: Derivative instruments can be exchange-traded or privately negotiated over the-counter (“OTC”) and include forward currency contracts and swap contracts. Forwards currency contracts and swap contracts are valued by the Adviser using observable inputs, such as market-based quotations received from the counterparty, dealers or brokers, whenever available and considered reliable. In instances where models are used, the value of an OTC derivative depends upon the contractual terms of, and specific risks inherent in the contract, as well as the availability and reliability of observable inputs. Such inputs include market prices for reference securities, yield curves, volatility assumptions and correlations of such inputs. Certain OTC derivatives can generally be corroborated by market data and are therefore classified within Level 1 or Level 2 of the fair value hierarchy depending on whether or not they are deemed to be actively traded.
Further inputs considered by the Adviser in estimating the value of investments may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, subsequent rounds of financing, recapitalizations and other transactions across the capital structure, offerings in the equity or debt capital markets (by the investment or other comparable investments), whether the loan contains call protection and changes in financial ratios or cash flows. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Adviser in the absence of market information. The fair value measurement of Level 3 investments does not include transaction costs that may have been capitalized as part of the security’s cost basis. Assumptions used by the Adviser due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Company’s Consolidated Results of Operations.
Rule 2a-5 under the 1940 Act was recently adopted by the SEC and establishes requirements for determining fair value in good faith for purposes of the 1940 Act. The rule permits boards, subject to board oversight and certain other conditions, to designate certain parties to perform the fair value determinations. In accordance with this rule, the Company’s Board of Trustees has designated our Adviser as the valuation designee primarily responsible for the valuation of the Company’s investments, subject to the oversight of the Board of Trustees.
The following table presents the fair value hierarchy of investments and cash equivalents:
(1) Includes investment in ULTRA III (refer to Note 11). Certain investments that are measured at fair value using the NAV practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.
June 30, 2024 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
First lien debt | $ | — | $ | 1,105,218 | $ | 9,543,295 | $ | 10,648,513 | |||||||||||||||
Second lien debt | — | 3,861 | 19,071 | 22,932 | |||||||||||||||||||
Other secured debt | — | — | 64,304 | 64,304 | |||||||||||||||||||
Unsecured debt | — | 13,112 | 30,568 | 43,680 | |||||||||||||||||||
Structured finance investments | — | 56,202 | — | 56,202 | |||||||||||||||||||
Equity investments | — | — | 47,935 | 47,935 | |||||||||||||||||||
Total investments | — | 1,178,393 | 9,705,173 | 10,883,566 | |||||||||||||||||||
Investments measured at NAV(1) | — | — | — | 238,639 | |||||||||||||||||||
Total | $ | — | $ | 1,178,393 | $ | 9,705,173 | $ | 11,122,205 | |||||||||||||||
Cash equivalents | $ | 269,155 | $ | — | $ | — | $ | 269,155 |
December 31, 2023 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
First lien debt | $ | — | $ | 1,046,460 | $ | 7,956,235 | $ | 9,002,695 | |||||||||||||||
Second lien debt | — | 47,646 | 19,441 | 67,087 | |||||||||||||||||||
Unsecured debt | — | 13,165 | 15,936 | 29,101 | |||||||||||||||||||
Structured finance investments | — | 29,868 | — | 29,868 | |||||||||||||||||||
Equity investments | — | — | 36,656 | 36,656 | |||||||||||||||||||
Total investments | — | 1,137,139 | 8,028,268 | 9,165,407 | |||||||||||||||||||
Investments measured at NAV(1) | — | — | — | 124,003 | |||||||||||||||||||
Total | $ | — | $ | 1,137,139 | $ | 8,028,268 | $ | 9,289,410 | |||||||||||||||
Cash equivalents | $ | 131,546 | $ | — | $ | — | $ | 131,546 |
57
The following table presents change in the fair value of investments for which Level 3 inputs were used to determine fair value:
Three Months Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||
First Lien Debt | Second Lien Debt | Other Secured Debt | Unsecured Debt | Equity Investments | Total Investments | ||||||||||||||||||||||||||||||
Fair value, beginning of period | $ | 8,557,580 | $ | 19,764 | $ | 63,719 | $ | 16,603 | $ | 40,081 | $ | 8,697,747 | |||||||||||||||||||||||
Purchases of investments(1) | 1,228,686 | — | — | 13,997 | 7,008 | 1,249,691 | |||||||||||||||||||||||||||||
Proceeds from principal repayments and sales of investments | (286,583) | — | — | — | — | (286,583) | |||||||||||||||||||||||||||||
Accretion of discount/amortization of premium | 14,116 | 39 | 108 | 4 | — | 14,267 | |||||||||||||||||||||||||||||
Net realized gain (loss) | (1,621) | — | — | — | — | (1,621) | |||||||||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 31,117 | (732) | 477 | (36) | 846 | 31,672 | |||||||||||||||||||||||||||||
Transfers into Level 3(2) | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Transfers out of Level 3(2) | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Fair value, end of period | $ | 9,543,295 | $ | 19,071 | $ | 64,304 | $ | 30,568 | $ | 47,935 | $ | 9,705,173 | |||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) related to financial instruments still held as of June 30, 2024 | $ | 35,367 | $ | (732) | $ | 477 | $ | (36) | $ | 846 | $ | 35,922 |
Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||
First Lien Debt | Second Lien Debt | Other Secured Debt | Unsecured Debt | Equity Investments | Total Investments | ||||||||||||||||||||||||||||||
Fair value, beginning of period | $ | 7,956,235 | $ | 19,441 | $ | — | $ | 15,936 | $ | 36,656 | $ | 8,028,268 | |||||||||||||||||||||||
Purchases of investments(1) | 2,486,339 | — | 63,700 | 14,591 | 10,555 | 2,575,185 | |||||||||||||||||||||||||||||
Proceeds from principal repayments and sales of investments | (967,310) | — | — | — | (385) | (967,695) | |||||||||||||||||||||||||||||
Accretion of discount/amortization of premium | 38,133 | 78 | 128 | 6 | — | 38,345 | |||||||||||||||||||||||||||||
Net realized gain (loss) | (8,487) | — | — | — | 60 | (8,427) | |||||||||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 45,359 | (448) | 476 | 35 | 1,049 | 46,471 | |||||||||||||||||||||||||||||
Transfers into Level 3(2) | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Transfers out of Level 3(2) | (6,974) | — | — | — | — | (6,974) | |||||||||||||||||||||||||||||
Fair value, end of period | $ | 9,543,295 | $ | 19,071 | $ | 64,304 | $ | 30,568 | $ | 47,935 | $ | 9,705,173 | |||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) related to financial instruments still held as of June 30, 2024 | $ | 54,266 | $ | (448) | $ | 476 | $ | 35 | $ | 1,103 | $ | 55,431 |
(1)Purchases include PIK interest and dividends, if applicable.
(2)Transfers between levels, if any, are recognized at the beginning of the period in which the transfers occur. For the three and six months ended June 30, 2024, transfers into or out of Level 3 were primarily due to decreased or increased price transparency, respectively.
58
Three Months Ended June 30, 2023 | |||||||||||||||||||||||||||||
First Lien Debt | Second Lien Debt | Unsecured Debt | Equity Investments | Total Investments | |||||||||||||||||||||||||
Fair value, beginning of period | $ | 5,774,333 | $ | 18,048 | $ | 1,915 | $ | 2,469 | $ | 5,796,765 | |||||||||||||||||||
Purchases of investments(1) | 431,483 | 1,879 | 66 | 2,334 | 435,762 | ||||||||||||||||||||||||
Proceeds from principal repayments and sales of investments | (138,977) | — | — | (125) | (139,102) | ||||||||||||||||||||||||
Accretion of discount/amortization of premium | 7,621 | 25 | (19) | — | 7,627 | ||||||||||||||||||||||||
Net realized gain (loss) | 1,853 | — | — | (49) | 1,804 | ||||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 27,850 | 87 | 13 | 100 | 28,050 | ||||||||||||||||||||||||
Transfers into Level 3(2) | — | — | — | — | — | ||||||||||||||||||||||||
Transfers out of Level 3(2) | — | — | — | — | — | ||||||||||||||||||||||||
Fair value, end of period | $ | 6,104,163 | $ | 20,039 | $ | 1,975 | $ | 4,729 | $ | 6,130,906 | |||||||||||||||||||
Net change in unrealized appreciation (depreciation) related to financial instruments still held as of June 30, 2023 | $ | 26,888 | $ | 86 | $ | 14 | $ | 102 | $ | 27,090 |
Six Months Ended June 30, 2023 | |||||||||||||||||||||||||||||
First Lien Debt | Second Lien Debt | Unsecured Debt | Equity Investments | Total Investments | |||||||||||||||||||||||||
Fair value, beginning of period | $ | 4,882,393 | $ | 8,794 | $ | 1,606 | $ | 2,306 | $ | 4,895,099 | |||||||||||||||||||
Purchases of investments(1) | 1,292,886 | 1,879 | 443 | 2,913 | 1,298,121 | ||||||||||||||||||||||||
Proceeds from principal repayments and sales of investments | (169,558) | — | — | (177) | (169,735) | ||||||||||||||||||||||||
Accretion of discount/amortization of premium | 15,602 | 58 | (10) | — | 15,650 | ||||||||||||||||||||||||
Net realized gain (loss) | 960 | — | — | (402) | 558 | ||||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 86,594 | (155) | (64) | 89 | 86,464 | ||||||||||||||||||||||||
Transfers into Level 3(2) | — | 9,463 | — | — | 9,463 | ||||||||||||||||||||||||
Transfers out of Level 3(2) | (4,714) | — | — | — | (4,714) | ||||||||||||||||||||||||
Fair value, end of period | $ | 6,104,163 | $ | 20,039 | $ | 1,975 | $ | 4,729 | $ | 6,130,906 | |||||||||||||||||||
Net change in unrealized appreciation (depreciation) related to financial instruments still held as of June 30, 2023 | $ | 84,064 | $ | (156) | $ | (65) | $ | 91 | $ | 83,934 |
(1)Purchases include PIK interest, if applicable.
(2)Transfers between levels, if any, are recognized at the beginning of the period in which the transfers occur. For the three and six months ended June 30, 2023, transfers into or out of Level 3 were primarily due to decreased or increased price transparency, respectively.
The following table presents quantitative information about the significant unobservable inputs of the Company’s Level 3 financial instruments. The table is not intended to be all-inclusive but instead captures the significant unobservable inputs relevant to the Company’s determination of fair value.
June 30, 2024 | |||||||||||||||||||||||||||||||||||
Range | |||||||||||||||||||||||||||||||||||
Fair Value(1) | Valuation Technique | Unobservable Input | Low | High | Weighted Average(2) | ||||||||||||||||||||||||||||||
Investments in first lien debt | $ | 6,705,820 | Yield analysis | Discount rate | 7.88 | % | 27.09 | % | 11.75 | % | |||||||||||||||||||||||||
49,353 | Recovery analysis | Recovery rate | 58.80 | % | 84.39 | % | 78.06 | % | |||||||||||||||||||||||||||
Investments in second lien debt | 19,070 | Yield analysis | Discount rate | 12.94 | % | 19.13 | % | 15.64 | % | ||||||||||||||||||||||||||
Investments in other secured debt | 64,304 | Yield analysis | Discount rate | 12.31 | % | 12.31 | % | 12.31 | % | ||||||||||||||||||||||||||
Investments in unsecured debt | 17,173 | Yield analysis | Discount rate | 14.40 | % | 15.14 | % | 14.97 | % | ||||||||||||||||||||||||||
Investments in preferred equity | 33,964 | Yield analysis | Discount rate | 11.61 | % | 15.00 | % | 14.64 | % | ||||||||||||||||||||||||||
Investments in common equity | 13,000 | Discounted cash flow | Discount rate | 9.00 | % | 15.00 | % | 12.02 | % | ||||||||||||||||||||||||||
Exit multiple | 10.00x | 10.00x | 10.00x | ||||||||||||||||||||||||||||||||
Terminal Growth Rate | 2.50 | % | 2.50 | % | 2.50 | % | |||||||||||||||||||||||||||||
Cap Rate | 9.00 | % | 9.00 | % | 9.00 | % |
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December 31, 2023 | |||||||||||||||||||||||||||||||||||
Range | |||||||||||||||||||||||||||||||||||
Fair Value(1) | Valuation Technique | Unobservable Input | Low | High | Weighted Average(2) | ||||||||||||||||||||||||||||||
Investments in first lien debt | $ | 6,422,647 | Yield analysis | Discount rate | 8.09 | % | 35.64 | % | 12.03 | % | |||||||||||||||||||||||||
21,039 | Recovery analysis | Recovery rate | 73.21 | % | 73.21 | % | 73.21 | % | |||||||||||||||||||||||||||
Investments in second lien debt | 19,441 | Yield analysis | Discount rate | 12.96 | % | 17.24 | % | 15.39 | % | ||||||||||||||||||||||||||
Investments in unsecured debt | 1,295 | Yield analysis | Discount rate | 16.00 | % | 16.00 | % | 16.00 | % | ||||||||||||||||||||||||||
Investments in preferred equity | 1,510 | Yield analysis | Discount rate | 14.50 | % | 16.31 | % | 14.94 | % | ||||||||||||||||||||||||||
Investments in common equity | 2,532 | Discounted cash flow | Discount rate | 9.00 | % | 15.00 | % | 9.47 | % | ||||||||||||||||||||||||||
Exit multiple | 10.00x | 10.00x | 10.00x | ||||||||||||||||||||||||||||||||
Terminal Growth Rate | 3.00 | % | 3.00 | % | 3.00 | % |
(1)As of June 30, 2024, included within the fair value of Level 3 assets of $9,705,173 is an amount of $2,802,489 for which the Adviser did not develop the unobservable inputs (examples include third-party pricing and transaction prices). As of December 31, 2023, included within the fair value of Level 3 assets of $8,028,268 is an amount of $1,559,804 for which the Adviser did not develop the unobservable inputs (examples include third-party pricing and transaction prices).
(2)Weighted averages are calculated based on fair value of investments.
The significant unobservable input used in the yield analysis is the discount rate based on comparable market yields. The significant unobservable inputs used in the income approach are the discount rate used to discount the estimated future cash flows expected to be received from the underlying investment. Significant increases in discount rates would result in a significantly lower fair value measurement. The significant unobservable input used in the recovery analysis is the recovery rate. The recovery rate represents the extent to which proceeds can be recovered and an increase or decrease in the recovery rate would result in an increase or decrease, respectively, in the fair value.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of the Company’s investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, it could realize significantly less than the value at which the Company has recorded it. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the valuations currently assigned.
60
Financial Instruments Not Carried at Fair Value
The following table presents fair value measurements of the Company’s debt obligations as of June 30, 2024 and December 31, 2023, had they been accounted for at fair value:
Debt
June 30, 2024 | December 31, 2023 | |||||||||||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||||||
HLEND A Funding Facility | $ | 604,851 | $ | 604,851 | $ | 615,838 | $ | 615,838 | ||||||||||||||||||
HLEND B Funding Facility | 134,828 | 134,828 | 513,747 | 513,747 | ||||||||||||||||||||||
HLEND C Funding Facility | 487,500 | 487,500 | 487,500 | 487,500 | ||||||||||||||||||||||
HLEND D Funding Facility | 125,000 | 125,000 | 195,000 | 195,000 | ||||||||||||||||||||||
HLEND E Funding Facility | — | — | — | — | ||||||||||||||||||||||
Revolving Credit Facility | 220,760 | 220,760 | 1,025,294 | 1,025,294 | ||||||||||||||||||||||
November 2025 Notes(1) | 168,261 | 173,528 | 168,749 | 170,580 | ||||||||||||||||||||||
November 2027 Notes(1) | 152,910 | 162,702 | 154,366 | 155,934 | ||||||||||||||||||||||
March 2026 Notes(1) | 271,712 | 281,970 | 274,716 | 275,727 | ||||||||||||||||||||||
March 2028 Notes(1) | 121,014 | 129,661 | 123,588 | 123,672 | ||||||||||||||||||||||
September 2027 Notes(1) | 74,032 | 79,080 | 75,545 | 76,389 | ||||||||||||||||||||||
September 2028 Notes(1) | 246,832 | 268,461 | 252,814 | 255,315 | ||||||||||||||||||||||
January 2029 Notes(1) | 527,665 | 553,559 | — | — | ||||||||||||||||||||||
September 2029 Notes(1) | 392,105 | 395,128 | — | — | ||||||||||||||||||||||
2023 CLO Secured Notes(2) | 319,879 | 319,879 | 319,743 | 319,743 | ||||||||||||||||||||||
2024 CLO Secured Notes(2) | 373,560 | 373,560 | — | — | ||||||||||||||||||||||
Total | $ | 4,220,909 | $ | 4,310,467 | $ | 4,206,900 | $ | 4,214,739 |
(1)The carrying value of the Company's November 2025 Notes, November 2027 Notes, March 2026 Notes, March 2028 Notes, September 2027 Notes, September 2028 Notes, January 2029 Notes and September 2029 Notes are presented net of unamortized debt issuance costs of $(0.9) million, $(1.2) million, $(1.4) million, $(0.8) million, $(0.6) million,$(2.2) million, $(11.6) million and $(8.8) million respectively, as of June 30, 2024 and includes the increase (decrease) in the notes carrying value of $(0.9) million, $(0.9) million, $(2.9) million, $(2.1) million, $(0.3) million, $(1.0) million, $(10.8) million and $0.9 million, respectively, as a result of the qualifying fair value hedge relationship as described above. The carrying value of the Company's November 2025 Notes, November 2027 Notes, March 2026 Notes, March 2028 Notes, September 2027 Notes and September 2028 Notes are presented net of unamortized debt issuance costs of $(1.2) million, $(1.4) million, $(1.8) million, $(0.9) million, $(0.7) million and $(2.5) million, respectively, as of December 31, 2023 and includes the increase (decrease) in the notes carrying value of $(0.0) million, $0.7 million, $0.6 million, $0.5 million, $1.3 million and $5.3 million, respectively, as a result of the qualifying fair value hedge relationship as described above.
(2)The carrying value of the Company’s 2023 CLO Secured Notes and 2024 CLO Secured Notes are presented net of unamortized debt issuance costs and original issue discount, as applicable, of $(3.1) million and $(26.4) million, respectively, as of June 30, 2024. The carrying value of the Company’s 2023 CLO Secured Notes are presented net of unamortized debt issuance costs of $(3.3) million as of December 31, 2023.
The following table presents the fair value hierarchy of the Company’s debt obligations as of June 30, 2024 and December 31, 2023:
June 30, 2024 | December 31, 2023 | ||||||||||
Level 1 | $ | — | $ | — | |||||||
Level 2 | 948,687 | — | |||||||||
Level 3 | 3,361,780 | 4,214,739 | |||||||||
Total | $ | 4,310,467 | $ | 4,214,739 |
As of June 30, 2024 and December 31, 2023, the carrying amounts of the Company’s assets and liabilities, other than investments at fair value and debt, approximate fair value due to their short maturities. Fair value is estimated by discounting remaining payments using applicable current market rates, which take into account changes in the Company’s marketplace credit ratings, if applicable, or market quotes, if available.
61
Note 6. Derivative Instruments
The Company enters into foreign currency forward contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies. The Company enters into swap contracts in the normal course of business to manage its interest rate risk exposure. For derivative contracts, the Company enters into netting arrangements with its counterparties. In accordance with authoritative guidance, the Company offsets fair value amounts recognized for derivative instruments with the same security type and counterparty under a master netting arrangement.
During the three and six months ended June 30, 2024, the average notional exposure for foreign currency forward contracts were $997.1 million and $847.1 million, respectively, and the average notional exposure for interest rate swaps were $1,537.5 million and $1,416.1 million, respectively. During the three and six months ended June 30, 2023, the average notional exposure for foreign currency forward contracts were $279.9 million and $265.7 million, respectively, and the average notional exposure for interest rate swaps were $562.5 million and $391.1 million, respectively.
The following tables summarize the aggregate notional amount and fair value of the Company’s derivative financial instruments as of June 30, 2024 and December 31, 2023.
June 30, 2024 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Fair Value | Notional | ||||||||||||||||||||||||||||
Derivative Assets | ||||||||||||||||||||||||||||||||
Foreign currency forward contracts | $ | — | $ | 9,587 | $ | — | $ | 9,587 | $ | 1,150,619 | ||||||||||||||||||||||
Interest rates swaps | — | 932 | — | 932 | 400,000 | |||||||||||||||||||||||||||
Total derivative assets, at fair value | $ | — | $ | 10,519 | $ | — | $ | 10,519 | $ | 1,550,619 | ||||||||||||||||||||||
Derivative Liabilities | ||||||||||||||||||||||||||||||||
Foreign currency forward contracts | $ | — | $ | (1,443) | $ | — | $ | (1,443) | $ | 58,752 | ||||||||||||||||||||||
Interest rate swaps | — | (18,833) | — | (18,833) | 1,437,500 | |||||||||||||||||||||||||||
Total derivative liabilities, at fair value | $ | — | $ | (20,276) | $ | — | $ | (20,276) | $ | 1,496,252 |
December 31, 2023 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Fair Value | Notional | ||||||||||||||||||||||||||||
Derivative Assets | ||||||||||||||||||||||||||||||||
Foreign currency forward contracts | $ | — | $ | 429 | $ | — | $ | 429 | $ | 94,135 | ||||||||||||||||||||||
Interest rate swaps | — | 8,396 | — | 8,396 | 802,500 | |||||||||||||||||||||||||||
Total derivative assets, at fair value | $ | — | $ | 8,825 | $ | — | $ | 8,825 | $ | 896,635 | ||||||||||||||||||||||
Derivative Liabilities | ||||||||||||||||||||||||||||||||
Foreign currency forward contracts | $ | — | $ | (9,533) | $ | — | $ | (9,533) | $ | 603,276 | ||||||||||||||||||||||
Interest rate swaps | — | (43) | — | (43) | 85,000 | |||||||||||||||||||||||||||
Total derivative liabilities, at fair value | $ | — | $ | (9,576) | $ | — | $ | (9,576) | $ | 688,276 |
The effect of transactions in derivative instruments that are not designated in a qualifying hedge accounting relationship on the Consolidated Statements of Operations during the three and six months ended June 30, 2024 and 2023 were as follows:
Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | |||||||||||||
Net change in unrealized gain (loss) on foreign currency forward contracts | $ | 4,754 | $ | 17,248 | ||||||||||
Realized gain (loss) on foreign currency forward contracts | $ | (2,821) | $ | (2,654) |
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Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | ||||||||||
Net change in unrealized gain (loss) on foreign currency forward contracts | $ | 3,409 | $ | 904 | |||||||
Realized gain (loss) on foreign currency forward contracts | $ | (7,152) | $ | (7,681) |
The following table presents both gross and net information about derivative instruments eligible for offset in the Consolidated Statements of Assets and Liabilities as of June 30, 2024 and December 31, 2023.
June 30, 2024 | ||||||||||||||||||||||||||||||||||||||
Counterparty | Account in the Consolidated Statements of Asset and Liabilities | Gross Amount of Assets | Gross Amount of (Liabilities) | Net amounts presented in the Consolidated Statements of Assets and Liabilities | Collateral Received/Pledged(1) | Net Amounts(2) | ||||||||||||||||||||||||||||||||
Goldman Sachs Bank USA | Derivative assets, at fair value | $ | 1,761 | $ | (1,416) | $ | 345 | $ | — | $ | 345 | |||||||||||||||||||||||||||
SMBC Capital Markets, Inc. | Derivative assets, at fair value | $ | 7,826 | $ | (27) | $ | 7,799 | $ | — | $ | 7,799 | |||||||||||||||||||||||||||
Goldman Sachs Bank USA | Derivative liabilities, at fair value | $ | 932 | $ | (8,051) | $ | (7,119) | $ | 7,119 | $ | — | |||||||||||||||||||||||||||
SMBC Capital Markets, Inc. | Derivative liabilities, at fair value | $ | — | $ | (10,782) | $ | (10,782) | $ | 10,782 | $ | — |
December 31, 2023 | ||||||||||||||||||||||||||||||||||||||
Counterparty | Account in the Consolidated Statements of Asset and Liabilities | Gross Amount of Assets | Gross Amount of (Liabilities) | Net amounts presented in the Consolidated Statements of Assets and Liabilities | Collateral Received/Pledged(1) | Net Amounts(2) | ||||||||||||||||||||||||||||||||
Goldman Sachs Bank USA | Derivative liabilities, at fair value | $ | 35 | $ | (8,225) | $ | (8,190) | $ | — | $ | (8,190) | |||||||||||||||||||||||||||
SMBC Capital Markets, Inc. | Derivative liabilities, at fair value | $ | 394 | $ | (1,308) | $ | (914) | $ | — | $ | (914) | |||||||||||||||||||||||||||
Goldman Sachs Bank USA | Derivative assets, at fair value | $ | 8,396 | $ | (43) | $ | 8,353 | $ | — | $ | 8,353 |
(1) Amount excludes excess cash collateral paid.
(2) Net amount represents the net amount due (to) from counterparty in the event of a default based on the contractual setoff rights under the agreement. Net amount excludes any over-collateralized amounts, if applicable.
Hedging
The Company designated certain interest rate swaps as the hedging instrument in a qualifying fair value hedge accounting relationship.
For derivative instruments designated in qualifying hedge relationships, the change in fair value of the hedging instrument and hedged item are recorded in interest expense and recognized as components of Interest expense in the Consolidated Statements of Operations.
The table below presents the carrying value of unsecured borrowings as of June 30, 2024 and December 31, 2023, that are designated in a qualifying hedging relationship and the related cumulative hedging adjustment increase (decrease) from current and prior hedging relationships included in such carrying values:
June 30, 2024 | December 31, 2023 | |||||||||||||||||||||||||
Description | Carrying Value | Cumulative Hedging Adjustments | Carrying Value | Cumulative Hedging Adjustments | ||||||||||||||||||||||
Unsecured Notes | $ | 1,793,946 | $ | (34,314) | $ | 888,221 | $ | (1,369) |
Note 7. Borrowings
In accordance with the 1940 Act, with certain limitations, the Company is allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 150% after such borrowing. As of June 30, 2024 and December 31, 2023, the Company’s asset coverage was 265.0% and 223.2%, respectively.
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As of June 30, 2024 and December 31, 2023, the Company was in compliance with all covenants and other requirements of the Credit Facilities, the Unsecured Notes and the CLO Notes, as applicable.
SPV Financing Facilities
From time to time, wholly-owned subsidiaries of the Company may enter into secured financing facilities (“SPV Financing Facilities”), as described below. The obligations of each special purpose vehicle (“SPV”) to the lenders are secured by a first priority security interest in all of the SPV’s portfolio investments and cash. The obligations of each SPV under the applicable SPV Financing Facility are non-recourse to the Company, and the Company’s exposure to the credit facility is limited to the value of its investment in the SPV, other than as described below with respect to the HLEND C Funding Facility.
In connection with the SPV Financing Facilities, the applicable SPV has made certain customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. Each SPV Financing Facility contains customary events of default for similar financing transactions, including if a change of control of the applicable SPV occurs. Upon the occurrence and during the continuation of an event of default, the lender under the SPV Financing Facility may declare the outstanding advances and all other obligations under the SPV Financing Facility immediately due and payable. The occurrence of an event of default (as described above) triggers a requirement that the SPV obtains the consent of the lenders under the SPV Financing Facility prior to entering into any sale or disposition with respect to portfolio investments.
As of June 30, 2024 and December 31, 2023, the Company had five and four SPV Financing Facilities, respectively, as discussed below.
HLEND A Funding Facility
On February 3 2022, HLEND A, entered into a SPV Financing Facility with Morgan Stanley Bank, N.A. (“HLEND A Funding Facility”). Morgan Stanley Senior Funding, Inc. serves as administrative agent and U.S. Bank Trust Company, National Association services as collateral agent. On December 23, 2022, HLEND A entered into an amendment to, among other things, increase the aggregate commitments under the HLEND A Funding Facility from $600 million to $800 million.
Loans under the HLEND A Funding Facility bear interest at a per annum rate equal to the benchmark in effect for the currency of the applicable advances, then in effect plus the applicable spread of 2.40% per annum.
As of June 30, 2024, the maximum principal amount under the HLEND A Funding Facility was $800 million, subject to availability under the borrowing base. Proceeds from borrowings under the HLEND A Funding Facility may be used to fund portfolio investments by HLEND A and to make advances under revolving loans or delayed draw term loans where HLEND A is a lender. The period during which HLEND A may make borrowings under the HLEND A Funding Facility expires two business days prior to February 3, 2025 and the HLEND A Funding Facility will mature and all amounts outstanding under credit facility must be repaid by February 3, 2027.
HLEND B Funding Facility
On July 19 2022, HLEND B, entered into a SPV Financing Facility with Bank of America, N.A. (“HLEND B Funding Facility”). Bank of America N.A. serves as administrative agent, U.S. Bank Trust Company, National Association, as collateral administrator, and U.S. Bank National Association, as collateral custodian. On January 25, 2024, HLEND B entered into an amendment to, among other things, increase the maximum principal amount under the HLEND B Funding Facility from $1,000 million to $1,250 million.
Loans under the HLEND B Funding Facility bear interest at a per annum rate equal to the benchmark in effect for the currency of the applicable advances, plus an applicable margin adjusted at one-month or three-month intervals based on the proportion of the broadly syndicated loans, large corporate loans and middle market loans in the portfolio, with the applicable margin attributable to broadly syndicated loans equal to 2.00% per annum, the applicable margin attributable to large corporate loans equal to 2.40% per annum and the applicable margin applicable to middle market loans equal to 2.65% per annum, subject to a blended floor of 2.35%.
As of June 30, 2024, the maximum principal amount under the HLEND B Funding Facility was $1,250 million, subject to availability under the borrowing base. Proceeds from borrowings under the HLEND B Funding Facility may be used to fund portfolio investments by HLEND B, to make advances under revolving loans or delayed draw term loans where HLEND B is a lender. The period during which HLEND B may make borrowings under the HLEND B Funding Facility expires on January 25, 2027 and the HLEND B Funding Facility will mature and all amounts outstanding under the credit facility must be repaid by January 25, 2029.
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HLEND C Funding Facility
On January 12, 2023, HLEND C, as borrower, and the Company, as equity holder, entered into a SPV Financing Facility with U.S. Bank Trust Company, National Association, as administrative agent and U.S. collateral agent (the “HLEND C Funding Facility”), Blackstone Asset Based Finance Advisors LP, as Blackstone Asset Based Finance Representative, and U.S. Bank National Association, as custodian. On June 22, 2023, HLEND C entered into an amendment to, among other things, increase the maximum principal amount under the HLEND C Funding Facility from $400 million to $750 million. The Company has agreed to provide a limited guaranty of a portion of amounts owed under the HLEND C Funding Facility in the event of certain bad acts, including fraud and certain other willful and intentional breaches of the facility documents.
Loans under the HLEND C Funding Facility bear interest at a per annum rate equal to Term SOFR plus the applicable margin of 2.95% per annum. On or after the anticipated repayment date of January 11, 2030, the applicable margin on any remaining outstanding advances will be increased by 2.00% per annum.
As of June 30, 2024, the maximum principal amount under the HLEND C Funding Facility was $750 million, subject to availability under the borrowing base. Proceeds from borrowings under the HLEND C Funding Facility may be used to fund portfolio investments by HLEND C. All amounts outstanding under the credit facility must be repaid by April 12, 2030.
HLEND D Funding Facility
On March 31 2023, HLEND D, as borrower, and the Company, as equity holder, entered into a SPV Financing Facility with BNP Paribas (“HLEND D Funding Facility”). BNP Paribas serves as administrative agent, and U.S. Bank Trust Company, National Association, as collateral agent. On August 1, 2023, HLEND D entered into an amendment to, among other things, increase the maximum principal amount under the HLEND D Funding Facility from $250 million to $500 million.
Loans under the HLEND D Funding Facility bear interest at a per annum rate equal to (i)(a) with respect to Dollar Advances, Term SOFR, (b) with respect to GBP Advances, Adjusted Cumulative Compounded SONIA, (c) with respect to Euro Advances, EURIBOR, (d) with respect to CAD Advances, CDOR, and (e) with respect to AUD Advances, BBSW, plus (ii) the Applicable Margin of 2.90% per annum, plus (iii) in the case of any Advance denominated in an Available Currency (other than Dollars), the Foreign Currency Advance Margin of 0.15% per annum.
As of June 30, 2024, the maximum principal amount under the HLEND D Funding Facility was $500 million, subject to availability under the borrowing base. Proceeds from borrowings under the HLEND D Funding Facility may be used to fund portfolio investments by HLEND D. The period during which HLEND D may make borrowings under the HLEND D Funding Facility expires on March 31, 2026 and amounts outstanding under the credit facility must be repaid by March 31, 2028.
HLEND E Funding Facility
On March 28, 2024, HLEND E, as borrower, and the Company, as equity holder and as collateral manager, entered into a SPV Financing Facility with the lenders from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent (the “HLEND E Funding Facility”), U.S. Bank Trust Company, National Association, as collateral agent, and U.S. Bank National Association, as document custodian.
Loans under the HLEND E Funding Facility bear interest at a per annum rate equal to (i)(a) with respect to Advances denominated in Dollars, Daily Simple SOFR, (b) with respect to Advances denominated in GBP, Daily Simple SONIA, (c) with respect to Advances denominated in Euros, EURIBOR, (d) with respect to Advances denominated in Canadian Dollars, Daily Simple CORRA, and (e) with respect to Advances denominated in Australian Dollars, the Bank Bill Rate, plus (ii) the Applicable Spread of 2.25% per annum.
As of June 30, 2024, the maximum principal amount under the HLEND E Funding Facility was $300 million, subject to availability under the borrowing base. Proceeds from borrowings under the HLEND E Funding Facility may be used to fund portfolio
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investments by HLEND E. The period during which HLEND E may make borrowings under the HLEND E Funding Facility expires on March 27, 2027, and amounts outstanding under the credit facility must be repaid by March 28, 2029.
Revolving Credit Facility
On June 23, 2022, the Company, as Borrower, entered into a senior secured revolving credit facility (the “Revolving Credit Facility,” together with HLEND A Funding Facility, HLEND B Funding Facility, HLEND C Funding Facility, HLEND D Funding Facility, and HLEND E Funding Facility the “Credit Facilities”) (which was most recently amended on October 30, 2023, and as further amended from time to time) pursuant to a Senior Secured Revolving Credit Agreement (the “Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent, and the lenders party thereto (the “Lenders”).
The Company may borrow amounts in U.S. dollars or certain other permitted currencies under the Revolving Credit Facility. Advances under the Revolving Credit Facility drawn in U.S. dollars will initially bear interest at a per annum rate equal to 0.75% or 0.875% plus an “alternate base rate” in the case of any ABR Loan and 1.75% or 1.875% plus the Adjusted Term SOFR Rate in the case of any other Loan, in each case, depending on the Company’s rate option election and borrowing base. Advances under the Revolving Credit Facility drawn in currencies other than U.S. dollars will initially bear interest at a per annum rate equal to 1.75% or 1.875%, in each case depending on the Company’s borrowing base, plus any applicable credit spread adjustment, plus certain local rates consistent with market standards. The Company also pays a fee of 0.375% on average daily undrawn amounts under the Revolving Credit Facility.
The maximum principal amount of the Revolving Credit Facility is $1,300 million (increased from $1,275 million to $1,300 million on January 17, 2024), subject to availability under the borrowing base, which is based on the Company’s portfolio investments and other outstanding indebtedness, with an accordion provision to permit increases to the total facility amount up to $1,912.5 million subject to the satisfaction of certain conditions.
The Revolving Credit Facility is guaranteed by certain subsidiaries of the Company, and will be guaranteed by certain domestic subsidiaries of the Company that are formed or acquired by the Company in the future (collectively, the “Guarantors”). Proceeds of the Revolving Credit Facility may be used for general corporate purposes, including, without limitation, repaying outstanding indebtedness, making distributions, contributions and investments, and acquisition and funding, and such other uses as permitted under the Agreement.
The Revolving Credit Facility is secured by a perfected first-priority interest in substantially all of the portfolio investments held by the Company and each Guarantor, subject to certain exceptions, and includes a $200 million limit for swingline loans.
The availability period under the Revolving Credit Facility will terminate on October 30, 2027 (the “Commitment Termination Date”) (other than with respect to the commitment of a lender in the amount of $100 million, which terminates on June 23, 2026), and the Revolving Credit Facility will mature on October 30, 2028 (the “Maturity Date”) (other than with respect to the commitment of a lender in the amount of $100 million, which matures on June 23, 2027). During the period from the Commitment Termination Date to the Maturity Date, the Company will be obligated to make mandatory prepayments under the Revolving Credit Facility out of the proceeds of certain asset sales, other recovery events and equity and debt issuances.
Private Unsecured Notes
The Company issued unsecured notes, as further described below: November 2025 Notes, November 2027 Notes, March 2026 Notes, March 2028 Notes, September 2027 Notes and September 2028 Notes (each as defined below), which are collectively referred to herein as the “Private Unsecured Notes”.
Interest on the Private Unsecured Notes will be due semiannually. The interest rate is subject to increase (up to a maximum increase of 2.00% above the stated rate) in the event that, subject to certain exceptions, the Private Unsecured Notes cease to have an investment grade rating and the Company’s minimum secured debt ratio exceeds certain thresholds. In addition, the Company is obligated to offer to repay the Private Unsecured Notes at par if certain change in control events occur. The Private Unsecured Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured, unsubordinated indebtedness issued by the Company.
November 2025 Notes
On November 14, 2022, the Company entered into a Master Note Purchase Agreement (the “2022 Note Purchase Agreement”) governing the issuance of $170 million in aggregate principal amount of its Series A Senior Notes, Tranche A (the “November 2025 Notes”) to institutional investors in a private placement. The November 2025 Notes have a fixed interest rate of 8.37% per annum and are due on November 14, 2025.
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In connection with the November 2025 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.37% per annum and pays a floating interest rate of SOFR + 4.08% per annum on $85 million of the November 2025 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
November 2027 Notes
On November 14, 2022, the Company entered into the 2022 Note Purchase Agreement governing the issuance of $155 million in aggregate principal amount of its Series A Senior Notes, Tranche B (the “November 2027 Notes”) to institutional investors in a private placement. The November 2027 Notes have a fixed interest rate of 8.43% per annum and are due on November 14, 2027.
In connection with the November 2027 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.43% per annum and pays a floating interest rate of SOFR + 4.42% per annum on $77.5 million of the November 2027 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
March 2026 Notes
On March 15, 2023, the Company entered into a Master Note Purchase Agreement (the “2023 Note Purchase Agreement”) governing the issuance of $276 million in aggregate principal amount of its Series A Senior Notes, Tranche A (the “March 2026 Notes”) to institutional investors in a private placement. The March 2026 Notes have a fixed interest rate of 8.12% per annum and are due on March 15, 2026.
In connection with the March 2026 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.12% per annum and pays a floating interest rate of SOFR + 3.761% per annum on $276 million of the March 2026 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
March 2028 Notes
On March 15, 2023, the Company entered into the 2023 Note Purchase Agreement governing the issuance of $124 million in aggregate principal amount of its Series A Senior Notes, Tranche B (the “March 2028 Notes”) to institutional investors in a private placement. The March 2028 Notes have a fixed interest rate of 8.17% per annum and are due on March 15, 2028.
In connection with the March 2028 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.18% per annum and pays a floating interest rate of SOFR + 4.241% per annum on $124 million of the March 2028 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
September 2027 Notes
On September 14, 2023, the Company entered into a First Supplement to the 2023 Note Purchase Agreement, governing the issuance of $75 million in aggregate principal amount of its Series 2023-B Senior Notes, Tranche A (the “September 2027 Notes”) to institutional investors in a private placement. The September 2027 Notes have a fixed interest rate of 8.67% per annum and are due on September 14, 2027.
In connection with the September 2027 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.67% per annum and pays a floating interest rate of 3-month Term SOFR plus 4.3055% per annum on $75 million of the September 2027 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
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September 2028 Notes
On September 14, 2023, the Company entered into the First Supplement to the 2023 Note Purchase Agreement, governing the issuance of $250 million in aggregate principal amount of its Series 2023-B Senior Notes, Tranche B (the “September 2028 Notes”) to institutional investors in a private placement. The September 2028 Notes have a fixed interest rate of 8.80% per annum and are due on September 14, 2028.
In connection with the September 2028 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.80% per annum and pays a floating interest rate of 3-month Term SOFR plus 4.5365% per annum on $250 million of the September 2028 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
144A Unsecured Notes
The Company issued unsecured notes, as further described below: January 2029 Notes and September 2029 Notes (each as defined below), which are collectively referred to herein as the “144A Unsecured Notes” (collectively with the Private Unsecured Notes, the “Unsecured Notes”).
The 144A Unsecured Notes may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in each respective indenture governing the 144A Unsecured Notes. The 144A Unsecured Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 144A Unsecured Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.
The 144A Unsecured Notes Indentures (as defined below) contain certain covenants, including covenants requiring the Company to comply with the asset coverage requirements of the 1940 Act, as amended, whether or not it is subject to those requirements, and to provide financial information to the holders of the 144A Unsecured Notes and the 144A Unsecured Note Trustee (as defined below) if the Company is no longer subject to the reporting requirements under the Exchange Act. These covenants are subject to important limitations and exceptions that are described in each respective indenture governing the 144A Unsecured Notes (the “144A Unsecured Notes Indentures”).
In addition, on the occurrence of a “change of control repurchase event,” as defined in each respective 144A Unsecured Notes Indenture, the Company will generally be required to make an offer to purchase the outstanding 144A Unsecured Notes at a price equal to 100% of the principal amount of such 144A Unsecured Notes plus accrued and unpaid interest to the repurchase date.
January 2029 Notes
On January 30, 2024, the Company issued $550.0 million aggregate principal amount of 6.75% notes due in 2029 (the “January 2029 Notes”) pursuant to an indenture (the “Base Indenture”) and a supplemental indenture, each dated as of January 30, 2024 (and together with the Base Indenture, the “January 2029 Notes Indenture”), between the Company and U.S. Bank Trust Company, National Association (the “144A Unsecured Note Trustee”).
The January 2029 Notes will mature on January 30, 2029 and bear interest at a rate of 6.75% per year payable semi-annually on January 30 and July 30 of each year, commencing on July 30, 2024.
In connection with the January 2029 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 6.75% per annum and pays a floating interest rate of 3-month Term SOFR plus 2.876% per annum on $550.0 million of the January 2029 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
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September 2029 Notes
On June 18, 2024, the Company issued $400.0 million aggregate principal amount of 6.25% notes due in 2029 (the “September 2029 Notes”) pursuant to a second supplemental indenture, dated as of June 18, 2024 (and together with the Base Indenture, the “September 2029 Notes Indenture”), to the Base Indenture between the Company and the 144A Unsecured Note Trustee.
The September 2029 Notes will mature on September 30, 2029 and bear interest at a rate of 6.25% per year payable semi-annually on March 30 and September 30 of each year, commencing on March 30, 2025.
In connection with the September 2029 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 6.25% per annum and pays a floating interest rate of 3-month Term SOFR plus 2.0575% per annum on $400.0 million of the September 2029 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
Debt Securitizations
The Company has determined that the securitization vehicles noted below operates as extensions of the Company and therefore, will be consolidated by the Company. The Company completed term debt securitizations, as further described below: 2023 CLO Notes and 2024 CLO Notes (each as defined below), which are collectively referred to herein as the “CLO Notes.”
2023 Debt Securitization
On October 5, 2023 (the “Closing Date”), the Company completed a $429.1 million term debt securitization (the “2023 Debt Securitization”), consisting of three tranches of secured notes (the “2023 CLO Secured Notes”) and subordinated notes (the “2023 CLO Subordinated Notes”). The 2023 CLO Secured Notes together with the 2023 CLO Subordinated Notes are collectively referred to as the “2023 CLO Notes.” Term debt securitizations are also known as collateralized loan obligations and are a form of secured financing incurred by a subsidiary of the Company, which is consolidated by the Company for financial reporting purposes and subject to its overall asset coverage requirement. The 2023 CLO Notes offered in the 2023 Debt Securitization were issued by HLEND CLO 2023-1, LLC (the “2023 Issuer”), an indirect, wholly-owned and consolidated subsidiary of the Company, and are backed by a diversified portfolio of middle-market commercial loans and participation interests therein. The 2023 CLO Notes are scheduled to mature on October 22, 2035; however, the 2023 CLO Notes may be redeemed by the 2023 Issuer, at the written direction of (i) a majority of the 2023 CLO Subordinated Notes with the consent of the Company or (ii) the Company, in each case, on any business day on or after October 22, 2025.
The following table presents information on the 2023 Debt Securitization:
Description | Type | Principal Outstanding | Interest Rate | Credit Rating | ||||||||||||||||||||||
Class A Notes | Senior Secured Floating Rate | $ | 246,500 | SF + 2.60% | AAA | |||||||||||||||||||||
Class B Notes | Senior Secured Floating Rate | 42,500 | SF + 3.35% | AA | ||||||||||||||||||||||
Class C Notes | Secured Deferrable Floating Rate | 34,000 | SF + 4.15% | A | ||||||||||||||||||||||
Total Secured Notes | $ | 323,000 | ||||||||||||||||||||||||
Subordinated Notes(1) | 106,100 | None | Not rated | |||||||||||||||||||||||
Total Notes | $ | 429,100 |
(1)The Company retained all of the 2023 CLO Subordinated Notes issued in the 2023 Debt Securitization which are eliminated in consolidation.
On the Closing Date and in connection with the 2023 Debt Securitization, the 2023 Issuer and the Company entered into a note purchase agreement with BofA Securities, Inc., as the initial purchaser (the “Initial Purchaser”), pursuant to which the Initial Purchaser purchased the 2023 CLO Secured Notes issued pursuant to an indenture as part of the 2023 Debt Securitization. HLEND CLO 2023-1 Investments, LLC, a wholly-owned subsidiary of the Company, retained all of the 2023 CLO Subordinated Notes issued in the 2023 Debt Securitization.
The 2023 CLO Notes have not been, and will not be, registered under the Securities Act of 1933, as amended, or any state securities or “blue sky” laws and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from registration.
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The Company serves as collateral manager for the 2023 Issuer under a collateral management agreement and has agreed to irrevocably waive all collateral management fees payable to it so long as it is the collateral manager under the collateral management agreement.
2024 Debt Securitization
On May 23, 2024 (the “2024 Closing Date”), the Company completed a $526.0 million term debt securitization (the “2024 Debt Securitization”), consisting of nine tranches of secured notes (the “2024 CLO Secured Notes”) and subordinated notes (the “2024 CLO Subordinated Notes”). The 2024 CLO Secured Notes together with the 2024 CLO Subordinated Notes are collectively referred to as the “2024 CLO Notes.” Term debt securitizations are also known as collateralized loan obligations and are a form of secured financing incurred by a subsidiary of the Company, which is consolidated by the Company for financial reporting purposes and subject to its overall asset coverage requirement. The 2024 CLO Notes offered in the 2024 Debt Securitization were issued by HLEND CLO 2024-2, LLC (the “2024 Issuer”), an indirect, wholly-owned and consolidated subsidiary of the Company, and are backed by a diversified portfolio of middle-market commercial loans and participation interests therein. The 2024 CLO Notes are scheduled to mature on April 20, 2034; however, the 2024 CLO Notes may be redeemed by the 2024 Issuer, at the written direction of (i) a majority of the 2024 CLO Subordinated Notes with the consent of the Company or (ii) the Company, in each case, on any business day on or after April 20, 2026.
The following table presents information on the 2024 Debt Securitization:
Description | Type | Principal Outstanding | Interest Rate | Credit Rating | Price | |||||||||||||||||||||||||||
Class A-1 Notes | Senior Secured Floating Rate | $ | 255,000 | SF + 0.250% | AAA(sf) | 93.22 | ||||||||||||||||||||||||||
Class A-2 Notes | Senior Secured Floating Rate | 40,850 | SF + 1.875% | AAA(sf) | 100.00 | |||||||||||||||||||||||||||
Class A-F Notes | Senior Secured Fixed Rate | 9,150 | 6.275% | AAA(sf) | 100.00 | |||||||||||||||||||||||||||
Class B-1 Notes | Senior Secured Floating Rate | 35,000 | SF + 0.500% | AA(sf) | 89.93 | |||||||||||||||||||||||||||
Class B-2 Notes | Senior Secured Floating Rate | 13,500 | SF + 2.400% | AA(sf) | 100.00 | |||||||||||||||||||||||||||
Class B-F Notes | Senior Secured Fixed Rate | 1,500 | 6.714% | AA(sf) | 100.00 | |||||||||||||||||||||||||||
Class C-1 Notes | Secured Deferrable Floating Rate | 31,500 | SF + 0.750% | A(sf) | 86.54 | |||||||||||||||||||||||||||
Class C-2 Notes | Secured Deferrable Floating Rate | 12,150 | SF + 3.200% | A(sf) | 100.00 | |||||||||||||||||||||||||||
Class C-F Notes | Secured Deferrable Fixed Rate | 1,350 | 7.490% | A(sf) | 100.00 | |||||||||||||||||||||||||||
Total Secured Notes | $ | 400,000 | ||||||||||||||||||||||||||||||
Subordinated Notes(1) | 126,000 | None | Not Rated | None | ||||||||||||||||||||||||||||
Total Notes | $ | 526,000 |
(1)The Company retained all of the 2024 CLO Subordinated Notes issued in the 2024 Debt Securitization which are eliminated in consolidation.
On the 2024 Closing Date and in connection with the 2024 Debt Securitization, the 2024 Issuer entered into a note purchase agreement with SG Americas Securities, LLC, as the initial purchaser (the “2024 Initial Purchaser”), pursuant to which the 2024 Initial Purchaser purchased the 2024 CLO Secured Notes issued pursuant to an indenture as part of the 2024 Debt Securitization. HLEND CLO 2024-2 Investments, LLC, a wholly-owned subsidiary of the Company, retained all of the 2024 CLO Subordinated Notes issued in the 2024 Debt Securitization.
The 2024 CLO Notes have not been, and will not be, registered under the Securities Act of 1933, as amended, or any state securities or “blue sky” laws and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from registration.
The Company serves as collateral manager for the 2024 Issuer under a collateral management agreement and has agreed to irrevocably waive all collateral management fees payable to it so long as it is the collateral manager under the collateral management agreement.
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Short-Term Borrowings
In order to finance certain investment transactions, the Company may, from time to time, enter into repurchase agreements, whereby the Company sells to a third party an investment that it holds and concurrently enters into an agreement to repurchase the same investment at an agreed-upon price at a future date, generally not to exceed 180-days from the date it was sold (each a “Short Term Financing Transaction”).
In accordance with ASC 860, Transfers and Servicing, the Short Term Financing Transactions meet the criteria for secured borrowings. Accordingly, the investment financed by these agreements remains on the Company’s Consolidated Statements of Assets and Liabilities as an asset, and the Company records a liability to reflect its repurchase obligation to a third party which is reported as debt on the Company’s Statements of Assets and Liabilities. The repurchase obligation is secured by the respective investment that is the subject of the repurchase agreement. Interest expense associated with the repurchase obligation is reported on the Company’s Consolidated Statements of Operations within interest expense. As of June 30, 2024 and December 31, 2023, there were no short-term borrowings outstanding.
The Company’s outstanding debt obligations were as follows:
June 30, 2024 | |||||||||||||||||||||||||||||
Aggregate Principal Committed | Outstanding Principal | Carrying Value | Unused Portion(1) | Amount Available(2) | |||||||||||||||||||||||||
HLEND A Funding Facility(3) | $ | 800,000 | $ | 604,851 | $ | 604,851 | $ | 195,149 | $ | 22,104 | |||||||||||||||||||
HLEND B Funding Facility(3) | 1,250,000 | 134,828 | 134,828 | 1,115,172 | 591,944 | ||||||||||||||||||||||||
HLEND C Funding Facility | 750,000 | 487,500 | 487,500 | 262,500 | 20,658 | ||||||||||||||||||||||||
HLEND D Funding Facility | 500,000 | 125,000 | 125,000 | 375,000 | 205,186 | ||||||||||||||||||||||||
HLEND E Funding Facility | 300,000 | — | — | 300,000 | 176,900 | ||||||||||||||||||||||||
Revolving Credit Facility(3) | 1,300,000 | 220,760 | 220,760 | 1,079,240 | 1,079,240 | ||||||||||||||||||||||||
November 2025 Notes(4) | 170,000 | 170,000 | 168,261 | — | — | ||||||||||||||||||||||||
November 2027 Notes(4) | 155,000 | 155,000 | 152,910 | — | — | ||||||||||||||||||||||||
March 2026 Notes(5) | 276,000 | 276,000 | 271,712 | — | — | ||||||||||||||||||||||||
March 2028 Notes(5) | 124,000 | 124,000 | 121,014 | — | — | ||||||||||||||||||||||||
September 2027 Notes(6) | 75,000 | 75,000 | 74,032 | — | — | ||||||||||||||||||||||||
September 2028 Notes(6) | 250,000 | 250,000 | 246,832 | — | — | ||||||||||||||||||||||||
January 2029 Notes(7) | 550,000 | 550,000 | 527,665 | — | — | ||||||||||||||||||||||||
September 2029 Notes(8) | 400,000 | 400,000 | 392,105 | — | — | ||||||||||||||||||||||||
2023 CLO Secured Notes(9) | 323,000 | 323,000 | 319,879 | — | — | ||||||||||||||||||||||||
2024 CLO Secured Notes(10) | 400,000 | 400,000 | 373,560 | — | — | ||||||||||||||||||||||||
Total | $ | 7,623,000 | $ | 4,295,939 | $ | 4,220,909 | $ | 3,327,061 | $ | 2,096,032 |
(1)The unused portion is the amount upon which commitment fees, if any, are based.
(2)The amount available reflects any limitations related to each respective credit facility’s borrowing base.
(3)The Company may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date.
Under the HLEND A Funding Facility, as of June 30, 2024, the Company had outstanding borrowings denominated in the following non-USD currencies:
•Euros (EUR) of 7.5 million
•Australian Dollars (AUD) of 94.4 million
•British Pounds (GBP) of 42.9 million
Under the HLEND B Funding Facility, as of June 30, 2024, the Company had outstanding borrowings denominated in the following non-USD currencies:
•Euros (EUR) of 3.4 million
•Australian Dollars (AUD) of 25.5 million
•British Pounds (GBP) of 90.3 million
Under the Revolving Credit Facility, as of June 30, 2024, the Company had outstanding borrowings denominated in the following non-USD currencies:
•Euros (EUR) of 130.3 million
•British Pounds (GBP) of 64.2 million
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(4)The carrying value of the Company's November 2025 Notes and November 2027 Notes are presented net of unamortized debt issuance costs of $(0.9) million and $(1.2) million, respectively, as of June 30, 2024 and includes the change in the notes carrying value of $(0.9) million and $(0.9) million, respectively, as a result of the qualifying fair value hedge relationship as described above.
(5)The carrying value of the Company's March 2026 Notes and March 2028 Notes are presented net of unamortized debt issuance costs of $(1.4) million and $(0.8) million, respectively, as of June 30, 2024 and includes the change in the notes carrying value of $(2.9) million and $(2.1) million, respectively, as a result of the qualifying fair value hedge relationship as described above.
(6)The carrying value of the Company's September 2027 Notes and September 2028 Notes are presented net of unamortized debt issuance costs of $(0.6) million and $(2.2) million, respectively, as of June 30, 2024 and includes the change in the notes carrying value of $(0.3) million and $(1.0) million, respectively, as a result of the qualifying fair value hedge relationship as described above.
(7)The carrying value of the Company's January 2029 Notes are presented net of unamortized debt issuance costs and original issue discount of $(11.6) million as of June 30, 2024 and includes the change in the notes carrying value of $(10.8) million as a result of the qualifying fair value hedge relationship as described above.
(8)The carrying value of the Company's September 2029 Notes are presented net of unamortized debt issuance costs and original issue discount of $(8.8) million as of June 30, 2024 and includes the change in the notes carrying value of $0.9 million as a result of the qualifying fair value hedge relationship as described above.
(9)The carrying value of the Company's 2023 CLO Secured Notes are presented net of unamortized debt issuance costs of $(3.1) million as of June 30, 2024.
(10)The carrying value of the Company's 2024 CLO Secured Notes are presented net of unamortized debt issuance costs and original issue discount of $(26.4) million as of June 30, 2024.
December 31, 2023 | |||||||||||||||||||||||||||||
Aggregate Principal Committed | Outstanding Principal | Carrying Value | Unused Portion(1) | Amount Available(2) | |||||||||||||||||||||||||
HLEND A Funding Facility(3) | $ | 800,000 | $ | 615,838 | $ | 615,838 | $ | 184,162 | $ | 38,218 | |||||||||||||||||||
HLEND B Funding Facility(3) | 1,000,000 | 513,747 | 513,747 | 486,253 | 356,891 | ||||||||||||||||||||||||
HLEND C Funding Facility | 750,000 | 487,500 | 487,500 | 262,500 | 12,576 | ||||||||||||||||||||||||
HLEND D Funding Facility | 500,000 | 195,000 | 195,000 | 305,000 | 205,018 | ||||||||||||||||||||||||
Revolving Credit Facility(3) | 1,275,000 | 1,025,294 | 1,025,294 | 249,706 | 249,706 | ||||||||||||||||||||||||
November 2025 Notes(4) | 170,000 | 170,000 | 168,749 | — | — | ||||||||||||||||||||||||
November 2027 Notes(4) | 155,000 | 155,000 | 154,366 | — | — | ||||||||||||||||||||||||
March 2026 Notes(5) | 276,000 | 276,000 | 274,716 | — | — | ||||||||||||||||||||||||
March 2028 Notes(5) | 124,000 | 124,000 | 123,588 | — | — | ||||||||||||||||||||||||
September 2027 Notes(6) | 75,000 | 75,000 | 75,545 | — | — | ||||||||||||||||||||||||
September 2028 Notes(6) | 250,000 | 250,000 | 252,814 | — | — | ||||||||||||||||||||||||
2023 CLO Secured Notes(7) | 323,000 | 323,000 | 319,743 | — | — | ||||||||||||||||||||||||
Total | $ | 5,698,000 | $ | 4,210,379 | $ | 4,206,900 | $ | 1,487,621 | $ | 862,409 |
(1)The unused portion is the amount upon which commitment fees, if any, are based.
(2)The amount available reflects any limitations related to each respective credit facility’s borrowing base.
(3)The Company may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date.
Under the HLEND A Funding Facility, as of December 31, 2023, the Company had outstanding borrowings denominated in the following non-USD currencies:
•Euros (EUR) of 7.5 million
•Australian Dollars (AUD) of 156.0 million
•British Pounds (GBP) of 42.9 million
Under the HLEND B Funding Facility, as of December 31, 2023, the Company had outstanding borrowings denominated in the following non-USD currencies:
•Euros (EUR) of 3.4 million
•Australian Dollars (AUD) of 108.0 million
•British Pounds (GBP) of 90.3 million
Under the Revolving Credit Facility, as of December 31, 2023, the Company had outstanding borrowings denominated in the following non-USD currencies:
•Euros (EUR) of 312.1 million
•Australian Dollars (AUD) of 95.2 million
•Canadian Dollars (CAD) of 47.1 million
•British Pounds (GBP) of 64.2 million
(4)The carrying value of the Company's November 2025 Notes and November 2027 Notes are presented net of unamortized debt issuance costs of $(1.2) million and $(1.4) million, respectively, as of December 31, 2023 and includes the change in the notes carrying value of $(0.0) million and $0.7 million, respectively, as a result of the qualifying fair value hedge relationship as described above.
(5)The carrying value of the Company's March 2026 Notes and March 2028 Notes are presented net of unamortized debt issuance costs of $(1.8) million and $(0.9) million, respectively, as of December 31, 2023 and includes the change in the notes carrying value of $0.6 million and $0.5 million, respectively, as a result of the qualifying fair value hedge relationship as described above.
(6)The carrying value of the Company's September 2027 Notes and September 2028 Notes are presented net of unamortized debt issuance costs of $(0.7) million and $(2.5) million, respectively, as of December 31, 2023 and includes the change in the notes carrying value of $1.3 million and $5.3 million, respectively, as a result of the qualifying fair value hedge relationship as described above.
(7)The carrying value of the Company's 2023 CLO Secured Notes are presented net of unamortized debt issuance costs of $(3.3) million as of December 31, 2023.
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As of June 30, 2024 and December 31, 2023, $74.8 million and $57.3 million, respectively, of interest expense and $3.0 million and $1.5 million, respectively, of unused commitment fees were included in interest payable. For the three months ended June 30, 2024 and 2023, the weighted average interest rate on all borrowings outstanding was 9.21% and 7.98% (including unused fees, amortization of deferred financing costs, debt issuance costs and original issue discounts), respectively, and the average principal debt outstanding was $3,871.6 million and $3,095.3 million, respectively. For the six months ended June 30, 2024 and 2023, the weighted average interest rate on all borrowings outstanding was 9.08% and 7.80% (including unused fees, amortization of deferred financing costs, debt issuance costs and original issue discounts), respectively, and the average principal debt outstanding was $3,871.0 million and $2,885.0 million, respectively.
The components of interest expense were as follows:
Three Months Ended June 30, | |||||||||||
2024 | 2023 | ||||||||||
Borrowing interest expense | $ | 75,149 | $ | 56,596 | |||||||
Facility unused fees | 4,131 | 877 | |||||||||
Amortization of deferred financing costs | 2,307 | 1,462 | |||||||||
Amortization of original issue discount and debt issuance costs | 2,059 | 514 | |||||||||
Gain (loss) from interest rate swaps accounted for as hedges and the related hedged items: | |||||||||||
Interest rate swaps | (7,619) | (12,533) | |||||||||
Hedged items | 12,641 | 14,684 | |||||||||
Total interest expense | $ | 88,668 | $ | 61,600 | |||||||
Cash paid for interest expense | $ | 67,033 | $ | 57,577 | |||||||
Six Months Ended June 30, | |||||||||||
2024 | 2023 | ||||||||||
Borrowing interest expense | $ | 150,542 | $ | 103,117 | |||||||
Facility unused fees | 7,171 | 3,032 | |||||||||
Amortization of deferred financing costs | 4,371 | 2,738 | |||||||||
Amortization of original issue discount and debt issuance costs | 3,247 | 809 | |||||||||
Gain (loss) from interest rate swaps accounted for as hedges and the related hedged items: | |||||||||||
Interest rate swaps | (26,254) | (5,044) | |||||||||
Hedged items | 35,684 | 6,911 | |||||||||
Total interest expense | $ | 174,761 | $ | 111,563 | |||||||
Cash paid for interest expense | $ | 148,162 | $ | 89,387 |
Note 8. Commitments and Contingencies
In the normal course of business, the Company enters into contracts that provide a variety of general indemnifications. Any exposure to the Company under these arrangements could involve future claims that may be made against the Company. Currently, no such claims exist or are expected to arise and, accordingly, the Company has not accrued any liability in connection with such indemnifications.
The Company’s investment portfolio may contain debt investments which are in the form of lines of credit or delayed draw commitments, which require us to provide funding when requested by portfolio companies in accordance with underlying loan agreements. As of June 30, 2024 and December 31, 2023, the Company had unfunded delayed draw term loans, revolvers and preferred equity in the aggregate principal amount of $1,227.4 million and $760.7 million, respectively.
From time to time, the Company may become a party to certain legal proceedings incidental to the normal course of its business. As of June 30, 2024, management is not aware of any pending or threatened material litigation.
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Note 9. Net Assets
In connection with its formation, the Company has the authority to issue an unlimited number of Class I, Class D, Class F and Class S common shares of beneficial interest at $0.01 per share par value. On July 23, 2021, HPS purchased 100 shares of the Company’s Class I common shares of beneficial interest at $25.00 per share.
As of February 3, 2022, the Company had satisfied the minimum offering requirement, and the Company’s Board had authorized the release of proceeds from escrow. As of such date, the Company issued and sold 20,437,880 shares (consisting of 7,074,280 Class I shares, 1,268,000 Class D Shares, and 12,095,600 Class F shares at an offering price of $25.00 per share), and the Escrow Agent released net proceeds of $510.9 million, of which $10.0 million was from an affiliate of HPS, to the Company as payment for such shares. Under the terms of the Company’s Declaration of Trust, all Common Shares have equal rights as to voting and, when they are issued, will be duly authorized, validly issued, fully paid and nonassessable. On October 1, 2023 Class S shares commenced operations at an offering price of $25.11.
The share classes have different ongoing distribution and/or shareholder servicing fees. Until the release of proceeds from escrow, the per share purchase price for Common Shares in the Offering was $25.00 per share. Thereafter, the purchase price per share for each class of Common Shares will equal the NAV per share, as of the effective date of the monthly share purchase date.
The following table summarizes transactions in common shares of beneficial interest during the three months ended June 30, 2024:
Shares | Amount | ||||||||||
CLASS I | |||||||||||
Subscriptions | 14,732,819 | $ | 374,949 | ||||||||
Share transfers between classes | 43,845 | 1,115 | |||||||||
Distributions reinvested | 521,941 | 13,283 | |||||||||
Share repurchases | (893,929) | (22,813) | |||||||||
Early repurchase deduction | — | 45 | |||||||||
Net increase (decrease) | 14,404,676 | $ | 366,579 | ||||||||
CLASS D | |||||||||||
Subscriptions | 3,218,891 | $ | 81,825 | ||||||||
Share transfers between classes | 533,674 | 13,549 | |||||||||
Distributions reinvested | 404,831 | 10,301 | |||||||||
Share repurchases | — | — | |||||||||
Early repurchase deduction | — | 20 | |||||||||
Net increase (decrease) | 4,157,396 | $ | 105,695 | ||||||||
CLASS F | |||||||||||
Subscriptions | 9,026,578 | $ | 229,852 | ||||||||
Share transfers between classes | (577,519) | (14,664) | |||||||||
Distributions reinvested | 1,579,206 | 40,181 | |||||||||
Share repurchases | (1,310,617) | (33,447) | |||||||||
Early repurchase deduction | — | 86 | |||||||||
Net increase (decrease) | 8,717,648 | $ | 222,008 | ||||||||
CLASS S | |||||||||||
Subscriptions | 4,036,044 | $ | 102,658 | ||||||||
Share transfers between classes | — | — | |||||||||
Distributions reinvested | 73,156 | 1,863 | |||||||||
Share repurchases | — | — | |||||||||
Early repurchase deduction | — | 5 | |||||||||
Net increase (decrease) | 4,109,200 | $ | 104,526 | ||||||||
Total net increase (decrease) | 31,388,920 | $ | 798,808 |
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The following table summarizes transactions in common shares of beneficial interest during the six months ended June 30, 2024:
Shares | Amount | ||||||||||
CLASS I | |||||||||||
Subscriptions | 29,041,953 | $ | 735,047 | ||||||||
Share transfers between classes | 97,008 | 2,448 | |||||||||
Distributions reinvested | 1,060,060 | 26,809 | |||||||||
Share repurchases | (2,203,517) | (56,024) | |||||||||
Early repurchase deduction | — | 45 | |||||||||
Net increase (decrease) | 27,995,504 | $ | 708,325 | ||||||||
CLASS D | |||||||||||
Subscriptions | 7,062,408 | $ | 178,322 | ||||||||
Share transfers between classes | 650,405 | 16,476 | |||||||||
Distributions reinvested | 841,001 | 21,265 | |||||||||
Share repurchases | (416,320) | (10,558) | |||||||||
Early repurchase deduction | — | 20 | |||||||||
Net increase (decrease) | 8,137,494 | $ | 205,525 | ||||||||
CLASS F | |||||||||||
Subscriptions | 26,047,117 | $ | 657,909 | ||||||||
Share transfers between classes | (804,344) | (20,355) | |||||||||
Distributions reinvested | 3,327,300 | 84,121 | |||||||||
Share repurchases | (1,931,940) | (49,204) | |||||||||
Early repurchase deduction | — | 86 | |||||||||
Net increase (decrease) | 26,638,133 | $ | 672,557 | ||||||||
CLASS S | |||||||||||
Subscriptions | 7,947,966 | $ | 201,047 | ||||||||
Share transfers between classes | 56,931 | 1,431 | |||||||||
Distributions reinvested | 96,113 | 2,441 | |||||||||
Share repurchases | — | — | |||||||||
Early repurchase deduction | — | 5 | |||||||||
Net increase (decrease) | 8,101,010 | $ | 204,924 | ||||||||
Total net increase (decrease) | 70,872,141 | $ | 1,791,331 |
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The following table summarizes transactions in common shares of beneficial interest during the three months ended June 30, 2023:
Shares | Amount | ||||||||||
CLASS I | |||||||||||
Subscriptions | 1,585,743 | $ | 38,749 | ||||||||
Share transfers between classes | — | — | |||||||||
Distributions reinvested | 330,161 | 8,064 | |||||||||
Share repurchases | (168,582) | (4,167) | |||||||||
Early repurchase deduction | — | 23 | |||||||||
Net increase (decrease) | 1,747,322 | $ | 42,669 | ||||||||
CLASS D | |||||||||||
Subscriptions | 2,026,626 | $ | 49,495 | ||||||||
Share transfers between classes | 223,376 | 5,462 | |||||||||
Distributions reinvested | 205,700 | 5,024 | |||||||||
Share repurchases | (1,015,260) | (25,097) | |||||||||
Early repurchase deduction | — | 12 | |||||||||
Net increase (decrease) | 1,440,442 | $ | 34,896 | ||||||||
CLASS F | |||||||||||
Subscriptions | 6,486,082 | $ | 158,441 | ||||||||
Share transfers between classes | (223,376) | (5,462) | |||||||||
Distributions reinvested | 984,876 | 24,055 | |||||||||
Share repurchases | (2,808,781) | (69,433) | |||||||||
Early repurchase deduction | — | 62 | |||||||||
Net increase (decrease) | 4,438,801 | $ | 107,663 | ||||||||
Total net increase (decrease) | 7,626,565 | $ | 185,228 |
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The following table summarizes transactions in common shares of beneficial interest during the six months ended June 30, 2023:
Shares | Amount | ||||||||||
CLASS I | |||||||||||
Subscriptions | 2,489,409 | $ | 60,642 | ||||||||
Share transfers between classes | 675,921 | 16,465 | |||||||||
Distributions reinvested | 682,337 | 16,590 | |||||||||
Share repurchases | (545,902) | (13,374) | |||||||||
Early repurchase deduction | — | 38 | |||||||||
Net increase (decrease) | 3,301,765 | $ | 80,361 | ||||||||
CLASS D | |||||||||||
Subscriptions | 3,276,005 | $ | 79,895 | ||||||||
Share transfers between classes | 223,376 | 5,462 | |||||||||
Distributions reinvested | 387,709 | 9,430 | |||||||||
Share repurchases | (1,015,260) | (25,097) | |||||||||
Early repurchase deduction | — | 20 | |||||||||
Net increase (decrease) | 2,871,830 | $ | 69,710 | ||||||||
CLASS F | |||||||||||
Subscriptions | 10,612,439 | $ | 258,850 | ||||||||
Share transfers between classes | (899,297) | (21,927) | |||||||||
Distributions reinvested | 1,997,873 | 48,579 | |||||||||
Share repurchases | (3,490,087) | (86,057) | |||||||||
Early repurchase deduction | — | 101 | |||||||||
Net increase (decrease) | 8,220,928 | $ | 199,546 | ||||||||
Total net increase (decrease) | 14,394,523 | $ | 349,617 |
Net Asset Value per Share and Offering Price
The Company determines NAV for each class of shares as of the last day of each calendar month. Share issuances related to monthly subscriptions are effective the first calendar day of each month. Shares are issued at an offering price equivalent to the most recent NAV per share available for each share class, which will be the prior calendar day NAV per share (i.e. the prior month-end NAV). The following table summarizes each month-end NAV per share for Class I, Class D, Class F, and Class S common shares of beneficial interest during the six months ended June 30, 2024 and 2023:
NAV Per Share | ||||||||||||||||||||||||||
For the Months Ended | Class I | Class D | Class F | Class S | ||||||||||||||||||||||
January 31, 2024 | $ | 25.14 | $ | 25.14 | $ | 25.14 | $ | 25.14 | ||||||||||||||||||
February 29, 2024 | $ | 25.25 | $ | 25.25 | $ | 25.25 | $ | 25.25 | ||||||||||||||||||
March 31, 2024 | $ | 25.36 | $ | 25.36 | $ | 25.36 | $ | 25.36 | ||||||||||||||||||
April 30, 2024 | $ | 25.42 | $ | 25.42 | $ | 25.42 | $ | 25.42 | ||||||||||||||||||
May 31, 2024 | $ | 25.55 | $ | 25.55 | $ | 25.55 | $ | 25.55 | ||||||||||||||||||
June 30, 2024 | $ | 25.52 | $ | 25.52 | $ | 25.52 | $ | 25.52 |
NAV Per Share | ||||||||||||||||||||||||||
For the Months Ended | Class I | Class D | Class F | Class S(1) | ||||||||||||||||||||||
January 31, 2023 | $ | 24.36 | $ | 24.36 | $ | 24.36 | $ | — | ||||||||||||||||||
February 28, 2023 | $ | 24.56 | $ | 24.56 | $ | 24.56 | $ | — | ||||||||||||||||||
March 31, 2023 | $ | 24.40 | $ | 24.40 | $ | 24.40 | $ | — | ||||||||||||||||||
April 30, 2023 | $ | 24.42 | $ | 24.42 | $ | 24.42 | $ | — | ||||||||||||||||||
May 31, 2023 | $ | 24.45 | $ | 24.45 | $ | 24.45 | $ | — | ||||||||||||||||||
June 30, 2023 | $ | 24.72 | $ | 24.72 | $ | 24.72 | $ | — |
77
(1) Class S commenced operations on October 1, 2023.
Distributions
The Company declares monthly distribution amounts per share of Class I, Class D, Class F, and Class S common shares of beneficial interest payable monthly in arrears. The record date for each distribution was the last calendar date of the month in which such distribution was declared. The following table presents distributions that were declared during the six months ended June 30, 2024:
Class I | ||||||||||||||||||||||||||||||||||||||
Declaration Date | Payment Date | Base Distribution Per Share | Variable Supplemental Distribution Per Share | Special Distribution Per Share | Total Distribution Per Share | Distribution Amount | ||||||||||||||||||||||||||||||||
January 30, 2024 | February 29, 2024 | $ | 0.1600 | $ | 0.0550 | $ | — | $ | 0.2150 | $ | 11,811 | |||||||||||||||||||||||||||
February 29, 2024 | March 29, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 13,391 | ||||||||||||||||||||||||||||||||
March 26, 2024 | April 30, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 14,482 | ||||||||||||||||||||||||||||||||
April 25, 2024 | May 31, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 15,054 | ||||||||||||||||||||||||||||||||
May 31, 2024 | June 28, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 16,339 | ||||||||||||||||||||||||||||||||
June 26, 2024 | July 31, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 17,490 | ||||||||||||||||||||||||||||||||
Total | $ | 0.9600 | $ | 0.3300 | $ | — | $ | 1.2900 | $ | 88,567 |
Class D | ||||||||||||||||||||||||||||||||||||||
Declaration Date | Payment Date | Base Distribution Per Share (1) | Variable Supplemental Distribution Per Share | Special Distribution Per Share | Total Distribution Per Share | Distribution Amount | ||||||||||||||||||||||||||||||||
January 30, 2024 | February 29, 2024 | $ | 0.1547 | $ | 0.0550 | $ | — | $ | 0.2097 | $ | 6,514 | |||||||||||||||||||||||||||
February 29, 2024 | March 29, 2024 | 0.1550 | 0.0550 | — | 0.2100 | 6,670 | ||||||||||||||||||||||||||||||||
March 26, 2024 | April 30, 2024 | 0.1547 | 0.0550 | — | 0.2097 | 6,834 | ||||||||||||||||||||||||||||||||
April 25, 2024 | May 31, 2024 | 0.1548 | 0.0550 | — | 0.2098 | 7,225 | ||||||||||||||||||||||||||||||||
May 31, 2024 | June 28, 2024 | 0.1546 | 0.0550 | — | 0.2096 | 7,404 | ||||||||||||||||||||||||||||||||
June 26, 2024 | July 31, 2024 | 0.1548 | 0.0550 | — | 0.2098 | 7,622 | ||||||||||||||||||||||||||||||||
Total | $ | 0.9286 | $ | 0.3300 | $ | — | $ | 1.2586 | $ | 42,269 |
Class F | ||||||||||||||||||||||||||||||||||||||
Declaration Date | Payment Date | Base Distribution Per Share (1) | Variable Supplemental Distribution Per Share | Special Distribution Per Share | Total Distribution Per Share | Distribution Amount | ||||||||||||||||||||||||||||||||
January 30, 2024 | February 29, 2024 | $ | 0.1494 | $ | 0.0550 | $ | — | $ | 0.2044 | $ | 26,889 | |||||||||||||||||||||||||||
February 29, 2024 | March 29, 2024 | 0.1500 | 0.0550 | — | 0.2050 | 28,278 | ||||||||||||||||||||||||||||||||
March 26, 2024 | April 30, 2024 | 0.1493 | 0.0550 | — | 0.2043 | 29,404 | ||||||||||||||||||||||||||||||||
April 25, 2024 | May 31, 2024 | 0.1496 | 0.0550 | — | 0.2046 | 29,919 | ||||||||||||||||||||||||||||||||
May 31, 2024 | June 28, 2024 | 0.1492 | 0.0550 | — | 0.2042 | 30,325 | ||||||||||||||||||||||||||||||||
June 26, 2024 | July 31, 2024 | 0.1495 | 0.0550 | — | 0.2045 | 31,356 | ||||||||||||||||||||||||||||||||
Total | $ | 0.8970 | $ | 0.3300 | $ | — | $ | 1.2270 | $ | 176,171 |
78
Class S | ||||||||||||||||||||||||||||||||||||||
Declaration Date | Payment Date | Base Distribution Per Share (1) | Variable Supplemental Distribution Per Share | Special Distribution Per Share | Total Distribution Per Share | Distribution Amount | ||||||||||||||||||||||||||||||||
January 30, 2024 | February 29, 2024 | $ | 0.1420 | $ | 0.0550 | $ | — | $ | 0.1970 | $ | 357 | |||||||||||||||||||||||||||
February 29, 2024 | March 29, 2024 | 0.1431 | 0.0550 | — | 0.1981 | 743 | ||||||||||||||||||||||||||||||||
March 26, 2024 | April 30, 2024 | 0.1418 | 0.0550 | — | 0.1968 | 954 | ||||||||||||||||||||||||||||||||
April 25, 2024 | May 31, 2024 | 0.1423 | 0.0550 | — | 0.1973 | 1,204 | ||||||||||||||||||||||||||||||||
May 31, 2024 | June 28, 2024 | 0.1417 | 0.0550 | — | 0.1967 | 1,550 | ||||||||||||||||||||||||||||||||
June 26, 2024 | July 31, 2024 | 0.1422 | 0.0550 | — | 0.1972 | 1,767 | ||||||||||||||||||||||||||||||||
Total | $ | 0.8531 | $ | 0.3300 | $ | — | $ | 1.1831 | $ | 6,575 |
(1) Distributions per share are net of shareholder servicing and/or distribution fees.
The following table presents distributions that were declared during the six months ended June 30, 2023:
Class I | ||||||||||||||||||||||||||||||||||||||
Declaration Date | Payment Date | Base Distribution Per Share | Variable Supplemental Distribution Per Share | Special Distribution Per Share | Total Distribution Per Share | Distribution Amount | ||||||||||||||||||||||||||||||||
January 19, 2023 | February 28, 2023 | $ | 0.1600 | $ | 0.0210 | $ | — | $ | 0.1810 | $ | 6,441 | |||||||||||||||||||||||||||
February 28, 2023 | March 31, 2023 | 0.1600 | 0.0300 | — | 0.1900 | 6,980 | ||||||||||||||||||||||||||||||||
March 28, 2023 | April 28, 2023 | 0.1600 | 0.0430 | — | 0.2030 | 7,518 | ||||||||||||||||||||||||||||||||
April 28, 2023 | May 31, 2023 | 0.1600 | 0.0440 | — | 0.2040 | 7,561 | ||||||||||||||||||||||||||||||||
May 26, 2023 | June 30, 2023 | 0.1600 | 0.0450 | — | 0.2050 | 7,668 | ||||||||||||||||||||||||||||||||
June 28, 2023 | July 31, 2023 | 0.1600 | 0.0450 | — | 0.2050 | 7,907 | ||||||||||||||||||||||||||||||||
Total | $ | 0.9600 | $ | 0.2280 | $ | — | $ | 1.1880 | $ | 44,075 |
Class D | ||||||||||||||||||||||||||||||||||||||
Declaration Date | Payment Date | Base Distribution Per Share (1) | Variable Supplemental Distribution Per Share | Special Distribution Per Share | Total Distribution Per Share | Distribution Amount | ||||||||||||||||||||||||||||||||
January 19, 2023 | February 28, 2023 | $ | 0.1549 | $ | 0.0210 | $ | — | $ | 0.1759 | $ | 3,173 | |||||||||||||||||||||||||||
February 28, 2023 | March 31, 2023 | 0.1553 | 0.0300 | — | 0.1853 | 3,351 | ||||||||||||||||||||||||||||||||
March 28, 2023 | April 28, 2023 | 0.1548 | 0.0430 | — | 0.1978 | 3,752 | ||||||||||||||||||||||||||||||||
April 28, 2023 | May 31, 2023 | 0.1550 | 0.0440 | — | 0.1990 | 3,951 | ||||||||||||||||||||||||||||||||
May 26, 2023 | June 30, 2023 | 0.1548 | 0.0450 | — | 0.1998 | 4,081 | ||||||||||||||||||||||||||||||||
June 28, 2023 | July 31, 2023 | 0.1550 | 0.0450 | — | 0.2000 | 4,285 | ||||||||||||||||||||||||||||||||
Total | $ | 0.9298 | $ | 0.2280 | $ | — | $ | 1.1578 | $ | 22,593 |
79
Class F | ||||||||||||||||||||||||||||||||||||||
Declaration Date | Payment Date | Base Distribution Per Share (1) | Variable Supplemental Distribution Per Share | Special Distribution Per Share | Total Distribution Per Share | Distribution Amount | ||||||||||||||||||||||||||||||||
January 19, 2023 | February 28, 2023 | $ | 0.1499 | $ | 0.0210 | $ | — | $ | 0.1709 | $ | 16,003 | |||||||||||||||||||||||||||
February 28, 2023 | March 31, 2023 | 0.1507 | 0.0300 | — | 0.1807 | 16,992 | ||||||||||||||||||||||||||||||||
March 28, 2023 | April 28, 2023 | 0.1496 | 0.0430 | — | 0.1926 | 18,590 | ||||||||||||||||||||||||||||||||
April 28, 2023 | May 31, 2023 | 0.1500 | 0.0440 | — | 0.1940 | 18,948 | ||||||||||||||||||||||||||||||||
May 26, 2023 | June 30, 2023 | 0.1496 | 0.0450 | — | 0.1946 | 19,516 | ||||||||||||||||||||||||||||||||
June 28, 2023 | July 31, 2023 | 0.1500 | 0.0450 | — | 0.1950 | 20,103 | ||||||||||||||||||||||||||||||||
Total | $ | 0.8998 | $ | 0.2280 | $ | — | $ | 1.1278 | $ | 110,152 |
(1)Distributions per share are net of shareholder servicing and/or distribution fees.
Distribution Reinvestment Plan
The Company has adopted a distribution reinvestment plan, pursuant to which the Company will reinvest all cash distributions declared by the Company on behalf of our shareholders who do not elect to receive their distributions in cash as provided below. As a result, if the Company declares a cash distribution, then shareholders who have not opted out of our distribution reinvestment plan will have their cash distributions automatically reinvested in additional shares as described below, rather than receiving the cash distribution. Distributions on fractional shares will be credited to each participating shareholder’s account to three decimal places.
Character of Distributions
The Company may fund its cash distributions to shareholders from any source of funds available to the Company, including but not limited to offering proceeds, net investment income from operations, capital gains proceeds from the sale of assets, borrowings, dividends or other distributions paid to it on account of preferred and common equity investments in portfolio companies and expense support from the Adviser, which is subject to recoupment.
Through June 30, 2024, a portion of the Company’s distributions resulted from expense support from the Adviser, and future distributions may result from expense support from the Adviser, each of which is subject to repayment by the Company within three years from the date of payment. The purpose of this arrangement avoids distributions being characterized as a return of capital for U.S. federal income tax purposes. Shareholders should understand that any such distribution is not based solely on the Company’s investment performance, and can only be sustained if the Company achieves positive investment performance in future periods and/or the Adviser continues to provide expense support. Shareholders should also understand that the Company’s future repayments of expense support will reduce the distributions that they would otherwise receive. There can be no assurance that the Company will achieve the performance necessary to sustain these distributions, or be able to pay distributions at all.
Sources of distributions, other than net investment income and realized gains on a U.S. GAAP basis, include required adjustments to U.S. GAAP net investment income in the current period to determine taxable income available for distributions. The following table reflects the sources of cash distributions on a U.S. GAAP basis that the Company has declared on its Common Shares during the six months ended June 30, 2024:
Class I | Class D | Class F | Class S | |||||||||||||||||||||||||||||||||||||||||||||||
Source of Distribution | Per Share | Amount | Per Share | Amount | Per Share | Amount | Per Share | Amount | ||||||||||||||||||||||||||||||||||||||||||
Net investment income | $ | 1.2900 | $ | 88,567 | $ | 1.2586 | $ | 42,269 | $ | 1.2270 | $ | 176,171 | $ | 1.1831 | $ | 6,575 | ||||||||||||||||||||||||||||||||||
Net realized gains | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 1.2900 | $ | 88,567 | $ | 1.2586 | $ | 42,269 | $ | 1.2270 | $ | 176,171 | $ | 1.1831 | $ | 6,575 |
80
The following table reflects the sources of cash distributions on a U.S. GAAP basis that the Company has declared on its Common Shares during the six months ended June 30, 2023:
Class I | Class D | Class F | ||||||||||||||||||||||||||||||||||||
Source of Distribution | Per Share | Amount | Per Share | Amount | Per Share | Amount | ||||||||||||||||||||||||||||||||
Net investment income | $ | 1.1880 | $ | 44,075 | $ | 1.1578 | $ | 22,593 | $ | 1.1278 | $ | 110,152 | ||||||||||||||||||||||||||
Net realized gains | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Total | $ | 1.1880 | $ | 44,075 | $ | 1.1578 | $ | 22,593 | $ | 1.1278 | $ | 110,152 |
Share Repurchase Program
The Company has commenced a share repurchase program in which the Company intends to repurchase, in each quarter, up to 5% of the Company’s Common Shares outstanding (by number of shares) as of the close of the previous calendar quarter. The Board may amend, suspend or terminate the share repurchase program if it deems such action to be in the best interest of the Company and the best interest of the shareholders. As a result, share repurchases may not be available each quarter. The Company intends to conduct such repurchase offers in accordance with the requirements of Rule 13e-4 promulgated under the Securities Exchange Act of 1934, as amended, and the 1940 Act. All shares purchased pursuant to the terms of each tender offer will be retired and thereafter will be authorized and unissued shares.
Under the Company’s share repurchase program, to the extent the Company offers to repurchase shares in any particular quarter, the Company expects to repurchase shares pursuant to tender offers using a purchase price equal to the NAV per share as of the last calendar day of the applicable quarter, except that shares that have not been outstanding for at least one year will be repurchased at 98% of such NAV (an “Early Repurchase Deduction”). The one-year holding period is measured as of the subscription closing date immediately following the prospective repurchase date. The Early Repurchase Deduction may be waived, at the Company’s discretion, in the case of repurchase requests arising from the death, divorce or qualified disability of the holder. The Early Repurchase Deduction will be retained by the Company for the benefit of remaining shareholders across all shares.
The following table summarizes the share repurchases completed during the six months ended June 30, 2024:
Repurchase Deadline Request | Percentage of Outstanding Shares the Company Offered to Repurchase(1) | Repurchase Pricing Date | Amount Repurchased (all classes)(2) | Number of Shares Repurchased (all classes) | Percentage of Outstanding Shares Purchased(1) | |||||||||||||||||||||||||||
March 1, 2024 | 5.00 | % | March 31, 2024 | $ | 59,526 | 2,347,231 | 1.13 | % | ||||||||||||||||||||||||
May 30, 2024 | 5.00 | % | June 30, 2024 | $ | 56,260 | 2,204,546 | 0.89 | % |
The following table summarizes the share repurchases completed during the six months ended June 30, 2023.
Repurchase Deadline Request | Percentage of Outstanding Shares the Company Offered to Repurchase(1) | Repurchase Pricing Date | Amount Repurchased (all classes)(2) | Number of Shares Repurchased (all classes) | Percentage of Outstanding Shares Purchased(1) | |||||||||||||||||||||||||||
March 2, 2023 | 5.00 | % | March 31, 2023 | $ | 25,836 | 1,058,869 | 0.73 | % | ||||||||||||||||||||||||
May 30, 2023 | 5.00 | % | June 30, 2023 | $ | 98,692 | 3,992,380 | 2.64 | % |
(1)Percentage is based on total shares as of the close of the previous calendar quarter. All repurchase requests were satisfied in full.
(2)Amounts not inclusive of Early Repurchase Deduction.
81
Note 10. Financial Highlights
The following are the financial highlights for the six months ended June 30, 2024:
Six Months Ended June 30, 2024 | ||||||||||||||||||||||||||
Class I | Class D | Class F | Class S | |||||||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 25.06 | $ | 25.06 | $ | 25.06 | $ | 25.06 | ||||||||||||||||||
Net investment income (1) | 1.42 | 1.40 | 1.36 | 1.30 | ||||||||||||||||||||||
Net unrealized and realized gain (loss) (2) | 0.33 | 0.32 | 0.33 | 0.34 | ||||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 1.75 | 1.72 | 1.69 | 1.64 | ||||||||||||||||||||||
Distributions from net investment income (3) | (1.29) | (1.26) | (1.23) | (1.18) | ||||||||||||||||||||||
Distributions from net realized gains (3) | — | — | — | — | ||||||||||||||||||||||
Net increase (decrease) in net assets from shareholders' distributions | (1.29) | (1.26) | (1.23) | (1.18) | ||||||||||||||||||||||
Early repurchase deduction fees (6) | — | — | — | — | ||||||||||||||||||||||
Total increase (decrease) in net assets | 0.46 | 0.46 | 0.46 | 0.46 | ||||||||||||||||||||||
Net asset value, end of period | $ | 25.52 | $ | 25.52 | $ | 25.52 | $ | 25.52 | ||||||||||||||||||
Shares outstanding, end of period | 80,453,015 | 36,330,213 | 152,019,594 | 8,958,889 | ||||||||||||||||||||||
Total return based on NAV (4) | 7.12 | % | 6.99 | % | 6.86 | % | 6.68 | % | ||||||||||||||||||
Ratios: | ||||||||||||||||||||||||||
Ratio of net expenses to average net assets (5) | 8.81 | % | 9.09 | % | 9.35 | % | 9.51 | % | ||||||||||||||||||
Ratio of net investment income to average net assets (5) | 11.41 | % | 11.19 | % | 10.95 | % | 10.43 | % | ||||||||||||||||||
Portfolio turnover rate | 13.07 | % | 13.07 | % | 13.07 | % | 13.07 | % | ||||||||||||||||||
Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period | $ | 2,052,817 | $ | 926,987 | $ | 3,878,862 | $ | 228,594 | ||||||||||||||||||
Asset coverage ratio | 265.0 | % | 265.0 | % | 265.0 | % | 265.0 | % |
(1)The per share data was derived by using the weighted average shares outstanding during the period.
(2)The amount shown does not correspond with the aggregate amount for the period as it includes the effect of the timing of capital transactions.
(3)The per share data for distributions was derived by using the actual shares outstanding at the date of the relevant transactions (refer to Note 9).
(4)Total return is calculated as the change in NAV per share during the period, plus distributions per share (assuming distributions are reinvested in accordance with the Company's distribution reinvestment plan) divided by the beginning NAV per share. Total return does not include upfront transaction fee, if any.
(5)For the six months ended June 30, 2024, amounts are annualized except for excise tax, and capital gains incentive fee.
(6)The per share amount rounds to less than $0.01 per share.
82
The following are the financial highlights for the six months ended June 30, 2023:
Six Months Ended June 30, 2023 | ||||||||||||||||||||
Class I | Class D | Class F | ||||||||||||||||||
Per Share Data: | ||||||||||||||||||||
Net asset value, beginning of period | $ | 23.88 | $ | 23.88 | $ | 23.88 | ||||||||||||||
Net investment income (1) | 1.43 | 1.40 | 1.37 | |||||||||||||||||
Net unrealized and realized gain (loss) (2) | 0.60 | 0.60 | 0.60 | |||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 2.03 | 2.00 | 1.97 | |||||||||||||||||
Distributions from net investment income (3) | (1.19) | (1.16) | (1.13) | |||||||||||||||||
Distributions from net realized gains (3) | — | — | — | |||||||||||||||||
Net increase (decrease) in net assets from shareholders' distributions | (1.19) | (1.16) | (1.13) | |||||||||||||||||
Early repurchase deduction fees (6) | — | — | — | |||||||||||||||||
Total increase (decrease) in net assets | 0.84 | 0.84 | 0.84 | |||||||||||||||||
Net asset value, end of period | $ | 24.72 | $ | 24.72 | $ | 24.72 | ||||||||||||||
Shares outstanding, end of period | 38,403,644 | 20,410,089 | 100,280,440 | |||||||||||||||||
Total return based on NAV (4) | 8.64 | % | 8.51 | % | 8.38 | % | ||||||||||||||
Ratios: | ||||||||||||||||||||
Ratio of net expenses to average net assets (5) | 9.43 | % | 9.76 | % | 9.94 | % | ||||||||||||||
Ratio of net investment income to average net assets (5) | 11.90 | % | 11.75 | % | 11.42 | % | ||||||||||||||
Portfolio turnover rate | 5.64 | % | 5.64 | % | 5.64 | % | ||||||||||||||
Supplemental Data: | ||||||||||||||||||||
Net assets, end of period | $ | 949,403 | $ | 504,572 | $ | 2,479,041 | ||||||||||||||
Asset coverage ratio | 224.9 | % | 224.9 | % | 224.9 | % |
(1)The per share data was derived by using the weighted average shares outstanding during the period.
(2)The amount shown does not correspond with the aggregate amount for the period as it includes the effect of the timing of capital transactions.
(3)The per share data for distributions was derived by using the actual shares outstanding at the date of the relevant transactions (refer to Note 9).
(4)Total return is calculated as the change in NAV per share during the period, plus distributions per share (assuming distributions are reinvested in accordance with the Company's distribution reinvestment plan) divided by the beginning NAV per share. Total return does not include upfront transaction fee, if any.
(5)For the six months ended June 30, 2023, amounts are annualized except for non-recurring expenses.
(6)The per share amount rounds to less than $0.01 per share.
Note 11. Joint Venture
On June 1, 2023, the Company entered into a limited liability company agreement (the “LLC Agreement”) with the Capital One Member (“COM”) to establish a joint venture to make certain unitranche loans to U.S. middle-market companies. The joint venture is called ULTRA III, LLC (“ULTRA III”). The Company and COM will provide capital to ULTRA III in the form of membership interests. The initial maximum investment amounts in ULTRA III for the Company and COM are approximately $200.0 million and $28.6 million, respectively, which correspond to initial membership interests of approximately 87.5% and 12.5%, respectively. The LLC Agreement is effective as of June 1, 2023.
On February 1, 2024, the Company entered into an amendment (“Amendment No. 1”) to the LLC Agreement with COM to increase the maximum investment amounts for the Company and COM in ULTRA III to $400.0 million and $57.1 million, respectively. The increased investment amounts for the Company and COM correspond to membership interests of 87.5% and 12.5%, respectively.
The Company and COM may, from time-to-time, make additional contributions of capital or may receive returns of capital from ULTRA III. As of June 30, 2024 and December 31, 2023, the Company had contributed $235.5 million and $129.7 million, respectively, and COM had contributed $33.6 million and $18.5 million, respectively, of capital. As of June 30, 2024 and December 31, 2023, $164.5 million and $70.3 million, respectively, of capital remained uncalled from the Company and $23.5 million and $10.1 million, respectively, of capital remained uncalled from COM. As of June 30, 2024 and December 31, 2023, the Company and COM’s membership interests are 87.5% and 12.5%, respectively, for both periods.
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All portfolio decisions and generally all other decisions in respect of ULTRA III must be approved by a credit committee of ULTRA III consisting of representatives of the Company and COM (generally with approval from a representative of each required). A Capital One entity is providing a senior revolving financing facility to ULTRA III. COM receives sourcing fees in connection with investments made by ULTRA III that are sourced by COM. When COM sources investments for ULTRA III, the percentage of sourcing fees that are paid to COM is substantially greater than its percentage membership interest in ULTRA III (the “Effective Sourcing Fee”). In this regard, for the three and six months ended June 30, 2024, the Company, through its investment in ULTRA III, paid an Effective Sourcing Fee to COM of $1.8 million and $3.8 million, respectively.
The Company has determined that ULTRA III is an investment company under ASC 946, and in accordance with ASC 946, the Company will generally not consolidate its investment in a company other than a wholly-owned investment company subsidiary. The Company and COM have equal voting rights with respect to the joint venture. The Company will not consolidate the assets and liabilities of the ULTRA III joint venture.
The Company's investment in ULTRA III is disclosed on the Company’s Consolidated Schedule of Investments as of June 30, 2024 and December 31, 2023.
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The following table presents the schedule of investments of ULTRA III as of June 30, 2024:
Company(1) | . | Reference Rate and Spread (2) | . | Interest Rate (2) | . | Maturity Date | . | Par Amount/Units | . | Amortized Cost (3) | . | Fair Value | . | Percentage of Net Assets | |||||||||||||||||||||||||||||||||
First Lien Debt | |||||||||||||||||||||||||||||||||||||||||||||||
General Industrials | |||||||||||||||||||||||||||||||||||||||||||||||
Bright Light Buyer, Inc. (4)(7) | SF + | 6.00% | 11.33% | 11/8/2029 | $ | 244,273 | $ | 238,823 | $ | 244,623 | |||||||||||||||||||||||||||||||||||||
238,823 | 244,623 | 89.69 | % | ||||||||||||||||||||||||||||||||||||||||||||
Health Care Providers | |||||||||||||||||||||||||||||||||||||||||||||||
Emerus Holdings, Inc. (4)(7) | SF + | 6.25% | 11.56% | 1/5/2028 | 159,600 | 155,395 | 157,912 | ||||||||||||||||||||||||||||||||||||||||
155,395 | 157,912 | 57.90 | % | ||||||||||||||||||||||||||||||||||||||||||||
Medical Equipment and Services | |||||||||||||||||||||||||||||||||||||||||||||||
EHOB, LLC (4)(7) | SF + | 5.50% | 10.83% | 12/18/2029 | 124,688 | 122,133 | 125,934 | ||||||||||||||||||||||||||||||||||||||||
FH BMX Buyer, Inc. (4)(5)(6) | 6/21/2031 | 34,600 | (518) | (517) | |||||||||||||||||||||||||||||||||||||||||||
FH BMX Buyer, Inc.(4)(6) | SF + | 5.25% | 10.60% | 6/21/2031 | 130,400 | 128,452 | 128,451 | ||||||||||||||||||||||||||||||||||||||||
250,067 | 253,868 | 93.08 | % | ||||||||||||||||||||||||||||||||||||||||||||
Software and Computer Services | |||||||||||||||||||||||||||||||||||||||||||||||
Brandt Information Services, LLC (4)(5)(6) | 5/31/2030 | 50,000 | (745) | (740) | |||||||||||||||||||||||||||||||||||||||||||
Brandt Information Services, LLC (4)(6) | SF + | 5.00% | 10.33% | 5/31/2030 | 115,000 | 113,299 | 113,299 | ||||||||||||||||||||||||||||||||||||||||
112,554 | 112,559 | 41.27 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total First Lien Debt | $ | 756,839 | $ | 768,962 | 281.95 | % | |||||||||||||||||||||||||||||||||||||||||
Total Investment Portfolio | $ | 756,839 | $ | 768,962 | 281.95 | % |
(1) Unless otherwise indicated, issuers of debt and equity investments held by the Company are denominated in dollars. All debt investments are income producing unless otherwise indicated. Certain portfolio company investments are subject to contractual restrictions on sales. The total par amount is presented for debt investments.
(2) The investments bear interest at a rate that is determined by reference to the Secured Overnight Financing Rate ("SOFR" or "SF"), which reset, monthly or quarterly. For each such investment, the Company has provided the spread over SOFR and the current contractual interest rate in effect at June 30, 2024. Certain investments are subject to a SOFR interest rate floor, or rate cap. SOFR based contracts may include a credit spread adjustment, which is included within the stated all-in interest rate, if applicable, that is charged in addition to the base rate and the stated spread.
(3) The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").
(4) These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by the Adviser as the Company’s valuation designee, subject to the oversight of the Board of Trustees (the “Board”) (see Note 2 and Note 5), pursuant to the Company’s valuation policy.
(5) Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may be subject to unused commitment fees. Negative cost and fair value results from unamortized fees, which are capitalized to the investment cost. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the ULTRA III unfunded commitments:
Investments | Commitment Type | Unfunded Commitment | Fair Value | |||||||||||||||||
Brandt Information Services, LLC | 1st Lien Senior Secured Delayed Draw Loan | $ | 50,000 | $ | (740) | |||||||||||||||
FH BMX Buyer, Inc. | 1st Lien Senior Secured Delayed Draw Loan | 34,600 | (517) | |||||||||||||||||
Total | $ | 84,600 | $ | (1,257) |
(6) The interest rate floor on these investments as of June 30, 2024 was 0.75%.
(7) The interest rate floor on these investments as of June 30, 2024 was 1.00%.
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The following table presents the schedule of investments of ULTRA III as of December 31, 2023:
Company (1) | . | Reference Rate and Spread (2) | . | Interest Rate (2) | . | Maturity Date | . | Par Amount/Units | . | Amortized Cost (3) | . | Fair Value | . | Percentage of Net Assets | |||||||||||||||||||||||||||||||||
First Lien Debt | |||||||||||||||||||||||||||||||||||||||||||||||
General Industrials | |||||||||||||||||||||||||||||||||||||||||||||||
Bright Light Buyer, Inc. (4)(5) | SF + | 6.00% | 11.37 | % | 11/8/2029 | $ | 245,500 | $ | 239,514 | $ | 239,511 | ||||||||||||||||||||||||||||||||||||
239,514 | 239,511 | 169.01 | % | ||||||||||||||||||||||||||||||||||||||||||||
Medical Equipment and Services | |||||||||||||||||||||||||||||||||||||||||||||||
EHOB, LLC (4)(5) | SF + | 5.75% | 11.13 | % | 12/18/2029 | 125,000 | 122,205 | 122,204 | |||||||||||||||||||||||||||||||||||||||
122,205 | 122,204 | 86.23 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total First Lien Debt | $ | 361,719 | $ | 361,715 | 255.24 | % | |||||||||||||||||||||||||||||||||||||||||
Total Investment Portfolio | $ | 361,719 | $ | 361,715 | 255.24 | % |
(1) Unless otherwise indicated, issuers of debt and equity investments held by the Company are denominated in dollars. All debt investments are income producing unless otherwise indicated. Certain portfolio company investments are subject to contractual restrictions on sales. The total par amount is presented for debt investments.
(2) The investments bear interest at a rate that is determined by reference to the Secured Overnight Financing Rate ("SOFR" or "SF"), which reset, monthly or quarterly. For each such investment, the Company has provided the spread over SOFR and the current contractual interest rate in effect at December 31, 2023. Certain investments are subject to a SOFR interest rate floor, or rate cap. SOFR based contracts may include a credit spread adjustment, which is included within the stated all-in interest rate, if applicable, that is charged in addition to the base rate and the stated spread.
(3) The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").
(4) These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by the Adviser as the Company’s valuation designee, subject to the oversight of the Board of Trustees (the “Board”) (see Note 2 and Note 5), pursuant to the Company’s valuation policy.
(5) The interest rate floor on these investments as of December 31, 2023 was 1.00%.
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The following table presents the selected statement of assets and liabilities information of ULTRA III as of June 30, 2024 and December 31, 2023:
June 30, 2024 | December 31, 2023 | |||||||||||||
ASSETS | (Unaudited) | |||||||||||||
Investments at fair value (amortized cost of $756,839 and $361,719 at June 30, 2024 and December 31, 2023, respectively) | $ | 768,962 | $ | 361,715 | ||||||||||
Cash and cash equivalents | 11,220 | 2,317 | ||||||||||||
Interest receivable | 7,321 | 2,401 | ||||||||||||
Total assets | $ | 787,503 | $ | 366,433 | ||||||||||
LIABILITIES | ||||||||||||||
Debt | $ | 506,350 | $ | 222,300 | ||||||||||
Interest payable and other liabilities | 8,424 | 2,415 | ||||||||||||
Total liabilities | 514,774 | 224,715 | ||||||||||||
MEMBERS’ EQUITY | ||||||||||||||
Members’ Equity | 272,730 | 141,718 | ||||||||||||
Total Members’ Equity | 272,730 | 141,718 | ||||||||||||
Total liabilities and members’ equity | $ | 787,503 | $ | 366,433 |
The following table presents the selected statement of operations information of ULTRA III for the three and six months ended June 30, 2024 (Unaudited):
Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | ||||||||||
Investment income: | |||||||||||
Interest income | $ | 17,317 | $ | 32,998 | |||||||
Total investment income | 17,317 | 32,998 | |||||||||
Expenses: | |||||||||||
Interest expense | 8,206 | 15,613 | |||||||||
Other expenses | 219 | 714 | |||||||||
Total expenses | 8,425 | 16,327 | |||||||||
Net investment income | 8,892 | 16,671 | |||||||||
Net realized and change in unrealized gain (loss) on investments | |||||||||||
Net realized gain (loss) on investments | — | — | |||||||||
Net change in unrealized appreciation (depreciation) on investments | 8,126 | 12,126 | |||||||||
Net realized and change in unrealized gain (loss) on investments | 8,126 | 12,126 | |||||||||
Net increase (decrease) in net assets resulting from operations | $ | 17,018 | $ | 28,797 |
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Note 12. Subsequent Events
The Company’s management evaluated subsequent events through the date of issuance of the consolidated financial statements. There have been no additional subsequent events that occurred during such period that would require disclosure in, or would be required to be recognized in the consolidated financial statements as of June 30, 2024, except as discussed below.
Subscriptions
The Company received $254.8 million of net proceeds relating to the issuance of Class I shares, Class D shares, Class F and Class S shares for subscriptions effective July 1, 2024.
The Company received $247.6 million of net proceeds relating to the issuance of Class I shares, Class D shares, Class F and Class S shares for subscriptions effective August 1, 2024.
Distributions Declarations
On July 26, 2024, the Company declared net distributions of $0.1600 per Class I share, $0.1546 per Class D share, $0.1492 per Class F share, and $0.1416 per Class S share, all of which are payable on or about August 30, 2024 to shareholders of record as of July 31, 2024. Additionally, the Company declared variable supplemental distributions of $0.0550 for all share classes outstanding, all of which are payable on or August 30, 2024 to shareholders of record as of July 31, 2024.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The information contained in this section should be read in conjunction with “Item 1. Consolidated Financial Statements.” This discussion contains forward-looking statements, which relate to future events, our future performance or financial condition and involves numerous risks and uncertainties. Actual results could differ materially from those implied or expressed in any forward-looking statements. Dollar amounts are in thousands, except per share data, percentages and as otherwise noted.
Overview and Investment Framework
We are an externally managed, non-diversified closed-end management investment company that has elected to be treated as a BDC under the 1940 Act. Formed as a Delaware statutory trust on December 23, 2020 that commenced operations on February 3, 2022, we are externally managed by the Adviser, which is responsible for sourcing potential investments, conducting due diligence on prospective investments, analyzing investment opportunities, structuring investments and monitoring our portfolio on an ongoing basis. Our Adviser is registered as an investment adviser with the SEC and a wholly-owned subsidiary of HPS. We have elected to be treated, and intend to qualify annually thereafter, as a RIC under the Code.
Under our Investment Advisory Agreement, we have agreed to pay the Adviser an annual management fee as well as an incentive fee based on our investment performance. Also, under the Administration Agreement, we have agreed to reimburse the Administrator for the allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including, but not limited to, our allocable portion of the costs of compensation (including salaries, bonuses and benefits) and related expenses of our chief compliance officer, chief financial officer and their respective staffs.
Our investment objective is to generate attractive risk-adjusted returns, predominately in the form of current income, with select investments exhibiting the ability to capture long-term capital appreciation. Our investment strategy focuses primarily on newly originated, privately negotiated senior credit investments in high-quality, established upper middle market companies and, in select situations, companies in special situations. We use the term upper middle market companies to generally mean companies with “EBITDA” of $75 million to $1 billion annually or $250 million to $5 billion in revenue annually at the time of investment. We have and may continue to invest in smaller or larger companies if the opportunity presents attractive investment characteristics and risk-adjusted returns. While our investment strategy primarily focuses on companies in the United States, we also intend to leverage HPS’s global presence to invest in companies in Europe, Australia and other locations outside the U.S., subject to compliance with BDC requirements to invest at least 70% of assets in “eligible portfolio companies.” We also include a smaller allocation to more liquid credit investments such as broadly syndicated loans and corporate bonds. We intend to use these investments to maintain liquidity for our share repurchase program and to manage cash while seeking attractive returns before investing subscription proceeds into originated loans. We invest at least 80% of our total assets (net assets plus borrowings for investment purposes) in credit and credit-related instruments issued by corporate issuers (including loans, notes, bonds and other corporate debt securities). If we change our 80% test, we will provide shareholders with at least 60 days’ prior notice of such change. Although not expected to be a primary component of our investment strategy, in select situations, we may also make certain opportunistic investments in instruments other than secured debt with a view to enhancing returns, such as mezzanine debt, payment-in-kind notes, convertible debt and other unsecured debt instruments, structured debt that is not secured by financial or other assets, debtor-in-possession financings and equity in loan portfolios or portfolios of receivables (“Opportunistic Investments”), in each case taking into account availability of leverage for such investments and our target risk/return profile. In addition, we may also participate in programmatic investments through partnerships or joint ventures with one or more unaffiliated banks or other financial institutions, including structures where a partner assumes senior exposure to each investment, and we participate in the junior exposure.
Subject to the limitations of the 1940 Act, we may invest in loans or other securities, the proceeds of which may refinance or otherwise repay debt or securities of companies whose debt is owned by other funds and accounts sponsored or managed by the Adviser or HPS. We expect to invest in co-investment transactions with other funds and accounts sponsored or managed by the Adviser or HPS.
To seek to enhance our returns, we employ leverage as market conditions permit and at the discretion of the Adviser, but we are subject to the limitations set forth in the 1940 Act, which currently allows us to borrow up to a 2:1 debt to equity ratio. We intend to use leverage in the form of borrowings, including loans from certain financial institutions and the issuance of debt securities. We may also use leverage in the form of the issuance of preferred shares, but do not currently intend to do so. In determining whether to borrow money, we will analyze the maturity, covenant package and rate structure of the proposed borrowings as well as the risks of such borrowings compared to our investment outlook. Any such leverage, if incurred, would be expected to increase our total capital available for investment.
To finance investments, we have in the past and may in the future securitize certain of our secured loans or other investments, including through the formation of one or more CLOs, while retaining all or most of the subordinated notes issued in the securitization.
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Key Components of Our Results of Operations
Investments
We focus primarily on senior secured loans and securities of private U.S. companies. Our level of investment activity (both the number of investments and the size of each investment) can and will vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to private companies, the level of merger and acquisition activity for such companies, the general economic environment and the competitive environment for the types of investments we make.
Revenues
We generate revenues in the form of interest and fee income on debt investments, capital gains, and dividend income from our equity investments in our portfolio companies. Our senior and subordinated debt investments are expected to bear interest at a fixed or floating rate. Interest on debt securities is generally payable monthly or quarterly. In some cases, some of our investments may provide for deferred interest payments or PIK interest. The principal amount of the debt securities and any accrued but unpaid PIK interest generally will become due at the maturity date. In addition, we may generate revenue from various fees in the ordinary course of business such as in the form of structuring, consent, waiver, amendment, syndication and other miscellaneous fees. Original issue discounts and market discounts or premiums will be capitalized, and we will accrete or amortize such amounts as interest income. We will record prepayment premiums on loans and debt securities as interest income. Dividend income, if any, will be recognized on an accrual basis to the extent that we expect to collect such amounts.
Expenses
Except as specifically provided below, all investment professionals and staff of the Adviser, when and to the extent engaged in providing investment advisory services to us, and the base compensation, bonus and benefits, and the routine overhead expenses, of such personnel allocable to such services, will be provided and paid for by the Adviser. We bear all other costs and expenses of our operations, administration and transactions, including, but not limited to:
•investment advisory fees, including management fees and incentive fees, to the Adviser, pursuant to the Investment Advisory Agreement;
•our allocable portion of compensation (including salaries, bonuses, and benefits), overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement, including but not limited to: (i) our chief compliance officer, chief financial officer and their respective staffs; (ii) investor relations, legal, operations and other non-investment professionals at the Administrator that performs duties for us; and (iii) any internal audit group personnel of HPS or any of its affiliates;
•all other expenses of the Company’s operations, administrations and transactions.
The Adviser agreed to advance all of our organization and offering expenses on our behalf through February 3, 2022, the date on which we broke escrow for our initial offering of Common Shares. On such date, the Company became obligated to reimburse the Adviser for such advanced expenses and the Adviser subsequently requested reimbursement of these expenses and was paid pursuant to the prior expense support agreement. After such date, the Company bears all such expenses, subject to the Expense Support Agreement. Pursuant to the Expense Support Agreement, the Adviser is obligated to advance all of our Other Operating Expenses to the effect that such expenses do not exceed 1.00% (on an annualized basis) of the Company’s NAV. We are obligated to reimburse the Adviser for such advanced expenses (including any additional expenses the Adviser elects to pay on our behalf), subject to certain conditions. See “—Expense Support and Conditional Reimbursement Agreement.” Any reimbursements will not exceed actual expenses incurred by the Adviser and its affiliates.
From time to time, the Adviser, the Administrator or their affiliates may pay third-party providers for goods or services. We will reimburse the Adviser, the Administrator or such affiliates thereof for any such amounts paid on our behalf. From time to time, the Adviser, the Administrator may defer or waive fees and/or rights to be reimbursed for expenses. All of the foregoing expenses are ultimately borne by our shareholders.
Expense Support and Conditional Reimbursement Agreement
We have entered into an Expense Support and Conditional Reimbursement Agreement with the Adviser. For additional information see “Note 3. Fees, Expenses, Agreements and Related Party Transactions” to the consolidated financial statements.
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Portfolio and Investment Activity
Our investment activity is presented below (information presented herein is at amortized cost unless otherwise indicated):
As of and for the three months ended June 30, | |||||||||||
2024 | 2023 | ||||||||||
Total investments, beginning of period | $ | 9,805,977 | $ | 6,719,271 | |||||||
New investments purchased | 1,603,152 | 583,345 | |||||||||
Payment-in-kind interest and dividends capitalized | 18,548 | 7,789 | |||||||||
Net accretion of discount on investments | 20,911 | 8,875 | |||||||||
Net realized gain (loss) on investments | (1,525) | 365 | |||||||||
Investments sold or repaid | (462,482) | (266,611) | |||||||||
Total investments, end of period | $ | 10,984,581 | $ | 7,053,034 |
The following table presents certain selected information regarding our investment portfolio:
June 30, 2024 | December 31, 2023 | ||||||||||
Weighted average yield on debt and income producing investments, at amortized cost(1) | 11.9% | 12.2% | |||||||||
Weighted average yield on debt and income producing investments, at fair value(1) | 11.8% | 12.1% | |||||||||
Weighted average yield on total portfolio, at amortized cost(2) | 11.9% | 12.0% | |||||||||
Weighted average yield on total portfolio, at fair value(2) | 11.7% | 11.9% | |||||||||
Number of portfolio companies | 260 | 239 | |||||||||
Weighted average EBITDA(3) | $ | 199 | $ | 193 | |||||||
Weighted average loan-to-value (“LTV”) (4) | 40% | 39% | |||||||||
Percentage of debt investments bearing a floating rate, at fair value | 99.0% | 98.6% | |||||||||
Percentage of debt investments bearing a fixed rate, at fair value | 1.0% | 1.4% |
(1)Computed as (a) the annual stated interest rate or yield plus the annual accretion of discounts and less any annual amortization of premiums, as applicable, on accruing (i) debt and (ii) other income producing securities, divided by (b) total accruing (i) debt and (ii) other income producing securities (at fair value or amortized cost, as applicable). Actual yields earned over the life of each investment could differ materially from the yields presented above.
(2)Computed as the annual stated interest rate or yield plus the annual accretion of discounts and less any annual amortization of premiums, as applicable, on all investments of the Company, divided by total investments of the Company (at fair value or amortized cost, as applicable). Actual yields earned over the life of each investment could differ materially from the yields presented above.
(3)Calculated with respect to all level 3 investments in the investment portfolio for which fair value is determined by the Adviser (in its capacity as the investment adviser of the Company, with assistance, at least quarterly, from a third-party valuation firm, and overseen by the Company’s Board), and excludes quoted assets and investments with no reported EBITDA or where EBITDA, in the Adviser’s judgement made in its discretion, was not a material component of the original investment thesis, such as LTV-based loans, NAV-based loans or reorganized equity. Weighted average EBITDA is weighted based on the fair value of the total applicable level 3 investments. Figures are derived from the most recent financial statements from portfolio companies.
(4)Calculated with respect to all level 3 debt investments in the investment portfolio for which fair value is determined by the Adviser (in its capacity as the investment adviser of the Company, with assistance, at least quarterly, from a third-party valuation firm, and overseen by the Company’s Board), and excludes quoted assets. LTV is calculated as net debt through each respective investment tranche in which the Company holds an investment divided by enterprise value or value of underlying collateral of the portfolio company. Weighted average LTV is weighted based on the fair value of the total applicable level 3 debt investments. Figures are derived from the most recent financial statements from portfolio companies.
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Our investments consisted of the following:
June 30, 2024 | December 31, 2023 | ||||||||||||||||||||||||||||||||||
Amortized Cost | Fair Value | % of Total Investments at Fair Value | Amortized Cost | Fair Value | % of Total Investments at Fair Value | ||||||||||||||||||||||||||||||
First lien debt | $ | 10,524,496 | $ | 10,648,513 | 95.74 | % | $ | 8,919,865 | $ | 9,002,695 | 96.93 | % | |||||||||||||||||||||||
Second lien debt | 24,299 | 22,932 | 0.21 | 64,782 | 67,087 | 0.72 | |||||||||||||||||||||||||||||
Other secured debt | 63,828 | 64,304 | 0.58 | — | — | — | |||||||||||||||||||||||||||||
Unsecured debt | 43,549 | 43,680 | 0.39 | 28,901 | 29,101 | 0.31 | |||||||||||||||||||||||||||||
Structured finance investments | 54,642 | 56,202 | 0.51 | 28,427 | 29,868 | 0.32 | |||||||||||||||||||||||||||||
Investments in joint ventures | 227,227 | 238,639 | 2.15 | 125,513 | 124,003 | 1.33 | |||||||||||||||||||||||||||||
Equity investments | 46,540 | 47,935 | 0.42 | 36,313 | 36,656 | 0.39 | |||||||||||||||||||||||||||||
Total | $ | 10,984,581 | $ | 11,122,205 | 100.00 | % | $ | 9,203,801 | $ | 9,289,410 | 100.00 | % |
As of June 30, 2024 and December 31, 2023, the Company had certain investments in four and three portfolio companies on non-accrual status, respectively. The following table shows the fair value of our performing and non-accrual debt investments as of June 30, 2024 and December 31, 2023:
June 30, 2024 | December 31, 2023 | ||||||||||||||||||||||
Fair Value | Percentage | Fair Value | Percentage | ||||||||||||||||||||
Performing | $ | 10,798,145 | 99.65 | % | $ | 9,098,383 | 99.67 | % | |||||||||||||||
Non-accrual(1) | 37,486 | 0.35 | 30,368 | 0.33 | |||||||||||||||||||
Total | $ | 10,835,631 | 100.00 | % | $ | 9,128,751 | 100.00 | % |
(1)Investments on non-accrual represented 0.46% and 0.40% of amortized cost of total debt investments as of June 30, 2024 and December 31, 2023, respectively.
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The table below describes investments by industry composition based on fair value:
June 30, 2024 | December 31, 2023 | |||||||||||||
Software and Computer Services | 17.43 | % | 15.86 | % | ||||||||||
Industrial Support Services | 12.07 | 11.45 | ||||||||||||
Medical Equipment and Services | 9.75 | 8.64 | ||||||||||||
Health Care Providers | 8.73 | 10.36 | ||||||||||||
Consumer Services | 6.01 | 6.76 | ||||||||||||
Non-life Insurance | 5.16 | 5.72 | ||||||||||||
Media | 4.49 | 6.52 | ||||||||||||
General Industrials | 4.47 | 4.36 | ||||||||||||
Investment Banking and Brokerage Services | 4.16 | 1.73 | ||||||||||||
Aerospace and Defense | 3.64 | 5.12 | ||||||||||||
Pharmaceuticals and Biotechnology | 2.48 | 2.89 | ||||||||||||
Travel and Leisure | 2.27 | 3.57 | ||||||||||||
Industrial Engineering | 2.18 | 2.74 | ||||||||||||
Investments in Joint Ventures | 2.15 | 1.33 | ||||||||||||
Personal Care, Drug and Grocery Stores | 1.97 | 1.29 | ||||||||||||
Retailers | 1.65 | 1.22 | ||||||||||||
Food Producers | 1.55 | 1.64 | ||||||||||||
Industrial Transportation | 1.07 | 0.36 | ||||||||||||
Automobiles and Parts | 0.87 | 1.22 | ||||||||||||
Electricity | 0.77 | 0.90 | ||||||||||||
Asset Based Lending and Fund Finance | 0.74 | 0.23 | ||||||||||||
Telecommunications Equipment | 0.73 | 0.16 | ||||||||||||
Personal Goods | 0.66 | 0.82 | ||||||||||||
Technology Hardware and Equipment | 0.64 | 0.76 | ||||||||||||
Real Estate Investment and Services | 0.60 | 0.43 | ||||||||||||
Finance and Credit Services | 0.56 | 0.64 | ||||||||||||
Industrial Metals and Mining | 0.54 | 0.13 | ||||||||||||
Structured Finance | 0.51 | 0.32 | ||||||||||||
Construction and Materials | 0.50 | 0.62 | ||||||||||||
Oil, Gas and Coal | 0.43 | 0.48 | ||||||||||||
Gas, Water and Multi-utilities | 0.39 | 0.47 | ||||||||||||
Telecommunications Service Providers | 0.28 | 0.76 | ||||||||||||
Alternative Energy | 0.25 | 0.18 | ||||||||||||
Chemicals | 0.14 | 0.16 | ||||||||||||
Life Insurance | 0.08 | 0.06 | ||||||||||||
Household Goods and Home Construction | 0.06 | 0.07 | ||||||||||||
Leisure Goods | 0.02 | 0.02 | ||||||||||||
Electronic and Electrical Equipment(1) | — | 0.01 | ||||||||||||
Total | 100.00 | % | 100.00 | % |
(1)Amount rounds to less than 0.01% as of June 30, 2024.
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The table below describes investments by geographic composition based on fair value:
June 30, 2024 | December 31, 2023 | ||||||||||
Australia | 1.69 | % | 2.87 | % | |||||||
Austria | 0.80 | — | |||||||||
Canada | 0.78 | 0.84 | |||||||||
France | 0.76 | 0.41 | |||||||||
Germany | 1.08 | 0.77 | |||||||||
Italy | 1.19 | 1.48 | |||||||||
Luxembourg | 0.06 | — | |||||||||
Norway | 0.19 | 0.27 | |||||||||
Singapore | 0.29 | 0.35 | |||||||||
Spain | 0.29 | 0.36 | |||||||||
Taiwan | 0.40 | 0.43 | |||||||||
United Kingdom | 6.79 | 4.78 | |||||||||
United States | 85.68 | 87.44 | |||||||||
Total | 100.00 | % | 100.00 | % |
Our Adviser monitors the financial trends of each portfolio company on an ongoing basis to determine if it is meeting its respective business plan and to assess the appropriate course of action for each company. Our Adviser has several methods of evaluating and monitoring the performance and fair value of our investments, which may include, but are not limited to, the following:
•assessment of success in adhering to the portfolio company’s business plan and compliance with covenants;
•periodic or regular contact with portfolio company management and, if appropriate, the financial or strategic sponsor to discuss financial position, requirements and accomplishments;
•comparisons to our other portfolio companies in the industry, if any;
•attendance at and participation in board meetings or presentations by portfolio companies; and
•review of monthly and quarterly financial statements and financial projections of portfolio companies.
ULTRA III, LLC
On June 1, 2023, the Company entered into a limited liability company agreement (the “LLC Agreement”) with the Capital One Member (“COM”) to establish a joint venture to make certain unitranche loans to U.S. middle-market companies. The joint venture is called ULTRA III, LLC (“ULTRA III”).
As of June 30, 2024, the Company and COM have committed to contribute up to $400.0 million and $57.1 million, respectively, of capital to ULTRA III. As of June 30, 2024, the Company had contributed $235.5 million and COM had contributed $33.6 million of capital and $164.5 million and $23.5 million of capital remained uncalled from the Company and COM, respectively. The Company and COM own 87.5% and 12.5%, respectively, of the membership interests of ULTRA III. All portfolio decisions and generally all other decisions in respect of ULTRA III must be approved by a credit committee of ULTRA III consisting of representatives of the Company and COM (generally with approval from a representative of each required). The Company and COM have equal voting rights with respect to the joint venture. The Company does not consolidate the ULTRA III joint venture.
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The following table is a summary of ULTRA III’s portfolio as of June 30, 2024 and December 31, 2023.
June 30, 2024 | December 31, 2023 | ||||||||||
Total senior secured debt investments at fair value | $ | 768,962 | $ | 361,715 | |||||||
Number of portfolio companies | 5 | 2 | |||||||||
Weighted average yield on debt investments, at amortized cost(1) | 11.7% | 12.0% | |||||||||
Weighted average yield on debt investments, at fair value(1) | 11.5% | 12.0% | |||||||||
Percentage of debt investments bearing a floating rate, at fair value | 100% | 100% | |||||||||
Percentage of debt investments bearing a fixed rate, at fair value | —% | —% | |||||||||
Percentage of assets on non-accrual(2) | —% | —% |
(1)Computed as the annual stated interest rate or yield plus the annual accretion of discounts and less any annual amortization of premiums, as applicable, on accruing debt securities, divided by total accruing debt securities (at fair value or amortized cost, as applicable). Actual yields earned over the life of each investment could differ materially from the yields presented above.
(2)As a percentage of fair value of investments of ULTRA III. ULTRA III had no assets on non-accrual as of June 30, 2024 and December 31, 2023.
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Results of Operations
The following table represents our operating results:
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||||||||
Total investment income | $ | 331,259 | $ | 215,805 | $ | 644,761 | $ | 394,581 | ||||||||||||||||||||||||
Total expenses | 150,783 | 98,693 | 296,288 | 180,851 | ||||||||||||||||||||||||||||
Net investment income before excise tax | 180,476 | 117,112 | 348,473 | 213,730 | ||||||||||||||||||||||||||||
Excise tax expense | 569 | — | 554 | (5) | ||||||||||||||||||||||||||||
Net investment income after excise tax | 179,907 | 117,112 | 347,919 | 213,735 | ||||||||||||||||||||||||||||
Net realized gain (loss) | 1,266 | (6,760) | (5,007) | (18,189) | ||||||||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 27,324 | 35,566 | 81,235 | 109,401 | ||||||||||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 208,497 | $ | 145,918 | $ | 424,147 | $ | 304,947 |
Net increase (decrease) in net assets resulting from operations can vary from period to period as a result of various factors, including acquisitions, the level of new investment commitments, the recognition of realized gains and losses and changes in unrealized appreciation and depreciation on the investment portfolio. As a result, comparisons may not be meaningful.
Investment Income
Investment income was as follows:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Interest income | $ | 303,580 | $ | 206,356 | $ | 595,344 | $ | 379,998 | |||||||||||||||
Payment-in-kind interest income | 16,910 | 8,161 | 34,940 | 12,891 | |||||||||||||||||||
Dividend Income | 7,599 | 47 | 10,213 | 47 | |||||||||||||||||||
Other income | 3,170 | 1,241 | 4,264 | 1,645 | |||||||||||||||||||
Total investment income | $ | 331,259 | $ | 215,805 | $ | 644,761 | $ | 394,581 |
Total investment income increased to $331.3 million for the three months ended June 30, 2024 from $215.8 million for the same period in the prior year primarily driven by our deployment of capital, the increased balance of our investments and by increased dividend income from ULTRA III. The size of our investment portfolio at fair value was $11,122.2 million and our weighted average yield on debt and income producing securities at fair value was 11.8%.
Total investment income increased to $644.8 million for the six months ended June 30, 2024 from $394.6 million for the same period in the prior year primarily driven by our deployment of capital, the increased balance of our investments and by increased dividend income from ULTRA III.
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Expenses
Expenses were as follows:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Interest expense | $ | 88,668 | $ | 61,600 | $ | 174,761 | $ | 111,563 | |||||||||||||||
Management fees | 21,207 | 12,070 | 39,546 | 23,258 | |||||||||||||||||||
Income based incentive fee | 27,025 | 17,211 | 52,590 | 31,459 | |||||||||||||||||||
Capital gains incentive fee | 3,573 | — | 9,528 | — | |||||||||||||||||||
Distribution and/or shareholder servicing fees | |||||||||||||||||||||||
Class D | 560 | 313 | 1,057 | 588 | |||||||||||||||||||
Class F | 4,724 | 3,055 | 9,033 | 5,890 | |||||||||||||||||||
Class S | 412 | — | 596 | — | |||||||||||||||||||
Professional fees | 843 | 1,285 | 1,599 | 2,204 | |||||||||||||||||||
Board of Trustees’ fees | 151 | 145 | 300 | 286 | |||||||||||||||||||
Administrative service expenses | 847 | 581 | 1,669 | 1,154 | |||||||||||||||||||
Other general & administrative | 2,410 | 2,044 | 4,793 | 3,695 | |||||||||||||||||||
Amortization of continuous offering costs | 363 | 389 | 816 | 754 | |||||||||||||||||||
Excise tax expense | 569 | — | 554 | (5) | |||||||||||||||||||
Total expenses (including excise tax expense) | $ | 151,352 | $ | 98,693 | $ | 296,842 | $ | 180,846 |
Interest Expense
Total interest expense (including unused fees and amortization of deferred financing costs) increased to $88.7 million for the three months ended June 30, 2024 from $61.6 million for the same period in the prior year primarily driven by increased borrowings under the Unsecured Notes and debt securitization issuances. The average principal debt outstanding increased to $3,871.6 million for the three months ended June 30, 2024 from $3,095.3 million for the same period in the prior year.
Total interest expense (including unused fees and amortization of deferred financing costs) increased to $174.8 million for the six months ended June 30, 2024 from $111.6 million for the same period in the prior year primarily driven by increased borrowings under the Unsecured Notes and debt securitization issuances. The average principal debt outstanding increased to $3,871.0 million for the six months ended June 30, 2024 from $2,885.0 million for the same period in the prior year.
Management Fees
Management fees increased to $21.2 million for the three months ended June 30, 2024 from $12.1 million for the same period in the prior year primarily due to an increase in net assets. Management fees increased to $39.5 million for the six months ended June 30, 2024 from $23.3 million for the same period in the prior year primarily due to an increase in net assets. Management fees are payable monthly in arrears at an annual rate of 1.25% of the value of our net assets as of the beginning of the first calendar day of the applicable month.
Income Based Incentive Fee
Income based incentive fees increased to $27.0 million for the three months ended June 30, 2024 from $17.2 million for the same period in the prior year primarily due to our deployment of capital and an increase in Pre-Incentive Fee Net Investment Income Returns. Income based incentive fees increased to $52.6 million for the six months ended June 30, 2024 from $31.5 million for the same period in the prior year primarily due to our deployment of capital and an increase in Pre-Incentive Fee Net Investment Income Returns.
Capital Gains Incentive Fees
U.S. GAAP requires that the capital gains incentive fee accrual consider the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement. This GAAP accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital depreciation included in the calculation of the capital gains incentive fee plus the aggregate cumulative unrealized capital appreciation, net of any expense associated with cumulative unrealized capital depreciation or appreciation. If such amount is positive at the end of a period, then GAAP requires the Company to record a capital gains incentive fee equal to 12.5% of such cumulative amount,
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less the aggregate amount of actual capital gains incentive fees paid or capital gains incentive fees accrued under GAAP in all prior periods.
Capital gains based incentive fees increased to $3.6 million for the three months ended June 30, 2024, from $0.0 million for the same period in the prior year primarily due to net unrealized gains on investments, none of which were payable under the Investment Advisory Agreement. Capital gains based incentive fees increased to $9.5 million for the six months ended June 30, 2024, from $0.0 million for the same period in the prior year primarily due to net unrealized gains on investments, none of which were payable under the Investment Advisory Agreement. The accrual for any capital gains incentive fee under U.S. GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less in the prior period. If such cumulative amount is negative, then there is no accrual.
Other Expenses
Organization costs and offering costs include expenses incurred in our initial formation and our continuous offering. Professional fees include legal, audit, tax, valuation, and other professional fees incurred related to the management of the Company. Administrative service expenses represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of certain of our executive officers, their respective staff and other non-investment professionals that perform duties for us. Other general and administrative expenses include insurance, filing, research, our sub-administrator, subscriptions and other costs.
Total other expenses increased to $10.3 million for the three months ended June 30, 2024, from $7.8 million for the same period in the prior year primarily driven by an increase of distribution and shareholder servicing fees, administrative service expenses and other general & administrative expenses due to servicing a growing portfolio.
Total other expenses increased to $19.9 million for the six months ended June 30, 2024, from $14.6 million for the same period in the prior year primarily driven by an increase of distribution and shareholder servicing fees, administrative service expenses and other general & administrative expenses due to servicing a growing portfolio.
Under the terms of the Administration Agreement and Investment Advisory Agreement, we reimburse the Administrator and Adviser, respectively, for services performed for us. In addition, pursuant to the terms of these agreements, the Administrator and Adviser may delegate its obligations under these agreements to an affiliate or to a third party and we reimburse the Administrator and Adviser for any services performed for us by such affiliate or third party. For the three months ended June 30, 2024, the Administrator charged $0.8 million, an increase from $0.6 million for the same period in the prior year, for certain costs and expenses allocable to the Company under the terms of the Administration Agreement. For the six months ended June 30, 2024, the Administrator charged $1.7 million, an increase from $1.2 million for the same period in the prior year, for certain costs and expenses allocable to the Company under the terms of the Administration Agreement.
Shareholder servicing and/or distributions fees increased to $5.7 million for the three months ended June 30, 2024 from $3.4 million for the same period in the prior year primarily due to an increase in shares outstanding. Shareholder servicing and/or distributions fees increased to $10.7 million for the six months ended June 30, 2024 from $6.5 million for the same period in the prior year primarily due to an increase in shares outstanding.
We entered into an Expense Support Agreement with the Adviser. For additional information see “Note 3. Fees, Expenses, Agreements and Related Party Transactions” to the consolidated financial statements.
Income Taxes, Including Excise Taxes
We have elected to be treated as a RIC under Subchapter M of the Code, and we intend to operate in a manner so as to continue to qualify each taxable year for the tax treatment applicable to RICs. To qualify for tax treatment as a RIC, we must, among other things, distribute to our shareholders in each taxable year generally at least 90% of the sum of our investment company taxable income, as defined by the Code (without regard to the deduction for dividends paid), and net tax-exempt income (if any) for that taxable year. To maintain our tax treatment as a RIC, we, among other things, intend to make the requisite distributions to our shareholders, which generally relieve us from corporate-level U.S. federal income taxes.
Depending on the level of taxable income earned in a tax year, we may carry forward taxable income (including net capital gains, if any) in excess of current year distributions from the current tax year into the next tax year and pay a nondeductible 4% U.S. federal excise tax on such taxable income, as required. To the extent that we determine that our estimated current year annual taxable income will be in excess of estimated current year distributions from such income, we will accrue excise tax on estimated excess taxable income.
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For the three months ended June 30, 2024 and 2023, we incurred U.S. federal excise tax of $0.6 million and $0.0 million, respectively. For the six months ended June 30, 2024 and 2023, we incurred U.S. federal excise tax of $0.6 million and $(0.0) million, respectively.
Net Realized Gain (Loss)
Net realized gains and losses were comprised of the following:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||||
Non-controlled/non-affiliated investments | $ | (1,525) | $ | 365 | $ | (11,474) | $ | (10,366) | |||||||||||||||||||||
Foreign currency forward contracts | (2,821) | (7,152) | (2,654) | (7,681) | |||||||||||||||||||||||||
Foreign currency transactions | 5,612 | 27 | 9,121 | (142) | |||||||||||||||||||||||||
Net realized gain (loss) | $ | 1,266 | $ | (6,760) | $ | (5,007) | $ | (18,189) |
For the three months ended June 30, 2024, we generated net realized gains (losses) of $1.3 million, driven by net realized gains of $5.6 million on foreign currency transactions, as a result of repayments of foreign borrowings and conversions of foreign cash balances, primarily attributable to fluctuations in the AUD, GBP and CAD exchange rates. Realized gains on foreign currency transactions were partially offset by net realized losses of $(1.9) million from the restructuring of a private debt investment and a $0.4 million gain on the sale of a private debt investment, and losses on foreign currency forwards contracts, primarily as a result of fluctuations in the AUD and GBP exchange rates.
For the six months ended June 30, 2024, we generated net realized gains (losses) of $(5.0) million, driven by net realized losses on non-controlled/non-affiliated investments of $(3.9) million primarily from the sales of syndicated loans and bonds and the restructuring of a private debt investment, and foreign currency realized losses of $(7.6) million on investments (included in realized losses on non-controlled/non-affiliated investments) primarily due to an AUD portfolio company repayment. We generated realized losses on foreign currency forwards contracts, primarily as a result of fluctuations in the AUD and GBP exchange rates. Realized losses were partially offset by $9.1 million of gains on foreign currency transactions, as a result of repayments of foreign borrowings and conversions of foreign cash balances, primarily attributable to fluctuations in the AUD, EUR, GBP and CAD exchange rates.
For the three and six months ended June 30, 2023, we generated net realized gains (losses) of $(6.8) million and $(18.2) million, respectively, which was primarily comprised of net realized losses on broadly syndicated loans, the restructuring of debt investments and foreign currency forwards contracts.
Net Change in Unrealized Appreciation (Depreciation)
Net change in unrealized appreciation (depreciation) was comprised of the following:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Non-controlled/non-affiliated investments | $ | 19,374 | $ | 38,117 | $ | 38,719 | $ | 115,990 | |||||||||||||||
Non-controlled/affiliated investments | 420 | — | 374 | — | |||||||||||||||||||
Controlled/affiliated investments | 6,234 | — | 12,922 | — | |||||||||||||||||||
Foreign currency forward contracts | 4,754 | 3,409 | 17,248 | 904 | |||||||||||||||||||
Translation of assets and liabilities in foreign currencies | (3,458) | (5,960) | 11,972 | (7,493) | |||||||||||||||||||
Net change in unrealized appreciation (depreciation) | $ | 27,324 | $ | 35,566 | $ | 81,235 | $ | 109,401 |
For the three months ended June 30, 2024, the fair value of our debt investments increased due to spread tightening in the private credit markets. For the three months ended June 30, 2024 we generated foreign currency unrealized losses of $(1.9) million on investments (included in unrealized gains on non-controlled/non-affiliated investments) primarily as a result of fluctuations in the AUD and EUR exchange rates. For the three months ended June 30, 2023, the fair value of our debt investments increased due to spread tightening in both the public and private credit markets.
For the six months ended June 30, 2024, the fair value of our debt investments increased due to spread tightening in the private credit markets. For the six months ended June 30, 2024 we generated foreign currency unrealized losses of $(22.9) million on investments
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(included in unrealized gains on non-controlled/non-affiliated investments) primarily as a result of fluctuations in the CAD, GBP and EUR exchange rates. For the six months ended June 30, 2023, the fair value of our debt investments increased due to spread tightening in both the public and private credit markets.
Interest Rate Swaps
We use interest rate swaps to mitigate interest rate risk associated with the Company's fixed rate liabilities. We have designated certain interest rate swaps to be in a hedge accounting relationship. See “Item 1. Consolidated Financial Statements - Notes to Consolidated Financial Statements - Note 2. Significant Accounting Policies” for additional disclosure regarding our accounting for derivative instruments designated in a hedge accounting relationship. See our schedule of investments for additional disclosure regarding these derivative instruments. See “Item 1. Consolidated Financial Statements—Notes to Consolidated Financial Statements—Note 7. Borrowings” for additional disclosure regarding the carrying value of our debt.
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Financial Condition, Liquidity and Capital Resources
We generate cash primarily from the net proceeds of our continuous offering of Common Shares, proceeds from net borrowings on our credit facilities, unsecured debt issuances, debt securitization issuances, income earned and repayments on principal on our debt investments. The primary uses of our cash and cash equivalents are for (i) originating and purchasing debt investments, (ii) funding the costs of our operations (including fees paid to our Adviser and expense reimbursements paid to our Administrator), (iii) debt service, repayment and other financing costs of our borrowings, (iv) funding repurchases under our share repurchase program and (v) cash distributions to our shareholders.
As of June 30, 2024 and December 31, 2023, we had several asset-based leverage facilities, a corporate-level revolving credit facility, unsecured note issuances and debt securitization issuances. From time to time, we may enter into additional credit facilities, increase the size of our existing credit facilities and/or issue debt securities, including additional unsecured notes and debt securitizations. In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to incur borrowings, issue debt securities or issue preferred stock, if immediately after the borrowing or issuance, the ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock, is at least 150%. As of June 30, 2024 and December 31, 2023, we had an aggregate amount of $4,295.9 million and $4,210.4 million, respectively, of debt outstanding and our asset coverage ratio was 265.0% and 223.2%, respectively. We seek to carefully consider our unfunded commitments for the purpose of planning our ongoing financial leverage.
Cash and cash equivalents as of June 30, 2024, taken together with our $3,327.1 million of available capacity under our credit facilities (subject to borrowing base availability) and the continuous offering of our Common Shares is expected to be sufficient for our investing activities and to conduct our operations in the near term. This determination is based in part on our expectations for the timing of funding investment purchases and the timing and amount of future proceeds from sales of our Common Shares and the use of existing and future financing arrangements. As of June 30, 2024, we had significant amounts payable and commitments for existing and new investments, which we planned to fund using proceeds from offering our Common Shares and available borrowing capacity under our credit facilities. Additionally, we held $1,178.4 million of syndicated loans and other liquid investments as of June 30, 2024, which could provide additional liquidity if necessary.
Although we were able to close on credit facilities and issue debt securities during the six months ended June 30, 2024, any disruption in the financial markets or any other negative economic development could restrict our access to financing in the future. We may not be able to find new financing for future investments or liquidity needs and, even if we are able to obtain such financing, such financing may not be on as favorable terms as we could have obtained in the past. These factors may limit our ability to make new investments and adversely impact our results of operations.
As of June 30, 2024, we had $351.1 million in cash and cash equivalents. During the six months ended June 30, 2024, cash used in operating activities was $1,332.1 million, primarily as a result of funding portfolio investments of $3,018.9 million and partially offset by proceeds from sale of investments and principal repayments of $1,309.7 million and other operating uses of $377.1 million. Cash provided by financing activities was $1,494.5 million during the period, primarily as a result of new share issuances related to $1,772.3 million of subscriptions and net borrowings (repayments) of $99.5 million.
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Equity
The following table summarizes transactions in common shares of beneficial interest during the three months ended June 30, 2024:
Shares | Amount | ||||||||||
CLASS I | |||||||||||
Subscriptions | 14,732,819 | $ | 374,949 | ||||||||
Share transfers between classes | 43,845 | 1,115 | |||||||||
Distributions reinvested | 521,941 | 13,283 | |||||||||
Share repurchases | (893,929) | (22,813) | |||||||||
Early repurchase deduction | — | 45 | |||||||||
Net increase (decrease) | 14,404,676 | $ | 366,579 | ||||||||
CLASS D | |||||||||||
Subscriptions | 3,218,891 | $ | 81,825 | ||||||||
Share transfers between classes | 533,674 | 13,549 | |||||||||
Distributions reinvested | 404,831 | 10,301 | |||||||||
Share repurchases | — | — | |||||||||
Early repurchase deduction | — | 20 | |||||||||
Net increase (decrease) | 4,157,396 | $ | 105,695 | ||||||||
CLASS F | |||||||||||
Subscriptions | 9,026,578 | $ | 229,852 | ||||||||
Share transfers between classes | (577,519) | (14,664) | |||||||||
Distributions reinvested | 1,579,206 | 40,181 | |||||||||
Share repurchases | (1,310,617) | (33,447) | |||||||||
Early repurchase deduction | — | 86 | |||||||||
Net increase (decrease) | 8,717,648 | $ | 222,008 | ||||||||
CLASS S | |||||||||||
Subscriptions | 4,036,044 | $ | 102,658 | ||||||||
Share transfers between classes | — | — | |||||||||
Distributions reinvested | 73,156 | 1,863 | |||||||||
Share repurchases | — | — | |||||||||
Early repurchase deduction | — | 5 | |||||||||
Net increase (decrease) | 4,109,200 | $ | 104,526 | ||||||||
Total net increase (decrease) | 31,388,920 | $ | 798,808 |
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The following table summarizes transactions in common shares of beneficial interest during the six months ended June 30, 2024:
Shares | Amount | ||||||||||
CLASS I | |||||||||||
Subscriptions | 29,041,953 | $ | 735,047 | ||||||||
Share transfers between classes | 97,008 | 2,448 | |||||||||
Distributions reinvested | 1,060,060 | 26,809 | |||||||||
Share repurchases | (2,203,517) | (56,024) | |||||||||
Early repurchase deduction | — | 45 | |||||||||
Net increase (decrease) | 27,995,504 | $ | 708,325 | ||||||||
CLASS D | |||||||||||
Subscriptions | 7,062,408 | $ | 178,322 | ||||||||
Share transfers between classes | 650,405 | 16,476 | |||||||||
Distributions reinvested | 841,001 | 21,265 | |||||||||
Share repurchases | (416,320) | (10,558) | |||||||||
Early repurchase deduction | — | 20 | |||||||||
Net increase (decrease) | 8,137,494 | $ | 205,525 | ||||||||
CLASS F | |||||||||||
Subscriptions | 26,047,117 | $ | 657,909 | ||||||||
Share transfers between classes | (804,344) | (20,355) | |||||||||
Distributions reinvested | 3,327,300 | 84,121 | |||||||||
Share repurchases | (1,931,940) | (49,204) | |||||||||
Early repurchase deduction | — | 86 | |||||||||
Net increase (decrease) | 26,638,133 | $ | 672,557 | ||||||||
CLASS S | |||||||||||
Subscriptions | 7,947,966 | $ | 201,047 | ||||||||
Share transfers between classes | 56,931 | 1,431 | |||||||||
Distributions reinvested | 96,113 | 2,441 | |||||||||
Share repurchases | — | — | |||||||||
Early repurchase deduction | — | 5 | |||||||||
Net increase (decrease) | 8,101,010 | $ | 204,924 | ||||||||
Total net increase (decrease) | 70,872,141 | $ | 1,791,331 |
103
The following table summarizes transactions in common shares of beneficial interest during the three months ended June 30, 2023:
Shares | Amount | ||||||||||
CLASS I | |||||||||||
Subscriptions | 1,585,743 | $ | 38,749 | ||||||||
Share transfers between classes | — | — | |||||||||
Distributions reinvested | 330,161 | 8,064 | |||||||||
Share repurchases | (168,582) | (4,167) | |||||||||
Early repurchase deduction | — | 23 | |||||||||
Net increase (decrease) | 1,747,322 | $ | 42,669 | ||||||||
CLASS D | |||||||||||
Subscriptions | 2,026,626 | $ | 49,495 | ||||||||
Share transfers between classes | 223,376 | 5,462 | |||||||||
Distributions reinvested | 205,700 | 5,024 | |||||||||
Share repurchases | (1,015,260) | (25,097) | |||||||||
Early repurchase deduction | — | 12 | |||||||||
Net increase (decrease) | 1,440,442 | $ | 34,896 | ||||||||
CLASS F | |||||||||||
Subscriptions | 6,486,082 | $ | 158,441 | ||||||||
Share transfers between classes | (223,376) | (5,462) | |||||||||
Distributions reinvested | 984,876 | 24,055 | |||||||||
Share repurchases | (2,808,781) | (69,433) | |||||||||
Early repurchase deduction | — | 62 | |||||||||
Net increase (decrease) | 4,438,801 | $ | 107,663 | ||||||||
Total net increase (decrease) | 7,626,565 | $ | 185,228 |
104
The following table summarizes transactions in common shares of beneficial interest during the six months ended June 30, 2023:
Shares | Amount | ||||||||||
CLASS I | |||||||||||
Subscriptions | 2,489,409 | $ | 60,642 | ||||||||
Share transfers between classes | 675,921 | 16,465 | |||||||||
Distributions reinvested | 682,337 | 16,590 | |||||||||
Share repurchases | (545,902) | (13,374) | |||||||||
Early repurchase deduction | — | 38 | |||||||||
Net increase (decrease) | 3,301,765 | $ | 80,361 | ||||||||
CLASS D | |||||||||||
Subscriptions | 3,276,005 | $ | 79,895 | ||||||||
Share transfers between classes | 223,376 | 5,462 | |||||||||
Distributions reinvested | 387,709 | 9,430 | |||||||||
Share repurchases | (1,015,260) | (25,097) | |||||||||
Early repurchase deduction | — | 20 | |||||||||
Net increase (decrease) | 2,871,830 | $ | 69,710 | ||||||||
CLASS F | |||||||||||
Subscriptions | 10,612,439 | $ | 258,850 | ||||||||
Share transfers between classes | (899,297) | (21,927) | |||||||||
Distributions reinvested | 1,997,873 | 48,579 | |||||||||
Share repurchases | (3,490,087) | (86,057) | |||||||||
Early repurchase deduction | — | 101 | |||||||||
Net increase (decrease) | 8,220,928 | $ | 199,546 | ||||||||
Total net increase (decrease) | 14,394,523 | $ | 349,617 |
Distributions and Distribution Reinvestment
The following table summarizes our distributions declared and payable for the six months ended June 30, 2024 (dollar amounts in thousands, except per share amounts), and the record date for each distribution was the last calendar date of the month in which such distribution was declared:
Class I | ||||||||||||||||||||||||||||||||||||||
Declaration Date | Payment Date | Base Distribution Per Share | Variable Supplemental Distribution Per Share | Special Distribution Per Share | Total Distribution Per Share | Distribution Amount | ||||||||||||||||||||||||||||||||
January 30, 2024 | February 29, 2024 | $ | 0.1600 | $ | 0.0550 | $ | — | $ | 0.2150 | $ | 11,811 | |||||||||||||||||||||||||||
February 29, 2024 | March 29, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 13,391 | ||||||||||||||||||||||||||||||||
March 26, 2024 | April 30, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 14,482 | ||||||||||||||||||||||||||||||||
April 25, 2024 | May 31, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 15,054 | ||||||||||||||||||||||||||||||||
May 31, 2024 | June 28, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 16,339 | ||||||||||||||||||||||||||||||||
June 26, 2024 | July 31, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 17,490 | ||||||||||||||||||||||||||||||||
Total | $ | 0.9600 | $ | 0.3300 | $ | — | $ | 1.2900 | $ | 88,567 |
105
Class D | ||||||||||||||||||||||||||||||||||||||
Declaration Date | Payment Date | Base Distribution Per Share (1) | Variable Supplemental Distribution Per Share | Special Distribution Per Share | Total Distribution Per Share | Distribution Amount | ||||||||||||||||||||||||||||||||
January 30, 2024 | February 29, 2024 | $ | 0.1547 | $ | 0.0550 | $ | — | $ | 0.2097 | $ | 6,514 | |||||||||||||||||||||||||||
February 29, 2024 | March 29, 2024 | 0.1550 | 0.0550 | — | 0.2100 | 6,670 | ||||||||||||||||||||||||||||||||
March 26, 2024 | April 30, 2024 | 0.1547 | 0.0550 | — | 0.2097 | 6,834 | ||||||||||||||||||||||||||||||||
April 25, 2024 | May 31, 2024 | 0.1548 | 0.0550 | — | 0.2098 | 7,225 | ||||||||||||||||||||||||||||||||
May 31, 2024 | June 28, 2024 | 0.1546 | 0.0550 | — | 0.2096 | 7,404 | ||||||||||||||||||||||||||||||||
June 26, 2024 | July 31, 2024 | 0.1548 | 0.0550 | — | 0.2098 | 7,622 | ||||||||||||||||||||||||||||||||
Total | $ | 0.9286 | $ | 0.3300 | $ | — | $ | 1.2586 | $ | 42,269 |
Class F | ||||||||||||||||||||||||||||||||||||||
Declaration Date | Payment Date | Base Distribution Per Share (1) | Variable Supplemental Distribution Per Share | Special Distribution Per Share | Total Distribution Per Share | Distribution Amount | ||||||||||||||||||||||||||||||||
January 30, 2024 | February 29, 2024 | $ | 0.1494 | $ | 0.0550 | $ | — | $ | 0.2044 | $ | 26,889 | |||||||||||||||||||||||||||
February 29, 2024 | March 29, 2024 | 0.1500 | 0.0550 | — | 0.2050 | 28,278 | ||||||||||||||||||||||||||||||||
March 26, 2024 | April 30, 2024 | 0.1493 | 0.0550 | — | 0.2043 | 29,404 | ||||||||||||||||||||||||||||||||
April 25, 2024 | May 31, 2024 | 0.1496 | 0.0550 | — | 0.2046 | 29,919 | ||||||||||||||||||||||||||||||||
May 31, 2024 | June 28, 2024 | 0.1492 | 0.0550 | — | 0.2042 | 30,325 | ||||||||||||||||||||||||||||||||
June 26, 2024 | July 31, 2024 | 0.1495 | 0.0550 | — | 0.2045 | 31,356 | ||||||||||||||||||||||||||||||||
Total | $ | 0.8970 | $ | 0.3300 | $ | — | $ | 1.2270 | $ | 176,171 |
Class S | ||||||||||||||||||||||||||||||||||||||
Declaration Date | Payment Date | Base Distribution Per Share (1) | Variable Supplemental Distribution Per Share | Special Distribution Per Share | Total Distribution Per Share | Distribution Amount | ||||||||||||||||||||||||||||||||
January 30, 2024 | February 29, 2024 | $ | 0.1420 | $ | 0.0550 | $ | — | $ | 0.1970 | $ | 357 | |||||||||||||||||||||||||||
February 29, 2024 | March 29, 2024 | 0.1431 | 0.0550 | — | 0.1981 | 743 | ||||||||||||||||||||||||||||||||
March 26, 2024 | April 30, 2024 | 0.1418 | 0.0550 | — | 0.1968 | 954 | ||||||||||||||||||||||||||||||||
April 25, 2024 | May 31, 2024 | 0.1423 | 0.0550 | — | 0.1973 | 1,204 | ||||||||||||||||||||||||||||||||
May 31, 2024 | June 28, 2024 | 0.1417 | 0.0550 | — | 0.1967 | 1,550 | ||||||||||||||||||||||||||||||||
June 26, 2024 | July 31, 2024 | 0.1422 | 0.0550 | — | 0.1972 | 1,767 | ||||||||||||||||||||||||||||||||
Total | $ | 0.8531 | $ | 0.3300 | $ | — | $ | 1.1831 | $ | 6,575 |
(1) Distributions per share are net of shareholder servicing and/or distribution fees.
106
The following table summarizes our distributions declared and payable for the six months ended June 30, 2023 (dollar amounts in thousands, except per share amounts), and the record date for each distribution was the last calendar date of the month in which such distribution was declared:
Class I | ||||||||||||||||||||||||||||||||||||||
Declaration Date | Payment Date | Base Distribution Per Share | Variable Supplemental Distribution Per Share | Special Distribution Per Share | Total Distribution Per Share | Distribution Amount | ||||||||||||||||||||||||||||||||
January 19, 2023 | February 28, 2023 | $ | 0.1600 | $ | 0.0210 | $ | — | $ | 0.1810 | $ | 6,441 | |||||||||||||||||||||||||||
February 28, 2023 | March 31, 2023 | 0.1600 | 0.0300 | — | 0.1900 | 6,980 | ||||||||||||||||||||||||||||||||
March 28, 2023 | April 28, 2023 | 0.1600 | 0.0430 | — | 0.2030 | 7,518 | ||||||||||||||||||||||||||||||||
April 28, 2023 | May 31, 2023 | 0.1600 | 0.0440 | — | 0.2040 | 7,561 | ||||||||||||||||||||||||||||||||
May 26, 2023 | June 30, 2023 | 0.1600 | 0.0450 | — | 0.2050 | 7,668 | ||||||||||||||||||||||||||||||||
June 28, 2023 | July 31, 2023 | 0.1600 | 0.0450 | — | 0.2050 | 7,907 | ||||||||||||||||||||||||||||||||
Total | $ | 0.9600 | $ | 0.2280 | $ | — | $ | 1.1880 | $ | 44,075 |
Class D | ||||||||||||||||||||||||||||||||||||||
Declaration Date | Payment Date | Base Distribution Per Share (1) | Variable Supplemental Distribution Per Share | Special Distribution Per Share | Total Distribution Per Share | Distribution Amount | ||||||||||||||||||||||||||||||||
January 19, 2023 | February 28, 2023 | $ | 0.1549 | $ | 0.0210 | $ | — | $ | 0.1759 | $ | 3,173 | |||||||||||||||||||||||||||
February 28, 2023 | March 31, 2023 | 0.1553 | 0.0300 | — | 0.1853 | 3,351 | ||||||||||||||||||||||||||||||||
March 28, 2023 | April 28, 2023 | 0.1548 | 0.0430 | — | 0.1978 | 3,752 | ||||||||||||||||||||||||||||||||
April 28, 2023 | May 31, 2023 | 0.1550 | 0.0440 | — | 0.1990 | 3,951 | ||||||||||||||||||||||||||||||||
May 26, 2023 | June 30, 2023 | 0.1548 | 0.0450 | — | 0.1998 | 4,081 | ||||||||||||||||||||||||||||||||
June 28, 2023 | July 31, 2023 | 0.1550 | 0.0450 | — | 0.2000 | 4,285 | ||||||||||||||||||||||||||||||||
Total | $ | 0.9298 | $ | 0.2280 | $ | — | $ | 1.1578 | $ | 22,593 |
Class F | ||||||||||||||||||||||||||||||||||||||
Declaration Date | Payment Date | Base Distribution Per Share (1) | Variable Supplemental Distribution Per Share | Special Distribution Per Share | Total Distribution Per Share | Distribution Amount | ||||||||||||||||||||||||||||||||
January 19, 2023 | February 28, 2023 | $ | 0.1499 | $ | 0.0210 | $ | — | $ | 0.1709 | $ | 16,003 | |||||||||||||||||||||||||||
February 28, 2023 | March 31, 2023 | 0.1507 | 0.0300 | — | 0.1807 | 16,992 | ||||||||||||||||||||||||||||||||
March 28, 2023 | April 28, 2023 | 0.1496 | 0.0430 | — | 0.1926 | 18,590 | ||||||||||||||||||||||||||||||||
April 28, 2023 | May 31, 2023 | 0.1500 | 0.0440 | — | 0.1940 | 18,948 | ||||||||||||||||||||||||||||||||
May 26, 2023 | June 30, 2023 | 0.1496 | 0.0450 | — | 0.1946 | 19,516 | ||||||||||||||||||||||||||||||||
June 28, 2023 | July 31, 2023 | 0.1500 | 0.0450 | — | 0.1950 | 20,103 | ||||||||||||||||||||||||||||||||
Total | $ | 0.8998 | $ | 0.2280 | $ | — | $ | 1.1278 | $ | 110,152 |
(1)Distributions per share are net of shareholder servicing and/or distribution fees.
With respect to distributions, we have adopted an “opt out” distribution reinvestment plan for shareholders. As a result, in the event of a declared cash distribution or other distribution, each shareholder that has not “opted out” of the distribution reinvestment plan will have their distributions automatically reinvested in additional shares rather than receiving cash distributions. Shareholders who receive distributions in the form of shares will be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions.
107
Sources of distributions, other than net investment income and realized gains on a U.S. GAAP basis, include required adjustments to U.S. GAAP net investment income in the current period to determine taxable income available for distributions. The following table reflects the sources of cash distributions on a U.S. GAAP basis that we declared on our Common Shares during the six months ended June 30, 2024:
Class I | Class D | Class F | Class S | |||||||||||||||||||||||||||||||||||||||||||||||
Source of Distribution | Per Share | Amount | Per Share | Amount | Per Share | Amount | Per Share | Amount | ||||||||||||||||||||||||||||||||||||||||||
Net investment income | $ | 1.2900 | $ | 88,567 | $ | 1.2586 | $ | 42,269 | $ | 1.2270 | $ | 176,171 | $ | 1.1831 | $ | 6,575 | ||||||||||||||||||||||||||||||||||
Net realized gains | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 1.2900 | $ | 88,567 | $ | 1.2586 | $ | 42,269 | $ | 1.2270 | $ | 176,171 | $ | 1.1831 | $ | 6,575 |
The following table reflects the sources of cash distributions on a U.S. GAAP basis that the Company has declared on its shares of common stock during the six months ended June 30, 2023:
Class I | Class D | Class F | ||||||||||||||||||||||||||||||||||||
Source of Distribution | Per Share | Amount | Per Share | Amount | Per Share | Amount | ||||||||||||||||||||||||||||||||
Net investment income | $ | 1.1880 | $ | 44,075 | $ | 1.1578 | $ | 22,593 | $ | 1.1278 | $ | 110,152 | ||||||||||||||||||||||||||
Net realized gains | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Total | $ | 1.1880 | $ | 44,075 | $ | 1.1578 | $ | 22,593 | $ | 1.1278 | $ | 110,152 |
Share Repurchase Program
At the discretion of the Board, we have commenced a share repurchase program in which we may repurchase, in each quarter, up to 5% of the NAV of our Common Shares outstanding (by number of shares) as of the close of the previous calendar quarter. The Board may amend, suspend or terminate the share repurchase program if it deems such action to be in the best interest of shareholders, such as when a repurchase offer would place an undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on us as a whole that would outweigh the benefit of the repurchase offer. As a result, share repurchases may not be available each quarter. We intend to conduct such repurchase offers in accordance with the requirements of Rule 13e-4 promulgated under the Securities Exchange Act of 1934, as amended, and the 1940 Act. All shares purchased pursuant to the terms of each tender offer will be retired and thereafter will be authorized and unissued shares.
Under the share repurchase program, to the extent we offer to repurchase shares in any particular quarter, it is expected to repurchase shares pursuant to tender offers using a purchase price equal to the NAV per share as of the last calendar day of the applicable quarter, except that shares that have not been outstanding for at least one year will be repurchased at 98% of such NAV (an “Early Repurchase Deduction”). The one-year holding period is measured as of the subscription closing date immediately following the prospective repurchase date. The Early Repurchase Deduction may be waived, at our discretion, in the case of repurchase requests arising from the death, divorce or qualified disability of the holder. The Early Repurchase Deduction will be retained by us for the benefit of remaining shareholders.
The following table further summarizes the share repurchases completed during the six months ended June 30, 2024:
Repurchase Deadline Request | Percentage of Outstanding Shares the Company Offered to Repurchase(1) | Repurchase Pricing Date | Amount Repurchased (all classes)(2) | Number of Shares Repurchased (all classes) | Percentage of Outstanding Shares Purchased(1) | |||||||||||||||||||||||||||
March 1, 2024 | 5.00 | % | March 31, 2024 | $ | 59,526 | 2,347,231 | 1.13 | % | ||||||||||||||||||||||||
May 30, 2024 | 5.00 | % | June 30, 2024 | $ | 56,260 | 2,204,546 | 0.89 | % |
The following table further summarizes the share repurchases completed during the six months ended June 30, 2023:
Repurchase Deadline Request | Percentage of Outstanding Shares the Company Offered to Repurchase(1) | Repurchase Pricing Date | Amount Repurchased (all classes)(2) | Number of Shares Repurchased (all classes) | Percentage of Outstanding Shares Purchased(1) | |||||||||||||||||||||||||||
March 2, 2023 | 5.00 | % | March 31, 2023 | $ | 25,836 | 1,058,869 | 0.73 | % | ||||||||||||||||||||||||
May 30, 2023 | 5.00 | % | June 30, 2023 | $ | 98,692 | 3,992,380 | 2.64 | % |
108
(1)Percentage is based on total shares as of the close of the previous calendar quarter. All repurchase requests were satisfied in full.
(2)Amounts not inclusive of Early Repurchase Deduction.
Borrowings
Our outstanding debt obligations were as follows:
June 30, 2024 | |||||||||||||||||||||||||||||
Aggregate Principal Committed | Outstanding Principal | Carrying Value | Unused Portion(1) | Amount Available(2) | |||||||||||||||||||||||||
HLEND A Funding Facility(3) | $ | 800,000 | $ | 604,851 | $ | 604,851 | $ | 195,149 | $ | 22,104 | |||||||||||||||||||
HLEND B Funding Facility(3) | 1,250,000 | 134,828 | 134,828 | 1,115,172 | 591,944 | ||||||||||||||||||||||||
HLEND C Funding Facility | 750,000 | 487,500 | 487,500 | 262,500 | 20,658 | ||||||||||||||||||||||||
HLEND D Funding Facility | 500,000 | 125,000 | 125,000 | 375,000 | 205,186 | ||||||||||||||||||||||||
HLEND E Funding Facility | 300,000 | — | — | 300,000 | 176,900 | ||||||||||||||||||||||||
Revolving Credit Facility(3) | 1,300,000 | 220,760 | 220,760 | 1,079,240 | 1,079,240 | ||||||||||||||||||||||||
November 2025 Notes(4) | 170,000 | 170,000 | 168,261 | — | — | ||||||||||||||||||||||||
November 2027 Notes(4) | 155,000 | 155,000 | 152,910 | — | — | ||||||||||||||||||||||||
March 2026 Notes(5) | 276,000 | 276,000 | 271,712 | — | — | ||||||||||||||||||||||||
March 2028 Notes(5) | 124,000 | 124,000 | 121,014 | — | — | ||||||||||||||||||||||||
September 2027 Notes(6) | 75,000 | 75,000 | 74,032 | — | — | ||||||||||||||||||||||||
September 2028 Notes(6) | 250,000 | 250,000 | 246,832 | — | — | ||||||||||||||||||||||||
January 2029 Notes(7) | 550,000 | 550,000 | 527,665 | — | — | ||||||||||||||||||||||||
September 2029 Notes(8) | 400,000 | 400,000 | 392,105 | — | — | ||||||||||||||||||||||||
2023 CLO Secured Notes(9) | 323,000 | 323,000 | 319,879 | — | — | ||||||||||||||||||||||||
2024 CLO Secured Notes(10) | 400,000 | 400,000 | 373,560 | — | — | ||||||||||||||||||||||||
Total | $ | 7,623,000 | $ | 4,295,939 | $ | 4,220,909 | $ | 3,327,061 | $ | 2,096,032 |
(1)The unused portion is the amount upon which commitment fees, if any, are based.
(2)The amount available reflects any limitations related to each respective credit facility’s borrowing base.
(3)The Company may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date.
Under the HLEND A Funding Facility, as of June 30, 2024, the Company had outstanding borrowings denominated in the following non-USD currencies:
1.Euros (EUR) of 7.5 million
2.Australian Dollars (AUD) of 94.4 million
3.British Pounds (GBP) of 42.9 million
Under the HLEND B Funding Facility, as of June 30, 2024, the Company had outstanding borrowings denominated in the following non-USD currencies:
1.Euros (EUR) of 3.4 million
2.Australian Dollars (AUD) of 25.5 million
3.British Pounds (GBP) of 90.3 million
Under the Revolving Credit Facility, as of June 30, 2024, the Company had outstanding borrowings denominated in the following non-USD currencies:
1.Euros (EUR) of 130.3 million
2.British Pounds (GBP) of 64.2 million
(4)The carrying value of the Company's November 2025 Notes and November 2027 Notes are presented net of unamortized debt issuance costs of $(0.9) million and $(1.2) million, respectively, as of June 30, 2024 and includes the change in the notes carrying value of $(0.9) million and $(0.9) million, respectively, as a result of the qualifying fair value hedge relationship as described above.
(5)The carrying value of the Company's March 2026 Notes and March 2028 Notes are presented net of unamortized debt issuance costs of $(1.4) million and $(0.8) million, respectively, as of June 30, 2024 and includes the change in the notes carrying value of $(2.9) million and $(2.1) million, respectively, as a result of the qualifying fair value hedge relationship as described above.
(6)The carrying value of the Company's September 2027 Notes and September 2028 Notes are presented net of unamortized debt issuance costs of $(0.6) million and $(2.2) million, respectively, as of June 30, 2024 and includes the change in the notes carrying value of $(0.3) million and $(1.0) million, respectively, as a result of the qualifying fair value hedge relationship as described above.
(7)The carrying value of the Company's January 2029 Notes are presented net of unamortized debt issuance costs and original issue discount of $(11.6) million as of June 30, 2024 and includes the change in the notes carrying value of $(10.8) million as a result of the qualifying fair value hedge relationship as described above.
(8)The carrying value of the Company's September 2029 Notes are presented net of unamortized debt issuance costs and original issue discount of $(8.8) million as of June 30, 2024 and includes the change in the notes carrying value of $0.9 million as a result of the qualifying fair value hedge relationship as described above.
(9)The carrying value of the Company's 2023 CLO Secured Notes are presented net of unamortized debt issuance costs of $(3.1) million as of June 30, 2024.
109
(10)The carrying value of the Company's 2024 CLO Secured Notes are presented net of unamortized debt issuance costs and original issue discount of $(26.4) million as of June 30, 2024.
December 31, 2023 | |||||||||||||||||||||||||||||
Aggregate Principal Committed | Outstanding Principal | Carrying Value | Unused Portion(1) | Amount Available(2) | |||||||||||||||||||||||||
HLEND A Funding Facility(3) | $ | 800,000 | $ | 615,838 | $ | 615,838 | $ | 184,162 | $ | 38,218 | |||||||||||||||||||
HLEND B Funding Facility(3) | 1,000,000 | 513,747 | 513,747 | 486,253 | 356,891 | ||||||||||||||||||||||||
HLEND C Funding Facility | 750,000 | 487,500 | 487,500 | 262,500 | 12,576 | ||||||||||||||||||||||||
HLEND D Funding Facility | 500,000 | 195,000 | 195,000 | 305,000 | 205,018 | ||||||||||||||||||||||||
Revolving Credit Facility(3) | 1,275,000 | 1,025,294 | 1,025,294 | 249,706 | 249,706 | ||||||||||||||||||||||||
November 2025 Notes(4) | 170,000 | 170,000 | 168,749 | — | — | ||||||||||||||||||||||||
November 2027 Notes(4) | 155,000 | 155,000 | 154,366 | — | — | ||||||||||||||||||||||||
March 2026 Notes(5) | 276,000 | 276,000 | 274,716 | — | — | ||||||||||||||||||||||||
March 2028 Notes(5) | 124,000 | 124,000 | 123,588 | — | — | ||||||||||||||||||||||||
September 2027 Notes(6) | 75,000 | 75,000 | 75,545 | — | — | ||||||||||||||||||||||||
September 2028 Notes(6) | 250,000 | 250,000 | 252,814 | — | — | ||||||||||||||||||||||||
2023 CLO Secured Notes(7) | 323,000 | 323,000 | 319,743 | — | — | ||||||||||||||||||||||||
Total | $ | 5,698,000 | $ | 4,210,379 | $ | 4,206,900 | $ | 1,487,621 | $ | 862,409 | |||||||||||||||||||
(1)The unused portion is the amount upon which commitment fees, if any, are based.
(2)The amount available reflects any limitations related to each respective credit facility’s borrowing base.
(3)USD using the applicable foreign currency exchange rate as of the applicable reporting date.
Under the HLEND A Funding Facility, as of December 31, 2023, the Company had outstanding borrowings denominated in the following non-USD currencies:
•Euros (EUR) of 7.5 million
•Australian Dollars (AUD) of 156.0 million
•British Pounds (GBP) of 42.9 million
Under the HLEND B Funding Facility, as of December 31, 2023, the Company had outstanding borrowings denominated in the following non-USD currencies:
•Euros (EUR) of 3.4 million
•Australian Dollars (AUD) of 108.0 million
•British Pounds (GBP) of 90.3 million
Under the Revolving Credit Facility, as of December 31, 2023, the Company had outstanding borrowings denominated in the following non-USD currencies:
•Euros (EUR) of 312.1 million
•Australian Dollars (AUD) of 95.2 million
•Canadian Dollars (CAD) of 47.1 million
•British Pounds (GBP) of 64.2 million
(4) The carrying value of the Company's November 2025 Notes and November 2027 Notes are presented net of unamortized debt issuance costs of $(1.2) million and $(1.4) million, respectively, as of December 31, 2023 and includes the change in the notes carrying value of $(0.0) million and $0.7 million, respectively, as a result of the qualifying fair value hedge relationship as described above.
(5) The carrying value of the Company's March 2026 Notes and March 2028 Notes are presented net of unamortized debt issuance costs of $(1.8) million and $(0.9) million, respectively, as of December 31, 2023 and includes the change in the notes carrying value of $0.6 million and $0.5 million, respectively, as a result of the qualifying fair value hedge relationship as described above.
(6) The carrying value of the Company's September 2027 Notes and September 2028 Notes are presented net of unamortized debt issuance costs of $(0.7) million and $(2.5) million, respectively, as of December 31, 2023 and includes the change in the notes carrying value of $1.3 million and $5.3 million, respectively, as a result of the qualifying fair value hedge relationship as described above.
(7) The carrying value of the Company's 2023 CLO Secured Notes are presented net of unamortized debt issuance costs of $(3.3) million as of December 31, 2023.
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A summary of our contractual payment obligations under our credit facilities, unsecured notes and debt securitization issuances as of June 30, 2024, is as follows:
June 30, 2024 | |||||||||||||||||||||||||||||
Total | Less than 1 year | 1-3 years | 3-5 years | After 5 years | |||||||||||||||||||||||||
HLEND A Funding Facility | $ | 604,851 | $ | — | $ | 604,851 | $ | — | $ | — | |||||||||||||||||||
HLEND B Funding Facility | 134,828 | — | — | 134,828 | — | ||||||||||||||||||||||||
HLEND C Funding Facility | 487,500 | — | — | — | 487,500 | ||||||||||||||||||||||||
HLEND D Funding Facility | 125,000 | — | — | 125,000 | — | ||||||||||||||||||||||||
HLEND E Funding Facility | — | — | — | — | — | ||||||||||||||||||||||||
Revolving Credit Facility | 220,760 | — | — | 220,760 | — | ||||||||||||||||||||||||
November 2025 Notes | 170,000 | — | 170,000 | — | — | ||||||||||||||||||||||||
November 2027 Notes | 155,000 | — | — | 155,000 | — | ||||||||||||||||||||||||
March 2026 Notes | 276,000 | — | 276,000 | — | — | ||||||||||||||||||||||||
March 2028 Notes | 124,000 | — | — | 124,000 | — | ||||||||||||||||||||||||
September 2027 Notes | 75,000 | — | — | 75,000 | — | ||||||||||||||||||||||||
September 2028 Notes | 250,000 | — | — | 250,000 | — | ||||||||||||||||||||||||
January 2029 Notes | 550,000 | — | — | 550,000 | — | ||||||||||||||||||||||||
September 2029 Notes | 400,000 | — | — | — | 400,000 | ||||||||||||||||||||||||
2023 CLO Secured Notes | 323,000 | — | — | — | 323,000 | ||||||||||||||||||||||||
2024 CLO Secured Notes | 400,000 | — | — | — | 400,000 | ||||||||||||||||||||||||
Total | $ | 4,295,939 | $ | — | $ | 1,050,851 | $ | 1,634,588 | $ | 1,610,500 |
For additional information on our debt obligations see “Note 7. Borrowings” to the consolidated financial statements.
Off-Balance Sheet Arrangements
Portfolio Company Commitments
Our investment portfolio contains and is expected to continue to contain debt investments which are in the form of lines of credit or delayed draw commitments, which require us to provide funding when requested by portfolio companies in accordance with underlying loan agreements. As of June 30, 2024 and December 31, 2023, we had unfunded delayed draw term loans, revolvers and preferred equity with an aggregate principal amount of $1,227.4 million and $760.7 million, respectively.
Other Commitments and Contingencies
From time to time, we may become a party to certain legal proceedings incidental to the normal course of its business. As of June 30, 2024, management is not aware of any pending or threatened litigation.
Related-Party Transactions
We entered into a number of business relationships with affiliated or related parties, including the following:
•the Investment Advisory Agreement;
•the Administration Agreement; and
•Expense Support and Conditional Reimbursement Agreement;
In addition to the aforementioned agreements, we, our Adviser and certain of our Adviser’s affiliates have been granted exemptive relief by the SEC to co-invest with other funds and accounts sponsored or managed by our Adviser or its affiliates in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors. For additional information, see “Note 3. Fees. Expenses, Agreements and Related Party Transactions” to the consolidated financial statements.
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Performance
The year-to-date (“YTD”) total return based on NAV for each of our share classes are as follows:
Inception Date | YTD Return (1) | ||||||||||
Class I (no upfront placement fee) | February 3, 2022 | 7.12 | % | ||||||||
Class I (with upfront placement fee) | February 3, 2022 | 4.98 | % | ||||||||
Class D (no upfront placement fee) | February 3, 2022 | 6.99 | % | ||||||||
Class D (with upfront placement fee) | February 3, 2022 | 4.85 | % | ||||||||
Class F (no upfront placement fee) | February 3, 2022 | 6.86 | % | ||||||||
Class F (with upfront placement fee) | February 3, 2022 | 4.72 | % | ||||||||
Class S (no upfront placement fee) | October 1, 2023 | 6.68 | % | ||||||||
Class S (with upfront placement fee) | October 1, 2023 | 2.94 | % |
(1)Performance is through June 30, 2024 and assumes the maximum allowable placement fee (if applicable) and that distributions are reinvested pursuant to our distribution reinvestment plan and, with respect to figures listed next to “with upfront placement fee,” the maximum upfront placement fee (e.g. 2.0% for Class I, Class D and Class F, and 3.5% for Class S) was charged and the starting NAV per share was increased for the applicable period, solely for purposes of this calculation, by the amount of the maximum upfront placement fee.
Recent Developments
See “Item 1. Financial Statements – Notes to Financial Statements – Note 12. Subsequent Events” for a summary of recent developments.
Critical Accounting Estimates
The preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ.
Investments and Fair Value Measurements
The Company is required to report its investments for which current market values are not readily available at fair value. The Company values its investments in accordance with ASC 820, Fair Value Measurement, which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date. ASC 820 prioritizes the use of observable market prices derived from such prices over entity-specific inputs. Due to the inherent uncertainties of valuation, certain estimated fair values may differ significantly from the values that would have been realized had a ready market for these investments existed, and these differences could be material.
Investments that are listed or traded on an exchange and are freely transferable are valued at either the closing price (in the case of securities and futures) or the mean of the closing bid and offer (in the case of options) on the principal exchange on which the investment is listed or traded. Investments for which other market quotations are readily available will typically be valued at those market quotations. To validate market quotations, the Company utilizes a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations. Where it is possible to obtain reliable, independent market quotations from a third party vendor, the Company uses these quotations to determine the value of its investments. The Company utilizes mid-market pricing (i.e., mid-point of average bid and ask prices) to value these investments. The Adviser obtains these market quotations from independent pricing services, if available; otherwise from one or more broker quotes. To assess the continuing appropriateness of pricing sources and methodologies, the Adviser regularly performs price verification procedures and issues challenges as necessary to independent pricing services or brokers, and any differences are reviewed in accordance with the valuation procedures. The Adviser does not adjust the prices unless it has a reason to believe market quotations are not reflective of the fair value of an investment.
Where prices or inputs are not available or, in the judgment of the Adviser, not reliable, valuation approaches based on the facts and circumstances of the particular investment will be utilized. Securities that are not publicly traded or for which market prices are not readily available, as will be the case for a substantial portion of the Company’s investments, are valued at fair value as determined in good faith by the Adviser as the Company’s valuation designee under Rule 2a-5 under the 1940 Act, pursuant to the Company’s valuation
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policy, and under the oversight of the Board, based on, among other things, the input of one or more independent valuation firms retained by the Company to review the Company’s investments. These valuation approaches involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments’ complexity.
With respect to the quarterly valuation of investments, the Company undertakes a multi-step valuation process each quarter in connection with determining the fair value of our investments for which reliable market quotations are not readily available as of the last calendar day of each quarter, which includes, among other procedures, the following:
•The valuation process begins with each investment being preliminarily valued by the Adviser’s valuation team in consultation with the Adviser’s investment professionals responsible for each portfolio investment;
•In addition, independent valuation firms retained by the Company prepare quarter-end valuations of each such investment that was (i) originated or purchased prior to the first calendar day of the quarter and (ii) is not a de minimis investment, as determined by the Adviser. The independent valuation firms provide a final range of values on such investments to the Adviser. The independent valuation firms also provide analyses to support their valuation methodology and calculations;
•The Adviser’s valuation committee with respect to the Company (the “Valuation Committee”) reviews the valuation recommendations prepared by the Adviser’s valuation team and, as appropriate, the independent valuation firms’ valuation ranges;
•The Adviser’s Valuation Committee then determines fair value marks for each of the Company’s portfolio investments; and
•The Board and Audit Committee periodically review the valuation process and provide oversight in accordance with the requirements of Rule 2a-5 under the 1940 Act.
As part of the valuation process, the Company takes into account relevant factors in determining the fair value of our investments for which reliable market quotations are not readily available, many of which are loans, including and in combination, as relevant, of: (i) the estimated enterprise value of a portfolio company, generally based on an analysis of discounted cash flows, publicly traded comparable companies and comparable transactions, (ii) the nature and realizable value of any collateral, (iii) the portfolio company’s ability to make payments based on its earnings and cash flow, (iv) the markets in which the portfolio company does business, and (v) overall changes in the interest rate environment and the credit markets that may affect the price at which similar investments may be made in the future. When an external event such as a purchase transaction, public offering or subsequent equity or debt sale occurs, the Adviser considers whether the pricing indicated by the external event corroborates its valuation.
The Company has and will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of the Company’s portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter, and the Company and the Adviser may reasonably rely on that assistance. However, the Adviser is responsible for the ultimate valuation of the portfolio investments at fair value as determined in good faith pursuant to the Company’s valuation policy, the Board’s oversight and a consistently applied valuation process.
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date.
The Company’s accounting policy on the fair value of our investments is critical because the determination of fair value involves subjective judgments and estimates. Accordingly, the notes to the Company’s consolidated financial statements express the uncertainty with respect to the possible effect of these valuations, and any change in these valuations, on the consolidated financial statements.
See “Note 5. Fair Value Measurements” to the consolidated financial statements for more information on the fair value of the Company’s investments.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are subject to financial market risks, including valuation risk and interest rate risk.
Valuation Risk
We have invested, and plan to continue to invest, primarily in illiquid debt and equity securities of private companies. Most of our investments will not have a readily available market price, and we value these investments at fair value as determined in good faith by the Adviser as the Company’s valuation designee under Rule 2a-5 under the 1940 Act, based on, among other things, the input of independent third-party valuation firms retained by the Company, and in accordance with our valuation policy. There is no single standard for determining fair value. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. If we were required to
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liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material.
Interest Rate Risk
Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. We intend to fund portions of our investments with borrowings, and at such time, our net investment income will be affected by the difference between the rate at which we invest and the rate at which we borrow. Accordingly, we cannot assure shareholders that a significant change in market interest rates will not have a material adverse effect on our net investment income.
As of June 30, 2024, 99.0% of our performing debt investments at fair value were at floating rates. Additionally, we entered into interest rate swaps with certain of our Unsecured Notes in order to align the interest rates of our liabilities with our investment portfolio. Based on our Consolidated Statements of Assets and Liabilities as of June 30, 2024, the following table shows the annualized impact on net income of hypothetical base rate changes in interest rates (considering base rate floors and ceilings for floating rate instruments) and assuming no changes in our investment and borrowing structure:
Interest Income | Interest Expense | Net Income | |||||||||||||||
Up 300 basis points | $ | 323,364 | $ | (123,643) | $ | 199,721 | |||||||||||
Up 200 basis points | $ | 215,576 | $ | (82,429) | $ | 133,147 | |||||||||||
Up 100 basis points | $ | 107,788 | $ | (41,214) | $ | 66,574 | |||||||||||
Down 100 basis points | $ | (107,788) | $ | 41,214 | $ | (66,574) | |||||||||||
Down 200 basis points | $ | (215,576) | $ | 82,429 | $ | (133,147) | |||||||||||
Down 300 basis points | $ | (322,415) | $ | 123,643 | $ | (198,772) |
We may in the future hedge against interest rate fluctuations by using hedging instruments such as additional interest rate swaps, futures, options and forward contracts. While hedging activities may mitigate our exposure to adverse fluctuations in interest rates, certain hedging transactions that we may enter into in the future, such as interest rate swap agreements, may also limit our ability to participate in the benefits of changes in interest rates with respect to our portfolio investments.
Item 4. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures
In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended, we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q and determined that our disclosure controls and procedures are effective as of the end of the period covered by the Quarterly Report on Form 10-Q.
(b) Changes in Internal Controls Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We are not currently subject to any material legal proceedings, nor, to our knowledge, are any material legal proceeding threatened against us. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. Our business is also subject to extensive regulation, which may result in regulatory proceedings against us. While the outcome of any such future legal or regulatory proceedings cannot be predicted with certainty, we do not expect that any such future proceedings will have a material effect upon our financial condition or results of operations.
Item 1A. Risk Factors.
In addition to the other information set forth in this quarterly report on Form 10-Q, you should carefully consider the risk factors set forth in “Item 1A Risk Factors” in our annual report on Form 10‑K for the year ended December 31, 2023 as well as the risk factors set forth in “Risk Factors” of our registration statement on Form N-2 filed on June 12, 2024, which could materially affect our business, financial condition and/or operating results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially affect our business, financial condition and/or operating results. There have been no material changes during the six months ended June 30, 2024 to the risk factors set forth in “Risk Factors” of our registration statement on Form N-2 filed on June 12, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Share Repurchases
We have commenced a share repurchase program in which we intend to offer to repurchase, in each quarter, up to 5% of our Common Shares outstanding (by number of shares) as of the close of the previous calendar quarter. Our Board of Trustees may amend or suspend the share repurchase program at any time if it deems such action to be in our best interest and the best interest of our shareholders, such as when a repurchase offer would place an undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on the Company as a whole, or should we otherwise determine that investing our liquid assets in originated loans or other illiquid investments rather than repurchasing our shares is in the best interests of the Company as a whole. As a result, share repurchases may not be available each quarter. We intend to conduct such repurchase offers in accordance with the requirements of Rule 13e-4 promulgated under the Exchange Act and the 1940 Act. All shares purchased by us pursuant to the terms of each tender offer will be retired and thereafter will be authorized and unissued shares.
Under our share repurchase program, to the extent we offer to repurchase shares in any particular quarter, we expect to repurchase shares pursuant to quarterly tender offers using a purchase price equal to the NAV per share as of the last calendar day of the applicable quarter, except that shares that have not been outstanding for at least one year will be repurchased at 98% of such NAV.
The following table sets forth information regarding repurchases of shares of our common stock during the six months ended June 30, 2024 (dollars in thousands):
Offer Date | Repurchase Deadline Request | Purchase Price per Share | Number of Shares Repurchased (all classes) | Amount Repurchased (all classes) | ||||||||||||||||||||||
February 1, 2024 | March 1, 2024 | $ | 25.36 | 2,347,231 | 1.13 | % | ||||||||||||||||||||
May 1, 2024 | May 30, 2024 | $ | 25.52 | 2,204,546 | 0.89 | % |
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
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Item 5. Other Information.
During the fiscal quarter ended June 30, 2024, none of our directors or executive officers adopted or terminated any contract,
instruction or written plan for the purchase or sale of our securities to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any
“non-Rule 10b5-1 trading arrangement.”
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Item 6. Exhibits.
*Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
HPS Corporate Lending Fund | |||||
August 14, 2024 | /s/ Michael Patterson | ||||
Michael Patterson | |||||
Chief Executive Officer | |||||
August 14, 2024 | /s/ Robert Busch | ||||
Robert Busch | |||||
Chief Financial Officer |
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