May 31, 2019
Jonathan Lamm
Chief Financial Officer
Goldman Sachs Private Middle Market Credit II LLC
200 West Street
New York, NY 10282
Re: Goldman Sachs Private Middle Market Credit II LLC
Registration Statement on Form 10
Filed May 2, 2019
File Nos. 000-56052 and 814-01307
Dear Mr. Lamm:
We have reviewed your registration statement and have the following
comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by amending your registration statement
and providing the
requested information. If you do not believe our comments apply to your facts
and
circumstances or do not believe an amendment is appropriate, please tell us why
in your
response.
After reviewing any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments.
General
Item 1 Business, page 4
1. On page 4 you state that, although you have "commenced exploring
investment
opportunities" you have not funded any investments. Please clarify
whether you have any
binding commitments to fund any investments and, if material, describe
the terms of your
agreement.
Jonathan Lamm
Goldman Sachs Private Middle Market Credit II LLC
May 31, 2019
Page 2
2. We note your strategy includes investing in first lien loans and
unitranche loans which you
indicate are first lien loans that may extend deeper into a company's
capital structure than
traditional first lien. It is our understanding that, in some instances,
companies are issuing
first lien debt without additional classes of subordinated debt, or less
subordinated debt than
was previously market standard. Please confirm if this is accurate; and,
if material, disclose
any changes to your investment analysis or risk levels as a result.
3. We note you provide an 80% policy tied to private middle-market credit
obligations and
related instruments which you define to include preferred stock and
"other instruments" that
provide exposure to such fixed-income instruments. Given where it falls
in a company's
capital structure, please explain why you believe it is appropriate to
include preferred stock
in the definition of credit obligations. In addition, please describe
what "other instruments"
may be included in your 80% basket. Please advise and revise as
necessary.
4. The disclosure on page 18 describing your revolving credit facility
indicates the agreement
will include "restrictions on certain operations." To the extent your
borrowing agreements,
or your intended use of leverage more generally, materially impacts the
types of investments
you will invest in (e.g., industry/geographic concentration, credit
metrics, position limits,
etc.) please describe the impacts in an appropriate location. In
addition, please disclose any
material covenants that, if breached, would accelerate the repayment
date under the facility.
5. We note that your borrowing base is calculated based on unfunded
commitments. Please
note the staff's view is that unfunded commitments are typically not an
"asset" that can be
used to calculate asset coverage ratios for purposes of complying with
the Investment
Company Act. Please confirm to us how you will determine your asset
coverage ratio for
purposes of complying with Section 18(a) of the Investment Company Act.
6. Please disclose the basis for your statement that expenses borne by the
company in the
ordinary course on an annual basis "will not exceed an amount equal to
0.5% of aggregate
commitments ..."
Item 1A Risk Factors, page 42
7. On page 63 you disclose that you may form one or more collateralized
loan obligation
vehicles (CLO). With a view to disclosure in appropriate locations,
please:
Tell us whether the transfer of loans into the CLO would be a
realization event for
purposes of calculating your incentive fee;
Tell us how loans will be selected for the CLO; and,
Disclose who will manage the CLO and any compensation they may
receive for
structuring and/or managing the CLO.
Jonathan Lamm
Goldman Sachs Private Middle Market Credit II LLC
May 31, 2019
Page 3
Item 7 Certain Relationships and Related Transactions, and Director
Independence, page 80
8. Please remove the statement on page 80 telling prospective unitholders
that they "should"
review the Adviser's Form ADV for additional information about
potential conflicts of
interest. Please explain why the statement that a unitholder "is
deemed to have assented to
the potential conflicts of interest" is appropriate.
Item 11 Description of Registrant's Securities to be Registered, page 96
9. The disclosure on page 98 indicates that, following the initial
investment period, you will
have the right to make drawdown requests to make additional
investments. Please revise the
disclosure here to discuss any limitations on your ability to make
additional investments
after the investment period.
Closing
We remind you that the fund and its management are responsible for the
accuracy and
adequacy of their disclosures, notwithstanding any review, comments action or
absence of action by
the staff.
* * * * *
If you have any questions prior to filing an amendment, please call me
at (202) 551-3393.
Sincerely,
Jay Williamson
Senior Counsel
cc: Fried, Frank, Harris, Shriver & Jacobson LLP
Lisa Schneider
Joshua Wechsler
Jonathan Lamm
Goldman Sachs Private Middle Market Credit II LLC
May 31, 2019
Page 4