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As filed with the Securities and Exchange Commission on April 23, 2021

Registration No. 333-          

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM N-2

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

  

PRE-EFFECTIVE AMENDMENT NO.

 

  

POST-EFFECTIVE AMENDMENT NO.

 

 

 

Crescent Capital BDC, Inc.

(Exact Name of Registrant as Specified in Charter)

 

 

11100 Santa Monica Blvd., Suite 2000

Los Angeles, CA 90025

(Address of Principal Executive Offices)

Registrant’s Telephone Number, including Area Code: (310) 235-5900

George P. Hawley

General Counsel

Crescent Capital BDC, Inc.

11100 Santa Monica Blvd. Suite 2000

Los Angeles, California 90025

(310) 235-5900

(Name and Address of Agent for Service)

Copies of information to:

Monica J. Shilling

Kirkland & Ellis LLP

2049 Century Park East, 37th Floor

Los Angeles, California 90067

(310) 552-4200

Approximate Date of Commencement of Proposed Public Offering: From time to time after the effective date of this Registration Statement.

 

Check box if the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans.

Check box if any securities being registered in this Form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933 (“Securities Act”), other than securities offered in connection with a dividend reinvestment plan.

Check box if this Form is a registration statement pursuant to General Instruction A.2 or a post-effective amendment thereto.

Check box if this Form is a registration statement pursuant to General Instruction B or a post-effective amendment thereto that will become effective upon filing with the Commission pursuant to Rule 463(e) under the Securities Act.

Check box if this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction B to register additional securities or additional classes of additional securities pursuant to Rule 413(b) under the Securities Act.

Is it proposed that this filing will become effective (check appropriate box):

 

when declared effective pursuant to Section 8(c) of the Securities Act

If appropriate, check the following box:

 

This post-effective amendment designates a new effective date for a previously filed registration statement.

This form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act and the Securities Act registration statement number of the earlier effective registration statement for the same offering is                .

This Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is                .

This Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is                .

Check each box that appropriately characterizes the Registrant:

 

Registered Closed-End Fund (closed-end company that is registered under the Investment Company Act of 1940 (“Investment Company Act”)).

Business Development Company (closed-end company that intends or has elected to be regulated as a business development company under the Investment Company Act).

Interval Fund (Registered Closed-End Fund or a Business Development Company that makes periodic repurchase offers under Rule 23c-3 under the Investment Company Act).

A.2 Qualified (qualified to register securities pursuant to General Instruction A.2 of this Form).

Well-Known Seasoned Issuer (as defined by Rule 405 under the Securities Act).

Emerging Growth Company (as defined by Rule 12b-2 under the Securities Exchange Act of 1934 (“Exchange Act”).

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 pursuant to Section 7(a)(2)(B) of Securities Act.

New Registrant (registered or regulated under the Investment Company Act for less than 12 calendar months preceding this filing).

 

 

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

 

 

Title of Securities Being
Registered
  Amount Being
Registered(1)
 

Proposed Maximum
Offering Price

Per Unit(1)

  Proposed Maximum
Aggregate
Offering Price(1)(2)
  Amount of
Registration Fee

Common Stock, $0.001 par value per share(3)(4)

               

Preferred Stock, $0.001 par value per share(3)

               

Subscription Rights(3)

               

Warrants(5)

               

Debt Securities(6)

               

Units(7)

               

Total(8)

         

$500,000,000

 

$54,550

 

 

(1)

An unspecified amount of securities or aggregate principal amount, as applicable, of each identified class is being registered as may from time to time be sold at unspecified prices.

(2)

Estimated pursuant to Rule 457(o) solely for the purpose of determining the registration fee. The proposed maximum offering price per security will be determined from time to time, by the Registrant in connection with the sale by the Registrant of the securities registered under this registration statement.

(3)

Subject to Note 1 above, such shares of common stock or preferred stock, or subscription rights to purchase shares of common stock, may be sold separately or as units in combination with other securities registered hereunder.

(4)

Subject to Note 1 above, such shares of common stock may be issued upon conversion or exchange of other securities registered hereunder, to the extent any such securities are, by their terms, convertible or exchangeable for common stock.

(5)

Subject to Note 1 above, such warrants may be sold, from time to time separately or as units in combination with other securities registered hereunder, representing rights to purchase common stock, preferred stock or debt securities.

(6)

Subject to Note 1 above, such principal amount of debt may be sold separately or as units in combination with other securities registered hereunder.

(7)

Subject to Note 1 above, such units may consist of a combination of any one or more of the securities being registered hereunder and may also include securities issued by third parties, including the U.S. Treasury.

(8)

In no event will the aggregate offering price of all securities issued from time to time pursuant to this registration statement by the Registrant exceed $500,000,000.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.

 

 

 


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The information in this prospectus is not complete and may be changed. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

Subject to Completion

Prospectus dated April 23, 2021

PROSPECTUS

 

 

LOGO

Common Stock

Preferred Stock

Debt Securities

Subscription Rights

Warrants

Units

 

 

Crescent Capital BDC, Inc. is a business development company that seeks to provide capital solutions to middle market companies with sound business fundamentals. We seek to create a broad and diversified portfolio that generally includes senior secured first lien, unitranche, senior secured second lien and subordinated loans and minority equity securities of U.S. middle market companies. We may on occasion invest in larger or smaller companies. Our investments may include non-cash income features, including payment-in-kind interest and original issue discount. We may also invest in securities that are rated below investment grade (e.g., junk bonds) by rating agencies or that would be rated below investment grade if they were rated.

We are externally managed by our investment advisor, Crescent Cap Advisors, LLC, an investment advisor that is registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended. CCAP Administration LLC provides certain administrative services and other services necessary for us to operate.

Our common stock is traded on The NASDAQ Global Market under the symbol “CCAP.” On April 21, 2021, the last reported sales price of our common stock on The NASDAQ Global Market was $18.78, per share. The net asset value per share of our common stock at December 31, 2020 (the last date prior to the date of this prospectus on which we determined net asset value) was $19.88.

Investing in our securities involves risks that are described in the “Risk Factors” section beginning on page 15 of this prospectus, including the risk of leverage.

We may offer, from time to time, in one or more offerings or series, our common stock, preferred stock, debt securities, subscription rights to purchase shares of our common stock, warrants representing rights to purchase shares of our common stock, preferred stock or debt securities, or units comprised of any combination of the foregoing, which we refer to, collectively, as the “securities.” The preferred stock, debt securities, subscription rights and warrants (including as part of a unit) offered hereby may be convertible or exchangeable into shares of our common stock. The securities may be offered at prices and on terms to be described in one or more supplements to this prospectus. In the event we offer common stock, the offering price per share of our common stock less any underwriting commissions or discounts will generally not be less than the net asset value per share of our common stock at the time we make the offering. However, we may issue shares of our common stock pursuant to this prospectus at a price per share that is less than our net asset value per share (a) in connection with a rights offering to our existing stockholders, (b) with the prior approval of a majority (as defined in the 1940 Act) of (1) the outstanding shares of our common stock and (2) the outstanding shares of the our common stock held by persons that are not affiliated persons of the Company or (c) under such circumstances as the U.S. Securities and Exchange Commission (the “SEC”) may permit.     

This prospectus describes some of the general terms that may apply to an offering of our securities. We will provide the specific terms of these offerings and securities in one or more supplements to this prospectus. We may also authorize one or more free writing prospectuses to be provided to you in connection with these offerings. The accompanying prospectus supplement and any related free writing prospectus may also add, update, or change information contained in this prospectus. You should carefully read this prospectus, the accompanying prospectus supplement, any related free writing prospectus and the documents incorporated by reference herein, before investing in our securities and keep them for future reference. We file annual, quarterly and current reports, proxy statements and other information with the SEC. This information is available free of charge by calling us collect at (310) 235-5900, by sending an e-mail to us at investor.relations@crescentcap.com or on our website at http://www.crescentbdc.com. The SEC also maintains a website at www.sec.gov that contains such information. The information on the websites referred to herein is not incorporated by reference into this prospectus or the accompanying prospectus supplement.

 

 

Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

This prospectus may not be used to consummate sales of securities unless accompanied by a prospectus supplement.

 

 

The date of this prospectus is [], 2021.


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You should rely only on the information contained in this prospectus, the accompanying prospectus supplement, any related free writing prospectus, the documents incorporated by reference in this prospectus and the applicable prospectus supplement, or any other information to which we have referred you. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in, or incorporated by reference in, this prospectus, the accompanying prospectus supplement or any such free writing prospectus is, or will be, accurate only as of the dates on their respective covers. Our business, financial condition, results of operations and prospects may have changed since any such date.

TABLE OF CONTENTS

 

     Page  

Prospectus Summary

     1  

The Company

     1  

Offerings

     7  

Fees and Expenses

     10  

Financial Highlights

     13  

Risk Factors

     15  

Forward-Looking Statements

     18  

Use of Proceeds

     20  

Price Range of Common Stock and Distributions

     21  

Management’s Discussion and Analysis of Financial Condition and Results of Operations

     22  

Senior Securities

     23  

Business

     24  

Portfolio Companies

     25  

Management

     44  

Certain Relationships and Related Transactions

     45  

Control Persons and Principal Stockholders

     46  

Determination of Net Asset Value

     48  

Certain Material U.S. Federal Income Tax Considerations

     50  

Description of Securities

     59  

Description of Our Preferred Stock

     66  

Description of Our Subscription Rights

     67  

Description of Our Warrants

     69  

Description of Our Debt Securities

     70  

Description of Our Units

     82  

Sales of Common Stock Below Net Asset Value

     83  

Regulation

     88  

Custodian, Transfer and Dividend Paying Agent and Registrar

     93  

Brokerage Allocation and Other Practices

     93  

Plan of Distribution

     93  

Legal Matters

     95  

Independent Registered Public Accounting Firm

     95  

Available Information

     96  

Incorporation of Certain Information By Reference

     96  

 

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ABOUT THIS PROSPECTUS

This prospectus is part of a “shelf” registration statement that we have filed with the SEC. Under the shelf registration process, we may offer, from time to time, in one or more offerings or series, our common stock, preferred stock, debt securities, subscription rights to purchase shares of our common stock, warrants representing rights to purchase shares of our common stock, preferred stock or debt securities, or units comprised of any combination of the foregoing, on terms to be determined at the time of the offering. The securities may be offered at prices and on terms described in one or more supplements to this prospectus. This prospectus provides you with a general description of the securities that we may offer. Each time we use this prospectus to offer securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. We may also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to these offerings. Such prospectus supplement and/or free writing prospectus (collectively referred to hereinafter as the “prospectus supplement”) may also add, update or change information contained in this prospectus or in the documents we incorporate by reference herein. This prospectus and the prospectus supplement, together with any documents incorporated by reference herein, will include all material information relating to the applicable offering. Please carefully read this prospectus and the prospectus supplement, together with any documents incorporated by reference in this prospectus and the applicable prospectus supplement, any exhibits and the additional information described under the headings “Available Information,” “Incorporation of Certain Information By Reference,” “Prospectus Summary” and “Risk Factors” before you make an investment decision.

 

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PROSPECTUS SUMMARY

This summary highlights some of the information contained elsewhere in this prospectus. It is not complete and may not contain all of the information that you may want to consider. You should read carefully the more detailed information set forth under “Risk Factors” and the other information included or incorporated by reference in this prospectus and the accompanying prospectus supplement. Except where the context suggests otherwise, the terms “CCAP,” “Crescent Capital,” “we,” “us,” “our,” and “the Company” refer to Crescent Capital BDC, Inc. The term “Advisor” refers to Crescent Cap Advisors, LLC, a Delaware limited liability company. The term “Administrator” refers to CCAP Administration, LLC, a Delaware limited liability company. The term “Crescent” refers to Crescent Capital Group LP and its controlled affiliates.

THE COMPANY

Overview

We are a specialty finance company focused on lending to middle-market companies and were incorporated under the laws of the State of Delaware on February 5, 2015 (the “Inception”). On January 30, 2020, we changed our state of incorporation from the State of Delaware to the State of Maryland. On January 31, 2020, the Company completed a transaction to acquire Alcentra Capital Corporation in a cash and stock transaction (the “Alcentra Acquisition”). The Company was listed and began trading on the NASDAQ stock exchange on February 3, 2020.

We have elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, we have elected to be treated for U.S. federal income tax purposes as a regulated investment company (a “RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). As such, we are required to comply with various regulatory requirements, such as the requirement to invest at least 70% of our assets in “qualifying assets,” source of income limitations, asset diversification requirements, and the requirement to distribute annually at least 90% of our taxable income and tax-exempt interest.

We are managed by our investment advisor, Crescent Cap Advisors, LLC (the “Advisor”, and formerly, CBDC Advisors, LLC), an investment advisor that is registered with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Our administrator, CCAP Administration LLC (the “Administrator”, and formerly, CBDC Administration, LLC) provides the administrative services necessary for us to operate. Our management consists of investment and administrative professionals from the Advisor and Administrator along with our Board of Directors (the “Board”). The Advisor directs and executes our investment operations and capital raising activities subject to oversight from the Board, which sets our broad policies. The Board has delegated investment management of our investment assets to the Advisor. The Board consists of five directors, four of whom are independent.

A portion of the outstanding shares of our common stock, par value $0.001 per share, are owned by Crescent. Crescent is also the majority member of the Advisor and sole member of the Administrator. We have entered into a license agreement with Crescent under which Crescent granted us a non-exclusive, royalty-free license to use the name “Crescent Capital”. The Advisor has entered into a resource sharing agreement with Crescent. On January 5, 2021 Sun Life Financial Inc. acquired a majority interest in Crescent.

Our primary investment objective is to maximize the total return to our stockholders in the form of current income and capital appreciation through debt and related equity investments. We seek to achieve our investment objectives by investing primarily in secured debt (including senior secured first lien, unitranche and senior



 

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secured second-lien debt) and unsecured debt (including senior unsecured, mezzanine and subordinated debt), as well as related equity securities of private U.S. middle-market companies. We may purchase interests in loans or make debt investments, either (i) directly from our target companies as primary market or private credit investments (i.e., private credit transactions), or (ii) primary or secondary market bank loan or high yield transactions in the broadly syndicated “over-the-counter” market (i.e., broadly syndicated loans and bonds). Although our focus is to invest in less liquid private credit transactions, we may from time to time invest in more liquid broadly syndicated loans and bonds to complement our private credit transactions.

Our investment objective is accomplished through:

 

   

accessing the origination channels that have been developed and established by Crescent;

 

   

originating investments in what we believe to be middle-market companies with strong business fundamentals, generally controlled by private equity investors that require capital for growth, acquisitions, recapitalizations, refinancings and leveraged buyouts;

 

   

applying Crescent’s underwriting standards; and

 

   

leveraging Crescent’s experience and resources to monitor our investments.

Our investment philosophy emphasizes capital preservation through credit selection and risk mitigation. We expect our targeted portfolio to provide downside protection through conservative cash flow and asset coverage requirements, priority in the capital structure and information requirements.

As a BDC under the Act and a RIC under the Code, our portfolio is subject to diversification and other requirements. See “—Certain U.S. Federal Income Tax Consequences” in our most recent Annual Report on Form 10-K and “Certain U.S. Federal Income Tax Consequences” below.

We have formed or acquired a wholly owned subsidiary that is structured as a tax blocker, to hold equity or equity-like investments in a portfolio company organized as a limited liability company. We have also formed a special purpose vehicle that holds certain debt investments in connection with a credit facility. These corporate subsidiaries are not consolidated for income tax purposes and may incur income tax expense as a result of their ownership of portfolio companies.

We may borrow money from time to time within the levels permitted by the 1940 Act (up to 150% of asset coverage requirement). In determining whether to borrow money, we 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. The use of borrowed funds or the proceeds of preferred stock offerings to make investments would have its own specific set of benefits and risks, and all of the costs of borrowing funds or issuing preferred stock would be borne by holders of our common stock. See “Item 1A. Risk Factors—Risks Relating to Our Business and Structure—We are subject to risks associated with the current interest rate environment, and to the extent we use debt to finance our investments, changes in interest rates may affect our cost of capital and net investment income. Further, changes in LIBOR or its discontinuation may adversely affect the value of LIBOR-indexed securities, loans, and other financial obligations or extensions of credit in our portfolio” in our most recent Annual Report on Form 10-K.

See “Business” in our most recent Annual Report on Form 10-K for additional information about us.

Risk Factors

Investing in Crescent Capital involves risks. The following is a summary of the principal risks that you should carefully consider before investing in our securities. In addition, see “Risk Factors” beginning on page 15



 

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and in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q incorporated by reference herein for a more detailed discussion of the principal risks as well as certain other risks you should carefully consider before deciding to invest in our securities.

Risks Relating to the COVID-19 pandemic

 

   

Global economic, political and market conditions caused by the current public health crisis have (and in the future, could further) adversely affect our business, results of operations and financial condition and those of our portfolio companies.

Risks Relating to our Business and Structure

 

   

We have a limited operating history and are dependent upon Crescent and key personnel of Crescent and the Advisor.

 

   

We may not replicate the historical results achieved by Crescent.

 

   

Global capital markets could enter a period of severe disruption and instability. These conditions have historically affected and could again materially and adversely affect debt and equity capital markets in the United States and around the world and our business.

 

   

Global economic, political and market conditions, including uncertainty about the financial stability of the United States, could have a significant adverse effect on our business, financial condition and results of operations.

 

   

Adverse developments in the credit markets may impair our ability to enter into new debt financing arrangements.

 

   

The Advisor, the investment committee of the Advisor, Crescent and their affiliates, officers, directors and employees may face certain conflicts of interest. Conflicts of interest may be created by the valuation process for certain portfolio holdings. Conflicts may arise related to other arrangements with Crescent and the Advisor and other affiliates.

 

   

Crescent’s principals and employees, the Advisor or their affiliates may, from time to time, possess material non-public information, limiting our investment discretion.

 

   

Our management and incentive fee structure may create incentives for the Advisor that are not fully aligned with our stockholders’ interests and may induce the Advisor to make speculative investments.

 

   

Our Investment Advisory Agreement was negotiated with the Advisor and the Administration Agreement was negotiated with the Administrator, which are both our related parties. The Advisor has limited liability and is entitled to indemnification under the Investment Advisory Agreement.

 

   

We operate in an increasingly competitive market for investment opportunities, which could make it difficult for us to identify and make investments that are consistent with our investment objectives. Our ability to enter into transactions with our affiliates is restricted. Our ability to sell or otherwise exit investments also invested in by other Crescent investment vehicles is restricted.

 

   

We may have difficulty paying our required distributions if we recognize income before, or without, receiving cash representing such income. We will be subject to corporate level income tax if we are unable to qualify as a RIC. Our business may be adversely affected if we fail to maintain our qualification as a RIC. Stockholders may be required to pay tax in excess of the cash they receive. We may be subject to withholding of U. S. Federal income tax on distributions for non-U.S. stockholders. We may retain income and capital gains in excess of what is permissible for excise tax purposes and such amounts will be subject to 4% U.S. federal excise tax, reducing the amount available for distribution to stockholders.



 

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We may need to raise additional capital. Regulations governing our operation as a BDC affect our ability to, and the way in which we may, raise additional capital. Certain investors are limited in their ability to make significant investments in us.

 

   

Our business could be adversely affected in the event we default under our existing credit facilities or any future credit or other borrowing facility.

 

   

Our strategy involves a high degree of leverage. We intend to continue to finance our investments with borrowed money, which will magnify the potential for gain or loss on amounts invested and increases the risk of investing in us. The risks of investment in a highly leveraged fund include volatility and possible distribution restrictions.

 

   

We are subject to risks associated with the current interest rate environment, and to the extent we use debt to finance our investments, changes in interest rates may affect our cost of capital and net investment income. Further, the discontinuation of LIBOR may adversely affect the value of LIBOR-indexed securities, loans, and other financial obligations or extensions of credit in our portfolio.

 

   

We are and may be subject to restrictions under our credit facilities and any future credit or other borrowing facility that could adversely impact our business.

 

   

We may be the target of litigation.

 

   

There is a risk that investors in our common stock may not receive dividends or that our dividends may not grow over time and that investors in our debt securities may not receive all of the interest income to which they are entitled.

 

   

If we do not invest a sufficient portion of our assets in qualifying assets, we could fail to qualify as a BDC or be precluded from investing according to our current business strategy.

 

   

The majority of our portfolio investments are recorded at fair value as determined in good faith by our Board and, as a result, there may be uncertainty as to the value of our portfolio investments.

 

   

We may experience fluctuations in our quarterly operating results.

 

   

New or modified laws or regulations governing our operations may adversely affect our business.

 

   

The United Kingdom’s withdrawal from the European Union has led to significant risks and uncertainty for global markets and may create significant risks and uncertainty for our investments.

 

   

Our Board may change our investment objectives, operating policies and strategies without prior notice or stockholder approval.

 

   

The Advisor and the Administrator each have the ability to resign on 60 days’ notice, and we may not be able to find a suitable replacement within that time, resulting in a disruption in operations that could adversely affect our financial condition, business and results of operations.

 

   

We are highly dependent on information systems, and systems failures or cyber-attacks could significantly disrupt its business, which may, in turn, negatively affect the value of shares of our common stock and our ability to pay distributions.

 

   

Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of its confidential information and/or damage to its business relationships.

 

   

We and the Advisor are subject to regulations and SEC oversight. If we or the Advisor fail to comply with applicable requirements, it may adversely impact our results relative to companies that are not subject to such regulations.

 

   

We are subject to risks related to corporate social responsibility.



 

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Risks Relating to Our Investments

 

   

We may hold the debt securities of leveraged companies. Economic recessions or downturns could impair our portfolio companies, and defaults by our portfolio companies will harm our operating results. Our portfolio companies may be unable to repay or refinance outstanding principal on their loans at or prior to maturity, and rising interests rates may make it more difficult for portfolio companies to make periodic payments on their loans.

 

   

We typically invest in middle-market companies, which involves higher risk than investments in large companies.

 

   

The due diligence process that the Advisor undertakes in connection with our investments may not reveal all the facts that may be relevant in connection with an investment.

 

   

The lack of liquidity in our investments may adversely affect our business. We may invest in high yield debt, or junk-rated debt, which has greater credit and liquidity risk than more highly rated debt obligations. Our subordinated investments may be subject to greater risk than investments that are not similarly subordinated.

 

   

Price declines and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing net asset value through increased net unrealized depreciation.

 

   

Our failure to make follow-on investments in our portfolio companies could impair the value of our portfolio.

 

   

The disposition of our investments may result in contingent liabilities.

 

   

We will be subject to the risk that the debt investments we make in our portfolio companies may be repaid prior to maturity.

 

   

We may be subject to risks under hedging transactions and may become subject to risk if we invest in non-U.S. securities.

 

   

We may not realize anticipated gains on the equity interests in which we invest.

 

   

Our investments with OID and PIK interest income features may expose us to risks associated with such income being required to be included in accounting income and taxable income prior to receipt of cash.

 

   

You may receive shares of our common stock as dividends, which could result in adverse tax consequences to you.

 

   

Changes in healthcare laws and other regulations applicable to some of our portfolio companies may constrain their ability to offer their products and services.

 

   

Our investments in the consumer products and services sector are subject to various risks including cyclical risks associated with the overall economy. Our investments in the financial services sector are subject to various risks including volatility and extensive government regulation. Our investments in technology companies are subject to many risks, including volatility, intense competition, shortened product life cycles, litigation risk and periodic downturn.

 

   

We may be unable to realize the benefits anticipated by the Alcentra Acquisition, including estimated cost savings and synergies, or it may take longer than anticipated to achieve such benefits.

Risks Relating to Our Common Stock

 

   

The market price of our common stock may fluctuate significantly. Our shares of common stock trade at a discount from net asset value and may continue to do so, which could limit our ability to raise additional equity capital.



 

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Our stockholders will experience dilution in their ownership percentage if they opt out of our dividend reinvestment plan.

 

   

Provisions of the Maryland General Corporation Law and of our Articles of Amendment and Restatement, as amended (the “Charter”), and Amended and Restated Bylaws, as amended (the “Bylaws”) could deter takeover attempts and have an adverse effect on the price of our common stock.

 

   

Our Charter designates the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.

 

   

We incur significant costs as a result of our listing on NASDAQ.

Our Corporate Information

Our administrative and principal executive offices are located at 11100 Santa Monica Blvd., Suite 2000, Los Angeles, California 90025, telephone number (310) 235-5900.



 

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OFFERINGS

We may offer, from time to time, in one or more offerings or series, our common stock, preferred stock, debt securities, subscription rights to purchase shares of our common stock, warrants representing rights to purchase shares of our common stock, preferred stock or debt securities, or units comprised of any combination of the foregoing, on terms to be determined at the time of the offering. We will offer our securities at prices and on terms to be set forth in one or more supplements to this prospectus. The offering price per share of our common stock, less any underwriting commissions or discounts, generally will not be less than the net asset value per share of our common stock at the time of an offering. However, we may issue shares of our common stock pursuant to this prospectus at a price per share that is less than our net asset value per share (a) in connection with a rights offering to our existing stockholders, (b) with the prior approval of a majority (as defined in the 1940 Act), of (1) the outstanding shares of our common stock and (2) the outstanding shares of the our common stock held by persons that are not affiliated persons of the Company or (c) under such other circumstances as the SEC may permit. Any such issuance of shares of our common stock below net asset value may be dilutive to the net asset value of our common stock. See “Risk Factors—Risks Relating to Our Common Stock” in our most recent Annual Report on Form 10-K as well as “Risk Factors” included in this prospectus.

We may offer our securities directly to one or more purchasers, including existing stockholders in a rights offering, through agents that we designate from time to time or to or through underwriters or dealers. The prospectus supplement relating to each offering will identify any agents or underwriters involved in the sale of our securities, and will set forth any applicable purchase price, fee, commission or discount arrangement between us and our agents or underwriters or among our underwriters or the basis upon which such amount may be calculated. See “Plan of Distribution” below. We may not sell any of our securities through agents, underwriters or dealers without delivery of a prospectus supplement describing the method and terms of the offering of our securities.

Set forth below is additional information regarding offerings of our securities:

 

Use of proceeds

Unless otherwise specified in a prospectus supplement, we intend to use the net proceeds from the sale of our securities for general corporate purposes, which include, among other things, (a) investing in portfolio companies in accordance with our investment objective and (b) repaying indebtedness. Each supplement to this prospectus relating to an offering will more fully identify the use of the proceeds from such offering. See “Use of Proceeds” below.

 

Distributions

We currently intend to pay dividends or make other distributions to our stockholders on a quarterly basis out of assets legally available for distribution. We may also pay additional dividends or make additional distributions to our stockholders from time to time. Our quarterly and additional dividends or distributions, if any, will be determined by our Board. For more information, see “Price Range of Common Stock and Distributions” below.

 

Taxation

We have elected to be treated as a RIC for U.S. federal income tax purposes. As a RIC, we generally will not pay U.S. federal corporate-level income taxes on any income and gain that we distribute to our stockholders as dividends on a timely basis. Among other things, in order to maintain our RIC status, we must meet specified source of income and asset diversification requirements and



 

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distribute annually generally an amount equal to at least 90% of our investment company taxable income, out of assets legally available for distribution. See “Risk Factors—Risks Relating to Our Business and Structure—Our business may be adversely affected if it fails to maintain its qualification as a RIC” and “We may have difficulty paying our required distributions if it recognizes income before, or without, receiving cash representing such income” in our most recent Annual Report on Form 10-K and “Price Range of Common Stock and Distributions” below.

 

Dividend reinvestment plan

We have a dividend reinvestment plan for our stockholders. This is an “opt out” dividend reinvestment plan. As a result, if we declare a cash dividend, then stockholders’ dividends will be automatically reinvested in additional shares of our common stock, unless they specifically “opt out” of the dividend reinvestment plan so as to receive cash. Stockholders whose cash dividends are reinvested in additional shares of our common stock will be subject to the same U.S. federal, state and local tax consequences as stockholders who elect to receive their dividends in cash. See “Dividend Reinvestment Plan” below.

 

The NASDAQ Global Market symbol

“CCAP”

 

Anti-takeover provisions

Our Board is divided into three classes of directors serving staggered three-year terms. This structure is intended to provide us with a greater likelihood of continuity of management, which may be necessary for us to realize the full value of our investments. A staggered Board also may serve to deter hostile takeovers or proxy contests, as may certain other measures adopted by us. See “Description of Our Capital Stock” below.

 

Leverage

We borrow funds to make additional investments. We use this practice, which is known as “leverage,” to attempt to increase returns to our stockholders, but it involves significant risks. See “Risk Factors,” “Senior Securities” and “Regulation—Indebtedness and Senior Securities” below. We are currently allowed to borrow amounts such that our asset coverage, as calculated pursuant to the 1940 Act, equals at least 150% after such borrowing (i.e. we are able to borrow up to two dollars for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Components of Operations” in our most recent Annual Report on Form 10-K.

 

  The amount of leverage that we employ at any particular time will depend on the Advisor’s and the Board’s assessments of market and other factors at the time of any proposed borrowing.

 

Management arrangements

Crescent Cap Advisors, LLC serves as our investment advisor. CCAP Administration, LLC serves as our administrator. For a description of



 

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Crescent Cap Advisors, LLC, CCAP Administration, LLC and our contractual arrangements with these companies, see “Business” in our most recent Annual Report on Form 10-K under the captions “Investment Advisory Agreement,” and “Administration Agreement.”

 

Available information

We are required to file periodic reports, proxy statements and other information with the SEC. This information is available free of charge by calling us collect at (310) 235-5900, by sending an e-mail to us at investor.relations@crescentcap.com or on our website at http://www.crescentbdc.com. Information contained on our website is not incorporated into this prospectus and you should not consider such information to be part of this prospectus. Such information is also available from the EDGAR database on the SEC’s website at www.sec.gov.

 

Incorporation of certain information by reference

This prospectus is part of a registration statement that we have filed with the SEC. The information incorporated by reference is considered to comprise a part of this prospectus from the date we file any such document. Any reports filed by us with the SEC subsequent to the date of this prospectus and before the date that any offering of any securities by means of this prospectus and any supplement thereto is terminated will automatically update and, where applicable, supersede any information contained in this prospectus or incorporated by reference in this prospectus. See “Incorporation of Certain Information by Reference” below.


 

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FEES AND EXPENSES

The following table is intended to assist you in understanding the costs and expenses that an investor in our common stock will bear, directly or indirectly, based on the assumptions set forth below. We caution you that some of the percentages indicated in the table below are estimates and may vary. The following table should not be considered a representation of our future expenses. Actual expenses may be greater or less than shown. Except where the context suggests otherwise, whenever this table contains a reference to our fees or expenses, we will pay such fees and expenses out of our net assets and, consequently, stockholders will indirectly bear these fees or expenses as our investors

 

Stockholder transaction expenses (as a percentage of offering price):

  

Sales load

     —   (1) 

Offering expenses

     —   (2) 

Dividend reinvestment plan expenses

    
Variable
Transaction Fee
 
(3) 
  

 

 

 

Total stockholder transaction expenses paid

     —   (4) 
  

 

 

 

Annual expenses (as a percentage of consolidated net assets attributable to common stock)(5):

  

Base management fees

     2.20 %(6) 

Incentive fees payable under Investment Advisory Agreement

     1.63 %(7) 

Interest payments on borrowed funds

     2.83 %(8) 

Other expenses

     0.84 %(9) 

Acquired fund fees and expenses

     0.47 %(10) 
  

 

 

 

Total annual expenses

     7.97 % (11) 

Base management fee waiver

     (0.88 )%(12) 

Incentive fee waiver

     (1.63 )%(13) 
  

 

 

 

Total annual expenses after waivers

     5.46 % 
  

 

 

 

 

(1)

In the event that the securities to which this prospectus relates are sold to or through underwriters, a corresponding prospectus supplement will disclose the applicable sales load (underwriting discount or commission). Purchases of shares of our common stock on the secondary market are not subject to sales charges but may be subject to brokerage commissions or other charges. The table does not include any sales load that stockholders may have paid in connection with their purchase of shares of our common stock.

(2)

The related prospectus supplement will disclose the estimated amount of offering expenses, the offering price and the offering expenses borne by us as a percentage of the offering price.

(3)

The expenses of the dividend reinvestment plan are included in “Other expenses.” The plan administrator’s fees under the plan are paid by us. If a participant elects by notice to the plan administrator in advance of termination to have the plan administrator sell part or all of the shares held by the plan administrator in the participant’s account and remit the proceeds to the participant, the plan administrator is authorized to deduct a transaction fee of up to $15 plus a $0.10 per share fee from the proceeds. See “Dividend Reinvestment Plan” below for more information.

(4)

The related prospectus supplement will disclose the offering price and the total stockholder transaction expenses as a percentage of the offering price.

(5)

The “consolidated net assets attributable to common stock” used to calculate the percentages in this table is our net assets as of December 31, 2020.

(6)

The base management fee referenced in the table above is estimated by annualizing the actual amounts incurred during the three months ended December 31, 2020.

 

The base management fee under the Amended and Restated Investment Advisory Agreement, dated as of January 5, 2021, by and between us and the Advisor (the “Investment Advisory Agreement”) is calculated

 

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  and payable quarterly in arrears at an annual rate of 1.25% of our average gross assets, including assets purchased with borrowed funds or other forms of leverage, but, excluding cash and cash equivalents, investment in Great American Capital Partners II LP (“GACP II”) and adjusted for share issuances or repurchases. For more detailed information about the base management fee and the Investment Advisory Agreement, please see Note 3 to our consolidated financial statements for the year ended December 31, 2020.
(7)

The incentive fee referenced in the table above is estimated by annualizing the actual amounts incurred during the three months ended December 31, 2020.

 

 

The incentive fee consists of two parts, one based on income and the other based on capital gains, that are determined independent of each other, with the result that one component may be payable even if the other is not:

 

  -

The first part, the “Income Incentive Fee,” is calculated and payable quarterly in arrears and equals 100% of the pre-incentive fee net investment income for the immediately preceding calendar quarter, if any, that exceeds a preferred return of 1.75% per quarter (7% annualized) (the “Hurdle”), but is less than or equal to 1.8182% in the calendar quarter; and 17.5% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.8182% in the calendar quarter provided, however, that the Advisor has agreed to waive the Income Incentive Fee from February 1, 2020 through July 31, 2021. The Advisor has notified the Company that, upon expiration of the current fee waivers on July 31, 2021, it intends to voluntarily waive income incentive fees to the extent net investment income falls short of the declared dividend on a full dollar basis through December 31, 2022.

 

  -

The second part, the capital gains incentive fee, is determined and payable in arrears as of the end of each fiscal year at a rate of 17.5% of our realized capital gains, if any, on a cumulative basis from the Inception through the end of the fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees.

 

 

For more detailed information about the incentive fee, please see Note 3 to our consolidated financial statements for the year ended December 31, 2020.

(8)

Interest payments on borrowed funds referenced in the table above are estimated by annualizing the actual amounts incurred during the three months ended December 31, 2020.

At December 31, 2020, the weighted average effective interest rate for total debt outstanding was 3.3%. We may borrow funds from time to time to make investments to the extent we determine that the economic situation is conducive to doing so. Our stockholders indirectly bear the costs of borrowings under any debt instruments that we may enter into.

(9)

Other expenses referenced in the table above are estimated by annualizing the actual amounts incurred during the three months ended December 31, 2020.

 

 

Other expenses include various overhead expenses, professional fees, director fees, and payments under the Amended and Restated Administration Agreement. See “Corporate Governance-Certain Relationships and Related Party Transactions-Administration Agreements” in our most recent Annual Report on Form 10-K.

(10)

Our stockholders indirectly bear the expenses of underlying funds or other investment vehicles in which we invest that (1) are investment companies or (2) would be investment companies under Section 3(a) of the 1940 Act but for the exceptions to that definition provided for in Sections 3(c)(1) and 3(c)(7) of the 1940 Act.

(11)

“Total annual expenses” as a percentage of consolidated net assets attributable to common stock are higher than the total annual expenses percentage would be for a company that is not leveraged. We borrow money to leverage and increase our total assets. The SEC requires that the “Total annual expenses” percentage be calculated as a percentage of net assets (defined as total assets less indebtedness and before taking into account any income based fees or capital gains incentive fees accrued during the period), rather than the total assets, including assets that have been funded with borrowed monies.

(12)

The Advisor agreed to waive a portion of the management fee from February 1, 2020 through July 31, 2021 so that only 0.75% shall be charged for such time period. The Advisor is not permitted to recoup any waived

 

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  amounts at any time. The management fee waiver referenced in the table above is estimated by annualizing the actual amounts incurred during the three months ended December 31, 2020.
(13)

The Advisor agreed to waive the income based portion of the incentive fee from February 1, 2020 through July 31, 2021 and has notified the Company that, upon expiration of the current fee waivers on July 31, 2021, it intends to voluntarily waive income incentive fees to the extent net investment income falls short of the declared dividend on a full dollar basis through December 31, 2022. The income based incentive fee waiver referenced in the table above is estimated by annualizing the actual amounts incurred during the three months ended December 31, 2020.

Example

The following example demonstrates the projected dollar amount of total cumulative expenses over various periods with respect to a hypothetical investment in our common stock, assuming asset coverage ratio of 217% (Corporation’s actual asset coverage as of December 31. 2020) and total annual expenses of 5.46% of net assets attributable to common stock as set forth in the fees and expenses table above, and (x) a 5.0% annual return resulting entirely from net realized capital gains (none of which is subject to the incentive fee) and (y) a 5.0% annual return resulting entirely from net realized capital gains (all of which is subject to the incentive fee based on capital gains). Transaction expenses are included in the following example. This example and the expenses in the table above should not be considered a representation of our future expenses, and actual expenses (including cost of debt, if any, and other expenses) may be greater or less than those shown.

 

You would pay the following expenses on a

$1,000 common stock investment:

   1 year      3 years      5 years      10 years  

assuming a 5% annual return resulting entirely from net realized capital gains (none of which is subject to the capital gains incentive fee)(1)

   $ 57      $ 171      $ 282      $ 554  

assuming a 5% annual return resulting entirely from net realized capital gains (all of which is subject to the incentive fee based on capital gains)(2)

   $ 66      $ 195      $ 320      $ 615  

 

(1)

Assumes that we will not realize any capital gains computed net of all realized capital losses and unrealized capital depreciation.

(2)

Assumes no unrealized capital depreciation and a 5% annual return resulting entirely from net realized capital gains and therefore subject to the incentive fee based on capital gains. Because our investment strategy involves investments that generate primarily current income, we believe that a 5% annual return resulting entirely from net realized capital gains is unlikely.

The foregoing table is to assist you in understanding the various costs and expenses that an investor in our common stock will bear directly or indirectly. While the example assumes, as required by the SEC, a 5% annual return, our performance will vary and may result in a return greater or less than 5%. Because the income portion of the incentive fee under the Investment Advisory Agreement is unlikely to be significant assuming a 5% annual return, the second example assumes that the 5% annual return will be generated entirely through net realized capital gains and, as a result, will trigger the payment of the capital gains portion of the incentive fee under the Investment Advisory Agreement. The income portion of the incentive fee under the Investment Advisory Agreement, assuming a 5% annual return, would either not be payable or have an immaterial impact on the expense amounts shown above, is not included in the example. If we achieve sufficient returns on our investments, including through net realized capital gains, to trigger an incentive fee of a material amount, our expenses, and returns to our investors, would be higher. In addition, while the example assumes reinvestment of all dividends and distributions at net asset value, under certain circumstances, reinvestment of dividends and other distributions under our dividend reinvestment plan may occur at a price per share that differs from net asset value.

This example and the expenses in the table above should not be considered a representation of our future expenses as, and actual expenses (including the cost of debt, if any, and other expenses) that we may incur in the future and such actual expenses may be greater or less than those shown.

 

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FINANCIAL HIGHLIGHTS

The following table of financial highlights is intended to help a prospective investor understand the Company’s financial performance for the periods shown. The financial data set forth in the following table as of and for the years ended December 31, 2020, 2019, 2018, 2017, 2016, and 2015 are derived from our consolidated financial statements, which have been audited by Ernst & Young LLP, an independent registered public accounting firm whose reports thereon are incorporated by reference in this prospectus, certain documents incorporated by reference in this prospectus or the accompanying prospectus supplement, or our Annual Reports on Form 10-K filed with the SEC, which may be obtained from www.sec.gov or upon request. You should read these financial highlights in conjunction with our consolidated financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this prospectus, any documents incorporated by reference in this prospectus or the accompanying prospectus supplement, or our Annual Reports on Form 10-K filed with the SEC.

 

    For the year
ended
December 31,
2020
    For the year
ended
December 31,
2019
    For the year
ended
December 31,
2018
    For the year
ended
December 31,
2017
    For the year
ended
December 31,
2016
    For the
period from
February 5,
2015
(Inception) to
December 31,
2015*
 

Per Share Data:(1)

           

Net asset value, beginning of period

  $ 19.50     $ 19.43     $ 20.10     $ 20.08     $ 19.13     $ 20.00  

Net investment income after tax

    1.80       1.83       1.65       1.31       1.23       0.55  

Net realized and unrealized gains (losses) on investments and forward contracts, net of taxes

    0.18       (0.14     (0.89     (0.11     1.04       (1.87
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

    1.98       1.69       0.76       1.20       2.27       (1.32
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Effect of equity issuances

    0.04       0.03       0.06       0.02       (0.20     0.77  

Distributions declared from net investment income(2)

    (1.64     (1.64     (1.47     (1.18     (1.10     (0.27

Distributions from net realized gains

    —         —         —         —         —         —    

Total distributions to stockholders

    (1.64     (1.64     (1.47     (1.18     (1.10     (0.27

Offering costs

    —         (0.01     (0.02     (0.02     (0.02     (0.05
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total increase (decrease) in net assets

    0.38       0.07       (0.67     0.02       0.95       (0.87
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

  $ 19.88     $ 19.50     $ 19.43     $ 20.10     $ 20.08     $ 19.13  

Shares outstanding, end of period

    28,167,360       20,862,314       13,358,289       8,597,116       6,376,850       4,056,316  

Weighted average shares outstanding

    27,681,757       17,344,640       10,719,485       7,562,447       5,191,589       2,855,996  

Per share market value at end of period

  $ 14.57     $ —       $ —       $ —       $ —       $ —    

Total return based on market value(3)

    1.47     —       —       —       —       —  

Total return based on net asset value(4)

    10.36     8.81     4.06     5.99     10.70     (3.00

 

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    For the year
ended
December 31,
2020
    For the year
ended
December 31,
2019
    For the year
ended
December 31,
2018
    For the year
ended
December 31,
2017
    For the year
ended
December 31,
2016
    For the
period from
February 5,
2015
(Inception) to
December 31,
2015*
 

Ratio/Supplemental Data:

           

Net assets, end of period(5)

  $ 560,000     $ 406,917     $ 259,579     $ 172,800     $ 128,056     $ 77,586  

Ratio of total net expenses to average net assets(6)(7)

    5.34     6.54     7.33     8.02     7.17     7.65 %(6) 

Ratio of net expenses (without incentive fees and interest and other debt expenses) to average net assets (7)

    2.24     2.50     3.06     3.53     4.08     5.53 %(6) 

Ratio of net investment income before taxes to average net assets(7)

    10.10     9.61     8.48     6.45     6.14     3.17 %(6) 

Ratio of interest and credit facility expenses to average net assets(8)

    3.10     4.03     4.01     3.44     2.59     2.12 %(7) 

Ratio of incentive fees to average net assets

    —       —       0.26     1.05     0.50     —  

Ratio of portfolio turnover to average investments at fair value

    28.01     23.97     27.89     19.27     34.36     4.08 %(4) 

Weighted average debt outstanding(5)

  $ 421,066     $ 275,905     $ 182,328     $ 133,486     $ 78,294     $ 23,591  

Asset coverage ratio

    217     225     209     214     236     242

 

*

The Company was formed on February 5, 2015 and commenced operations on June 26, 2015.

(1)

Based on actual number of shares outstanding at the end of the corresponding period or the weighted average shares outstanding for the period, unless otherwise noted, as appropriate.

(2)

The per share data for distributions per share reflects the actual amount of distributions declared per share for the applicable periods.

(3)

Total return based on market value is calculated as the change in market value per share during the period, taking into account dividends, if any, reinvested in accordance with the Company’s dividend reinvestment plan. The beginning market value per share is based on the market price of $16.40 per share on February 3, 2020, the date of the Company’s listing on NASDAQ, and not annualized.

(4)

Total return based on net asset value is calculated as the change in net asset value per share during the period plus declared dividends per share during the period, divided by the beginning net asset value per share.

(5)

In thousands.

(6)

The ratio of total expenses to average net assets in the table above reflects the Advisor’s voluntary waivers of its right to receive a portion of the management fees and income incentive fees with respect to the Company’s ownership in GACP II. Excluding the effects of waivers, the ratio of total expenses to average net assets would have been 5.37%, 6.58% and 7.36% for the years ended December 31, 2020, December 31, 2019 and December 31, 2018, respectively. The GACP II investment was made after 2018, and as such, the 2017, 2016 and 2015 ratios were not affected.

(7)

Annualized except for organization expenses.

(8)

Annualized.

 

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RISK FACTORS

You should carefully consider the risk factors described below, and in the section titled “Risk Factors” in the applicable prospectus supplement and any related free writing prospectus, and the risks discussed in the section titled “Item 1A. Risk Factors” in our Annual Report on Form 10-K, which is incorporated by reference herein, and any subsequent filings we have made with the SEC that are incorporated by reference into this prospectus or any prospectus supplement, together with all of the other information included in this prospectus, the accompanying prospectus supplement and any documents incorporated by reference herein, including our consolidated financial statements and the related notes thereto, before you decide whether to make an investment in our securities. The risks set out below and described in such documents are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial condition and results of operations could be materially adversely affected. In such case, the net asset value of our common stock and the trading price, if any, of our securities could decline, and you may lose all or part of your investment.

Investors in offerings of our common stock will likely incur immediate dilution upon the closing of such offering.

We generally expect the public offering price of any offering of shares of our common stock to be higher than the book value per share of our outstanding common stock (unless we offer shares pursuant to a rights offering or after obtaining prior approval for such issuance from our stockholders and our independent directors). Accordingly, investors purchasing shares of our common stock in offerings pursuant to this prospectus may pay a price per share that exceeds the tangible book value per share after such offering.

Dilution represents the difference between the offering price and the tangible book value per share immediately after completion of an offering. You could experience dilution both as a result of the offering price and as a result of any shares you purchase in an offering of our common stock having a lower book value than shares held by our existing stockholders.

Your interest in us may be diluted if you do not fully exercise your subscription rights in any rights offering. In addition, if the subscription price is less than our net asset value per share, then you will experience an immediate dilution of the aggregate net asset value of your shares.

In the event we issue subscription rights, stockholders who do not fully exercise their subscription rights should expect that they will, at the completion of a rights offering pursuant to this prospectus, own a smaller proportional interest in us than would otherwise be the case if they fully exercised their rights. We cannot state precisely the amount of any such dilution in share ownership because we do not know at this time what proportion of the shares will be purchased as a result of such rights offering.

In addition, if the subscription price is less than the net asset value per share of our common stock, then our stockholders would experience an immediate dilution of the aggregate net asset value of their shares as a result of the offering. The amount of any decrease in net asset value is not predictable because it is not known at this time what the subscription price and net asset value per share will be on the expiration date of a rights offering or what proportion of the shares will be purchased as a result of such rights offering. Such dilution could be substantial. See “Risk Factors—The net asset value per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current net asset value per share of our common stock or securities to subscribe for or convertible into shares of our common stock” and “Sales of Common Stock Below Net Asset Value” below.

 

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We may initially invest a portion of the net proceeds of offerings pursuant to this prospectus primarily in high-quality short-term investments, which will generate lower rates of return than those expected from the interest generated on our target portfolio investments.

We may initially invest a portion of the net proceeds of offerings pursuant to this prospectus primarily in cash, cash equivalents, U.S. government securities and other high-quality short-term investments. These securities generally earn yields substantially lower than the income that we anticipate receiving once we are fully invested in accordance with our investment objective. As a result, we may not, for a time, be able to achieve our investment objective and/or we may need to, for a time, decrease the amount of any dividend that we may pay to our stockholders to a level that is substantially lower than the level that we expect to pay when the net proceeds of offerings are fully invested in accordance with our investment objective. If we do not realize yields in excess of our expenses, we may incur operating losses and the market price of our shares may decline.

The net asset value per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current net asset value per share of our common stock or securities to subscribe for or convertible into shares of our common stock.

We may sell our common stock, or warrants, options or rights to acquire shares of our common stock, at a price below the then-current net asset value per share of our common stock if our Board determines that such sale is in our best interests, and if our stockholders, including a majority (as defined in the 1940 Act), of (1) the outstanding shares of our common stock and (2) the outstanding shares of the our common stock held by persons that are not affiliated persons of the Company, approve such sale. In any such case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our Board, closely approximates the market value of such securities (less any distributing commission or discount). We do not currently have authorization from our stockholders to issue our common stock at a price below the then-current net asset value per share.

Any decision to sell shares of our common stock below its then current net asset value per share or securities to subscribe for or convertible into shares of our common stock would be subject to the determination by our Board that such issuance is in our and our stockholders’ best interests.

If we were to sell shares of our common stock below its then current net asset value per share, such sales would result in an immediate dilution to the net asset value per share of our common stock. This dilution would occur as a result of the sale of shares at a price below the then current net asset value per share of our common stock and a proportionately greater decrease in the stockholders’ interest in our earnings and assets and their voting interest in us than the increase in our assets resulting from such issuance. Because the number of shares of common stock that could be so issued and the timing of any issuance is not currently known, the actual dilutive effect cannot be predicted.

In addition, if we issue warrants or securities to subscribe for or convertible into shares of our common stock, subject to certain limitations, the exercise or conversion price per share could be less than the net asset value per share at the time of exercise or conversion (including through the operation of anti-dilution protections). Because we would incur expenses in connection with any issuance of such securities, such issuance could result in a dilution of the net asset value per share at the time of exercise or conversion. This dilution would include reduction in the net asset value per share as a result of the proportionately greater decrease in the stockholders’ interest in our earnings and assets and their voting interest than the increase in our assets resulting from such issuance.

Further, if our current stockholders do not purchase any shares to maintain their percentage interest when we issue new shares, regardless of whether such offering is above or below the then current net asset value per share, their voting power will be diluted.

 

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We cannot predict how tax reform legislation will affect us, our investments, or our stockholders, and any such legislation could adversely affect our business.

Legislative or other actions relating to taxes could have a negative effect on us. The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service (“IRS”) and the U.S. Treasury Department. We cannot predict with certainty how any changes in the tax laws might affect us, our stockholders, or our portfolio investments. New legislation and any U.S. Treasury regulations, administrative interpretations or court decisions interpreting such legislation could significantly and negatively affect our ability to qualify for tax treatment as a RIC or the U.S. federal income tax consequences to us and our stockholders of such qualification, or could have other adverse consequences. Stockholders are urged to consult with their tax advisor regarding tax legislative, regulatory, or administrative developments and proposals and their potential effect on an investment in our securities.

 

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FORWARD-LOOKING STATEMENTS

Some of the statements included or incorporated by reference in this prospectus and the accompanying prospectus supplement, constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this prospectus and the accompanying prospectus supplement, including the documents we incorporate by reference herein and therein, involve a number of risks and uncertainties, including statements concerning:

 

   

uncertainty surrounding the financial stability of the United States, Europe and China;

 

   

the ability of our investment advisor to locate suitable investments for us and to monitor and administer our investments;

 

   

potential fluctuation in quarterly operating results;

 

   

potential impact of economic recessions or downturns;

 

   

adverse developments in the credit markets;

 

   

regulations governing our operation as a business development company;

 

   

operation in a highly competitive market for investment opportunities;

 

   

changes in interest rates may affect our cost of capital and net investment income;

 

   

the impact of the elimination of the London Interbank Offered Rate (“LIBOR”) on our operating results;

 

   

financing investments with borrowed money;

 

   

potential adverse effects of price declines and illiquidity in the corporate debt markets;

 

   

the impact of COVID-19 on our portfolio companies and the markets in which they operate, interest rates and the economy in general;

 

   

lack of liquidity in investments;

 

   

the outcome and impact of any litigation;

 

   

the timing, form and amount of any dividends or other distributions;

 

   

risks regarding distributions;

 

   

potential adverse effects of new or modified laws and regulations;

 

   

the social, geopolitical, financial, trade and legal implications of Brexit;

 

   

potential resignation of the Advisor and or the Administrator;

 

   

uncertainty as to the value of certain portfolio investments;

 

   

defaults by portfolio companies;

 

   

our ability to successfully complete and integrate any acquisitions;

 

   

risks associated with original issue discount (“OID”) and payment-in-kind (“PIK”) interest income; and

 

   

the market price of our common stock may fluctuate significantly.

We use words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may” and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. Our actual results and condition could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” and the other information included in this prospectus and the accompanying prospectus supplement, including the documents we incorporate by reference herein and therein.

 

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You should not place undue reliance on these forward-looking statements, which are based on information available to us as of the date of this prospectus or the prospectus supplement, as applicable, including any documents incorporated by reference. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

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USE OF PROCEEDS

Unless otherwise specified in a prospectus supplement, we intend to use the net proceeds from the sale of our securities for general corporate purposes, which include investing in portfolio companies in accordance with our investment objective. We also expect to use the net proceeds of an offering to repay or repurchase outstanding indebtedness, if any, which may include indebtedness ($455.8 million aggregate principal amount outstanding as of April 21, 2021) under (a) the $350 million loan and security agreement of our wholly owned subsidiary Crescent Capital BDC Funding, LLC (the “SPV Asset Facility”) ($260.2 million outstanding as of December 31, 2020), (b) our $200 million revolving credit facility (the “Corporate Revolving Facility”) ($149.9 million outstanding as of December 31, 2020), (c) our $50 million in aggregate principal amount of unsecured notes (the “2023 Unsecured Notes”) that mature on July 30, 2023 ($50 million aggregate principal amount outstanding as of December 31, 2020) and (d) $135.0 million of unsecured notes (the “2026 Unsecured Notes”) that mature on February 17, 2026 ($85 million aggregate principal amount outstanding as of February 17, 2021). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K.

The interest charged on the indebtedness incurred under the SPV Asset Facility is based on LIBOR plus an applicable spread between 1.65% or 2.20%, determined based on the proportion of liquid and illiquid loans pledged to the SPV Asset Facility. The stated maturity date for the SPV Asset Facility is March 10, 2025. The interest rate charged on the indebtedness incurred under the Corporate Facility is based on LIBOR plus 2.35% per annum. The stated maturity date of the Corporate Revolving Facility is August 20, 2024.

The interest charged on the 2023 Unsecured Notes and the 2026 Unsecured Notes is as follows: (a) 5.95% in the case of the 2023 Unsecured Notes and (b) 4.00% in the case of the 2026 Unsecured Notes. The 2023 Unsecured Notes mature on July 30, 2023 and the 2026 Unsecured Notes mature on February 17, 2026. The supplement to this prospectus relating to an offering may more fully identify the use of the proceeds from such offering.

We anticipate that substantially all of the net proceeds of an offering of securities pursuant to this prospectus and its related prospectus supplement will be used for the above purposes within three months of any such offering, depending on the availability of appropriate investment opportunities consistent with our investment objective, but no longer than within six months of any such offerings.

Our primary investment objective is to maximize the total return to our stockholders in the form of current income and capital appreciation through debt and related equity investments. We seek to create a broad and diversified portfolio that generally includes senior secured first lien, unitranche, senior secured second lien and subordinated loans and minority equity securities of U.S. middle market companies. We may on occasion invest in larger or smaller companies. Our investments may include non-cash income features, including payment-in-kind interest and original issue discount. We may also invest in securities that are rated below investment grade (e.g., junk bonds) by rating agencies or that would be rated below investment grade if they were rated. We also may invest up to 30% of our portfolio in non-qualifying assets, as permitted by the 1940 Act. See “Regulation” below. Specifically, as part of this 30% basket, we may invest in entities that are not considered “eligible portfolio companies” (as defined in the 1940 Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under the 1940 Act, and publicly traded entities whose public equity market capitalization exceeds the levels provided for under the 1940 Act. Pending such investments, we will invest a portion of the net proceeds primarily in cash, cash equivalents, U.S. government securities and other high-quality short-term investments. These securities generally earn yields substantially lower than the income that we anticipate receiving once we are fully invested in accordance with our investment objective. As a result, we may not, for a time, be able to achieve our investment objective and/or we may need to, for a time, decrease the amount of any dividend that we may pay to our stockholders to a level that is substantially lower than the level that we expect to pay when the net proceeds of offerings are fully invested in accordance with our investment objective. If we do not realize yields in excess of our expenses, we may incur operating losses and the market price of our common stock and debt securities may decline. See “Regulation—Temporary Investments” below for additional information about temporary investments we may make while waiting to make longer-term investments in pursuit of our investment objective.

 

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PRICE RANGE OF COMMON STOCK AND DISTRIBUTIONS

Our common stock is traded on The NASDAQ Global Market under the symbol “CCAP.” Our common stock has historically traded at prices below our net asset value per share. It is not possible to predict whether our common stock will trade at, above or below net asset value. See “Risk Factors—Risks Relating to Our Common Stock—Our shares of common stock have traded at a discount from net asset value and may do so again in the future, which could limit our ability to raise additional equity capital” in our most recent Annual Report on Form 10-K.

The following table sets forth, for the first three quarters of the year ending December 31, 2020, the net asset value per share of our common stock, the range of high and low closing sales prices of our common stock, the closing sales price as a premium (discount) to net asset value and the dividends or other distributions declared by us. On April 21, 2021, the last reported closing sales price of our common stock on The NASDAQ Global Market was $18.78 per share, which represented a discount of approximately 5.5% to the net asset value per share reported by us as of December 31, 2020.

 

     Net
Asset

Value(1)
     Price Range      High
Sales Price
Premium
(Discount)
to Net Asset

Value(2)
    Low
Sales Price
Premium
(Discount)
to Net Asset

Value(2)
    Cash
Dividend
Per

Share(3)
 
     High      Low  

Year ended December 31, 2020

               

First Quarter(4)

   $ 16.52      $ 17.10      $ 6.21        3.51     (62.4 )%    $ 0.41  

Second Quarter

   $ 18.12      $ 13.25      $ 8.68        (26.9 )%      (52.1 )%    $ 0.41  

Third Quarter

   $ 19.07      $ 13.81      $ 11.65        (27.6 )%      (38.9 )%    $ 0.41  

Fourth Quarter

   $ 19.88      $ 15.25      $ 12.40        (23.3 )%      (37.6 )%    $ 0.41  

Year ended December 31, 2021

               

First Quarter

     *      $ 18.17      $ 14.72        (8.6 )%      (26.0 )%    $ 0.41  

Second Quarter (through April 21, 2021)

     *      $ 19.95      $ 17.05        0.4     (14.2 )%   

 

(1)

Net asset value per share is determined as of the last day in the relevant quarter and therefore may not reflect the net asset value per share on the date of the high and low closing sales prices. The net asset values shown are based on outstanding shares at the end of the relevant quarter.

(2)

Calculated as the respective high or low closing sales price less net asset value, divided by net asset value (in each case, as of the applicable quarter).

(3)

Represents the dividend or other distribution declared in the relevant quarter.

(4)

Shares of our common stock began trading on The NASDAQ Global Market under the symbol “CCAP” on February 3, 2020, in connection with our acquisition of Alcentra Capital Corporation. The price range for such quarter has been calculated as of such date.

*

Net asset value has not yet been calculated for this period.

To the extent that we have taxable income available, we distribute quarterly dividends to our stockholders. The amount of our dividends, if any, are determined by our Board. Dividends and other distributions are recorded on the record date. The amount to be paid out as a dividend is determined by the Board each quarter and is generally based upon the earnings estimated by management. Distributions will generally be paid from net investment income. Net realized capital gains, if any, are distributed at least annually, although we may decide to retain such capital gains for investment. If we do not generate sufficient net investment income during a year, all or part of a distribution may constitute a return of capital. The specific tax characteristics of our dividends and other distributions will be reported to stockholders after the end of each calendar year. Any dividends to our stockholders will be declared out of assets legally available for distribution.

We have elected to be treated as a BDC under the 1940 Act. We have also elected to be treated as a RIC under the Internal Revenue Code. So long as we maintain our status as a RIC, we will generally not pay

 

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corporate-level U.S. federal income or excise taxes on any ordinary income or capital gains that we distribute at least annually to our stockholders as dividends. As a result, any tax liability related to income earned and distributed by us represents obligations of our stockholders and will not be reflected in our consolidated financial statements.

In order for us not to be subject to federal excise taxes, we must distribute annually an amount at least equal to the sum of (i) 98% of our ordinary income (taking into account certain deferrals and elections), (ii) 98.2% of our net capital gains from the current year and (iii) any undistributed ordinary income and net capital gains from preceding years. At our discretion, we may carry forward taxable income in excess of calendar year dividends and pay a 4% excise tax on this income. If we choose to do so, this generally would increase expenses and reduce the amount available to be distributed to stockholders. We will accrue excise tax on estimated undistributed taxable income as required.

We intend to make distributions in cash unless a stockholder elects to receive dividends and/or long-term capital gains distributions in additional shares of common stock. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, if we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings.

The following tables summarize our dividends declared and payable for the years ended December 31, 2020, 2019, 2018, 2017, 2016 and the period from February 5, 2015 to December 31, 2015(1):

 

Date Declared    Record
Date
   Payment
Date
   Per
Share
Amount
 

November 4, 2020

   December 31, 2020    January 15, 2021    $ 0.41  

August 7, 2020

   September 30, 2020    October 15, 2020    $ 0.41  

May 11, 2020

   June 30, 2020    July 15, 2020    $ 0.41  

March 3, 2020

   March 31, 2020    April 15, 2020    $ 0.41  

November 8, 2019

   December 30, 2019    January 17, 2020    $ 0.41  

September 27, 2019

   September 27, 2019    October 18, 2019    $ 0.41  

June 28, 2019

   June 28, 2019    July 18, 2019    $ 0.41  

March 29, 2019

   March 29, 2019    April 12, 2019    $ 0.41  

December 31, 2018

   December 31, 2018    January 15, 2019    $ 0.40  

September 27, 2018

   September 28, 2018    October 12, 2018    $ 0.38  

June 19, 2018

   June 20, 2018    July 13, 2018    $ 0.37  

March 29, 2018

   March 30, 2018    April 13, 2018    $ 0.32  

 

(1)

We were formed on February 5, 2015 and commenced operations on June 26, 2015.

We cannot assure you that we will achieve results that will permit the payment of any cash distributions. We maintain an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a cash dividend, stockholders’ cash dividends will be automatically reinvested in additional shares of our common stock, unless they specifically “opt out” of the dividend reinvestment plan so as to receive cash dividends. See “Dividend Reinvestment Plan” below.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The information contained under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our most recent Annual Report on Form 10-K is incorporated by reference herein.

 

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SENIOR SECURITIES

Information about our senior securities (including preferred stock, debt securities and other indebtedness) is shown in the following table as of the dates indicated in the table below. The report of our independent registered public accounting firm, Ernst & Young LLP, on the senior securities table for each of the five years in the period ended December 31, 2020 and the period from February 5, 2015 (inception) through December 31, 2015 is attached as an exhibit to the registration statement of which this prospectus is a part.

 

Class and Year    Total
Amount
Outstanding
Exclusive of
Treasury
Securities(1)
     Asset
Coverage
Per
Unit(2)
     Involuntary
Liquidating
Preference
Per Unit(3)
     Average
Market
Value
Per
Unit(4)
 

SPV Asset Facility

           

Fiscal 2020

   $ 260,210      $ 2,166        —          N/A  

Fiscal 2019

   $ 220,687      $ 2,250        —          N/A  

Fiscal 2018

   $ 159,629      $ 2,085        —          N/A  

Fiscal 2017

   $ 86,629      $ 2,135        —          N/A  

Fiscal 2016

   $ 47,629      $ 2,347        —          N/A  

Fiscal 2015

   $ —        $ 2,415        —          N/A  

Revolving Credit Facility(5)

           

Fiscal 2020

   $ —        $ 2,166        —          N/A  

Fiscal 2019

   $ —        $ 2,250        —          N/A  

Fiscal 2018

   $ —        $ 2,085        —          N/A  

Fiscal 2017

   $ —        $ 2,135        —          N/A  

Fiscal 2016

   $ 47,810      $ 2,347        —          N/A  

Fiscal 2015

   $ 54,810      $ 2,415        —          N/A  

Revolving Credit Facility II(6)

           

Fiscal 2020

   $ —        $ 2,166        —          N/A  

Fiscal 2019

   $ —        $ 2,250        —          N/A  

Fiscal 2018

   $ 78,310      $ 2,085        —          N/A  

Fiscal 2017

   $ 65,310      $ 2,135        —          N/A  

Fiscal 2016

   $ —        $ 2,347        —          N/A  

Fiscal 2015

   $ —        $ 2,415        —          N/A  

Corporate Revolving Facility

           

Fiscal 2020

   $ 149,904      $ 2,166        —          N/A  

Fiscal 2019

   $ 104,754      $ 2,250        —          N/A  

Fiscal 2018

   $ —        $ —          —          N/A  

Fiscal 2017

   $ —        $ —          —          N/A  

Fiscal 2016

   $ —        $ —          —          N/A  

Fiscal 2015

   $ —        $ —          —          N/A  

2023 Unsecured Notes

           

Fiscal 2020

   $ 50,000      $ 2,166        —          N/A  

Fiscal 2019

   $ —        $ —          —          N/A  

Fiscal 2018

   $ —        $ —          —          N/A  

Fiscal 2017

   $ —        $ —          —          N/A  

Fiscal 2016

   $ —        $ —          —          N/A  

Fiscal 2015

   $ —        $ —          —          N/A  

Internotes

           

Fiscal 2020

   $ 16,418      $ 2,166        —          N/A  

Fiscal 2019

   $ —        $ —          —          N/A  

Fiscal 2018

   $ —        $ —          —          N/A  

Fiscal 2017

   $ —        $ —          —          N/A  

Fiscal 2016

   $ —        $ —          —          N/A  

Fiscal 2015

   $ —        $ —          —          N/A  

 

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(1)

Total amount of each class of senior securities outstanding at principal value at the end of the period presented.

(2)

The asset coverage ratio for a class of senior securities representing indebtedness is calculated as (i) the sum of (A) total assets at end of period and (B) other liabilities excluding total debt outstanding and accrued borrowing expenses at end of period, divided by (ii) the sum of total debt outstanding and accrued borrowing expenses at the end of the period. This asset coverage ratio is multiplied by $1,000 to determine the “Asset Coverage Per Unit”.

(3)

The amount to which such class of senior security would be entitled upon our involuntary liquidation in preference to any security junior to it.

(4)

Not applicable.

(5)

Our $50 million revolving credit facility with Natixis, New York Branch, as administrative agent and certain of its affiliates as lenders, dated as of June 29, 2015, which has been paid down in full and was terminated on June 29, 2017.

(6)

Our $75 million revolving credit facility with Capital One, National Association, as Administrative Agent, Lead Arranger, Managing Agent and Committed Lender, dated as of June 29, 2019, which has been paid down in full and was terminated on August 20, 2019.

BUSINESS

The information contained under the caption “Business” of our most recent Annual Report on Form 10-K is incorporated by reference herein.

 

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PORTFOLIO COMPANIES

The following table describes each of the businesses included in our portfolio and reflects data as of December 31, 2020. Percentages shown for class of investment securities held by us represent percentage of the class owned and do not necessarily represent voting ownership. Percentages shown for equity securities, other than warrants or options, represent the actual percentage of the class of security held before dilution. Percentages shown for warrants and options held represent the percentage of class of security we may own assuming we exercise our warrants or options before dilution.

We have indicated by footnote portfolio companies (a) where we directly or indirectly own more than 25% of the outstanding voting securities of such portfolio company and, therefore, are presumed to be “controlled” by us under the 1940 Act and (b) where we directly or indirectly own 5% to 25% of the outstanding voting securities of such portfolio company or where we hold one or more seats on the portfolio company’s board of directors and, therefore, are deemed to be an “affiliated person” under the 1940 Act. We directly or indirectly own less than 5% of the outstanding voting securities of all other portfolio companies (or have no other affiliations with such portfolio companies) listed on the table. We offer to make significant managerial assistance to certain of our portfolio companies. Where we do not hold a seat on the portfolio company’s board of directors, we may receive rights to observe such board meetings.

Where we have indicated by footnote the amount of undrawn commitments to portfolio companies to fund various revolving and delayed draw senior secured and subordinated loans, such undrawn commitments are presented net of (i) standby letters of credit treated as drawn commitments because they are issued and outstanding, (ii) commitments substantially at our discretion and (iii) commitments that are unavailable due to borrowing base or other covenant restrictions.

 

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PORTFOLIO COMPANIES

As of December 31, 2020

(dollar amounts in millions)

(Unaudited)

 

Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 

Abode Healthcare, Inc.

1099 Main Avenue, Suite 2000, Durango, CO 81301

  Health Care Equipment & Services   Senior Secured First Lien Revolver   L + 525
(100 Floor)
    08/2025     $ —       $ (18   $ (11  
    Senior Secured First Lien Term Loan   L + 525
(100 Floor)
    08/2025     $ 4,740     $ 4,663     $ 4,693    

Aegis Sciences Corporation

515 Great Circle Road, Nashville, TN 37228

  Health Care Equipment & Services   Senior Secured First Lien Term Loan   L + 550 (100 Floor)     05/2025     $ 7,328     $ 6,936     $ 6,442    

Affinitiv, Inc.

300 S. Wacker, Suite 900, Chicago, IL 60606

  Software & Services   Unitranche First Lien Revolver   L + 700 (100 Floor)     08/2024     $ —       $ (7   $ —      
    Unitranche First Lien Term Loan   L + 700 (100 Floor)     08/2024     $ 6,435     $ 6,349     $ 6,435    

Alion Science and Technology Corporation

1750 Tysons Boulevard Ste 1300, McLean, VA 22102

  Capital Goods   Common Stock         745,504     $ 766     $ 1,392       0.15

Allied Universal holdings, LLC

161 Washington Street, Suite 600, Conshohocken, PA 19428

  Commercial & Professional Services   Common Stock, Class A         2,240,375     $ 1,011     $ 2,716       0.07

Ameda, Inc.

485 Half Day Rd. #320, Buffalo Grove, IL 60089

  Health Care Equipment & Services   Senior Secured First Lien Revolver   L + 700 (100 Floor)     09/2022     $ 188     $ 186     $ 163    
    Senior Secured First Lien Term Loan   L + 700 (100 Floor)     09/2022     $ 2,201     $ 2,185     $ 2,022    

Anne Arundel Dermatology Management, LLC

1306 Concourse Dr, 201, Linthicum Heights, MD 21090

  Health Care Equipment & Services   Senior Secured First Lien Delayed Draw Term Loan   L + 600 (100 Floor)     10/2025     $               491     $           460     $           491    
    Senior Secured First Lien Revolver   L + 600 (100 Floor)     10/2025     $ —       $ (11   $ —      
    Senior Secured First Lien Term Loan   L + 600 (100 Floor)     10/2025     $ 2,450     $ 2,403     $ 2,450    

Ansira Partners, Inc.

2300 Locust Street, St. Louis, MO 63103

  Software & Services   Unitranche First Lien Delayed Draw Term Loan   L + 650 PIK     12/2024     $ 964     $ 931     $ 676    
    Unitranche First Lien Term Loan   L + 650 PIK     12/2024     $ 7,122     $ 6,687     $ 4,997    

 

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Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 

ASP MCS Acquisition Corp.(4)

350 Highland Drive, Lewisville, TX 75067

  Commercial & Professional Services   Senior Secured Second Lien Term Loan   L + 600 (100 Floor)     10/2025     $ 295     $ 273     $ 293    
    Common Stock         11,792     $ 1,150     $ 1,500       1.18

Auction Technology Group(1)

The Harlequin Building, 65 Southwark Street, London, SE1 0HR

  Consumer Services   Unitranche First Lien Term Loan   L + 650     02/2027     £ 3,339.00     $ 4,241     $ 4,564    
    Unitranche First Lien Term Loan   L + 650     02/2027     $ 10,687     $ 10,398     $ 10,687    
Auto-Vehicle Parts, LLC
100 Homan Drive, Cold Spring, KY 41076
  Automobiles & Components   Senior Secured First Lien Revolver   L + 450 (100 Floor)     01/2023     $ —       $ (4   $ (10  
    Senior Secured First Lien Term Loan   L + 450 (100 Floor)     01/2023     $ 4,566     $ 4,535     $ 4,488    
Avaap USA LLC
510 Thornall Street, Suite 250, Edison, NJ 08837
  Software & Services   Senior Secured First Lien Delayed Draw Term Loan   L + 725 (100 Floor)     03/2023     $ 344     $ 340     $ 336    
    Senior Secured First Lien Revolver   L + 725 (100 Floor)     03/2023     $ —       $ (7   $ (15  
    Senior Secured First Lien Term Loan   L + 725 (100 Floor)     03/2023     $ 3,769     $ 3,727     $ 3,684    
Avalign Technologies, Inc.
2275 Half Day Rd. Suite 126, Bannockburn, IL 60015
  Health Care Equipment & Services   Senior Secured First Lien Term Loan   L + 450     12/2025     $ 16,837     $ 16,709     $ 16,753    
BAART Programs, Inc.
1720 Lakepointe Dr., Suite 117, Lewisville, TX 75057
  Health Care Equipment & Services   Senior Secured Second Lien Delayed Draw Term Loan   L + 800 (100 Floor)     03/2025     $ 1,000     $ 957     $ 997    
    Senior Secured Second Lien Term Loan   L + 825 (100 Floor)     03/2025     $ 7,000     $ 6,700     $ 6,977    
Battery Solutions, Inc.(4)
4930 Holtz Dr, Wixom, MI 48393
  Commercial & Professional Services   Unsecured Debt   1200 + 200 PIK     11/2021     $ 1,263     $ 1,248     $ 1,192    
    Preferred Stock, Class E         5,275,561     $ 3,669     $ 2,373       41.67
    Preferred Stock, Class A         50,000     $ —       $ —         12.84
    Preferred Stock, Class F         3,333,333     $ —       $ —         8.29
Benesys Inc.
700 Tower Drive, Suite 300, Troy, MI 48098
  Software & Services   Senior Secured First Lien Term Loan   L + 475 (100 Floor)     10/2024     $ 300     $ 294     $ 295    
    Senior Secured First Lien Revolver   L + 475 (100 Floor)     10/2024     $ —       $ (1   $ (3  

 

27


Table of Contents

Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 
    Senior Secured First Lien Term Loan   L + 475 (100 Floor)     10/2024     $ 1,414     $ 1,400     $ 1,388    
BFC Solmetex LLC & Bonded Filter Co. LLC
One Vantage Way, Suite D-210, Nashville TN 37228
50 Bearfoot Road, Northborough, MA 01532
  Commercial & Professional Services   Unitranche First Lien Revolver   L + 850
(100 Floor)
    09/2023     $ 750     $ 742     $ 750    
    Unitranche First Lien Revolver   L + 850
(100 Floor)
    09/2023     $ 300     $ 296     $ 300    
    Unitranche First Lien Term Loan   L + 850 (100 Floor)     09/2023     $ 5,920     $ 5,848     $ 5,920    
    Unitranche First Lien Term Loan   L + 850 (100 Floor)     09/2023     $ 618     $ 610     $ 618    

BJ Services, LLC(2)

11211 FM 2920 Rd. Tomball, TX 77375

  Energy   Unitranche First Lien—Last Out Term Loan   L + 1033 (100 Floor)     01/2023     $ 8,075     $ 8,014     $ 6,463    
    Unitranche First Lien Term Loan   L + 700 (150 Floor)     01/2023     $ 2,668     $ 2,653     $ 2,668    
BJH Holdings III Corp.
124 West Oxmoor Road, Birmingham, AL 35209
  Consumer Services   Unitranche First Lien Term Loan   L + 525 (100 Floor)     08/2025     $ 13,355     $ 13,194     $ 12,921    
Black Diamond Oilfield Rentals, LLC
9595 Six Pines Dr, #8210, The Woodlands, TX 77380
  Energy   Senior Secured First Lien Term Loan   L + 650 (100 Floor)     09/2021     $ 10,386     $ 10,332     $ 9,645    

C-4 Analytics, LLC

999 Broadway, Suite 500, Saugus, MA 01906

  Software & Services   Senior Secured First Lien Revolver   L + 525 (100 Floor)     08/2023     $ —       $ (5   $ —      
    Senior Secured First Lien Term Loan   L + 525 (100 Floor)     08/2023     $ 9,916     $ 9,832     $ 9,916    
Cambium Learning Group, Inc.
17855 Dallas Parkway, Suite 400, Dallas TX 75287
  Consumer Services   Senior Secured Second Lien Term Loan   L + 850 (100 Floor)     12/2026     $ 5,000     $ 4,865     $ 4,800    
CAT Buyer, LLC
165 N Arlington Heights Rd, Suite 101, Buffalo Grove, IL 60089
  Software & Services   Unitranche First Lien Revolver   L + 550 (100 Floor)     04/2024     $ —       $ (8   $ (17  
    Unitranche First Lien Term Loan   L + 550 (100 Floor)     04/2024     $ 6,239     $ 6,154     $ 6,041    
CBDC Senior Loan Fund LLC(1)(3)
11100 Santa Monica Blvd, Suite 2000, Los Angeles, CA 90025
  Diversified Financials   Partnership Interest         40,000,000     $ 40,000     $ 38,735       50.00
Centria Subsidiary Holdings, LLC
27777 Inkster Rd., Suite 100, Farmington Hills, MI 48334
  Health Care Equipment & Services   Unitranche First Lien Revolver   L + 600 (100 Floor)     12/2025     $ 158     $ 109     $ 158    

 

28


Table of Contents

Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 
    Unitranche First Lien Term Loan   L + 600 (100 Floor)     12/2025     $ 11,753     $ 11,452     $ 11,753    
    Common Stock         11,911     $ 1,191     $ 1,353       0.43

CHA Holdings, Inc.

575 Broadway, Suite 301, Albany, NY 12207

  Commercial & Professional Services   Senior Secured First Lien Delayed Draw Term Loan   L + 450 (100 Floor)     04/2025     $ 1,013     $ 1,010     $ 987    
    Senior Secured First Lien Term Loan   L + 450 (100 Floor)     04/2025     $ 4,805     $ 4,789     $ 4,683    
Claritas, LLC
8044 Montgomery Road, Suite 455, Cincinnati, OH 45236
  Software & Services   Senior Secured First Lien Revolver   L + 600 (100 Floor)     12/2023     $ 113     $ 111     $ 113    
    Senior Secured First Lien Term Loan   L + 600 (100 Floor)     12/2023     $ 1,093     $ 1,085     $ 1,093    
Colibri Group LLC
12977 North Outer Forty, St. Louis, MO 63141
  Consumer Services   Unitranche First Lien Delayed Draw Term Loan   L + 575 (100 Floor)     05/2025     $ 1,337     $ 1,312     $ 1,350    
    Unitranche First Lien Revolver   L + 575 (100 Floor)     05/2025     $ —       $ (18   $ 10    
    Unitranche First Lien Term Loan   L + 575 (100 Floor)     05/2025     $ 8,126     $ 7,970     $ 8,208    
Comet Acquisition, Inc.
1277 Treat Boulevard, Suite 800, Walnut Creek, CA 94597
  Insurance   Senior Secured Second Lien Term Loan   L + 750     10/2026     $ 3,563     $ 3,556     $ 3,231    
Conisus, LLC(4)
1300 Parkwood Circle SE, Suite 450A, Atlanta, GA 30339
  Media & Entertainment   Common Stock         4,914,556     $ —       $ 4,320       15.79
    Preferred Stock, Series B   1500 PIK       18,544,370     $ 10,160     $ 18,545       50.00
Consolidated Label Co., LLC
2001 E Lake Mary Blvd, Sanford, FL 32773
  Commercial & Professional Services   Senior Secured First Lien Revolver   L + 575 (100 Floor)     07/2026     $ —       $ (12   $ —      
    Senior Secured First Lien Term Loan   L + 575 (100 Floor)     07/2026     $ 4,339     $ 4,258     $ 4,339    
Continental Battery Company
4919 Woodall St. Dallas, TX 75247
  Automobiles & Components   Senior Secured First Lien Delayed Draw Term Loan   L + 675 (100 Floor)     12/2022     $ 6,578     $ 6,522     $ 6,578    
    Senior Secured First Lien Delayed Draw Term Loan   L + 675 (100 Floor)     12/2022     $ 3,465     $ 3,444     $ 3,465    
    Senior Secured First Lien Revolver   L + 675 (100 Floor)     12/2022     $ 283     $ 278     $ 283    
    Senior Secured First Lien Term Loan   L + 675 (100 Floor)     12/2022     $ 3,933     $ 3,902     $ 3,933    

 

29


Table of Contents

Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 
CRA MSO, LLC
835 Third Avenue, Suite A, Chula Vista, CA 91911
  Health Care Equipment & Services   Senior Secured First Lien Revolver   L + 700 (100 Floor)     12/2023     $ 80     $ 78     $ 72    
    Senior Secured First Lien Term Loan   L + 700 (100 Floor)     12/2023     $ 1,225     $ 1,210     $ 1,173    
Crusoe Bidco Limited(1)
Skyguard House, 457 Kingston Road, Epsom, Surrey, KT19 0DB
  Commercial & Professional Services   Unitranche First Lien Delayed Draw Term Loan   L + 625     12/2025     £ 303     $ 398     $ 415    
    Unitranche First Lien Term Loan   L + 625     12/2025     £ 6,068     $ 7,431     $ 8,294    
    Unitranche First Lien Delayed Draw Term Loan   L + 625     12/2025     £ —       $ —       $ —      
Curvature
5910 Landerbrook Drive, Cleveland, OH 44124
  Software & Services   Residual Interest             $ 2,482     $ 2,481       0.05
Digital Room Holdings, Inc.
8000 Haskell Avenue, Van Nuys, CA 91406
  Commercial & Professional Services   Senior Secured First Lien Term Loan   L + 500     05/2026     $ 6,895     $ 6,602     $ 6,533    
EiKo Global, LLC
23220 W 84th Street, Shawnee, KS 66227
  Consumer Durables & Apparel   Senior Secured First Lien Revolver   L + 600 (100 Floor)     06/2023     $ —       $ (8   $ —      
    Senior Secured First Lien Term Loan   L + 600 (100 Floor)     06/2023     $ 3,223     $ 3,188     $ 3,223    

Empire Auto Parts, LLC

15 Jackson Road, Totowa, NJ 07512

  Automobiles & Components   Unitranche First Lien Revolver   L + 550 (100 Floor)     09/2024     $ —       $ (5   $ (8  
    Unitranche First Lien Term Loan   L + 550 (100 Floor)     09/2024     $ 2,370     $ 2,334     $ 2,324    
    Unitranche First Lien Term Loan   L + 550 (100 Floor)     09/2024     $ 2,444     $ 2,411     $ 2,396    
Envocore Holding, LLC
750 MD Route 3 South, Suite 19, Gambrills, MD 21054
  Capital Goods   Senior Secured First Lien Term Loan   L + 900 (200 Floor) (including 425 PIK)     06/2022     $ 18,541     $ 15,834     $ 14,335    
    Preferred Stock         1,139,725     $ —       $ —         1.27
Everlast Holding, Inc.
2501 Parmenter St, Ste. 300A, Middleton, WI 53562
  Consumer Services   Common Stock         948     $ 948     $ 948       0.09
    Unitranche First Lien Delayed Draw Term Loan   L + 650 (100 Floor)     10/2026     $ —       $ (41     —      
    Unitranche First Lien Revolver   L + 650 (100 Floor)     10/2026     $ —       $ (39     —      
    Unitranche First Lien Term Loan   L + 650 (100 Floor)     10/2026     $ 14,028     $ 13,686     $ 14,028    
ExamWorks Group, Inc.
3280 Peachtree Rd, Suite 2625, Atlanta, GA 30305
  Health Care Equipment & Services   Senior Secured Second Lien Term Loan   L + 725 (100 Floor)     07/2024     $ 5,735     $ 5,642     $ 5,735    

 

30


Table of Contents

Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 
    Common Stock         7,500     $ 750     $ 1,586       0.06
FH MD Buyer, Inc
25700 Interstate 45 North, Suite 300, Spring, TX 77386
  Health Care Equipment & Services   Senior Secured First Lien Term Loan   L + 575 (100 Floor)     10/2026     $ 17,264     $ 16,845     $ 16,832    
GACP II LP(1)
11100 Santa Monica Blvd, Suite 800, Los Angeles, CA 90025
  Diversified Financials   Partnership Interest         16,227,613     $ 16,228     $ 16,154       7.78
GGC Aperio Holdings, L.P.
Three Harbor Drive, Suite 204, Sausalito, CA 94965
  Diversified Financials   Unitranche First Lien Term Loan   L + 500     10/2024     $ 8,405     $ 8,393     $ 8,410    
GH Holding Company
15 S Main St, Suite 500, Greenville, SC 29601
  Commercial & Professional Services   Senior Secured First Lien Term Loan   L + 450     02/2023     $ 1,459     $ 1,455     $ 1,412    
GI Revelation Acquisition, LLC 13915 Burnet Rd, Austin, TX 78728
1828 L Street NW, Suite 1070, Washington, DC 20036
  Commercial & Professional Services   Senior Secured First Lien Term Loan   L + 500     04/2025     $ 7,321     $ 7,296     $ 7,049    
Goldentree Loan Management US CLO 2, Ltd.(1)
300 Park Avenue, 21st Floor, New York, NY 10022
  Diversified Financials   CLO, Series 2017-2A, Class E   L + 470     11/2030     $ 2,000     $ 1,902     $ 1,829    
GrapeTree Medical Staffing, LLC
1003 23rd Street, Milford, IA 51351
  Health Care Equipment & Services   Senior Secured First Lien Revolver   L + 525 (100 Floor)     10/2022     $ —       $ (3   $ (3  
    Senior Secured First Lien Term Loan   L + 525 (100 Floor)     10/2022     $ 1,645     $ 1,633     $ 1,634    
    Senior Secured First Lien Term Loan   L + 525 (100 Floor)     10/2022     $ 1,383     $ 1,367     $ 1,374    
HCAT Acquisition, Inc.
6161 N State Highway 161, Suite 200, Irving, TX 75038
  Health Care Equipment & Services   Unitranche First Lien Delayed Draw Term Loan   L + 925 (100 Floor)     11/2022     $ 2,307     $ 2,195     $ 2,104    
    Unitranche First Lien Revolver   L + 925 (100 Floor)     11/2022     $ 3,837     $ 3,649     $ 3,499    
    Unitranche First Lien Term Loan   L + 925 (100 Floor)     11/2022     $ 14,666     $ 13,948     $ 13,375    
HCOS Group Intermediate III LLC
1550 Liberty Ridge Drive, Wayne, PA 19087
  Health Care Equipment & Services   Senior Secured First Lien Revolver   L + 600 (100 Floor)     09/2026     $ —       $ (17   $ (13  
    Senior Secured First Lien Term Loan   L + 600 (100 Floor)     09/2026     $ 11,571     $ 11,348     $ 11,397    

 

31


Table of Contents

Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 
Hepaco, LLC
2711 Burch Dr, Charlotte, NC 28269
  Commercial & Professional Services   Senior Secured First Lien Delayed Draw Term Loan   L + 500 (100 Floor)     08/2024     $ 4,156     $ 4,130     $ 3,999    
    Senior Secured First Lien Revolver   L + 500 (100 Floor)     08/2024     $ 825     $ 824     $ 791    
    Senior Secured First Lien Term Loan   L + 500 (100 Floor)     08/2024     $ 5,098     $ 5,067     $ 4,911    
Hercules Borrower LLC
412 Georgia Avenue, Suite 300, Chattanooga, TN 37403
  Commercial & Professional Services   Unitranche First Lien Revolver   L + 650 (100 Floor)     12/2026     $ —       $ (55   $ (55  
    Unitranche First Lien Term Loan   L + 650 (100 Floor)     12/2026     $ 19,125     $ 18,650     $ 18,647    
    Common Stock         1,153,075     $ 1,153     $ 1,153       0.15
HGH Purchaser, Inc.
320 Century Blvd, Wilmington, DE 19805
  Consumer Services   Unitranche First Lien Delayed Draw Term Loan   L + 675 (100 Floor)     11/2025     $ 2,815     $ 2,725     $ 2,815    
    Unitranche First Lien Revolver   L + 675 (100 Floor)     11/2025     $ 101     $ 81     $ 101    
    Unitranche First Lien Term Loan   L + 675 (100 Floor)     11/2025     $ 8,027     $ 7,859     $ 8,027    
    Common Stock, Class A         4,171     $ 417     $ 562       0.10
Hospice Care Buyer, Inc.
500 Faulconer Dr, Charlottesville, VA 22903
  Health Care Equipment & Services   Unitranche First Lien Delayed Draw Term Loan   L + 650 (100 Floor)     12/2026     $ —       $ (40   $ —      
    Unitranche First Lien Revolver   L + 650 (100 Floor)     12/2026     $ 231     $ 183     $ 231    
    Unitranche First Lien Term Loan   L + 650 (100 Floor)     12/2026     $ 12,743     $ 12,339     $ 12,743    
    Common Stock         11,265     $ 1,127     $ 1,127       0.30
Hsid Acquisition, LLC
1250 23rd Street NW, 4th Floor, Washington, DC 20037
  Commercial & Professional Services   Senior Secured First Lien Delayed Draw Term Loan   L + 500 (100 Floor)     01/2026     $ 2,893     $ 2,844     $ 2,893    
    Senior Secured First Lien Revolver   L + 500 (100 Floor)     01/2026     $ —       $ (13   $ —      
    Senior Secured First Lien Term Loan   L + 500 (100 Floor)     01/2026     $ 3,866     $ 3,799     $ 3,866    
IGT Holding LLC
2105 Skinner Road, Houston, TX 77093
  Commercial & Professional Services   Preferred Stock         645,730     $ —       $ —         4.67
    Common Stock         1,000,000     $ —       $ —         3.68
Impact Group, LLC 915 W. Jefferson Blvd, Boise, ID 83702   Commercial & Professional Services   Senior Secured First Lien Term Loan   L + 737 (100 Floor)     06/2023     $ 7,040     $ 5,455     $ 6,585    
    Senior Secured First Lien Delayed Draw Term Loan   L + 737 (100 Floor)     06/2023     $ 6,645     $ 5,149     $ 6,216    

 

32


Table of Contents

Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 
Institutional Shareholder Services, Inc.
2099 Gaither Road, Suite 501, Rockville, MD 20850
  Commercial & Professional Services   Senior Secured First Lien Term Loan   L + 450     03/2026     $ 2,948     $ 2,909     $ 2,936    
    Senior Secured Second Lien Term Loan   L + 850     03/2027     $ 2,000     $ 1,928     $ 2,000    
Integrity Marketing Acquisition, LLC
9111 Cypress Waters Blvd. Ste 450, Dallas, TX 75019
  Insurance   Unitranche First Lien Delayed Draw Term Loan   L + 550 (100 Floor)     08/2025     $ 5,068     $ 4,959     $ 5,068    
    Unitranche First Lien Delayed Draw Term Loan   L + 550 (100 Floor)     08/2025     $ 3,064     $ 2,997     $ 3,064    
    Unitranche First Lien Revolver   L + 550 (100 Floor)     08/2025     $ —       $ (39   $ —      
    Unitranche First Lien Term Loan   L + 550 (100 Floor)     08/2025     $ 12,879     $ 12,618     $ 12,879    
    Common Stock         619,562     $ 648     $ 1,252       0.06
    Preferred Stock         1,247     $ 1,216     $ 1,485       0.96
Integro Parent, Inc.(1)
1 State Street Plaza, 9th Floor, New York, NY 10004
  Insurance   Senior Secured First Lien Term Loan   L + 575 (100 Floor)     10/2022     $ 473     $ 470     $ 473    
    Senior Secured Second Lien Delayed Draw Term Loan   L + 925 (100 Floor)     10/2023     $ 380     $ 378     $ 369    
    Senior Secured Second Lien Term Loan   L + 925 (100 Floor)     10/2023     $ 2,916     $ 2,889     $ 2,825    
    Common Stock         4,468     $ 454     $ 784       0.14
Isagenix International, LLC
155 East Rivulon Blvd, Gilbert, AZ 85297
  Food & Staples Retailing   Senior Secured First Lien Term Loan   L + 575 (100 Floor)     06/2025     $ 6,068     $ 6,046     $ 3,408    
ISS Compressors Industries, Inc.
10070 Daniels Interstate Court, Suite 140, Fort Myers, FL 33913
  Commercial & Professional Services   Senior Secured First Lien Revolver   L + 550 (100 Floor)     02/2026     $ —       $ (7   $ (27  
    Senior Secured First Lien Term Loan   L + 550 (100 Floor)     02/2026     $ 9,098     $ 9,019     $ 8,807    
IvyRehab Intermediate II, LLC
1311 Mamaroneck Avenue, Suite 140, White Plains, NY 10605
  Health Care Equipment & Services   Unitranche First Lien Delayed Draw Term Loan   L + 675 (100 Floor)     12/2024     $ —       $ (28   $ (14  
    Unitranche First Lien Revolver   L + 675 (100 Floor)     12/2024     $ —       $ (10   $ (5  
    Unitranche First Lien Term Loan   L + 675 (100 Floor)     12/2024     $ 8,030     $ 7,872     $ 7,951    
JLL XDD, Inc.
5800 Foxridge Dr, Suite 406, Mission, KS 66202
  Consumer Services   Senior Secured First Lien Term Loan   L + 600 (100 Floor)     12/2023     $ 5,970     $ 5,824     $ 6,030    

 

33


Table of Contents

Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 
    Senior Secured First Lien Term Loan   L + 550 (100 Floor)     12/2023     $ 2,113     $ 2,076     $ 2,105    
Jordan Healthcare, Inc.
875 N Michigan Ave, Chicago, IL 60611
  Commercial & Professional Services   Senior Secured First Lien Delayed Draw Term Loan   L + 600 (100 Floor)     07/2022     $ 691     $ 688     $ 691    
    Senior Secured First Lien Revolver   L + 600 (100 Floor)     07/2022     $ 450     $ 449     $ 450    
    Senior Secured First Lien Term Loan   L + 600 (100 Floor)     07/2022     $ 3,980     $ 3,966     $ 3,980    
Kestrel Parent, LLC
1100 Xenium Lane N. Minneapolis, MN 55441
  Materials   Unitranche First Lien Revolver   L + 575 (100 Floor)     11/2023     $ —       $ (12   $ —      
    Unitranche First Lien Term Loan   L + 575 (100 Floor)     11/2025     $ 6,672     $ 6,547     $ 6,672    
    Common Stock, Class A         41,791     $ 209     $ 240       0.08
Learn-It Systems, LLC
3600 Clipper Mill Rd. Ste. 330, Baltimore, MD 21211
  Consumer Services   Senior Secured First Lien Delayed Draw Term Loan   L + 450 (100 Floor)     03/2025     $ 1,140     $ 1,079     $ 1,111    
    Senior Secured First Lien Revolver   L + 450 (100 Floor)     03/2025     $ —       $ (14   $ (7  
    Senior Secured First Lien Term Loan   L + 450 (100 Floor)     03/2025     $ 4,337     $ 4,236     $ 4,288    
Legalshield
One Pre-Paid Way, Ada, OK 74820
  Consumer Services   Common Stock         372     $ 372     $ 495       0.06
Lightspeed Buyer, Inc.
16260 North 71st Street, Suite 350, Scottsdale, AZ 85254
  Health Care Equipment & Services   Unitranche First Lien Delayed Draw Term Loan   L + 550 (100 Floor)     02/2026     $ 1,146     $ 1,120     $ 1,114    
    Unitranche First Lien Revolver   L + 550 (100 Floor)     02/2026     $ 350     $ 332     $ 331    
    Unitranche First Lien Term Loan   L + 550 (100 Floor)     02/2026     $ 9,925     $ 9,752     $ 9,745    
List Partners, Inc.
3098 Piedmont Road, Suite 200, Atlanta, GA 30305
  Software & Services   Senior Secured First Lien Revolver   L + 500 (100 Floor)     01/2023     $ —       $ (4   $ (6  
    Senior Secured First Lien Term Loan   L + 500 (100 Floor)     01/2023     $ 4,495     $ 4,455     $ 4,440    
Mann Lake Ltd.
501 1st Street South, Hackensack, MN 56452
  Food, Beverage & Tobacco   Senior Secured First Lien Revolver   L + 750 (100 Floor)     10/2024     $ 840     $ 829     $ 840    
    Senior Secured First Lien Term Loan   L + 750 (100 Floor)     10/2024     $ 3,826     $ 3,773     $ 3,826    
MDVIP, Inc.
4950 Communication Ave. Ste. 100, Boca Raton, FL 33431
  Health Care Equipment & Services   Senior Secured First Lien Term Loan   L + 425 (100 Floor)     11/2024     $ 9,561     $ 9,561     $ 9,534    

 

34


Table of Contents

Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 
    Common Stock         46,807     $ 648     $ 1,169       0.17
Medsurant Holdings, LLC
One Tower Bridge, 100 Front Street, Suite 280, West Conshohocken, PA 19428
  Health Care Equipment & Services   Senior Secured Second Lien Term Loan   1400     03/2022     $ 7,945     $ 7,907     $ 7,859    
MHS Acquisition Holdings, LLC
3235 Levis Commons Blvd. Perrysburg, OH 43528
  Commercial & Professional Services   Senior Secured Second Lien Delayed Draw Term Loan   L + 875 (100 Floor)     03/2025     $ 467     $ 461     $ 455    
    Senior Secured Second Lien Term Loan   L + 875 (100 Floor)     03/2025     $ 8,102     $ 7,956     $ 7,900    
    Unsecured Debt   1350 PIK     03/2026     $ 272     $ 270     $ 264    
    Unsecured Debt   1350 PIK     03/2026     $ 817     $ 810     $ 792    
    Common Stock         10     $ 10     $ —           0.19
    Preferred Stock         1,018     $ 923     $ 799       0.22
MIR Bidco SA(1) 
Koningstraat 97, 1000 Brussels, Belgium
  Commercial & Professional Services   Unitranche First Lien Term Loan   E + 625     04/2026     9,507     $ 10,491     $ 11,168    
    Common Stock         921     $ 1     $ —         0.04
    Preferred Stock                  81,384     $ 91     $ 57       0.04
    Unitranche First Lien Term Loan   L + 625     04/2026     $ 4,162     $        4,061     $        3,983    
MRI Software LLC
28925 Fountain Parkway, Solon, OH 44139
  Software & Services   Unitranche First Lien Delayed Draw Term Loan   L + 550 (100 Floor)     02/2026     $ —       $ (22   $ (3  
    Unitranche First Lien Delayed Draw Term Loan   L + 550 (100 Floor)     02/2026     $ —       $ (4   $ (1  
    Unitranche First Lien Revolver   L + 550 (100 Floor)     02/2026     $ —       $ (16   $ (32  
    Unitranche First Lien Term Loan   L + 550 (100 Floor)     02/2026     $ 149     $ 145     $ 149    
    Unitranche First Lien Term Loan   L + 550 (100 Floor)     02/2026     $ 18,079     $ 17,841     $ 18,034    
My Alarm Center, LLC
3803 West Chester Pike, Suite 100, Newtown Square, PA 19073
  Commercial & Professional Services   Common Stock         129,582     $ —       $ —         4.60
    Junior Preferred Stock         2,420     $ —       $ —         21.04
    Senior Preferred Stock         2,998     $ —       $ —         3.70
NMN Holdings III Corp.
155 Franklin Road, Suite 100, Brentwood, TN 37027
  Health Care Equipment & Services   Senior Secured Second Lien Delayed Draw Term Loan   L + 775     11/2026     $ 1,667     $ 1,626     $ 1,641    
    Senior Secured Second Lien Term Loan   L + 775     11/2026     $ 7,222     $ 7,049     $ 7,110    
    Common Stock                    11,111     $        1,111     $      1,454       0.28

 

35


Table of Contents

Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 
NMSC Holdings, Inc.
68 S. Service Road, Suite 350, Melville, NY 11747
  Health Care Equipment & Services   Senior Secured Second Lien Term Loan   L + 1000 (100 Floor)     10/2023     $ 4,307     $ 4,230     $ 4,194    
Omni Ophthalmic Management Consultants, LLC
485 Route 1 South, Iselin, NJ 08830
  Health Care Equipment & Services   Senior Secured First Lien Delayed Draw Term Loan   L + 750 (100 Floor)     03/2021     $ —       $ (2   $ (39  
    Senior Secured First Lien Revolver   L + 750 (100 Floor)     05/2023     $ 850     $ 843     $ 797    
    Senior Secured First Lien Term Loan   L + 750 (100 Floor)     05/2023     $ 6,878     $ 6,820     $ 6,452    
Ontario Systems, LLC
1150 W Kilgore Ave, Muncie, IN 47305
  Software & Services   Unitranche First Lien Delayed Draw Term Loan   L + 550 (100 Floor)     08/2025     $ —       $ (4   $ (38  
    Unitranche First Lien Revolver   L + 550 (100 Floor)     08/2025     $ 200     $ 196     $ 183    
    Unitranche First Lien Term Loan   L + 550 (100 Floor)     08/2025     $ 3,209     $ 3,183     $ 3,098    
Onvoy, LLC
10300 6th Ave. N. Plymouth, MN 55441
  Technology Hardware & Equipment   Senior Secured Second Lien Term Loan   L + 1050 (100 Floor)     02/2025     $ 2,635     $ 2,556     $ 2,585    
    Common Stock, Class A         3,649       365       410       0.11
    Common Stock, Class B         2,536     $ —       $ —         0.09
Palmetto Moon LLC
1950 Hanahan Road, North Charleston, SC 29406
  Retailing   Senior Secured First Lien Term Loan   1150 + 250 PIK     10/2021     $ 4,155     $ 3,397     $ 3,813    
    Common Stock         99     $ —       $ —         1.70
Park Place Technologies, LLC
5910 Landerbrook Drive, Cleveland, OH 44124
  Software & Services   Unsecured Debt   1250 PIK     05/2029     $ 784     $ 784     $ 784    
Perforce Software, Inc.
400 First Avenue North, #200, Minneapolis, MN 55401
  Software & Services   Senior Secured Second Lien Term Loan   L + 800     07/2027     $ 5,000     $ 4,977     $ 5,000    
PetIQ, LLC(1)
923 S. Bridgeway Place, Eagle, ID 83616
  Food & Staples Retailing   Senior Secured First Lien Term Loan   L + 500 (100 Floor)     07/2025     $ 14,812     $ 14,703     $ 14,812    
PharComp Parent B.V.(1)(2)
Cypresbaan 9 Capelle Aan Den Ijssel, 2908 LT Netherlands
  Pharmaceuticals, Biotechnology & Life Sciences   Unitranche First Lien—Last Out Term Loan   E + 625     02/2026     6,910     $ 7,654     $ 8,454    
    Unitranche First Lien Term Loan   E + 625     02/2026     187     $ 151     $ 229    
Pharmalogic Holdings Corp.
1 South Ocean Blvd. Suite #206, Boca Raton, FL 33432
  Pharmaceuticals, Biotechnology & Life Sciences   Senior Secured Second Lien Term Loan   L + 800     12/2023     $ 5,460     $ 5,428     $ 5,349    

 

36


Table of Contents

Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 
    Senior Secured Second Lien Delayed Draw Term Loan   L + 800     12/2023     $ 4,760     $ 4,733     $ 4,663    
    Senior Secured Second Lien Term Loan   L + 800     12/2023     $ 5,880     $ 5,845     $ 5,760    
Pilot Air Freight, LLC
314 North Middletown Road, Lima, PA 19037
  Transportation   Senior Secured First Lien Delayed Draw Term Loan   L + 475 (100 Floor)     07/2024     $ 1,196     $ 1,196     $ 1,184    
    Senior Secured First Lien Delayed Draw Term Loan   L + 475 (100 Floor)     07/2024     $ 771     $ 769     $ 764    
    Senior Secured First Lien Revolver   L + 475 (100 Floor)     07/2024     $ —       $ —       $ (1  
    Senior Secured First Lien Term Loan   L + 475 (100 Floor)     07/2024     $ 5,363     $ 5,343     $ 5,310    
Pinnacle Treatment Centers, Inc.
1317 Route 73, Suite 200, Mt. Laurel, NJ 08054
  Health Care Equipment & Services   Unitranche First Lien Delayed Draw Term Loan   L + 625 (100 Floor)     12/2022     $ 684     $ 677     $ 684    
    Unitranche First Lien Revolver   L + 625 (100 Floor)     12/2022     $ —       $ (5   $ —      
    Unitranche First Lien Term Loan   L + 625 (100 Floor)     12/2022     $ 8,052     $ 7,996     $ 8,052    
Pinstripe Holdings, LLC
200 South Executive Drive, Brookfield, WI 53005
  Commercial & Professional Services   Unitranche First Lien Term Loan   L + 600 (100 Floor)     01/2025     $ 9,825     $ 9,618     $ 9,807    
Potter Electric Signal Company
5757 Phantom Drive, Suite 125, Hazelwood, MO 63042
  Capital Goods   Senior Secured First Lien Delayed Draw Term Loan   L + 425 (100 Floor)     12/2024     $ —       $ (16   $ (8  
    Senior Secured First Lien Revolver   L + 425 (100 Floor)     12/2022     $ —       $ (4   $ (4  
    Senior Secured First Lien Term Loan   L + 425 (100 Floor)     12/2025     $ 2,480     $ 2,461     $ 2,461    
    Senior Secured First Lien Term Loan   L + 425 (100 Floor)     12/2024     $ 471     $ 468     $ 467    
Prism Bidco, Inc.
21251 Ridgetop Circle, Suite 100, Dulles, VA 20166
  Software & Services   Unitranche First Lien Revolver   L + 700 (100 Floor)     06/2026     $ —       $ (23   $ (13  
    Unitranche First Lien Term Loan   L + 700 (100 Floor)     06/2026     $ 7,463     $ 7,254     $ 7,351    
Professional Physical Therapy 333 Earle Ovington Boulevard, Suite 225, Uniondale, NY 11553   Health Care Equipment & Services   Senior Secured First Lien Term Loan   L + 850 (100 Floor) (including 250 PIK)     12/2022     $ 8,975     $ 8,755     $ 6,855    

 

37


Table of Contents

Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 
PT Network, LLC
501 Fairmount Avenue, Suite 302, Towson, MD 21286
  Health Care Equipment & Services   Senior Secured First Lien Revolver   L + 750 (100 Floor) (including 200 PIK)     11/2023     $ —       $ (1   $ (10  
    Senior Secured First Lien Term Loan   L + 750 (100 Floor) (including 200 PIK)     11/2023     $ 4,789     $ 4,782     $ 4,672    
    Common Stock, Class C         0.93     $ —       $ —         3.70
Pye-Barker Fire & Safety, LLC
11605 Haynes Bridge Rd. Ste 350, Alpharetta, GA 30009
  Commercial & Professional Services   Unitranche First Lien Delayed Draw Term Loan   L + 600 (100 Floor)     11/2025     $ 3,715     $ 3,623     $ 3,715    
    Unitranche First Lien Term Loan   L + 600 (100 Floor)     11/2025     $ 10,024     $ 9,790     $ 10,024    
    Common Stock         1,125,000     $ 1,125     $ 1,189       0.36
Receivable Solutions, Inc.
800 Dutch Square Boulevard, Suite 100, Columbia, SC 29210
  Commercial & Professional Services   Senior Secured First Lien Revolver   L + 500 (100 Floor)     10/2024     $ —       $ (4   $ (3  
    Senior Secured First Lien Term Loan   L + 500 (100 Floor)     10/2024     $ 2,070     $ 2,042     $ 2,047    
    Preferred Stock, Class A         137,000     $ 137     $ 196       0.34
Right Networks, LLC
14 Hampshire Drive, Hudson, NH 03051
  Software & Services   Unitranche First Lien Revolver   L + 600 (100 Floor)     11/2024     $ —       $ (4   $ —      
    Unitranche First Lien Term Loan   L + 600 (100 Floor)     11/2024     $ 9,645     $ 9,472     $ 9,645    
Ruffalo Noel Levitz, LLC
1025 Kirkwood Parkway SW, Cedar Rapids, IA 52404
  Software & Services   Unitranche First Lien Revolver   L + 600 (100 Floor)     05/2022     $ 240     $ 238     $ 237    
    Unitranche First Lien Term Loan   L + 600 (100 Floor)     05/2022     $ 2,505     $ 2,489     $ 2,480    
Safco Dental Supply, LLC
1111 Corporate Grove Dr, Buffalo Grove, IL 60089
  Health Care Equipment & Services   Unitranche First Lien Revolver   L + 450 (100 Floor)     06/2025     $ —       $ (8   $ (1  
  Health Care Equipment & Services   Unitranche First Lien Term Loan   L + 450 (100 Floor)     06/2025     $ 4,043     $ 3,988     $ 4,034    
Sandvine Corporation(1)
408 Albert St., Waterloo, Ontario, Canada
  Telecommunication Services   Senior Secured Second Lien Term Loan   L + 800     11/2026     $ 4,500     $ 4,359     $ 4,062    
Saturn Borrower Inc
5 Becker Farm Road, Roseland, NJ 07068
  Software & Services   Unitranche First Lien Revolver   L + 650 (100 Floor)     09/2026     $ —       $ (43   $ —      
    Unitranche First Lien Term Loan   L + 650 (100 Floor)     09/2026     $ 20,524     $ 19,929     $ 20,524    

 

38


Table of Contents

Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 
    Common Stock         411,511     $ 412     $ 412       0.07
SavATree, LLC
550 Bedford Road, Bedford Hills, NY 10507
  Commercial & Professional Services   Senior Secured First Lien Delayed Draw Term Loan   L + 500 (100 Floor)     06/2022     $ 772     $ 766     $ 772    
    Senior Secured First Lien Revolver   L + 500 (100 Floor)     06/2022     $ —       $ (3   $ —      
    Senior Secured First Lien Term Loan   L + 500 (100 Floor)     06/2022     $ 3,910     $ 3,887     $ 3,910    
Seniorlink Incorporated
120 Saint James, Suite 203, Boston, MA 02116
  Health Care Equipment & Services   Unitranche First Lien Revolver   L + 700 (100 Floor)     07/2026     $ —       $ (29   $ —      
    Unitranche First Lien Term Loan   L + 700 (100 Floor)     07/2026     $ 6,818     $ 6,626     $ 6,818    
    Common Stock         68,182     $ 682     $ 944       0.22
Service Logic Acquisition, Inc 214 N Tryon Street, Suite 2425, Charlotte, NC 28202   Commercial & Professional Services   Senior Secured Second Lien Delayed Draw Term Loan   L + 850 (100 Floor)     10/2028     $ —       $ (71   $ —      
    Senior Secured Second Lien Term Loan   L + 850 (100 Floor)     10/2028     $ 8,755     $ 8,496     $ 8,755    
    Common Stock         13,132     $ 1,313     $ 1,313       0.15
Slickdeals Holdings, LLC(4)
6010 South Durango Drive, Suite 200, Las Vegas, NV 89113
  Retailing   Unitranche First Lien Revolver   L + 625 (100 Floor)     06/2023     $ —       $ (10   $ —      
    Unitranche First Lien Term Loan   L + 625 (100 Floor)     06/2024     $ 14,528     $ 14,223     $ 14,528    
    Common Stock         61     $ 990     $ 1,482       0.31
Smile Brands, Inc. 100 Spectrum Center Drive, Suite 1500, Irvine, CA 92618   Health Care Equipment & Services   Senior Secured First Lien Delayed Draw Term Loan   L + 517 (21 Floor)     10/2024     $ 619     $ 615     $ 604    
    Senior Secured First Lien Revolver   L + 517 (21 Floor)     09/2024     $ —       $ (2   $ (7  
    Senior Secured First Lien Term Loan   L + 517 (21 Floor)     10/2024     $ 2,058     $ 2,044     $ 2,007    
Smile Doctors LLC
2113 SW HK Dodgen Loop, Temple, TX 76502
  Health Care Equipment & Services   Senior Secured First Lien Revolver   L + 600 (100 Floor)     10/2022     $ —       $ —       $ (6  
    Senior Secured First Lien Term Loan   L + 600 (100 Floor)     10/2022     $ 16,280     $ 16,261     $ 16,196    
Southern HVAC Corporation
485 North Keller Road, Suite 515, Maitland, FL 32751
  Consumer Services   Unitranche First Lien Delayed Draw Term Loan   L + 625 (100 Floor)     10/2025     $ —       $ (24   $ —      
    Unitranche First Lien Revolver   L + 625 (100 Floor)     10/2025     $ —       $ (19   $ —      
    Unitranche First Lien Term Loan   L + 625 (100 Floor)     10/2025     $ 5,550     $ 5,442     $ 5,550    

 

39


Table of Contents

Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 
Southern Technical Institute, Inc.(4)
3940 North Dean Road, Orlando, FL 32817
  Consumer Services   Common Stock, Class A1         6,000,000     $ —       $ 6,987       100.00
    Common Stock, Class A         3,164,063     $ —       $ 266       8.12
Spear Education
7201 E Princess Boulevard, Scottsdale, AZ 85255
  Commercial & Professional Services   Senior Secured First Lien Delayed Draw Term Loan   L + 550 (100 Floor)     02/2025     $ —       $ (26   $ (81  
    Senior Secured First Lien Term Loan   L + 550 (100 Floor)     02/2025     $ 6,823     $ 6,765     $ 6,646    
Teaching Strategies LLC
4500 East West Highway, Suite 300, Bethesda, MD 20814
  Consumer Services   Unitranche First Lien Revolver   L + 600 (100 Floor)     05/2024     $ —       $ (9   $ —      
    Unitranche First Lien Term Loan   L + 600 (100 Floor)     05/2024     $ 9,141     $ 8,999     $ 9,141    
Teal Acquisition Co., Inc
1200 Lenox Drive, Lawrenceville, NJ 08648
  Pharmaceuticals, Biotechnology & Life Sciences   Unitranche First Lien Delayed Draw Term Loan   L + 625 (100 Floor)     09/2026     $ —       $ (24   $ —      
    Unitranche First Lien Revolver   L + 625 (100 Floor)     09/2026     $ 274     $ 237     $ 274    
    Unitranche First Lien Term Loan   L + 625 (100 Floor)     09/2026     $ 9,124     $ 8,861     $ 9,124    
    Common Stock         4,562     $ 456     $ 456       0.15
TecoStar Holdings, Inc.
115 Eames Street, Wilmington, MA 01887
  Commercial & Professional Services   Senior Secured Second Lien Term Loan   L + 850 (100 Floor)     11/2024     $ 5,000     $ 4,925     $ 5,000    
    Common Stock         500,000     $ 500     $ 1,024       0.11
The Hilb Group, LLC
6802 Paragon Place, Suite 200, Richmond, VA 23230
  Insurance   Unitranche First Lien Delayed Draw Term Loan   L + 575 (100 Floor)     12/2026     $ 1,019     $ 996     $ 1,016    
    Unitranche First Lien Revolver   L + 575 (100 Floor)     12/2025     $ —       $ (7   $ (1  
    Unitranche First Lien Term Loan   L + 575 (100 Floor)     12/2026     $ 3,603     $ 3,524     $ 3,594    
    Unitranche First Lien Delayed Draw Term Loan   L + 600 (100 Floor)     12/2026     $ 53     $ 31     $ 49    
    Unitranche First Lien Revolver   L + 600 (100 Floor)     12/2025     $ —       $ (4   $ —      
    Unitranche First Lien Term Loan   L + 600 (100 Floor)     12/2026     $ 1,069     $ 1,042     $ 1,066    
Transportation Insight, LLC
310 Main Ave Way SE, Hickory, NC 28602
  Software & Services   Senior Secured First Lien Delayed Draw Term Loan   L + 450     12/2024     $ 1,277     $ 1,269     $ 1,226    
    Senior Secured First Lien Revolver   L + 450     12/2024     $ —       $ (5   $ (30  
    Senior Secured First Lien Term Loan   L + 450     12/2024     $ 5,142     $ 5,107     $ 4,936    

 

40


Table of Contents

Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 
Tranzonic
26301 Curtiss-Wright Parkway, Cleveland, OH 44143
  Household & Personal Products   Senior Secured First Lien Revolver   L + 450 (100 Floor)     03/2023     $ 440     $ 438     $ 440    
    Senior Secured First Lien Term Loan   L + 450 (100 Floor)     03/2023     $ 3,813     $ 3,793     $ 3,813    
Trident Technologies, LLC
310 The Bridge Street, Suite 350, Huntsville, AL 35806
  Software & Services   Senior Secured First Lien Term Loan   L + 600 (150 Floor)     12/2025     $ 14,850     $ 14,658     $ 14,726    
Trinity Partners, LLC
230 Third Avenue, Waltham, MA 02451
  Pharmaceuticals, Biotechnology & Life Sciences   Senior Secured First Lien Revolver   L + 525 (100 Floor)     02/2025     $ —       $ (4   $ —      
    Senior Secured First Lien Term Loan   L + 525 (100 Floor)     02/2025     $ 3,709     $ 3,682     $ 3,709    
Unifeye Vision Partners
2651 North Harwood Street, Suite 120, Dallas, TX 75201
  Health Care Equipment & Services   Senior Secured First Lien Delayed Draw Term Loan   L + 500 (100 Floor)     09/2025     $ 813     $ 782     $ 707    
    Senior Secured First Lien Revolver   L + 500 (100 Floor)     09/2025     $ 453     $ 427     $ 394    
    Senior Secured First Lien Term Loan   L + 500 (100 Floor)     09/2025     $ 5,346     $ 5,259     $ 5,159    
United Language Group, Inc.
1660 Utica Avenue S, Minneapolis, MN 55416
  Consumer Services   Senior Secured First Lien Revolver   L + 675 (100 Floor)     12/2021     $ 400     $ 398     $ 381    
    Senior Secured First Lien Term Loan   L + 675 (100 Floor)     12/2021     $ 4,641     $ 4,616     $ 4,419    
UP Acquisition Corp.
217 Metro Dr. Terrell, TX 75160
  Commercial & Professional Services   Unitranche First Lien Delayed Draw Term Loan   L + 625 (100 Floor)     05/2024     $ 1,189     $ 1,170     $ 1,163    
    Unitranche First Lien Revolver   L + 625 (100 Floor)     05/2024     $ 391     $ 374     $ 364    
    Unitranche First Lien Term Loan   L + 625 (100 Floor)     05/2024     $ 4,334     $ 4,272     $ 4,242    
VetStrategy (1)
7000 Pine Valley Drive, Suite 201, Woodbridge, ON L4L 4Y8, Canada
  Health Care Equipment & Services   Unitranche First Lien Delayed Draw Term Loan   C + 700 (100 Floor)     07/2027     C$ 657     $ (35   $ —      
    Unitranche First Lien Term Loan   C + 700 (100 Floor)     07/2027     C$ 9292     $ 6,738     $ 7,294    
    Unitranche First Lien Delayed Draw Term Loan   C + 700 (100 Floor)     07/2027     C$ 1399     $ 973     $ 1,010    
    Unitranche First Lien Delayed Draw Term Loan   C + 700 (100 Floor)     07/2027     C$ 1729     $ 1,259     $ 1,357    
    Common Stock         750,000     $ 560     $ 589       0.07
Vistage Worldwide, Inc.
11452 El Camino Real, Suite 400, San Diego, CA 92130
  Consumer Services   Senior Secured First Lien Term Loan   L + 400 (100 Floor)     02/2025     $ 6,134     $ 6,143     $ 6,092    

 

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Name and
Address of
Portfolio Company

 

Industry

 

Investment
Type

 

Interest
Term

  Maturity/
Dissolution
Date
    Principal
Amount,
Par Value
or Shares
    Cost     Fair
Value
    Percentage
of Class
Held
 
Vital Care Buyer, LLC
1170 Northeast Industrial Park Rd., Meridian, MS 39301
  Health Care Equipment & Services   Unitranche First Lien Revolver   L + 600 (100 Floor)     10/2025     $ —       $ (37   $ (39  
    Unitranche First Lien Term Loan   L + 600 (100 Floor)     10/2025     $ 7,778     $ 7,646     $ 7,642    
Vivid Seats Ltd.(4)
111 N. Canal St, #800, Chicago, IL 60606
  Retailing   Common Stock         608,108     $ 608     $ 801       0.21
    Preferred Stock         1,891,892     $ 1,892     $ 2,913       1.35
WeddingWire, Inc.
2 Wisconsin Circle, 3rd Floor, Chevy Chase, MD 20815
  Consumer Services   Senior Secured Second Lien Term Loan   L + 825     12/2026     $ 5,000     $ 4,955     $ 4,604    
Winxnet Holdings LLC
63 Marginal Way, 4th Floor, Portland, ME 04101
  Software & Services   Unitranche First Lien Delayed Draw Term Loan   L + 600 (100 Floor)     06/2023     $ 641     $ 632     $ 636    
    Unitranche First Lien Delayed Draw Term Loan   L + 600 (100 Floor)     06/2023     $ 1,050     $ 1,029     $ 1,043    
    Unitranche First Lien Revolver   L + 600 (100 Floor)     06/2023     $ 240     $ 236     $ 237    
    Unitranche First Lien Term Loan   L + 600 (100 Floor)     06/2023     $ 1,950     $ 1,929     $ 1,936    
Wrench Group LLC
1787 Williams Dr. Marietta, GA 30066
  Consumer Services   Senior Secured Second Lien Term Loan   L + 788     04/2027     $ 2,500     $ 2,436     $ 2,492    
    Common Stock, Class A         1,143     $ 115     $ 160       0.02
    Common Stock         4,082     $ 410     $ 569       0.07
Xcentric Mold and Engineering Acquisition Company, LLC
24541 Maplehurst Drive, Clinton Twp, MI 48036
  Commercial & Professional Services   Senior Secured First Lien Revolver   L + 700 (100 Floor)
(including 100 PIK)
    01/2022     $ 710     $ 707     $ 614    
    Senior Secured First Lien Term Loan   L + 700 (100 Floor)
(including 100 PIK)
    01/2022     $ 4,416     $ 4,395     $ 3,819    
Xpress Global Systems, LLC
6137 Shallowford Rd, Chattanooga, TN 37421
  Transportation   Common Stock         12,544     $ —       $ —         31.36
Zest Acquisition Corp.
2061 Wineridge Place, Escondido, CA 92029
  Health Care Equipment & Services   Senior Secured First Lien Term Loan   L + 350     03/2025     $ 8,603     $ 8,604     $ 8,259    
           

 

 

   

 

 

   

Total Investments

            $ 1,011,124     $ 1,034,001    
           

 

 

   

 

 

   

 

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(1)

The Company has determined that indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.

(2)

The Company generally earns a higher interest rate on the “last out” tranche of debt, to the extent the debt has been allocated to “first out” and “last out” tranches, whereby the “first out” tranche will have priority as to the “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder.

(3)

As defined in the 1940 Act, the Company is deemed to “control” this portfolio company as the Company either owns more than 25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company.

(4)

As defined in the 1940 Act, the Company is deemed to be an “Affiliated Investment” of the Company as the Company owns 5% or more of the portfolio company’s securities.

 

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MANAGEMENT

The information contained under the captions “Proposal 1: Election of Class I and Class II Directors ” and “Corporate Governance” in our most recent Proxy Statement for our Annual Meeting of Stockholders and “Business” of our most recent Annual Report on Form 10-K is incorporated by reference herein.

The description below supplements the information contained under the captions “Proposal 1: Election of Class I and Class II Directors” and “Corporate Governance” in our most recent Proxy Statement for our Annual Meeting of Stockholders and “Business” of our most recent Annual Report on Form 10-K.

PORTFOLIO MANAGEMENT

Crescent Capital BDC considers the members of the Investment Committee of Crescent Cap Advisors, LLC to be Crescent Capital BDC’s portfolio managers. The following individuals function as portfolio managers with the most significant responsibility for the day-to-day management of Crescent Capital BDC’s portfolio.

 

Name   Position  

Length of
Service with
Crescent Cap
Advisors,
LLC (years)

 

Principal Occupation(s)

During Past Five Years

John S. Bowman

  Managing Director, Crescent Capital Group, LP U.S. Direct Lending   Since 2012   Serves on Crescent Cap Advisors’ investment committee; Managing Director and co-head of Crescent Capital Group LP’s U.S. Direct Lending business. Prior to joining Crescent Capital Group LP in 2012, Mr. Bowman was president of HighPoint Capital Management, LLC (a U.S. direct lending business which he co-founded in 2005).

Jason A. Breaux

  Chief Executive Officer, Crescent Capital BDC   Since 2000   Chairman of Crescent Cap Advisors’ investment committee and Managing Director of Crescent Capital Group LP within the private credit strategy.

Jonathan R. Insull

  President, Crescent Capital BDC   Since 1997   Serves on Crescent Cap Advisors’ investment committee and also serves as Managing Director of Crescent Capital Group LP within the capital markets strategy.

Christopher G. Wright

  Director, Crescent Capital BDC   Since 2001   Serves on Crescent Cap Advisors’ investment committee; Managing Director of Crescent Capital Group LP focusing on mezzanine finance.

Collectively or separately, John Bowman, Jason Breaux, Jonathan Insull and Chris Wright are also primarily responsible for the day-to-day management of certain other accounts and pooled investment vehicles, with over $14.1 billion of capital under management, of which certain accounts and vehicles, with over $11.2 billion of capital under management, are subject to performance or incentive fees. As previously disclosed, Mr. Insull has notified the Company of his decision to resign from the Company on or before June 30, 2021. Mr. Insull’s resignation did not involve any disagreements with the Company with regard to its operations, policies or practices.

 

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The following table sets forth the dollar range of Crescent Capital BDC’s equity securities based on the net asset value of Crescent Capital BDC’s common stock as of December 31, 2020 and the number of shares beneficially owned by each of the portfolio managers described above as of December 31, 2020 unless otherwise indicated below.

 

Name    Aggregate Dollar Range of
Equity Securities
in Crescent Capital BDC(1)
 

John S. Bowman

     None  

Jason A. Breaux

   $ 100,001–$500,000  

Jonathan R. Insull

   $ 50,001–$100,000  

Christopher G. Wright

   $ 100,001–$500,000  

 

(1)

Dollar ranges are as follows: none, $1–$10,000, $10,001–$50,000, $50,001–$100,000, $100,001–$500,000, $500,001–$1,000,000 or over $1,000,000.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information contained under the caption “Certain Relationships and Related Transactions” in our most recent Proxy Statement for our Annual Meeting of Stockholders is incorporated by reference herein.

 

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CONTROL PERSONS AND PRINCIPAL STOCKHOLDERS

To Crescent Capital BDC’s knowledge, as of April 21, 2021, there were no persons that owned 25% or more of Crescent Capital BDC’s outstanding voting securities and no person would be deemed to control Crescent Capital BDC, as such term is defined in the 1940 Act, as a result of share ownership.

The following table sets forth, as of April 21, 2021 (unless otherwise noted), the number of shares of Crescent Capital BDC common stock beneficially owned by each of its current directors and named executive officers, all directors and executive officers as a group and beneficial owners who directly or indirectly own, control or hold, with the power to vote, five percent or more of the outstanding Crescent Capital BDC common stock. Ownership information for those persons who beneficially own 5% or more of the outstanding shares of Crescent Capital BDC common stock is based upon Schedule 13D, Schedule 13G, Form 4, Form 13F or other filings by such persons with the SEC and other information obtained from such persons.

Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities.

 

Name and address(1)

   Type of
ownership
     Shares
owned
     Percentage of the
Corporation’s
outstanding
shares as of
April 21, 2021
 

Independent Directors

        

Kathleen S. Briscoe

     Common        —          —  

Michael S. Segal

     Common        3,765        *  

Steven F. Strandberg

     Common        225,744        0.7

George G. Strong, Jr.

     Common        26,361        *  

Interested Directors

        

Christopher G. Wright

     Common        24,881        *  

Executive Officers

        

Jason Breaux

     Common        29,394        *  

Jonathan R. Insull

     Common        7,554        *  

Gerhard Lombard

     Common        14,910        *  

Joseph A. Hanlon

     Common        7,071        *  

George P. Hawley

     Common        4,165        *  

Raymond Barrios

     Common        8,015        *  

Kirill Bouek

     —          —          —  

All Directors and Officers as a Group

     Common        351,860        1.2

 

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Type of

ownership

  

Name and address

   Shares owned     Percentage
of the
Corporation’s

Outstanding
Shares as of
April 21, 2021
 

Five Percent Stockholders:

 

Common

  

Allied World Assurance Company, Ltd.

27 Richmond Road

Pembroke, Bermuda, HM 08(2)

     3,796,246 (2)      13.48

Common

  

Fidelity & Guaranty Life Insurance Company

Two Ruan Center, 601 Locust Street, 14th Fl.

Des Moines, IA 50309(3)

     4,205,307 (3)      14.93

Common

  

Texas County & District Retirement Systems

Barton Oaks Plaza IV, 901 Mopac South, Ste. 500

Austin, TX 78746(4)

     5,001,752 (4)      17.76

Common

  

UFCW Northern California Employers Joint Pension Plan

1000 Burnett Ave, Ste. 200

Concord, CA 94520(5)

     4,228,985 (5)      15.01

 

(1)

The address for the Advisor and each Director or officer is c/o Crescent Capital BDC, Inc., 11100 Santa Monica Blvd., Suite 2000, Los Angeles, California 90025.

(2)

The foregoing information is based on a Schedule 13G filed by Allied World Assurance Company, Ltd. with the SEC on January 29, 2021 reporting common stock ownership as of December 31, 2020.

(3)

The foregoing information is based on a Form 13F-HR filed by Fidelity National Financial, Inc. with the SEC on February 16, 2021 reporting share ownership as of December 31, 2020.

(4)

The foregoing information is based on an amended Schedule 13G filed by Texas County & District Retirement System with the SEC on February 10, 2021 reporting common stock ownership as of December 31, 2020.

(5)

The foregoing information is based on an amended Schedule 13G filed by UFCW Northern California Employers Joint Pension Plan with the SEC on February 17, 2021 reporting common stock ownership as of December 31, 2020.

*

Less than 0.1% percent.

 

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DETERMINATION OF NET ASSET VALUE

The net asset value per share of our outstanding shares of common stock is determined quarterly by dividing the value of total assets minus liabilities by the total number of shares outstanding.

We calculate the value of our investments in accordance with the procedures described in “Management’s Discussion and Analysis of Financial Condition Results of Operations—Critical Accounting Policies” in of our most recent Annual Report on Form 10-K under the caption “Critical Accounting Policies,” which are incorporated by reference herein.

We adopted a dividend reinvestment plan that provides for reinvestment of our dividends and other distributions on behalf of our stockholders, unless a stockholder elects to receive cash. As a result, if our Board authorizes, and we declare, a cash dividend or other distribution, then stockholders who are participating in the dividend reinvestment plan (the “Participants”), will have their cash dividends and distributions automatically reinvested in additional shares of our common stock, rather than receiving cash dividends and distributions.

Prior to February 3, 2020, which is the date of our listing on NASDAQ, only stockholders who “opted in” to the dividend reinvestment plan had their cash dividends and other distributions automatically reinvested in additional shares of our common stock. After February 3, 2020, stockholders who do not “opt out” of the dividend reinvestment plan will have their cash dividends and other distributions automatically reinvested in additional shares of our common stock. The elections of stockholders that made an election prior to February 3, 2020 remain effective.

Those stockholders whose shares are held by a broker or other financial intermediary may receive dividends in cash by notifying their broker or another financial intermediary of their election.

To implement the dividend reinvestment plan, we may use newly issued shares or we may purchase shares in the open market, in each case to the extent permitted under applicable law, whether our shares are trading at, above or below net asset value. If newly issued shares are used to implement the dividend reinvestment plan, the number of shares to be issued to a stockholder shall be determined by dividing the total dollar amount of the distribution payable to such stockholder by the market price per share of our common stock at the close of regular trading on the applicable stock exchange on the date of such distribution subject to the adjustments described below. The market price per share of our common stock on a particular date shall be the closing price for such shares on the applicable stock exchange on such date or, if no sale is reported for such date, at the average of their reported bid and asked prices. However, if the market price per share exceeds the most recently computed net asset value per share, we will issue shares at the greater of (i) the most recently computed net asset value per share and (ii) 95% of the current market price per share (or such lesser discount to the current market price per share that still exceeds the most recently computed net asset value per share). If we determine to make open market purchase of our shares for the accounts of Participants, the purchase price for such shares shall be set to the average weighted price for all shares purchased for Plan participants with respect to such distribution.

There are no brokerage charges or other charges to stockholders who participate in the dividend reinvestment plan. The plan administrator’s fees under the plan are paid by us. If a participant elects by notice to the plan administrator in advance of termination to have the plan administrator sell part or all of the shares held by the plan administrator in the participant’s account and remit the proceeds to the participant, the plan administrator is authorized to deduct a transaction fee of up to $15 plus a $0.10 per share fee from the proceeds.

Stockholders whose cash dividends are reinvested in shares of our common stock are subject to the same U.S. federal, state and local tax consequences as are stockholders who elect to receive their dividends in cash. A stockholder’s initial basis for determining gain or loss upon the sale of stock received in a dividend from us will be equal to the total dollar amount of the dividend payable to the stockholder. Any stock received on

 

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reinvestment of a cash dividend will have a new holding period for tax purposes commencing on the day following the day on which the shares are credited to the U.S. stockholder’s account. See “Certain Material U.S. Federal Income Tax Considerations” below.

Participants may terminate their accounts under the dividend reinvestment plan by notifying the plan administrator by submitting a letter of instruction terminating the Participant’s account under the dividend reinvestment plan to Crescent Capital BDC, Inc., care of the plan administrator at the addresses set forth below:

 

Regular Mail

Broadridge Shareholder Services

c/o Broadridge Corporate Issuer Solutions

PO Box 1342

Brentwood, NY 11717-071

  

Overnight Mail

Broadridge Shareholder Services

c/o Broadridge Corporate Issuer Solutions

1155 Long Island Avenue

Edgewood, NY 11717-8309

Attn: IWS

The dividend reinvestment plan may be terminated by us upon notice in writing mailed to each participant at least 30 days prior to any record date for the payment of any dividend by us. All correspondence concerning the dividend reinvestment plan should be directed to the plan administrator by mail at the addresses listed above or by telephone at 1-877-830-4936 or 1-720-378-5591.

 

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CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following discussion is a general summary of certain material U.S. federal income tax considerations relating to the acquisition, ownership, and disposition of shares of our preferred stock or common stock and our qualification and taxation as a RIC for U.S. federal income tax purposes. This discussion does not purport to be a complete description of all of the tax considerations relating thereto. In particular, we have not described certain considerations that may be relevant to certain types of stockholders subject to special treatment under U.S. federal income tax laws, including stockholders subject to the alternative minimum tax, tax-exempt organizations, insurance companies, stockholders that are treated as partnerships for U.S. federal income tax purposes, dealers in securities, traders in securities that elect to use a mark-to-market method of accounting for securities holdings, pension plans and trusts, financial institutions, a person that holds shares in our preferred stock or common stock as part of a straddle or a hedging or conversion transaction, real estate investment trusts (“REITs”), RICs, U.S. stockholders (as defined below) whose functional currency is not the U.S. dollar, non-U.S. stockholders (as defined below) engaged in a trade or business in the United States, persons who have ceased to be U.S. citizens or to be taxed as residents of the United States, “controlled foreign corporations,” and passive foreign investment companies (“PFICs”). This summary is limited to stockholders that hold our preferred stock or common stock as capital assets (within the meaning of the Code), and does not address owners of a stockholder. This discussion is based upon the Code, its legislative history, existing and certain proposed U.S. Treasury regulations, published rulings and court decisions, each as of the date of this prospectus and all of which are subject to change, possibly retroactively, which could affect the continuing validity of this discussion. We have not sought and will not seek any ruling from the IRS regarding the offerings pursuant to this prospectus or pursuant to the accompanying prospectus supplement unless expressly stated therein. This summary does not discuss any aspects of U.S. estate or gift tax or foreign, state or local tax. It does not discuss the special treatment under U.S. federal income tax laws that could result if we invest in tax-exempt securities or certain other investment assets. It also does not discuss the tax aspects of common or preferred stock sold in units with the other securities being registered.

If we issue preferred stock that may be convertible into or exercisable or exchangeable for securities or other property or preferred stock with other terms that may have different U.S. federal income tax consequences than those described in this summary, the U.S. federal income tax consequences of that preferred stock will be described in the relevant prospectus supplement. This summary does not discuss the consequences of an investment in our subscription rights, debt securities or warrants representing rights to purchase shares of our preferred stock, common stock, debt securities, or in units of more than one of our securities. The U.S. federal income tax consequences of such an investment will be discussed in the relevant prospectus supplement.

A “U.S. stockholder” is a beneficial owner of shares of our preferred stock or common stock that is for U.S. federal income tax purposes:

 

   

an individual who is a citizen or resident of the United States;

 

   

a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof or the District of Columbia;

 

   

a trust, if a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons (as defined in the Code) have the authority to control all of its substantial decisions, or if the trust has a valid election in effect under applicable U.S. Treasury regulations to be treated as a domestic trust for U.S. federal income tax purposes; or

 

   

an estate, the income of which is subject to U.S. federal income taxation regardless of its source.

 

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A “non-U.S. stockholder” is a beneficial owner of shares of our preferred stock or common stock that is not a U.S. stockholder or an entity that is treated as a partnership for U.S. federal income tax purposes.

 

An investment in shares of our preferred stock or common stock is complex, and certain aspects of the U.S. tax treatment of such investment are not certain. Tax matters are very complicated and the tax consequences to a stockholder of an investment in the shares of our preferred stock or common stock will depend on the facts of such stockholder’s particular situation. Stockholders are strongly urged to consult their tax advisor regarding the U.S. federal income tax consequences of the acquisition, ownership and disposition of our preferred stock or common stock, as well as the effect of state, local and foreign tax laws and the effect of any possible changes in tax laws.

ELECTION TO BE TAXED AS A RIC

As a BDC, we have elected to be treated and intend to operate in a manner so as to continuously qualify annually as a RIC under the Code. As a RIC, we generally will not pay corporate-level U.S. federal income taxes on our net ordinary income or capital gains that we timely distribute (or are deemed to distribute) to our stockholders as dividends. Instead, dividends we distribute (or are deemed to timely distribute) generally will be taxable to stockholders, and any net operating losses, foreign tax credits and most other tax attributes generally will not pass through to stockholders. We will be subject to U.S. federal corporate-level income tax on any undistributed income and gains. To continue to qualify as a RIC, we must, among other things, meet certain source of income and asset diversification requirements (as described below). In addition, we must distribute to our stockholders, for each taxable year at least 90% of our “investment company taxable income,” as defined by the Code (the “Annual Distribution Requirement”). See “Risk Factors—Risks Relating to Our Business—We may be subject to additional corporate-level income taxes if we fail to maintain our status as a RIC” and “We may have difficulty paying our required distributions under applicable tax rules if we recognize income before or without receiving cash representing such income” in our most recent Annual Report on Form 10-K.

TAXATION AS A RIC

If we:

 

   

qualify as a RIC; and

 

   

satisfy the Annual Distribution Requirement;

then we will not be subject to U.S. federal income tax on the portion of our investment company taxable income and net capital gain (realized net long-term capital gain in excess of realized net short-term capital loss) that we timely distribute (or are deemed to timely distribute) to stockholders. We will be subject to U.S. federal income tax at the regular corporate rates on any net income or capital gains not distributed (or deemed distributed) to our stockholders.

We will be subject to a 4% nondeductible U.S. federal excise tax on certain undistributed income unless we distribute in a timely manner an amount at least equal to the sum of (1) 98% of our ordinary income for each calendar year, (2) 98.2% of our capital gain net income for each calendar year and (3) any income realized, but not distributed, in preceding years (to the extent that U.S. federal income tax was not imposed on such amounts) less certain over-distributions in the prior year (collectively, the “Excise Tax Requirement”). We have paid in the past, and may pay in the future, such excise tax on a portion of our income.

Moreover, our ability to dispose of assets to meet our distribution requirements may be limited by (1) the illiquid nature of our portfolio and (2) other requirements relating to our status as a RIC, including the Diversification Tests (as defined below). If we dispose of assets to meet the Annual Distribution Requirement, the Diversification Tests, or the Excise Tax Requirement, we may make such dispositions at times that, from an investment standpoint, are not advantageous.

 

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To qualify as a RIC for U.S. federal income tax purposes, we generally must, among other things:

 

   

qualify to be treated as a BDC at all times during each taxable year;

 

   

derive in each taxable year at least 90% of our gross income from (a) dividends, interest, payments with respect to certain securities loans, gains from the sale of stock or other securities or foreign currencies or other income derived with respect to our business of investing in such stock, securities or foreign currencies, or (b) net income derived from an interest in a “qualified publicly traded partnership,” or “QPTP” (collectively, the “90% Income Test”); and

 

   

diversify our holdings so that at the end of each quarter of the taxable year:

 

   

at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs and other securities that, with respect to any issuer, do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of that issuer; and

 

   

no more than 25% of the value of our assets is invested in the securities, other than U.S. government securities or securities of other RICs, of (i) one issuer, (ii) two or more issuers that are controlled, as determined under the Code, by us and that are engaged in the same or similar or related trades or businesses, or (iii) securities of one or more QPTPs (collectively, the “Diversification Tests”).

We may be required to recognize taxable income for U.S. federal income tax purposes in circumstances in which we do not receive a corresponding payment in cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount, or “OID” (such as debt instruments with “payment-in-kind” interest or, in certain cases, that have increasing interest rates or that are issued with warrants), we must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. Because any original issue discount or other amounts accrued will be included in our investment company taxable income for the year of accrual, we may be required to make a distribution to our stockholders in order to satisfy the Annual Distribution Requirement and the Excise Tax Requirement, even though we will not have received any corresponding cash amount. To enable us to make distributions to stockholders that will be sufficient to enable us to satisfy the Annual Distribution Requirement and the Excise Tax Requirement we may need to liquidate or sell some of our assets at times or at prices that are not advantageous, raise additional equity or debt capital, take out loans, forego new investment opportunities or otherwise take actions that are disadvantageous to our business (or be unable to take actions that are advantageous to our business). If we borrow money, we may be prevented by loan covenants from declaring and paying dividends in certain circumstances. Even if we are authorized to borrow funds and to sell assets in order to satisfy distribution requirements, under the 1940 Act, we are generally not permitted to make distributions to our stockholders while our debt obligations and senior securities are outstanding unless certain “asset coverage” tests or other financial covenants are met. Limits on our payment of dividends may prevent us from meeting the Annual Distribution Requirement, and may, therefore, jeopardize our qualification for taxation as a RIC, or subject us to the 4% excise tax on undistributed income.

A portfolio company in which we invest may face financial difficulty that requires us to work-out, modify or otherwise restructure our investment in the portfolio company. Any such restructuring could, depending on the specific terms of the restructuring, cause us to recognize taxable income without a corresponding receipt of cash, which could affect our ability to satisfy the Annual Distribution Requirement or the Excise Tax Requirement, or result in unusable capital losses and future non-cash income. Any such reorganization could also result in our receiving assets that give rise to non-qualifying income for purposes of the 90% Income Test.

Certain of our investment practices may be subject to special and complex U.S. federal income tax provisions that may, among other things, (a) disallow, suspend or otherwise limit the allowance of certain losses

 

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or deductions, (b) convert long-term capital gain (currently taxed at lower rates for non-corporate taxpayers) into higher taxed short-term capital gain or ordinary income, (c) convert an ordinary loss or a deduction into a capital loss (the deductibility of which is more limited), (d) adversely affect the time as to when a purchase or sale of stock or securities is deemed to occur, (e) adversely alter the characterization of certain complex financial transactions, (f) treat dividends that would otherwise constitute qualified dividend income as non-qualified dividend income, (g) cause us to recognize income or gain without receipt of a corresponding cash payment, and (h) produce income that will not be qualifying income for purposes of the 90% Income Test. We will monitor our transactions and may make certain tax elections to mitigate the effects of these provisions; however, no assurance can be given that we will be eligible for any such tax elections or that any elections we make will fully mitigate the effects of these provisions.

Gain or loss recognized by us from warrants acquired by us as well as any loss attributable to the lapse of such warrants generally will be treated as capital gain or loss. Such gain or loss generally will be long-term or short-term, depending on how long we held a particular warrant.

Our investment in non-U.S. securities may be subject to non-U.S. income, withholding and other taxes, which would decrease our yield on those securities. Stockholders will generally not be entitled to claim a U.S. foreign tax credit or deduction with respect to non-U.S. taxes paid by us.

If we purchase shares in a PFIC, we may be subject to U.S. federal income tax on a portion of any “excess distribution” received on, or gain from the disposition of, such shares, even if such income is distributed as a taxable dividend by us to our stockholders. Additional charges in the nature of interest may be imposed on us in respect of deferred taxes arising from such distributions or gains. If we invest in a PFIC and elect to treat the PFIC as a “qualified electing fund” under the Code (a “QEF”), in lieu of the foregoing requirements, we will be required to include in income each year a portion of the ordinary earnings and net capital gain of the QEF, even if such income is not distributed to us. Alternatively, we may elect to mark-to-market at the end of each taxable year our shares in such PFIC; in this case, we will recognize as ordinary income any increase in the value of such shares, and as ordinary loss any decrease in such value to the extent it does not exceed prior increases included in income. Our ability to make either election will depend on factors beyond our control, and we are subject to restrictions that may limit the availability or benefit of these elections. Under either election, we may be required to recognize in any year income in excess of our distributions from PFICs and our proceeds from dispositions of PFIC stock during that year, and such income will nevertheless be subject to the Annual Distribution Requirement and will be taken into account for purposes of determining whether we satisfy the Excise Tax Requirement.

Our functional currency is the U.S. dollar for U.S. federal income tax purposes. Under Section 988 of the Code, gains or losses attributable to fluctuations in exchange rates between the time we accrue income, expenses or other liabilities denominated in a foreign currency and the time we actually collect such income or pay such expenses or liabilities may be treated as ordinary income or loss. Similarly, gains or losses on foreign currency forward contracts, the disposition of debt denominated in a foreign currency and other financial transactions denominated in foreign currency, to the extent attributable to fluctuations in exchange rates between the acquisition and disposition dates, may also be treated as ordinary income or loss.

Some of the income and fees that we recognize, such as management fees, may not satisfy the 90% Income Test. To ensure that such income and fees do not disqualify us as a RIC for a failure to satisfy the 90% Income Test, we may choose to recognize such income or fees through one or more entities treated as U.S. corporations for U.S. federal income tax purposes that in turn pays us a distribution. While we expect that recognizing such income through such corporations will assist us in satisfying the 90% Income Test, no assurance can be given that this structure will be respected for U.S. federal income tax purposes, which could result in such income not being counted towards satisfying the 90% Income Test. If the amount of such income were too great and we were otherwise unable to mitigate this result, it could result in our disqualification as a RIC. If, as we expect, the structure is respected, such corporations will be required to pay U.S. corporate income tax on their earnings, which ultimately will reduce the yield on such income and fees.

 

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We are limited in our ability to deduct expenses in excess of our investment company taxable income. If our expenses in a given year exceed our investment company taxable income, we will have a net operating loss for that year. However, we are not permitted to carry forward our net operating losses to subsequent years, so these net operating losses generally will not pass through to our stockholders. In addition, expenses can be used only to offset investment company taxable income, and may not be used to offset net capital gain. As a RIC, we may not use any net capital losses (that is, realized capital losses in excess of realized capital gains) to offset our investment company taxable income, but may carry forward those losses, and use them to offset future capital gains, indefinitely.

FAILURE TO QUALIFY AS A RIC

If we fail to satisfy the 90% Income Test for any taxable year or the Diversification Tests for any quarter of the taxable year, we may still continue to be taxed as a RIC for the relevant taxable year if we are eligible for certain relief provisions under the Code if the failures are due to reasonable cause and not willful neglect and if a penalty tax is paid with respect to each failure to satisfy the applicable requirements. Additionally, relief is provided for certain de minimis failures of the diversification requirements where we correct the failure within a specified period. If the applicable relief provisions are not available or cannot be met, all of our income would be subject to corporate-level income tax as described below. We cannot provide assurance that we would qualify for any such relief should we fail the 90% Income Test or the Diversification Tests.

If we were to fail to meet the RIC requirements for more than two consecutive years and then seek to requalify as a RIC, we would be required to pay corporate-level tax on the unrealized appreciation recognized during the succeeding five-year period unless we make a special election to recognize gain to the extent of any unrealized appreciation in our assets at the time of requalification.

If we are unable to qualify for treatment as a RIC, and relief is not available as discussed above, we would be subject to tax on all of our taxable income at the regular corporate U.S. federal income tax rate (and we also would be subject to any applicable state and local taxes). We would not be able to deduct distributions to stockholders and would not be required to make distributions for U.S. federal income tax purposes. Distributions generally would be taxable to our stockholders as ordinary dividend income to the extent of our current and accumulated earnings and profits. Subject to certain limitations under the Code, corporate U.S. stockholders would be eligible for the dividends-received deduction. Distributions in excess of our current and accumulated earnings and profits would be treated first as a return of capital to the extent of the stockholder’s adjusted tax basis in its shares of our preferred stock or common stock, and any remaining distributions would be treated as capital gains. See “Election to Be Taxed as a RIC” above and “Risk Factors—Risks Relating to Our Business—We may be subject to additional corporate-level income taxes if we fail to maintain our status as a RIC” and “We may have difficulty paying our required distributions under applicable tax rules if we recognize income before or without receiving cash representing such income” in our most recent Annual Report on Form 10-K. The following discussion assumes that we qualify as a RIC.

TAXATION OF U.S. STOCKHOLDERS

The following summary generally describes certain material U.S. federal income tax consequences of an investment in shares of our preferred stock and common stock beneficially owned by U.S. stockholders (as defined above). If you are not a U.S. stockholder, this section does not apply to you.

Whether an investment in the shares of our preferred stock or common stock is appropriate for a U.S. stockholder will depend upon that person’s particular circumstances. An investment in the shares of our preferred stock or common stock by a U.S. stockholder may have adverse tax consequences. U.S. stockholders are urged to consult their tax advisors about the U.S. tax consequences of investing in shares of our preferred stock or common stock.

 

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Distributions on Our Preferred Stock and Common Stock

Distributions by us generally are taxable as ordinary income or capital gain. To the extent such distributions we pay to non-corporate U.S. stockholders (including individuals) are attributable to dividends from U.S. corporations and certain qualified foreign corporations, such distributions (“qualified dividends”) generally are taxable to U.S. stockholders at the preferential rates applicable to long-term capital gains. A portion of our ordinary dividends, but not capital gain dividends, paid to U.S. corporate stockholders may, if certain conditions are met, qualify for the dividends-received deduction to the extent that we have received dividends from certain corporations during the taxable year. However, it is anticipated that distributions paid by us generally will not be attributable to dividends and, therefore, generally will not qualify for the preferential rates applicable to qualified dividends or the dividends-received deduction available to corporations under the Code. A corporate U.S. stockholder may be required to reduce its basis in our preferred stock or common stock with respect to certain “extraordinary dividends,” as defined in Section 1059 of the Code. Corporate U.S. stockholders are urged to consult their tax advisors in determining the application of these rules in their particular circumstances. We first allocate our earnings and profits to distributions to our preferred stockholders and then to distributions to our common stockholders based on priority in our capital structure. Distributions of our investment company taxable income will be taxable as ordinary income to U.S. stockholders to the extent of our current and accumulated earnings and profits, whether paid in cash or reinvested in additional shares of our common stock. Distributions of our net capital gain properly reported by us as “capital gain dividends” will be taxable to a U.S. stockholders as long-term capital gains (which, under current law, are taxed at preferential rates) in the case of individuals, trusts or estates. This is true regardless of the U.S. stockholder’s holding period in our preferred stock or common stock and regardless of whether the dividend is paid in cash or reinvested in additional common stock. Distributions in excess of our earnings and profits first will reduce a U.S. stockholder’s adjusted tax basis in such U.S. stockholder’s preferred stock or common stock and, after the adjusted tax basis is reduced to zero, will constitute capital gain to such U.S. stockholder. As a result, a U.S. stockholder will need to consider the effect of our distributions on such U.S. stockholder’s adjusted tax basis in our preferred stock or common stock in their individual circumstances.

Although we currently intend to distribute our net capital gain for each taxable year on a timely basis, we may in the future decide to retain some or all of our net capital gain, and may designate the retained amount as a “deemed dividend.” In that case, among other consequences: we will pay U.S. federal corporate income tax on the retained amount; each U.S. stockholder will be required to include their pro rata share of the deemed distribution in income as if it had been actually distributed to them; and the U.S. stockholder will be entitled to claim a credit equal to their pro rata share of the tax paid thereon by us. The amount of the deemed distribution net of such tax will be added to the U.S. stockholder’s adjusted tax basis in our preferred stock or common stock.

For purposes of determining (1) whether the Annual Distribution Requirement is satisfied for any year and (2) the amount of capital gains dividends paid for that year, we may, under certain circumstances, elect to treat a dividend that is paid during the following taxable year as if it had been paid during the taxable year in question. If we make such an election, a U.S. stockholder will still be treated as receiving the dividend in the taxable year in which the distribution is made. However, any dividend declared by us in October, November or December of any calendar year, payable to stockholders of record on a specified date in such a month and actually paid during January of the following year, will be treated as if it had been received by a U.S. stockholders on December 31 of the year in which the dividend was declared.

We have the ability to declare a large portion of a dividend in shares of our stock. As long as a certain portion of such dividend is paid in cash and certain requirements are met, the entire distribution will be treated as a dividend for U.S. federal income tax purposes. As a result, a U.S. stockholder will be taxed on 100% of the fair market value of the dividend on the date the dividend is received in the same manner as a cash dividend, even if most of the dividend was paid in shares of our stock. If stockholders purchase shares of our preferred stock or common stock shortly before the record date of a distribution, the price of the shares will include the value of the distribution and such U.S. stockholder will be subject to tax on the distribution even though it economically represents a return of his, her or its investment.

 

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Distributions out of our current and accumulated earnings and profits will not be eligible for the 20% pass-through deduction under Section 199A of the Code, although we may pay Section 199A dividend with respect to qualified REIT dividends earned by us.

Sale or Other Disposition of Our Preferred Stock or Common Stock

A U.S. stockholder generally will recognize taxable gain or loss if the U.S. stockholder sells or otherwise disposes of such stockholder’s shares of our preferred stock or common stock. The amount of gain or loss will be measured by the difference between a U.S. stockholder’s adjusted tax basis in our preferred stock or common stock sold or otherwise disposed of and the amount of the proceeds received in exchange. Any gain or loss arising from such sale or other disposition generally will be treated as long-term capital gain or loss if a U.S. stockholder has held our preferred stock or common stock for more than one year. Otherwise, such gain or loss will be classified as short-term capital gain or loss. However, any capital loss arising from the sale or disposition of shares of our preferred stock or common stock in which a U.S. stockholder has a holding period of six months or less will be treated as long-term capital loss to the extent of the amount of capital gain dividends received, or undistributed capital gain deemed received, with respect to such shares. In addition, all or a portion of any loss recognized upon a disposition of shares of our preferred stock or common stock may be disallowed if substantially identical stock or securities are purchased (whether through reinvestment of distributions or otherwise) within 30 days before or after the disposition.

In general, U.S. stockholders that are individuals, trusts or estates are taxed at preferential rates on their net capital gain. Such rate is lower than the maximum rate on ordinary income currently payable by individuals. Corporate U.S. stockholders currently are subject to U.S. federal income tax on net capital gain at the maximum rate that also applies to ordinary income. Non-corporate U.S. stockholders with net capital losses for a year (i.e., capital loss in excess of capital gain) generally may deduct up to $3,000 of such losses against their ordinary income each year; any net capital losses of a non-corporate U.S. stockholder in excess of $3,000 generally may be carried forward and used in subsequent years as provided in the Code. Corporate U.S. stockholders generally may not deduct any net capital losses for a year, but may carry back such losses for three years or carry forward such losses for five years.

Information Reporting and Backup Withholding

We will send to each of our U.S. stockholders, after the end of each calendar year, a notice providing, on a per share and per distribution basis, the amounts includible in such U.S. stockholder’s taxable income for such year as ordinary income and as long-term capital gain. In addition, the U.S. federal tax status of each year’s distributions generally will be reported to the IRS. Distributions may also be subject to additional state, local and foreign taxes depending on a U.S. stockholder’s particular situation.

We may be required to withhold U.S. federal income tax (“backup withholding”) from all taxable distributions to a U.S. stockholder (1) who fails to furnish us with a correct taxpayer identification number or a certificate that such stockholder is exempt from backup withholding or (2) with respect to whom the IRS notifies us that such stockholder is subject to backup withholding. An individual’s taxpayer identification number is his or her social security number. Backup withholding is not an additional tax. Any amount withheld under backup withholding is allowed as a credit against the U.S. stockholder’s U.S. federal income tax liability and may entitle such stockholder to a refund, provided that proper information is timely provided to the IRS.

Medicare Tax on Net Investment Income

Non-corporate U.S. stockholders generally are subject to a 3.8% Medicare surtax on their “net investment income,” the calculation of which includes interest income and OID, any taxable gain from the disposition of our preferred stock or common stock and any distributions on our preferred stock or common stock (including the amount of any deemed distribution) to the extent such distribution is treated as a dividend or as capital gain (as

 

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described above under “Taxation of U.S. Stockholders—Distributions on Our Preferred Stock or Common Stock”). Non-corporate U.S. stockholders are urged to consult their tax advisors on the effect of acquiring, holding and disposing of our preferred stock or common stock, on the computation of “net investment income” in their individual circumstances.

Disclosure of Certain Recognized Losses.

Under U.S. Treasury regulations, if a U.S. stockholder recognizes a loss with respect to either our preferred stock or common stock of $2 million or more for a non-corporate U.S. stockholder or $10 million or more for a corporate U.S. stockholder in any single taxable year, such stockholder must file with the IRS a disclosure statement on Form 8886. Direct stockholders of certain “portfolio securities” in many cases are excepted from this reporting requirement, but under current guidance, equity owners of a RIC are not excepted. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer’s treatment of the loss is proper. Significant monetary penalties apply to a failure to comply with this reporting requirement. States may also have a similar reporting requirement. U.S. stockholders are urged to consult own tax advisors to determine the applicability of these regulations in light of their individual circumstances.

TAXATION OF NON-U.S. STOCKHOLDERS

The following discussion applies only to persons that are non-U.S. stockholders. If you are not a non-U.S. stockholder, this discussion does not apply to you.

Whether an investment in our preferred stock or common stock is appropriate for a non-U.S. stockholder will depend upon that stockholder’s particular circumstances. An investment in our preferred stock or common stock by a non-U.S. stockholder may have adverse tax consequences and, accordingly, may not be appropriate for a non-U.S. stockholder. Non-U.S. stockholders are urged to consult their tax advisors as to the tax consequences of acquiring, holding and disposing of our preferred stock or common stock before investing.

Distributions on, and Sale or Other Disposition of, Our Preferred Stock or Common Stock

Distributions of our investment company taxable income to non-U.S. stockholders will be subject to U.S. withholding tax at a rate of 30% (unless reduced or eliminated by an applicable income tax treaty) to the extent payable from our current and accumulated earnings and profits unless an exception applies.

Actual or deemed distributions of our net capital gain to a non-U.S. stockholder, and gains recognized by a non-U.S. stockholder upon the sale of our preferred stock or common stock, will not be subject to withholding of U.S. federal income tax and generally will not be subject to U.S. federal income tax unless the non-U.S. stockholder is an individual, has been present in the United States for 183 days or more during the taxable year, and certain other conditions are satisfied. Non-U.S. stockholders of our preferred stock or common stock are encouraged to consult their advisors as to the applicability of an income tax treaty in their individual circumstances.

In general, no U.S. withholding taxes will be imposed on dividends paid by RICs to non-U.S. stockholders to the extent the dividends are designated as “interest-related dividends” or “short-term capital gain dividends” and satisfy certain other requirements Under this exemption, interest-related dividends and short-term capital gain dividends generally represent distributions of interest or short-term capital gain that would not have been subject to U.S. withholding tax at the source if they had been received directly by a non-U.S. stockholder. We expect that a portion of our dividends will qualify as interest-related dividends, although we cannot assure you the exact proportion that will so qualify.

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non-U.S. stockholder’s allocable share of the tax we pay on the capital gain deemed to have been distributed. To obtain the refund, the non-U.S. stockholder must obtain a U.S. taxpayer identification number (if one has not been previously obtained) and file a U.S. federal income tax return even if the non-U.S. stockholder would not otherwise be required to obtain a U.S. taxpayer identification number or file a U.S. federal income tax return.

We have the ability to declare a large portion of a dividend in shares of our common stock. As long as a certain portion of such dividend is paid in cash and certain requirements are met, the entire distribution will be treated as a dividend for U.S. federal income tax purposes. As a result, our non-U.S. stockholders will be taxed on 100% of the fair market value of the dividend on the date the dividend is received in the same manner as a cash dividend (including the application of withholding tax rules described above), even if most of the dividend is paid in shares of our common stock. In such a circumstance, we may be required to withhold all or substantially all of the cash we would otherwise distribute to a non-U.S. stockholder.

Information Reporting and Backup Withholding

A non-U.S. stockholder who is otherwise subject to withholding of U.S. federal income tax, may be subject to information reporting and backup withholding of U.S. federal income tax on dividends unless the non-U.S. stockholder provides us or the dividend paying agent with an IRS Form W-8BEN or IRS Form W-8BEN-E (or an acceptable substitute form) or otherwise meets documentary evidence requirements for establishing that it is a non-U.S. stockholder or otherwise establishes an exemption from backup withholding.

WITHHOLDING AND INFORMATION REPORTING ON FINANCIAL ACCOUNTS

Pursuant to Sections 1471 to 1474 of the Code and the U.S. Treasury regulations thereunder, the relevant withholding agent generally will be required to withhold 30% of any dividends paid on our preferred stock or common stock to: (i) a foreign financial institution unless such foreign financial institution agrees to verify, report and disclose its U.S. accountholders and meets certain other specified requirements or (ii) a non-financial foreign entity that is the beneficial owner of the payment unless such entity certifies that it does not have any substantial U.S. owners or provides the name, address and taxpayer identification number of each substantial U.S. owner and such entity meets certain other specified requirements or is subject to an applicable “intergovernmental agreement.” If payment of this withholding tax is made, non-U.S. stockholders that are otherwise eligible for an exemption from, or reduction of, U.S. federal withholding taxes with respect to such dividends will be required to seek a credit or refund from the IRS to obtain the benefit of such exemption or reduction. In certain cases, the relevant foreign financial institution or non-financial foreign entity may qualify for an exemption from, or be deemed to be in compliance with, these rules. Certain jurisdictions have entered into agreements with the United States that may supplement or modify these rules. Non-U.S. stockholders are urged to consult their tax advisors regarding the particular consequences to them of this legislation and guidance. We will not pay any additional amounts in respect of any amounts withheld.

Currently effective, proposed U.S. Treasury Regulations have been issued that, when finalized, will provide for the repeal of the 30% withholding tax that would have applied to all payments of gross proceeds from the sale, exchange or disposition of our preferred stock or common stock. In the preamble to the proposed U.S. Treasury Regulations, the government provided that taxpayers may rely upon this repeal until the issuance of final U.S. Treasury Regulations.

 

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DESCRIPTION OF SECURITIES

This prospectus contains a summary of the common stock, preferred stock, subscription rights, debt securities, warrants and units. These summaries are not meant to be a complete description of each security. However, this prospectus and the accompanying prospectus supplement will contain the material terms and conditions for each security.

As of December 31, 2020, Crescent Capital BDC, Inc. (“Crescent Capital,” the “Company,” “we,” “us” or “our”) had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, our common stock. In this section, references to “Crescent Capital,” “we,” “us” and “our” refer only to Crescent Capital and not any of its subsidiaries.

Common Stock, $0.001 par value per share

The statements made under this caption include summaries of certain provisions contained in our Charter and Bylaws, each of which is filed as an exhibit to our most recent Annual Report on Form 10-K. This summary does not purport to be complete and is qualified in its entirety by reference to our Charter and Bylaws. We encourage you to read our Charter, our Bylaws, and the applicable provisions of the Maryland General Corporation Law (“MGCL”).

Our authorized stock consists of 200,010,000 shares of stock, par value $0.001 per share, 200,000,000 of which are currently classified as common stock and 10,000 of which are currently classified as preferred stock. Our common stock trades on The NASDAQ Global Market under the symbol “CCAP.” On April 21, 2021, the last reported sales price of our common stock on The NASDAQ Global Market was $18.78 per share. There are no outstanding options or warrants to purchase our stock. No stock has been authorized for issuance under any equity compensation plans. Under Maryland law, our stockholders generally are not personally liable for our indebtedness or obligations.

Under our Charter, our board of directors (the “Board”) is authorized to classify any unissued shares of stock and reclassify any previously classified but unissued shares of stock into one or more classes or series of stock and authorize the issuance of shares of stock without obtaining stockholder approval. As permitted by the MGCL, the Charter provides that a majority of the entire Board, without any action by our stockholders, may amend the Charter from time to time to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that has authority to issue.

Common Stock

All shares of common stock have equal rights as to earnings, assets, dividends and voting and, when they are issued, will be duly authorized, validly issued, fully paid and nonassessable. Distributions may be paid to the holders of common stock if, as and when authorized by the Board and declared by us out of funds legally available therefor. Shares of common stock have no preemptive, exchange, conversion or redemption rights and are freely transferable, except as otherwise provided in the Charter or where their transfer is restricted by federal and state securities laws or by contract.

In the event of our liquidation, dissolution or winding up, each share of common stock would be entitled to share ratably in all of our assets that are legally available for distribution after pays off all indebtedness and other liabilities and subject to any preferential rights of holders of our preferred stock, if any preferred stock is outstanding at such time.

Except as may otherwise be specified in the Charter, each share of common stock is entitled to one vote on all matters submitted to a vote of stockholders, including the election of directors. Except as provided with respect to any other class or series of stock, the holders of common stock will possess exclusive voting power. There is

 

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no cumulative voting in the election of our directors, which means that holders of a majority of the outstanding shares of common stock can elect all of our directors.

Preferred Stock

Our Charter authorizes our Board to classify any unissued shares of stock and reclassify any previously classified but unissued shares of stock into other classes or series of stock, including preferred stock. Prior to issuance of shares of each class or series, the Board is required by Maryland law and by our charter to set the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each class or series. Thus, our Board could authorize the issuance of shares of our preferred stock with terms and conditions that could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for holders of our common stock or otherwise be in their best interest.

You should note, however, that any issuance of preferred stock must comply with the requirements of the 1940 Act. The 1940 Act requires, among other things, that (a) immediately after issuance and before any dividend or other distribution is made with respect to our common stock and before any purchase of common stock is made, such preferred stock together with all other indebtedness and senior securities must not exceed an amount equal to 50% of our total assets after deducting the amount of such dividend, distribution or purchase price, as the case may be and (b) the holders of shares of preferred stock, if any are issued, must be entitled as a class to elect two directors at all times and to elect a majority of the directors if dividends on such preferred stock are in arrears by two years or more. Certain matters under the 1940 Act require the separate vote of the holders of any issued and outstanding preferred stock. For example, holders of preferred stock would vote separately from the holders of common stock on a proposal to cease operations as a BDC. We believe that the availability for issuance of preferred stock may provide us with increased flexibility in structuring future financings and acquisitions.

Limitation on Liability of Directors and Officers; Indemnification and Advance of Expenses

Maryland law permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty established by a final adjudication as being material to the cause of action. The Charter contains such a provision, which eliminates directors’ and officers’ liability to the maximum extent permitted by Maryland law, subject to the requirements of the 1940 Act.

The Charter requires us, to the maximum extent permitted by Maryland law and subject to the requirements of the 1940 Act, to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to any present or former director or officer or any individual who, while a director or officer and at our request, serves or has served another corporation, real estate investment trust, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, trustee, member, manager or partner, in each case who is made or threatened to be made a party to, or witness in, the proceeding by reason of his or her service in that capacity. The Charter also permits us to indemnify and advance expenses to any person who served a predecessor of us in any of the capacities described above and any of our employees or agents or any employees or agents of our predecessor. In accordance with the 1940 Act, we will not indemnify any person for any liability to which such person would be subject by reason of such person’s willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

In addition to the indemnification provided for in the Charter, we have entered into indemnification agreements with each of our current directors and certain of our officers and with members of our investment advisor’s investment committee and we intend to enter into indemnification agreements with each of our future directors,

 

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members of our investment committee and certain of our officers. The indemnification agreements provide these directors, officers and other persons the maximum indemnification permitted under Maryland law and the 1940 Act. The agreements provide, among other things, for the advancement of expenses and indemnification for liabilities that such person may incur by reason of his or her status as a present or former director or officer or member of our investment advisor’s investment committee in any action or proceeding arising out of the performance of such person’s services as a present or former director or officer or member of our investment advisor’s investment committee.

Maryland law requires a corporation (unless its charter provides otherwise, which the Charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made or threatened to be made a party by reason of his or her service in that capacity. Maryland law permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or are threatened to be made a party by reason of their service in those or other capacities unless it is established that (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. However, under Maryland law, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that a personal benefit was improperly received, unless in either case a court orders indemnification, and then only for expenses. In addition, Maryland law permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of (x) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation and (y) a written undertaking by him or her or on his or her behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not met.

Provisions of the Maryland General Corporation Law and the Charter and Bylaws

The MGCL and the Charter and Bylaws contain provisions that could make it more difficult for a potential acquiror to acquire Crescent Capital by means of a tender offer, proxy contest or otherwise. These provisions are expected to discourage certain coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to negotiate first with the Board. We believe that the benefits of these provisions outweigh the potential disadvantages of discouraging any such acquisition proposals because, among other things, the negotiation of such proposals may improve their terms.

Classified Board of Directors

The Board is divided into three classes of directors serving staggered three-year terms, with the term of office of only one of the three classes expiring each year. A classified board may render a change in control of or removal of our incumbent management more difficult. We believe, however, that the longer time required to elect a majority of a classified board of directors helps to ensure the continuity and stability of our management and policies.

Election of Directors

The Bylaws provide that the affirmative vote of a majority of the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to elect each director; provided, that if the number of nominees for director exceeds the number of directors to be elected, directors will be elected by a plurality of votes cast.

 

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Number of Directors; Vacancies; Removal

The Charter provides that the number of directors will be set only by the Board in accordance with the Bylaws. The Bylaws provide that a majority of our entire Board may at any time increase or decrease the number of directors. However, unless the Bylaws are amended, the number of directors may never be less than four or more than 15. The Charter sets forth our election to be subject to the provision of Subtitle 8 of Title 3 of the MGCL regarding the filling of vacancies on the Board. Accordingly, except as may be provided by the Board in setting the terms of any class or series of preferred stock, any and all vacancies on the Board may be filled only by the affirmative vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy will serve for the remainder of the full term of the class in which the vacancy occurred and until a successor is elected and qualifies, subject to any applicable requirements of the 1940 Act.

The Charter provides that a director may be removed only for cause, as defined in the Charter, and then only by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast generally in the election of directors.

Action by Stockholders

Under the MGCL, stockholder action can be taken only at an annual or special meeting of stockholders or by unanimous written or electronically transmitted consent instead of a meeting. These provisions, combined with the requirements of the Bylaws regarding the calling of a stockholder-requested special meeting of stockholders discussed below, may have the effect of delaying consideration of a stockholder proposal until the next annual meeting.

Advance Notice Provisions for Stockholder Nominations and Stockholder Proposals

The Bylaws provide that with respect to an annual meeting of stockholders, nominations of individuals for election to the Board and the proposal of business to be considered by stockholders may be made only (a) pursuant to our notice of the meeting, (b) by or at the direction of the Board or (c) by a stockholder who is a stockholder of record at the record date set by the Board for the purpose of determining stockholders entitled to vote at the meeting, at the time of giving the advance notice required by the Bylaws and at the time of the meeting (and any adjournment or postponement thereof), is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and has complied with the advance notice procedures of the Bylaws. With respect to special meetings of stockholders, only the business specified in our notice of the meeting may be brought before the meeting. Nominations of individuals for election to the Board at a special meeting may be made only (a) by or at the direction of the Board or (b) provided that the special meeting has been called in accordance with the Bylaws for the purpose of electing directors, by a stockholder who is a stockholder of record at the record date set by the Board for the purpose of determining stockholders entitled to vote at the meeting, at the time of giving the advance notice required by the Bylaws and at the time of the meeting (and any adjournment or postponement thereof), who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the advance notice provisions of the Bylaws.

The purpose of requiring stockholders to give advance notice of nominations and other business is to afford the Board a meaningful opportunity to consider the qualifications of the proposed nominees and the advisability of any other proposed business and, to the extent deemed necessary or desirable by the Board, to inform stockholders and make recommendations about such qualifications or business, as well as to provide a more orderly procedure for conducting meetings of stockholders. Although the Bylaws do not give the Board any power to disapprove stockholder nominations for the election of directors or proposals recommending certain action, they may have the effect of precluding a contest for the election of directors or the consideration of stockholder proposals if proper procedures are not followed and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposal without regard to whether consideration of such nominees or proposals might be harmful or beneficial to us and our stockholders.

 

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Calling of Special Meetings of Stockholders

The Bylaws provide that special meetings of stockholders may be called by the Board and certain of our officers. Additionally, the Bylaws provide that, subject to the satisfaction of certain procedural and informational requirements by the stockholders requesting the meeting, a special meeting of stockholders must be called by the secretary of the corporation to act on any matter that may properly be considered at a meeting of stockholders upon the written request of stockholders entitled to cast not less than a majority of all the votes entitled to be cast on such matter at such meeting.

Approval of Extraordinary Corporate Action; Amendment of the Charter and Bylaws

Under Maryland law, a Maryland corporation generally cannot dissolve, amend its charter, merge, convert, sell all or substantially all of its assets, engage in a share exchange or engage in similar transactions outside the ordinary course of business, unless approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter. However, a Maryland corporation may provide in its charter for approval of these matters by a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter. The Charter generally provides for approval of charter amendments and extraordinary transactions by the stockholders entitled to cast at least a majority of the votes entitled to be cast on the matter. The Charter also provides that certain charter amendments and any proposal for our conversion, whether by merger or otherwise, from a closed-end company to an open-end company or any proposal for our liquidation or dissolution require the approval of the stockholders entitled to cast at least 80% of the votes entitled to be cast on such matter. However, if such amendment or proposal is approved by at least two-thirds of our continuing directors (as defined below) (in addition to approval by the Board), such amendment or proposal may be approved by a majority of the votes entitled to be cast on the matter. The “continuing directors” are defined in the Charter as our current directors as well as those directors whose nomination for election by the stockholders or whose election by the directors to fill vacancies is approved by a majority of the continuing directors then on the Board.

The Bylaws provide that the Board will have the power to adopt, alter or repeal any provision of the Bylaws and to make new bylaws. The Bylaws also provide that the stockholders will have the power, at any annual or special meeting of the stockholders, subject to the requirements in the Bylaws regarding the advance notice of stockholder proposals or the calling of a stockholder-requested special meeting of stockholders, as the case may be, to alter or repeal any provision of the Bylaws and to adopt new bylaws if any such alteration, repeal or adoption is approved by the affirmative vote of a majority of all votes entitled to be cast on the matter and is otherwise permitted by applicable law, except that the stockholders will not have the power to alter or repeal or adopt any provision inconsistent with the amendment provisions of the Bylaws without the approval of the Board.

No Appraisal Rights

Except with respect to appraisal rights arising in connection with the Control Share Acquisition Act discussed below, as permitted by the MGCL, the Charter provides that stockholders will not be entitled to exercise appraisal rights unless the Board determines that such rights will apply, with respect to all or any classes or series of stock, to one or more transactions occurring after the date of such determination in connection with which stockholders would otherwise be entitled to exercise appraisal rights.

Control Share Acquisitions

The Control Share Acquisition Act provides that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquiror, by officers or by employees who are directors of the corporation are excluded from shares entitled to vote on the matter. Control shares are voting shares of stock that, if aggregated with all other shares of stock owned by the acquiror or in

 

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respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting power:

 

   

one-tenth or more but less than one-third;

 

   

one-third or more but less than a majority; or

 

   

a majority or more of all voting power.

The requisite stockholder approval must be obtained each time an acquiror crosses one of the thresholds of voting power set forth above. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A control share acquisition means the acquisition of issued and outstanding control shares, subject to certain exceptions.

A person who has made or proposes to make a control share acquisition may compel the board of directors of the corporation to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. The right to compel the calling of a special meeting is subject to the satisfaction of certain conditions, including an undertaking to pay the expenses of the meeting. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting.

If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute, then the corporation may redeem for fair value any or all of the control shares, except those for which voting rights have previously been approved. The right of the corporation to redeem control shares is subject to certain conditions and limitations, including, as provided in the Bylaws, compliance with the 1940 Act, which will prohibit any such redemption other than in limited circumstances. Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date of any meeting of stockholders at which the voting rights of the shares are considered and not approved or, if no such meeting is held, as of the date of the last control share acquisition by the acquiror. If voting rights for control shares are approved at a stockholders meeting and the acquiror becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition.

The Control Share Acquisition Act does not apply (a) to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or (b) to acquisitions approved or exempted by the charter or bylaws of the corporation.

The Bylaws contain a provision exempting from the Control Share Acquisition Act any and all acquisitions by any person of our shares of stock and, as a result, any control shares of will have the same voting rights as all of the other shares of common stock. Such provision could be amended or eliminated at any time in the future. However, we will amend the Bylaws to be subject to the Control Share Acquisition Act only if the Board determines that it would be in our best interests and determines (after consultation with the SEC staff) that our being subject to the Control Share Acquisition Act does not conflict with the 1940 Act.

Business Combinations

Under Maryland law, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as:

 

   

any person who, directly or indirectly, beneficially owns 10% or more of the voting power of the corporation’s outstanding voting stock; or

 

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an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then outstanding stock of the corporation.

A person is not an interested stockholder under this statute if the Board approved in advance the transaction by which such person otherwise would have become an interested stockholder. However, in approving a transaction, the Board may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the Board.

After the five-year prohibition, any business combination between the corporation and an interested stockholder generally must be recommended by the Board of the corporation and approved by the affirmative vote of at least:

 

   

80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and

 

   

two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.

These super-majority vote requirements do not apply if the corporation’s common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares.

The statute permits various exemptions from its provisions, including business combinations that are exempted by the Board before the time that the interested stockholder becomes an interested stockholder. The Board has adopted a resolution that any business combination between us and any other person is exempted from the provisions of the Business Combination Act, provided that the business combination is first approved by the Board, including a majority of the independent directors. This resolution, however, may be altered or repealed in whole or in part at any time. If this resolution is repealed or the Board does not otherwise approve a business combination, the statute may discourage others from trying to acquire control of and increase the difficulty of consummating any offer.

Conflict with the 1940 Act

The Bylaws provide that, if and to the extent that any provision of the MGCL, including the Control Share Acquisition Act (if we amend the Bylaws to be subject to such act) and the Business Combination Act, or any provision of the Charter or Bylaws conflicts with any provision of the 1940 Act, the applicable provision of the 1940 Act will control.

Exclusive Forum

The Charter provides that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, will be the sole and exclusive forum for: (i) any derivative action or proceeding brought on our behalf, (ii) any Internal Corporate Claim, as such term is defined in Section 1-101(p) of the MGCL, including, without limitation, (a) any action asserting a claim of breach of any duty owed by any of our directors or officers or other employees to or to our stockholders or (b) any action asserting a claim against or any of our directors or officers or other employees arising pursuant to any provision of the MGCL or the Charter or Bylaws, or (iii) any action asserting a claim against or any of our directors or officers or other employees that is governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring or holding any interest in our stock will be deemed to have notice of and to have consented and waived any objection to this exclusive forum provision of the Charter, as the same may be amended from time to time.

 

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DESCRIPTION OF OUR PREFERRED STOCK

In addition to shares of common stock, our Charter authorizes the issuance of preferred stock. If we offer preferred stock under this prospectus, we will issue an appropriate prospectus supplement. We may issue preferred stock from time to time in one or more classes or series, without stockholder approval. Prior to issuance of shares of each class or series, our Board is required by Maryland law and by our charter to set, subject to the express terms of any of our then outstanding classes or series of stock, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each class or series. Any such an issuance must adhere to the requirements of the 1940 Act, Maryland law and any other limitations imposed by law.

The 1940 Act currently requires, among other things, that (a) immediately after issuance and before any distribution is made with respect to common stock, the liquidation preference of the preferred stock, together with all other senior securities, must not exceed an amount equal to 50% of our total assets (taking into account such distribution), (b) the holders of shares of preferred stock, if any are issued, must be entitled as a class to elect two directors at all times and to elect a majority of the directors if dividends on the preferred stock are in arrears by two years or more and (c) such class of stock have complete priority over any other class of stock as to distribution of assets and payment of dividends, which dividends shall be cumulative.

For any class or series of preferred stock that we may issue, our Board will determine and the articles supplementary and the prospectus supplement relating to such class or series will describe:

 

   

the designation and number of shares of such class or series;

 

   

the rate and time at which, and the preferences and conditions under which, any dividends will be paid on shares of such class or series, as well as whether such dividends are participating or non-participating;

 

   

any provisions relating to convertibility or exchangeability of the shares of such class or series, including adjustments to the conversion price of such class or series;

 

   

the rights and preferences, if any, of holders of shares of such class or series upon our liquidation, dissolution or winding up of our affairs;

 

   

the voting powers, if any, of the holders of shares of such class or series;

 

   

any provisions relating to the redemption of the shares of such class or series;

 

   

any limitations on our ability to pay dividends or make distributions on, or acquire or redeem, other securities while shares of such class or series are outstanding;

 

   

any conditions or restrictions on our ability to issue additional shares of such class or series or other securities;

 

   

if applicable, a discussion of certain U.S. federal income tax considerations; and

 

   

any other relative powers, preferences and participating, optional or special rights of shares of such class or series, and the qualifications, limitations or restrictions thereof.

All shares of preferred stock that we may issue will be identical and of equal rank except as to the particular terms thereof that may be fixed by our Board, and all shares of each class or series of preferred stock will be identical and of equal rank except as to the dates from which dividends, if any, thereon will be cumulative. You should read the accompanying prospectus supplement, as well as the complete articles supplementary that contain the terms of the applicable class or series of preferred stock.

 

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DESCRIPTION OF OUR SUBSCRIPTION RIGHTS

GENERAL

We may issue subscription rights to our stockholders to purchase common stock. Subscription rights may be issued independently or together with any other offered security and may or may not be transferable by the person purchasing or receiving the subscription rights. In connection with a subscription rights offering to our stockholders, we would distribute certificates evidencing the subscription rights and a prospectus supplement to our stockholders on the record date that we set for receiving subscription rights in such subscription rights offering. You should read the prospectus supplement related to any such subscription rights offering.

The applicable prospectus supplement would describe the following terms of subscription rights in respect of which this prospectus is being delivered:

 

   

the period of time the offering would remain open (which shall be open a minimum number of days such that all record holders would be eligible to participate in the offering and shall not be open longer than 120 days);

 

   

the title of such subscription rights;

 

   

the exercise price for such subscription rights (or method of calculation thereof);

 

   

the ratio of the offering (which, in the case of transferable rights, will require a minimum of three shares to be held of record before a person is entitled to purchase an additional share);

 

   

the number of such subscription rights issued to each stockholder;

 

   

the extent to which such subscription rights are transferable and the market on which they may be traded if they are transferable;

 

   

if applicable, a discussion of certain U.S. federal income tax considerations applicable to the issuance or exercise of such subscription rights;

 

   

the date on which the right to exercise such subscription rights shall commence, and the date on which such right shall expire (subject to any extension);

 

   

the extent to which such subscription rights include an over-subscription privilege with respect to unsubscribed securities and the terms of such over-subscription privilege;

 

   

any termination right we may have in connection with such subscription rights offering; and

 

   

any other terms of such subscription rights, including exercise, settlement and other procedures and limitations relating to the transfer and exercise of such subscription rights.

We will not offer any subscription rights to purchase shares of our common stock under this prospectus or an accompanying prospectus supplement without first filing a new post-effective amendment to the registration statement.

EXERCISE OF SUBSCRIPTION RIGHTS

Each subscription right would entitle the holder of the subscription right to purchase for cash such amount of shares of common stock at such exercise price as shall in each case be set forth in, or be determinable as set forth in, the prospectus supplement relating to the subscription rights offered thereby. Subscription rights may be exercised at any time up to the close of business on the expiration date for such subscription rights set forth in the prospectus supplement. After the close of business on the expiration date, all unexercised subscription rights would become void.

 

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Subscription rights may be exercised as set forth in the prospectus supplement relating to the subscription rights offered thereby. Upon receipt of payment and the subscription rights certificate properly completed and duly executed at the corporate trust office of the subscription rights agent or any other office indicated in the prospectus supplement we will forward, as soon as practicable, the shares of common stock purchasable upon such exercise. To the extent permissible under applicable law, we may determine to offer any unsubscribed offered securities directly to persons other than stockholders, to or through agents, underwriters or dealers or through a combination of such methods, as set forth in the applicable prospectus supplement.

 

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DESCRIPTION OF OUR WARRANTS

The following is a general description of the terms of the warrants we may issue from time to time. Particular terms of any warrants we offer will be described in the prospectus supplement relating to such warrants. You should read the prospectus supplement related to any warrants offering.

We may issue warrants to purchase shares of our common stock, preferred stock or debt securities. Such warrants may be issued independently or together with shares of common stock, preferred stock or debt securities and may be attached or separate from such securities. We will issue each series of warrants under a separate warrant agreement to be entered into between us and a warrant agent. The warrant agent will act solely as our agent and will not assume any obligation or relationship of agency for or with holders or beneficial owners of warrants.

A prospectus supplement will describe the particular terms of any series of warrants we may issue, including the following:

 

   

the title of such warrants;

 

   

the aggregate number of such warrants;

 

   

the price or prices at which such warrants will be issued;

 

   

the currency or currencies, including composite currencies, in which the price of such warrants may be payable;

 

   

if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security;

 

   

in the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant and the price at which and the currency or currencies, including composite currencies, in which this principal amount of debt securities may be purchased upon such exercise;

 

   

in the case of warrants to purchase common stock or preferred stock, the number of shares of common stock or preferred stock, as the case may be, purchasable upon exercise of one warrant and the price at which and the currency or currencies, including composite currencies, in which these shares may be purchased upon such exercise;

 

   

the date on which the right to exercise such warrants shall commence and the date on which such right will expire;

 

   

whether such warrants will be issued in registered form or bearer form;

 

   

if applicable, the minimum or maximum amount of such warrants that may be exercised at any one time;

 

   

if applicable, the date on and after which such warrants and the related securities will be separately transferable;

 

   

information with respect to book-entry procedures, if any;

 

   

the terms of the securities issuable upon exercise of the warrants;

 

   

if applicable, a discussion of certain U.S. federal income tax considerations; and

 

   

any other terms of such warrants, including terms, procedures and limitations relating to the exchange and exercise of such warrants.

 

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We and the warrant agent may amend or supplement the warrant agreement for a series of warrants without the consent of the holders of the warrants issued thereunder to effect changes that are not inconsistent with the provisions of the warrants and that do not materially and adversely affect the interests of the holders of the warrants.

Prior to exercising their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such exercise, including, in the case of warrants to purchase debt securities, the right to receive principal, premium, if any, or interest payments, on the debt securities purchasable upon exercise or to enforce covenants in the applicable indenture or, in the case of warrants to purchase common stock or preferred stock, the right to receive dividends, if any, or payments upon our liquidation, dissolution or winding up or to exercise any voting rights.

Under the 1940 Act, we may generally only offer warrants provided that (a) the warrants expire by their terms within ten years, (b) the exercise or conversion price is not less than the current market value at the date of issuance, (c) our stockholders authorize the proposal to issue such warrants, and our Board approves such issuance on the basis that the issuance is in the best interests of Crescent Capital and its stockholders and (d) if the warrants are accompanied by other securities, the warrants are not separately transferable unless no class of such warrants and the securities accompanying them has been publicly distributed. The 1940 Act also provides that the amount of our voting securities that would result from the exercise of all outstanding warrants, as well as options and rights, at the time of issuance may not exceed 25% of our outstanding voting securities.

DESCRIPTION OF OUR DEBT SECURITIES

We may issue debt securities in one or more series. The specific terms of each series of debt securities will be described in the particular prospectus supplement relating to that series. The prospectus supplement may or may not modify the general terms found in this prospectus and will be filed with the SEC. For a complete description of the terms of a particular series of debt securities, you should read this prospectus and the prospectus supplement relating to that particular series.

As required by federal law for all bonds and notes of companies that are publicly offered, the debt securities are governed by a document called an “indenture.” An indenture is a contract between us and a financial institution qualified to act as trustee on your behalf under the Trust Indenture Act of 1939, as amended (the “TIA”), referred to as the trustee, and is subject to and governed by the TIA. The trustee has two main roles. First, the trustee can enforce your rights against us if we default. There are some limitations on the extent to which the trustee acts on your behalf, described in the second paragraph under “Events of Default—Remedies if an Event of Default Occurs.” We will provide the name of the trustee in any prospectus supplement related to the issuance of debt securities, and we will also provide certain other information related to the trustee, including describing any relationship we have with the trustee, in such prospectus supplement.

Because this section is a summary, it does not describe every aspect of the debt securities and the indenture. We urge you to read the indenture because it, and not this description, defines your rights as a holder of debt securities. For example, in this section, we use capitalized words to signify terms that are specifically defined in the indenture. Some of the definitions are repeated in this prospectus, but for the rest you will need to read the indenture. We have filed the form of the indenture with the SEC. See “Available Information” below for information on how to obtain a copy of the indenture.

The prospectus supplement, which will accompany this prospectus, will describe the particular series of debt securities being offered, including, among other things:

 

   

the designation or title of the series of debt securities;

 

   

the total principal amount of the series of debt securities;

 

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the percentage of the principal amount at which the series of debt securities will be offered;

 

   

the date or dates on which principal will be payable;

 

   

the rate or rates (which may be either fixed or variable) and/or the method of determining such rate or rates of interest, if any;

 

   

the date or dates from which any interest will accrue, or the method of determining such date or dates, and the date or dates on which any interest will be payable;

 

   

the terms for redemption, extension or early repayment, if any;

 

   

the currencies in which the series of debt securities are issued and payable;

 

   

whether the amount of payments of principal, premium or interest, if any, on a series of debt securities will be determined with reference to an index, formula or other method (which could be based on one or more currencies, commodities, equity indices or other indices) and how these amounts will be determined;

 

   

the place or places, if any, other than or in addition to the City of New York, of payment, transfer, conversion and/or exchange of the debt securities;

 

   

the denominations in which the offered debt securities will be issued;

 

   

the provision for any sinking fund;

 

   

any restrictive covenants;

 

   

any Events of Default;

 

   

whether the series of debt securities is issuable in certificated form;

 

   

any provisions for defeasance or covenant defeasance;

 

   

if applicable, U.S. federal income tax considerations relating to original issue discount;

 

   

whether and under what circumstances we will pay additional amounts in respect of any tax, assessment or governmental charge and, if so, whether we will have the option to redeem the debt securities rather than pay the additional amounts (and the terms of this option);

 

   

any provisions for convertibility or exchangeability of the debt securities into or for any other securities;

 

   

whether the debt securities are subject to subordination and the terms of such subordination;

 

   

the listing, if any, on a securities exchange; and

 

   

any other terms.

The debt securities may be secured or unsecured obligations. Unless the prospectus supplement states otherwise, principal (and premium, if any) and interest, if any, will be paid by us in immediately available funds.

We are currently permitted, under specified conditions, to issue multiple classes of indebtedness if our asset coverage, calculated pursuant to the 1940 Act, is at least equal to 150% immediately after each such issuance (i.e. we are able to borrow up to two dollars for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us). In addition, while any indebtedness and senior securities remain outstanding, we must make provisions to prohibit the distribution to our stockholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. We may also borrow amounts up to 5% of the value of our total assets for temporary or emergency purposes without regard to asset coverage. For a discussion of the risks associated with leverage, see “Risk Factors—Risks Relating to Our Business—Regulations governing our operation as a BDC affect our ability to, and the way in which we, raise additional capital” in our most recent Annual Report on Form 10-K.

 

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GENERAL

The indenture provides that any debt securities proposed to be sold under this prospectus and the accompanying prospectus supplement (“offered debt securities”) and any debt securities issuable upon the exercise of warrants or upon conversion or exchange of other offered securities (“underlying debt securities”) may be issued under the indenture in one or more series.

For purposes of this prospectus, any reference to the payment of principal of or premium or interest, if any, on debt securities will include additional amounts if required by the terms of the debt securities.

The indenture does not limit the amount of debt securities that may be issued thereunder from time to time. Debt securities issued under the indenture, when a single trustee is acting for all debt securities issued under the indenture, are called the “indenture securities.” The indenture also provides that there may be more than one trustee thereunder, each with respect to one or more different series of indenture securities. See “Resignation of Trustee” below. At a time when two or more trustees are acting under the indenture, each with respect to only certain series, the term “indenture securities” means the one or more series of debt securities with respect to which each respective trustee is acting. In the event that there is more than one trustee under the indenture, the powers and trust obligations of each trustee described in this prospectus will extend only to the one or more series of indenture securities for which it is trustee. If two or more trustees are acting under the indenture, then the indenture securities for which each trustee is acting would be treated as if issued under separate indentures.

The indenture does not contain any provisions that give you protection in the event we issue a large amount of debt or we are acquired by another entity.

We refer you to the prospectus supplement for information with respect to any deletions from, modifications of or additions to the Events of Default or our covenants that are described below, including any addition of a covenant or other provision providing event risk or similar protection.

We have the ability to issue indenture securities with terms different from those of indenture securities previously issued and, without the consent of the holders thereof, to reopen a previous issue of a series of indenture securities and issue additional indenture securities of that series unless the reopening was restricted when that series was created.

We expect that we will usually issue debt securities in book entry only form represented by global securities.

CONVERSION AND EXCHANGE

If any debt securities are convertible into or exchangeable for other securities, the prospectus supplement will explain the terms and conditions of the conversion or exchange, including the conversion price or exchange ratio (or the calculation method), the conversion or exchange period (or how the period will be determined), if conversion or exchange will be mandatory or at the option of the holder or us, provisions for adjusting the conversion price or the exchange ratio and provisions affecting conversion or exchange in the event of the redemption of the underlying debt securities. These terms may also include provisions under which the number or amount of other securities to be received by the holders of the debt securities upon conversion or exchange would be calculated according to the market price of the other securities as of a time stated in the prospectus supplement.

PAYMENT AND PAYING AGENTS

We will pay interest to the person listed in the applicable trustee’s records as the owner of the debt security at the close of business on a particular day in advance of each due date for interest, even if that person no longer owns the debt security on the interest due date. That day, usually about two weeks in advance of the interest due

 

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date, is called the “record date.” Because we will pay all the interest for an interest period to the holders on the record date, holders buying and selling debt securities must work out between themselves the appropriate purchase price. The most common manner is to adjust the sales price of the debt securities to prorate interest fairly between buyer and seller based on their respective ownership periods within the particular interest period. This prorated interest amount is called “accrued interest.”

Payments on Global Securities

We will make payments on a global security in accordance with the applicable policies of the depositary as in effect from time to time. Under those policies, we will make payments directly to the depository, or its nominee, and not to any indirect holders who own beneficial interests in the global security. An indirect holder’s right to those payments will be governed by the rules and practices of the depository and its participants.

Payments on Certificated Securities

We will make payments on a certificated debt security as follows. We will pay interest that is due on an interest payment date by check mailed on the interest payment date to the holder at his or her address shown on the trustee’s records as of the close of business on the regular record date. We will make all payments of principal and premium, if any, by check at the office of the applicable trustee in New York, NY and/or at other offices that may be specified in the prospectus supplement or in a notice to holders against surrender of the debt security.

Alternatively, if the holder asks us to do so, we will pay any amount that becomes due on the debt security by wire transfer of immediately available funds to an account at a bank in New York City, on the due date. To request payment by wire, the holder must give the applicable trustee or other paying agent appropriate transfer instructions at least 15 business days before the requested wire payment is due. In the case of any interest payment due on an interest payment date, the instructions must be given by the person who is the holder on the relevant regular record date. Any wire instructions, once properly given, will remain in effect unless and until new instructions are given in the manner described above.

Payment When Offices Are Closed

If any payment is due on a debt security on a day that is not a business day, we will make the payment on the next day that is a business day. Payments made on the next business day in this situation will be treated under the indenture as if they were made on the original due date, except as otherwise indicated in the accompanying prospectus supplement. Such payment will not result in a default under any debt security or the indenture, and no interest will accrue on the payment amount from the original due date to the next day that is a business day.

Book-entry and other indirect holders should consult their banks or brokers for information on how they will receive payments on their debt securities.

EVENTS OF DEFAULT

You will have rights if an Event of Default occurs in respect of the debt securities of your series and is not cured, as described later in this subsection.

The term “Event of Default” in respect of the debt securities of your series means any of the following (unless the prospectus supplement relating to such debt securities states otherwise):

 

   

We do not pay the principal of, or any premium on, a debt security of the series on its due date, and do not cure this default within 5 days.

 

   

We do not pay interest on a debt security of the series when due, and such default is not cured within 30 days.

 

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We do not deposit any sinking fund payment in respect of debt securities of the series on its due date, and do not cure this default within 5 days.

 

   

We remain in breach of a covenant in respect of debt securities of the series for 60 days after we receive a written notice of default stating we are in breach. The notice must be sent by either the trustee or holders of at least 25% of the principal amount of debt securities of the series.

 

   

We file for bankruptcy or certain other events of bankruptcy, insolvency or reorganization occur and remain undischarged or unstayed for a period of 90 days.

 

   

On the last business day of each of twenty-four consecutive calendar months, we have an asset coverage of less than 100%.

 

   

Any other Event of Default in respect of debt securities of the series described in the applicable prospectus supplement occurs.

An Event of Default for a particular series of debt securities does not necessarily constitute an Event of Default for any other series of debt securities issued under the same or any other indenture. The trustee may withhold notice to the holders of debt securities of any default, except in the payment of principal, premium or interest, if it considers the withholding of notice to be in the best interests of the holders.

Remedies if an Event of Default Occurs

If an Event of Default has occurred and has not been cured, the trustee or the holders of at least 25% in principal amount of the debt securities of the affected series may declare the entire principal amount of all the debt securities of that series to be due and immediately payable. This is called a declaration of acceleration of maturity. In certain circumstances, a declaration of acceleration of maturity may be canceled by the holders of a majority in principal amount of the debt securities of the affected series.

The trustee is not required to take any action under the indenture at the request of any holders unless the holders offer the trustee reasonable protection from expenses and liability (called an “indemnity”) (Section 315 of the TIA). If reasonable indemnity is provided, the holders of a majority in principal amount of the outstanding debt securities of the relevant series may direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. The trustee may refuse to follow those directions in certain circumstances. No delay or omission in exercising any right or remedy will be treated as a waiver of that right, remedy or Event of Default.

Before you are allowed to bypass your trustee and bring your own lawsuit or other formal legal action or take other steps to enforce your rights or protect your interests relating to the debt securities, the following must occur:

 

   

You must give your trustee written notice that an Event of Default has occurred and remains uncured.

 

   

The holders of at least 25% in principal amount of all outstanding debt securities of the relevant series must make a written request that the trustee take action because of the default and must offer reasonable indemnity to the trustee against the cost and other liabilities of taking that action.

 

   

The trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity.

 

   

The holders of a majority in principal amount of the debt securities must not have given the trustee a direction inconsistent with the above notice during that 60 day period.

However, you are entitled at any time to bring a lawsuit for the payment of money due on your debt securities on or after the due date.

 

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Holders of a majority in principal amount of the debt securities of the affected series may waive any past defaults other than:

 

   

the payment of principal, any premium or interest; or

 

   

in respect of a covenant that cannot be modified or amended without the consent of each holder.

Book-entry and other indirect holders should consult their banks or brokers for information on how to give notice or direction to or make a request of the trustee and how to declare or cancel an acceleration of maturity.

Each year, we will furnish to each trustee a written statement of certain of our officers certifying that to their knowledge we are in compliance with the indenture and the debt securities, or else specifying any default.

MERGER OR CONSOLIDATION

Under the terms of the indenture, we are generally permitted to consolidate or merge with another entity. We are also permitted to sell all or substantially all of our assets to another entity. However, unless the prospectus supplement relating to certain debt securities states otherwise, we may not take any of these actions unless all the following conditions are met:

 

   

Where we merge out of existence or sell our assets, the resulting entity must agree to be legally responsible for our obligations under the debt securities.

 

   

Immediately after giving effect to such transaction, no Default or Event of Default shall have happened and be continuing.

 

   

Under the indenture, no merger or sale of assets may be made if as a result any of our property or assets or any property or assets of one of our subsidiaries, if any, would become subject to any mortgage, lien or other encumbrance unless either (a) the mortgage, lien or other encumbrance could be created pursuant to the limitation on liens covenant in the indenture without equally and ratably securing the indenture securities or (b) the indenture securities are secured equally and ratably with or prior to the debt secured by the mortgage, lien or other encumbrance.

 

   

We must deliver certain certificates and documents to the trustee.

 

   

We must satisfy any other requirements specified in the prospectus supplement relating to a particular series of debt securities.

MODIFICATION OR WAIVER

There are three types of changes we can make to the indenture and the debt securities issued thereunder.

Changes Requiring Your Approval

First, there are changes that we cannot make to your debt securities without your specific approval. The following is a list of those types of changes:

 

   

change the stated maturity of the principal of or interest on a debt security;

 

   

reduce any amounts due on a debt security;

 

   

reduce the amount of principal payable upon acceleration of the maturity of a security following a default;

 

   

adversely affect any right of repayment at the holder’s option;

 

   

change the place (except as otherwise described in the prospectus or prospectus supplement) or currency of payment on a debt security;

 

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impair your right to sue for payment;

 

   

adversely affect any right to convert or exchange a debt security in accordance with its terms;

 

   

modify the subordination provisions in the indenture in a manner that is adverse to holders of the debt securities;

 

   

reduce the percentage of holders of debt securities whose consent is needed to modify or amend the indenture;

 

   

reduce the percentage of holders of debt securities whose consent is needed to waive compliance with certain provisions of the indenture or to waive certain defaults;

 

   

modify any other aspect of the provisions of the indenture dealing with supplemental indentures, modification and waiver of past defaults, changes to the quorum or voting requirements or the waiver of certain covenants; and

 

   

change any obligation we have to pay additional amounts.

Changes Not Requiring Approval

The second type of change does not require any vote by the holders of the debt securities. This type is limited to clarifications and certain other changes that would not adversely affect holders of the outstanding debt securities in any material respect. We also do not need any approval to make any change that affects only debt securities to be issued under the indenture after the change takes effect.

Changes Requiring Majority Approval

Any other change to the indenture and the debt securities would require the following approval:

 

   

If the change affects only one series of debt securities, it must be approved by the holders of a majority in principal amount of that series.

 

   

If the change affects more than one series of debt securities issued under the same indenture, it must be approved by the holders of a majority in principal amount of all of the series affected by the change, with all affected series voting together as one class for this purpose.

The holders of a majority in principal amount of all of the series of debt securities issued under an indenture, voting together as one class for this purpose, may waive our compliance with some of our covenants in that indenture. However, we cannot obtain a waiver of a payment default or of any of the matters covered by the bullet points included above under “—Changes Requiring Your Approval.”

Further Details Concerning Voting

When taking a vote, we will use the following rules to decide how much principal to attribute to a debt security:

 

   

For original issue discount securities, we will use the principal amount that would be due and payable on the voting date if the maturity of these debt securities were accelerated to that date because of a default.

 

   

For debt securities whose principal amount is not known (for example, because it is based on an index), we will use a special rule for that debt security described in the prospectus supplement.

 

   

For debt securities denominated in one or more foreign currencies, we will use the U.S. dollar equivalent. Debt securities will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in trust money for their payment or redemption. Debt securities will also not be eligible to vote if they have been fully defeased as described later under “Defeasance—Full Defeasance.”

 

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We will generally be entitled to set any day as a record date for the purpose of determining the holders of outstanding indenture securities that are entitled to vote or take other action under the indenture. If we set a record date for a vote or other action to be taken by holders of one or more series, that vote or action may be taken only by persons who are holders of outstanding indenture securities of those series on the record date and must be taken within eleven months following the record date.

Book-entry and other indirect holders should consult their banks or brokers for information on how approval may be granted or denied if we seek to change the indenture or the debt securities or request a waiver.

DEFEASANCE

The following provisions will be applicable to each series of debt securities unless we state in the applicable prospectus supplement that the provisions of covenant defeasance and full defeasance will not be applicable to that series.

Covenant Defeasance

If certain conditions are satisfied, we can make the deposit described below and be released from some of the restrictive covenants in the indenture under which the particular series was issued. This is called “covenant defeasance.” In that event, you would lose the protection of those restrictive covenants but would gain the protection of having money and government securities set aside in trust to repay your debt securities. If applicable, you also would be released from the subordination provisions described under “Indenture Provisions—Subordination” below. In order to achieve covenant defeasance, we must do the following:

 

   

If the debt securities of the particular series are denominated in U.S. dollars, we must deposit in trust for the benefit of all holders of such debt securities a combination of money and U.S. government or U.S. government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the debt securities on their various due dates.

 

   

We must deliver to the trustee a legal opinion of our counsel confirming that, under current U.S. federal income tax law, we may make the above deposit without causing you to be taxed on the debt securities any differently than if we did not make the deposit and just repaid the debt securities ourselves at maturity.

We must deliver to the trustee a legal opinion of our counsel stating that the above deposit does not require registration by us under the 1940 Act and a legal opinion and officers’ certificate stating that all conditions precedent to covenant defeasance have been complied with.

If we accomplish covenant defeasance, you can still look to us for repayment of the debt securities if there were a shortfall in the trust deposit or the trustee is prevented from making payment. For example, if one of the remaining Events of Default occurred (such as our bankruptcy) and the debt securities became immediately due and payable, there might be a shortfall. Depending on the event causing the default, you may not be able to obtain payment of the shortfall.

Full Defeasance

If there is a change in U.S. federal tax law, as described below, we can legally release ourselves from all payment and other obligations on the debt securities of a particular series (called “full defeasance”) if we put in place the following other arrangements for you to be repaid:

 

   

If the debt securities of the particular series are denominated in U.S. dollars, we must deposit in trust for the benefit of all holders of such debt securities a combination of money and U.S. government or

 

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U.S. government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the debt securities on their various due dates.

 

   

We must deliver to the trustee a legal opinion confirming that there has been a change in current U.S. federal tax law or an IRS ruling that allows us to make the above deposit without causing you to be taxed on the debt securities any differently than if we did not make the deposit and just repaid the debt securities ourselves at maturity. Under current U.S. federal tax law, the deposit and our legal release from the debt securities would be treated as though we paid you your share of the cash and notes or bonds at the time the cash and notes or bonds were deposited in trust in exchange for your debt securities and you would recognize gain or loss on the debt securities at the time of the deposit.

 

   

We must deliver to the trustee a legal opinion of our counsel stating that the above deposit does not require registration by us under the 1940 Act and a legal opinion and officers’ certificate stating that all conditions precedent to defeasance have been complied with.

If we ever did accomplish full defeasance, as described above, you would have to rely solely on the trust deposit for repayment of the debt securities. You could not look to us for repayment in the unlikely event of any shortfall. Conversely, the trust deposit would most likely be protected from claims of our lenders and other creditors if we ever became bankrupt or insolvent. If applicable, you would also be released from the subordination provisions described later under “Indenture Provisions—Subordination.”

FORM, EXCHANGE AND TRANSFER OF CERTIFICATED REGISTERED SECURITIES

Holders may exchange their certificated securities, if any, for debt securities of smaller denominations or combined into fewer debt securities of larger denominations, as long as the total principal amount is not changed.

Holders may exchange or transfer their certificated securities, if any, at the office of their trustee. We have appointed the trustee to act as our agent for registering debt securities in the names of holders transferring debt securities. We may appoint another entity to perform these functions or perform them ourselves.

Holders will not be required to pay a service charge to transfer or exchange their certificated securities, if any, but they may be required to pay any tax or other governmental charge associated with the transfer or exchange. The transfer or exchange will be made only if our transfer agent is satisfied with the holder’s proof of legal ownership.

If we have designated additional transfer agents for your debt security, they will be named in your prospectus supplement. We may appoint additional transfer agents or cancel the appointment of any particular transfer agent. We may also approve a change in the office through which any transfer agent acts.

If any certificated securities of a particular series are redeemable and we redeem less than all the debt securities of that series, we may block the transfer or exchange of those debt securities during the period beginning 15 days before the day we mail the notice of redemption and ending on the day of that mailing, in order to freeze the list of holders to prepare the mailing. We may also refuse to register transfers or exchanges of any certificated securities selected for redemption, except that we will continue to permit transfers and exchanges of the unredeemed portion of any debt security that will be partially redeemed.

RESIGNATION OF TRUSTEE

Each trustee may resign or be removed with respect to one or more series of indenture securities provided that a successor trustee is appointed to act with respect to these series. In the event that two or more persons are acting as trustee with respect to different series of indenture securities under the indenture, each of the trustees will be a trustee of a trust separate and apart from the trust administered by any other trustee.

 

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INDENTURE PROVISIONS—SUBORDINATION

Upon any distribution of our assets upon our dissolution, winding up, liquidation or reorganization, the payment of the principal of (and premium, if any) and interest, if any, on any indenture securities denominated as subordinated debt securities is to be subordinated to the extent provided in the indenture in right of payment to the prior payment in full of all Senior Indebtedness (as defined below), but our obligation to you to make payment of the principal of (and premium, if any) and interest, if any, on such subordinated debt securities will not otherwise be affected. In addition, no payment on account of principal (or premium, if any), sinking fund or interest, if any, may be made on such subordinated debt securities at any time unless full payment of all amounts due in respect of the principal (and premium, if any), sinking fund and interest on Senior Indebtedness has been made or duly provided for in money or money’s worth.

In the event that, notwithstanding the foregoing, any payment by us is received by the trustee in respect of subordinated debt securities or by the holders of any of such subordinated debt securities before all Senior Indebtedness is paid in full, the payment or distribution must be paid over to the holders of the Senior Indebtedness or on their behalf for application to the payment of all the Senior Indebtedness remaining unpaid until all the Senior Indebtedness has been paid in full, after giving effect to any concurrent payment or distribution to the holders of the Senior Indebtedness. Subject to the payment in full of all Senior Indebtedness upon this distribution by us, the holders of such subordinated debt securities will be subrogated to the rights of the holders of the Senior Indebtedness to the extent of payments made to the holders of the Senior Indebtedness out of the distributive share of such subordinated debt securities.

By reason of this subordination, in the event of a distribution of our assets upon our insolvency, certain of our senior creditors may recover more, ratably, than holders of any subordinated debt securities. The indenture provides that these subordination provisions will not apply to money and securities held in trust under the defeasance provisions of the indenture. “Senior Indebtedness” is defined in the indenture as the principal of (and premium, if any) and unpaid interest on:

 

   

our indebtedness (including indebtedness of others guaranteed by us), whenever created, incurred, assumed or guaranteed, for money borrowed (other than indenture securities issued under the indenture and denominated as subordinated debt securities), unless in the instrument creating or evidencing the same or under which the same is outstanding it is provided that this indebtedness is not senior or prior in right of payment to the subordinated debt securities, and

 

   

renewals, extensions, modifications and refinancings of any of this indebtedness.

If this prospectus is being delivered in connection with the offering of a series of indenture securities denominated as subordinated debt securities, the accompanying prospectus supplement will set forth the approximate amount of our Senior Indebtedness outstanding as of a recent date.

CERTAIN CONSIDERATIONS RELATING TO FOREIGN CURRENCIES

Debt securities denominated or payable in foreign currencies may entail significant risks. These risks include the possibility of significant fluctuations in the foreign currency markets, the imposition or modification of foreign exchange controls and potential illiquidity in the secondary market. These risks will vary depending upon the currency or currencies involved and will be more fully described in the applicable prospectus supplement.

BOOK-ENTRY DEBT SECURITIES

The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the debt securities. The debt securities will be issued as fully registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC.

 

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One fully registered certificate will be issued for the debt securities, in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”).

DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the SEC. More information about DTC can be found at www.dtcc.com.

Purchases of debt securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the debt securities on DTC’s records. The ownership interest of each actual purchaser of each security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the debt securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in debt securities, except in the event that use of the book-entry system for the debt securities is discontinued.

To facilitate subsequent transfers, all debt securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of debt securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the debt securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such debt securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Redemption notices shall be sent to DTC. If less than all of the debt securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

 

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Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the debt securities unless authorized by a Direct Participant in accordance with DTC’s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to us as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the debt securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, distributions, and dividend payments on the debt securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from us or the trustee on the payment date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC or its nominee, the trustee, or us, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of us or the trustee, but disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the debt securities at any time by giving reasonable notice to us or the trustee. Under such circumstances, in the event that a successor depository is not obtained, certificates are required to be printed and delivered. We may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered to DTC.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that we believe to be reliable, but we take no responsibility for the accuracy thereof.

 

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DESCRIPTION OF OUR UNITS

The following is a general description of the terms of the units we may issue from time to time. Particular terms of any units we offer will be described in the prospectus supplement relating to such units. For a complete description of the terms of particular units, you should read this prospectus and the prospectus supplement relating to those particular units.

We may issue units comprised of one or more of the other securities described in this prospectus in any combination. Each unit may also include debt obligations o